Record Labels Sue Owner of Puretunes

Online music distributor Sakfield Holding Co. sold songs through its Puretunes Web site for only a few weeks, but that proved to be a few weeks too long for the major record companies.

The labels filed suit against Madrid-based Sakfield and 10 unnamed owners or accomplices on July 3, accusing them of violating copyrights and misleading the public by claiming to be an authorized music distributor even though it hadn’t obtained licenses from the labels. The lawsuit seeks more than $57 million in damages, as well as the seizure or destruction of the computers Puretunes used to store song files.

Launched in Madrid on May 20, Puretunes let users download as many song files as they wished for a flat fee. The fees ranged from $4 for eight hours of downloading to $25 for a full month.

The site described Puretunes as “the most exciting authorized subscription digital music download service on the Web.” Sakfield’s attorney at the time, Javier Siguenza, said the company had obtained licenses from Spanish trade associations representing publishers and performers, and that was enough to satisfy Spanish law.

But the lawsuit, filed in Washington, contends that Sakfield lacked the right under U.S. law to copy or distribute the labels’ music online without their permission. The federal court in Washington has jurisdiction, the lawsuit argues, because Sakfield sought to do business there, attracted customers and sold music there and maintained the Puretunes Web site through Washington-based Internet service provider Cogent Communications Group Inc.

Sakfield executives could not be reached for comment. The Puretunes site was swamped with users initially, but it shut down in mid-June without explanation.

One problem for the company is that, contrary to Siguenza’s statements, it appears to have launched the site before it obtained any of the necessary licenses.

Gonzalo Mora, manager for video and multimedia at the Spanish publishers’ association, said the group talked to Puretunes about a license but never actually granted one. To his knowledge, the performers’ association hadn’t granted Puretunes a license, either.

“We have been trying to go against these people, but up to the moment I have not found a way,” he said.

In addition, Mora said, Puretunes appears to have obtained at least some of its song files from Weblisten, a competing online service in Madrid, without that company’s permission. Weblisten found its electronic watermarks in a number of the songs sold by Puretunes, Mora said.

Weblisten, which does have licenses from the Spanish associations of publishers and performers, is embroiled in its own dispute with the record companies. A group of major and independent labels have sued Weblisten in Spain, claiming it needs to obtain licenses directly from them in order to sell their songs.