MySpace is sued by Universal Music
Universal Music Group sued MySpace.com on Friday, alleging that the social networking site that bills itself as a source of “user generated” content instead trades on “user stolen” songs and music videos.
The lawsuit, filed in U.S. District Court in Los Angeles, described MySpace as a “vast virtual warehouse” of pirated works from some of the company’s best-known artists, including Mariah Carey, Diana Krall and U2. Universal claims that “no intellectual property is safe” from the alleged copyright infringement, even unreleased albums such as Jay-Z’s “Kingdom Come.”
The dispute pits the world’s largest music label against media mogul Rupert Murdoch and his News Corp., which acquired MySpace for $580 million in September 2005. Universal has embarked on an aggressive legal campaign against social networking sites since it reached an agreement last month to license its songs and music videos to YouTube Inc., now owned by Google Inc.
Since then, Santa Monica-based Universal has filed federal lawsuits against Grouper Networks Inc. and Bolt Inc. for permitting users to post without authorization hundreds of music videos from popular artists.
Universal, a unit of France’s Vivendi, is seeking damages of $150,000 for each unauthorized music video or song posted on MySpace, alleged that MySpace not only is aware of the infringement but also makes money selling advertising to the millions of users attracted by the lure of free access to copyrighted works.
“Businesses that seek to trade off on our content, and the hard work of our artists and songwriters, shouldn’t be free to do so without permission and without fairly compensating the content creators,” Universal said in a statement. “Our music and videos play a key role in building the communities that have created hundreds of millions of dollars of value for the owners of MySpace.”
In a written response, MySpace said it did not “induce, encourage or condone” copyright violation in any way. Indeed, on Friday it announced a new tool to make it easier and faster for content holders to remove unauthorized content from the site.
“MySpace provides an extraordinary promotion platform for artists -- from major labels to independent acts -- while respecting their copyrights,” a company spokeswoman said. “We have been keeping [Universal Music] closely apprised of our industry-leading efforts to protect creators’ rights. It’s unfortunate they decided to file this unnecessary and meritless litigation.”
The latest lawsuit could be a test case for broader copyright issues involving sites such as YouTube that allow users to upload content. Google earmarked $200 million of the $1.6 billion it paid for YouTube to deal with copyright lawsuits. Intellectual property lawyers say Universal has no choice: It can’t afford to have some sites distributing for free videos that others pay to license. But the issue also complicates business for Universal executives who have sought to embrace social networking as a marketing tool.
Some of the company’s executives, such as Courtney Holt, Interscope Records’ head of new media, have been quoted praising MySpace’s role in launching new releases from the Black Eyed Peas, Nine Inch Nails, Beck and Queens of the Stone Age. Universal Music also reached an agreement in February with MySpace to offer on-demand streaming of its music videos.
But the relationship appears to have soured over what Universal viewed as MySpace’s failure to police its site. Universal Chief Executive Doug Morris put social networking and video sites on notice at a September investment conference in Pasadena when he said that “we believe these new businesses are copyright infringers and owe us tens of millions of dollars.”
Other sources said the lawsuit was a tool designed to give Universal leverage in its continuing licensing talks with MySpace. Underscoring the theory that the dispute is largely over how much money MySpace should pay is a reference in the lawsuit to a lucrative $900-million advertising deal the site struck with Google.
MySpace said it was protected under the Digital Millennium Copyright Act of 1998, which provides special legal protections known as “safe harbors” to Web-hosting sites that remove copyrighted works after receiving takedown notices from the content owners.
Mark Litvack, an entertainment lawyer with Manatt Phelps & Phillips, said such court battles would ultimately determine how far websites such as MySpace must go to police content. “If the music is up there without authorization, there’s no dispute. It’s infringement,” Litvack said. “Now the question is who’s responsible? There’s no doubt that the poster is. The question is what MySpace’s obligation is.”
Michael S. Sherman, chairman of the entertainment group for law firm Jeffer, Mangels, Butler & Marmaro, said MySpace’s safe harbor defense might be undermined because the site sells advertising tailored to the content of songs, music videos and artist pages.