Safe Harbor in The Cloud?

In a recent court decision [PDF] (docket), also known as “EMI v. MP3Tunes” may change the strength of Safe Harbor laws under the DMCA [PDF] for online (“cloud”) storage services–such as Grooveshark, Amazon CloudDrive, and even Google’s new Google Music.

While not a cut and dry victory for either side, the recent decision by a NY U.S Judge, William Pauley helps solidify protections of Safe Harbor by essentially stipulating MP3Tunes LLC did not promote copyright infringement with its cloud-based storage service. MP3Tunes LLC did not go unscathed in the ruling nonetheless.

Safe Harbor states that websites are immune from copyright infringement if they comply with take-down notices in a prompt manner. The record label, unsuccessfully, attempted to argue that this was inapplicable since so many users were “sideloading” songs from websites like rapidshare–ergo, they should have known this was infringement. Unfortunately, the DMCA does not stipulate obligation to investigate content unless i) a complaint is filed or ii) “red flags” are triggered from file/URL names such as “bootleg” and “pirate”.

EMI further attempted to argue that MP3Tunes LLC benefited from users uploading copyrighted material, and the website had the ability to stop it. Judge Pauley was not convinced–stating that it was up to the users to controlled which files were put in their lockers.

Bittersweet Decision

It was not a flawless victory for MP3Tunes LLC. When EMI notified the website to remove infringing files they only removed search results from sideload.com–their music search engine. They did not, however, remove the files from users’ individual lockers. The judge argued that this meant MP3Tunes LLC was secondarily liable for helping users infringe on those specific EMI works. It was also found that the website’s founder, Michael Robertson, had used sideload.com to infringe on EMI’s copyrights by storing said files in his personal locker.

Not Getting (De)Duped

In a 2008 case, Cartoon Network, LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (PDF), it was argued “de-duping” files–a process often used to save disk space–opened up companies to the copyright violation. The argument was that keeping a single “master record” and distributing files qualified as infringing on public performances.

Judge Pauley refuted this claim saying:

“MP3tunes does not use a ‘master copy’ to store or play back songs stored in its lockers. Instead, MP3tunes uses a standard data compression algorithm that eliminates redundant digital data.”

Set Sails to Unknown

Not to overstate the precedent set forth by a district court ruling, but the decision comes at a critical time. Even though MP3tunes did not get a slam-dunk victory, if further appellate rulings are of the same vein, this could be great news for services like Google or Amazon. Neither service offers search functionality similar that of sideload.com–arguably a huge onus upon MP3tunes.

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