Sony and Warner Are Said to Sue Web Music Service

By Ben Sisario
The New York Times

December 14, 2011

Over the last decade, the big forces of the music industry have often teamed up in lawsuits against common Internet foes: first Napster, then Grokster, then LimeWire.

The latest target is Grooveshark, a free streaming service that says it has attracted 35 million users.

Last month, the Universal Music Group sued Grooveshark in United States District Court in Manhattan, saying that the service engaged in copyright infringement on a large scale, abetted by executives of the company. Now Sony Music Entertainment and the Warner Music Group, the next largest of the four major labels, are preparing to join the suit, according to four people briefed on the companies’ plans.

Sony’s and Warner’s suit could be filed by Thursday, according to these people, who were not authorized to speak about it publicly.

But while most of the major music companies are lining up against Grooveshark, the industry’s opposition is not unanimous.

Grooveshark has said that its music service is legal under the provisions of the Digital Millennium Copyright Act, the federal law that gives “safe harbor” to companies that host third-party material on the Internet if they comply with takedown notices from copyright holders.

In a statement on Wednesday, the company declined to comment on the suit, but said: “We respect the intellectual property of all artists, and our strict policies are designed to ensure that our users only upload content to which they are entitled. This is a policy which we vigorously enforce within D.M.C.A. requirements.”

In its recent suit, Universal accused Grooveshark’s executives of uploading thousands of songs themselves, which would violate the law. That suit also cited e-mails from Grooveshark executives that appeared to boast of “achieving all this growth without paying a dime to any of the labels.”

Sony and Warner are expected to lodge similar complaints in their suit.

If Grooveshark and its executives are found guilty of willful copyright infringement, the penalties could be steep. Federal statutes allow for a maximum penalty of $150,000 per work.

Grooveshark is not without allies in the music industry, however. The company has signed licensing agreements with many independent labels, as well as with Merlin, an organization that represents thousands of small labels.

It also has a licensing agreement with EMI, the smallest of the four major record companies. But even EMI’s agreement is in jeopardy, as the company’s relationship with Grooveshark deteriorates, according to another person familiar with EMI’s licensing operations, which are private.

Last month, EMI was sold in a deal that, if approved by regulatory agencies, would split the company’s assets between Universal and Sony.

Grooveshark’s relations with labels and individual artists have been under the industry’s microscope lately as disputes over content have been made public.

In one e-mail exchange that was published on the industry blog Digital Music News [ http://www.digitalmusicnews.com/stories/101311cc ], Robert Fripp of the British progressive rock band King Crimson complained that his music had remained available on the service despite several takedown notices.

That exchange was included in Universal’s suit, along with an anonymous comment on the same blog that purported to be from a Grooveshark employee, saying that the company’s executives instructed employees to upload songs themselves.

Major label executives also say they have sent hundreds of thousands of takedown notices to Grooveshark, only to watch songs reappear on its servers within seconds.