Business News Grooveshark Timeline Labels & Publishers Legal Top Stories

Warner and Sony join Universal’s Grooveshark lawsuit

By CMU Editorial | Published on Friday 16 December 2011

The Warner and Sony music companies yesterday joined Universal’s increasingly raucous ‘We Hate Grooveshark, It Must Die’ party, by adding their names to their rival’s latest lawsuit against the increasingly controversial streaming music website.

As previously reported, some in the record industry reckon Grooveshark is guilty of copyright infringement for allowing users to upload tracks to the streaming service’s library from labels with which the digital firm has no licensing agreements, including Universal, Sony and Warner. But Grooveshark says it operates a takedown system and routinely removes said content if made aware of it by a rights owner, and therefore enjoys protection under US copyright law.

Some would argue Grooveshark is right, while even those who support the record labels would agree this is a grey area of American copyright law and victory for the rights owners in a straightforward copyright infringement lawsuit is not assured. (Of course Grooveshark operates globally, and outside the US said ‘takedown system’ protection doesn’t technically apply, though most legal squabbles with the Florida-based streaming service so far have been in the US).

However, Universal’s most recent lawsuit alleges that it’s not only Grooveshark’s users who are uploading unlicensed content, but that employees and directors at the streaming music company do also. If that could be proven to be so, then the Groovesharkers would not be able to use the safe harbour provisions of the US Digital Millennium Copyright Act to circumvent liability for infringement.

Of course Universal is not the first rights owner to sue Grooveshark, but similar actions by both EMI and indie labels rights body Merlin were settled and licensing agreements subsequently reached. While Grooveshark recognises Universal is its biggest adversary, insiders at the company have hoped that label’s legal action could be resolved out of court also, if only because as the months go by the Grooveshark user base, and the stats the company has about those users, increase in number and therefore value.

But Universal, which may well have the power to revoke the EMI licence at some point should its acquisition of the British record company go ahead, has never seemed in the mood to negotiate, seemingly applying the same policy to Grooveshark as it did to LimeWire – ignoring how good or valuable the service might be, refusing to forgive past piracy, and moving to sue the company out of business.

Warner Music and Sony Music were added to Universal’s legal complaint against Grooveshark yesterday, meaning the digital firm is now facing a court battle with the three biggest music rights owners in the world. Grooveshark seems ready for a fight though, arguing that Universal’s evidence that its employees are uploading unlicensed music is weak.

But it has to be said, however misguided you think the record industry may be when it sues digital companies like Grooveshark, or the P2P providers of old, major litigation such as this in the US rarely ends well for the digital operators, unless they have access to multi-million dollar funds to aid out of court negotiations.