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TRANSCRIPT
New York County Clerk’s Index No. 100152/10
New York Supreme CourtAPPELLATE DIVISION — FIRST DEPARTMENT
UMG RECORDINGS, INC.,
Plaintiff-Appellant,
against
ESCAPE MEDIA GROUP, INC.,
Defendant-Respondent.
>> >>
To Be Argued By:
John J. Rosenberg
BRIEF FOR DEFENDANT-RESPONDENT
JOHN J. ROSENBERG
MATTHEW H. GIGER
BRETT T. PERALA
ROSENBERG & GIGER P.C.
Attorneys for Defendant-Respondent
488 Madison Avenue, 10th Floor
New York, New York 10022
212-705-4824
Printed on Recycled Paper
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TABLE OF CONTENTS
Page
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FACTUAL BACKGROUND AND PROCEDURAL HISTORY . . . . . . . . . . . . . . . . . . . 6
Escape’s Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Escape’s Compliance with the DMCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Present Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
The MP3tunes Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Copyright Office Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
The Lower Court’s Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
The Notice of Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
I. Standard of Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
II. The Relevant Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
III. The Language, Legislative History and Intent of the DMCA Confirm Its Applicability to Both Pre- and Post-1972 Recordings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
A. The Language of the DMCA Makes No Distinction Between the Application of Its Safe Harbor Provisions to Claims of Infringement Based on Pre- and Post-1972 Recordings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
B. The Statutory Intent and Legislative History of the DMCA Further Undermine UMG’s Asserted Position . . . . . . . . . . . . . . . 26
ii
C. The Copyright Office Report Is Not Entitled To Deference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
IV. Application of the DMCA to Pre-1972 Recordings Neither Limits Nor Annuls State Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
A. Application of the DMCA to Pre-1972 Recordings Does Not Violate Section 301(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
PRINTING SPECIFICATIONS STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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TABLE OF AUTHORITIES
Page
Cases
182 Fifth Ave., LLC v. Design Dev. Concepts, Inc., 300 A.D.2d 198, 751 N.Y.S.2d 739 (1st Dep’t 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 15
Am. Library Assoc. v. Pataki, 969 F. Supp. 160 (S.D.N.Y. 1997) . . . . . . . . . . . . . . . . . 38
Bartok v. Boosey & Hawkes, Inc., 523 F.2d 941 (2d Cir. 1975) . . . . . . . . . . . . . . . . . . . 32
Bishop v. Maurer, 33 A.D.3d 497, 823 N.Y.S.2d 366 (1st Dep’t 2006) . . . . . . . . . . . 15
Butler v. Catinella, 58 A.D.3d 145, 868 N.Y.S.2d 101 (2d Dep’t 2008) . . . . . . . 16, 24
Capitol Records, Inc. v. MP3tunes, LLC, 821 F. Supp. 2d 627 (S.D.N.Y. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
Capitol Records, Inc. v. Naxos of Am., 4 N.Y.3d 540, 830 N.E.2d 250 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 17, 26
Elektra Entm’t Grp. v. Barker, 551 F. Supp. 2d 234 (S.D.N.Y. 2011) . . . . . 13, 32, 33
EMI Records Ltd. v. Premise Media Corp., L.P., Index No. 601209/08, 2008 N.Y. Misc. LEXIS 7485 (Sup. Ct. N.Y. Co. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Fireman’s Fund Ins. Co. v. Farrell, 57 A.D.3d 721, 869 N.Y.S.2d 597 (2d Dep’t 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 16
Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 654 F.3d 958 (9th Cir. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Goldstein v. California, 412 U.S. 546 (1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Grunder v. Recckio, 138 A.D.2d 923, 526 N.Y.S.2d 267 (4th Dep’t 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
McCarthy v. Bronson, 500 U.S. 136 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
iv
Morris v. Bus. Concepts, Inc., 283 F.3d 502 (2d Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . 32
Polan v. State Ins. Dep’t, 3 N.Y.3d 54, 814 N.E.2d 789 (2004) . . . . . . . . . . . . . . . . . . . . 26
Small v. Gen. Nutrition Co., 388 F. Supp. 2d 83 (E.D.N.Y. 2005) . . . . . . . . . . . . . . . . . 25
UMG Recordings, Inc. v. Veoh Networks Inc., 665 F. Supp. 2d 1099 (C.D. Cal. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 19, 28
Viacom Int’l Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012) . . . . . . . . . . . . . . . 19, 35
Viacom Int’l Inc. v. YouTube, LLC, 718 F. Supp. 2d 514 (S.D.N.Y. 2010), . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 27, 28, 39
Wolk v. Kodak Imaging Network, Inc., 10 Civ. 4135 (RWS), 2011 U.S. Dist. LEXIS 27541 (S.D.N.Y. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Yeardon v. Henry, 91 F. 3d 370 (2d Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Statutes
17 U.S.C. § 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17 U.S.C. § 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 24
17 U.S.C. § 107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
17 U.S.C. § 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3, 4, 34
17 U.S.C. § 301(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
17 U.S.C. § 301(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
17 U.S.C. § 501(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22, 25, 33
17 U.S.C. § 512 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
17 U.S.C. § 512(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 17, 19, 23
17 U.S.C. § 512(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
17 U.S.C. § 512(c)(3)(A)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
v
17 U.S.C. § 512(c)(3)(A)(v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 26
17 U.S.C. § 512(m)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
17 U.S.C. § 512(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
17 U.S.C. § 512(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
47 U.S.C. § 230(e)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
47 U.S.C. §§ 230(c)(1) and (e)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
N.Y. Gen. Bus. Law § 340 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
INTRODUCTION
This appeal raises significant issues concerning the applicability and scope
of the Digital Millennium Copyright Act, 17 U.S.C. § 512 (the “DMCA”), a statute
that was intended to facilitate the robust development of the internet by providing a
“safe harbor” from copyright infringement liability to internet service providers for
content uploaded to their websites by third parties. Hoping that this Court will
ignore the decisions of the federal and state courts that have addressed the issue,
plaintiff-appellant UMG Recordings, Inc. (“UMG”) argues that the DMCA’s safe
harbor provisions should be unavailable in respect of sound recordings that were
created prior to February 15, 1972. In advancing its untenable position, UMG
urges this Court to contort the plain language of the DMCA and disregard its
manifest purpose by endorsing a construction of the statute that would, in the
words of United States District Judge William Pauley, “eviscerate” the DMCA’s
critical safe harbor provisions and lead to an “absurd or futile” result. Capitol
Records, Inc. v. MP3tunes, LLC, 821 F. Supp. 2d 627, 641 (S.D.N.Y. 2011). If
endorsed by this Court, UMG’s strained construction of the DMCA would threaten
the viability not only of respondent Escape Media Group, Inc. (“Escape”), but of
dozens, if not hundreds of other internet service providers - - including YouTube,
Google, Facebook and Twitter - - that rely upon the DMCA’s safe harbor in their
business operations.
2
Escape owns and operates the proprietary internet-based service
“Grooveshark.com,” which permits users to “upload” digital audio files to
Escape’s internet server and then search for and playback or “stream” (i.e., listen
to, but not download or copy) the user-uploaded recordings from the resulting,
centrally available archive. In its Complaint filed before the lower court, UMG
asserted claims against Escape for common law copyright infringement and unfair
competition based on Escape’s alleged “streaming,” at the request of users, of
UMG’s sound recordings uploaded to Escape’s Grooveshark internet service.
UMG’s claims are addressed solely to “sound recordings recorded prior to
February 15, 1972.” (Compl. ¶¶ 1, 2 [A74, A75].) This myopic focus is not the
result of any particular business concerns of UMG that are limited to the protection
of pre-1972 recordings, as opposed to the numerous more modern recordings in its
massive catalog. Rather, it reflects an unabashed attempt by UMG to force Escape
(and other similarly situated internet service providers) out of business by
exploiting what UMG perceives to be a loophole in the federal statutory scheme
that provides safe harbor protection to internet service providers such as Escape.
Repeating the arguments that it unsuccessfully raised before the lower court,
UMG once again asserts that the language of the DMCA’s safe harbor does not
apply to pre-1972 recordings. In making this argument, UMG avers that the term
“infringement of copyright,” as used in the DMCA, is a defined term under the
3
Copyright Act that is expressly limited to acts that infringe federal copyright
interests. This argument is disingenuous, at best; the phrase “infringement of
copyright” is not, as UMG would have this Court believe, a defined term in the
Copyright Act, and, as will be more fully explicated below, there is nothing in the
language, legislative history or intent of the DMCA that counsels, let alone
mandates, that its safe harbor protections be limited to post-1972 recordings.
Indeed, the plain language of the statute, and the Act’s history and articulated
intent, confirm precisely the opposite, i.e., that the DMCA’s safe harbor is
available to internet service providers without regard to the date on which a
particular sound recording might have been created.
In an attempt to avoid that inescapable conclusion, UMG repeatedly invokes
17 U.S.C. § 301(c) of the Copyright Act, which UMG contends forecloses
application of the DMCA safe harbor to pre-1972 sound recordings. Section
301(c), passed more than two decades before the DMCA, provides that “With
respect to sound recordings fixed before February 15, 1972, any rights or remedies
under the common law or statutes of any State shall not be annulled or limited by
this title until February 15, 2067.” UMG argues that application of the DMCA’s
safe harbor to pre-1972 sound recordings somehow limits UMG’s rights and
remedies under New York State common law governing the infringement of
copyright, and thus runs afoul of Section 301. As Judge Pauley observed in
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rejecting this very argument, Section 301(c) does not prohibit all subsequent
regulation of pre-1972 recordings, and as UMG’s profferred interpretation of
Section 301(c) “would eviscerate the purpose of the DMCA . . . . that interpretation
should be rejected.” MP3tunes, LLC, 821 F. Supp. 2d at 641-42.
The fact is that application of the DMCA to pre-1972 recordings does not
limit UMG’s rights or remedies under state law. Notwithstanding application of
the DMCA safe harbor, UMG still retains all of its copyright interests attendant to
its ownership of pre-1972 recordings, and still possesses all of its remedies, i.e., it
can bring an infringement action against any individuals who infringe its
copyrights by uploading UMG’s works to websites such as Escape’s Grooveshark
service. In such circumstances, UMG’s rights and remedies remain intact; the
DMCA simply affords a safe harbor to a discrete category of innocent
intermediaries who store “at the direction of a user” the allegedly infringing
material.
If this Court nonetheless were still to have any remaining concern that
application of the DMCA to pre-1972 recordings might limit UMG’s state law
rights and remedies, the record on this appeal would not be sufficient to permit the
Court to resolve that question. UMG’s Section 301 “analysis” fails to articulate
the parameters of New York State law on this issue. The reason for this omission
is self-evident: the courts of this state have not yet determined the “rights and
5
remedies” of copyright holders or, conversely, the nature and scope of the
protections available to internet service providers, in respect of content uploaded to
a service provider’s website by third parties. As New York law remains undefined
on this critical issue, in the event that this Court, despite the analysis summarized
above, has some lingering uncertainty concerning the applicability of Section
301(c) in this context, the Court should remand the issue to the lower court for
determination of the state law “rights and remedies” of UMG on a fully developed
record.
For those and the other reasons discussed below, this Court should affirm the
lower court’s decision on the DMCA and permit this matter to proceed to its just
resolution in the lower court, with Escape receiving the benefit of its proffered
DMCA defense. In the alternative, this Court should remand this matter to the
lower court to afford it the opportunity to articulate the parameters of New York
State common law governing the rights and remedies of copyright owners and the
liability vel non of internet service providers in respect of content uploaded to their
websites by third parties.
QUESTIONS PRESENTED
1. Whether the safe harbor provisions of the DMCA apply to sound
recordings created prior to February 15, 1972, as is confirmed by the language,
6
history and intent of the DMCA. The lower court answered this question in the
affirmative.
2. Whether the application of the DMCA’s safe harbor provisions to pre-
1972 recordings is consistent with and does not contravene the proscriptions of 17
U.S.C. 301(c). The lower court answered this question in the affirmative.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY1
Escape’s Business
Escape developed, owns and operates the internet service “Grooveshark,”
which is accessible on the World Wide Web at www.grooveshark.com (the
“Grooveshark website”). (Compl. ¶ 2 [A74]; Answer ¶ 2 [A84].) Through
Escape’s Grooveshark service, third-party internet users may upload files
containing audio recordings to Escape’s internet servers - - including (as is true
with the widely used YouTube website) the users’ own self-produced recordings of
their own works. (Answer ¶ 10 [A85].) The resulting archive of recordings is
searchable through the Grooveshark website, thus allowing users to locate
particular recordings on the central server and “stream” them over the Internet - -
i.e., play (but not download) them through their individual computers. (Answer ¶
1 As is proper in the context of a motion to dismiss an affirmative defense, the factual recitation set forth above is taken from the parties’ pleadings, including Escape’s Answer, and the “submitted proof” proffered by Escape, 182 Fifth Ave., LLC v. Design Dev. Concepts, Inc., 300 A.D.2d 198, 199, 751 N.Y.S.2d 739 (1st Dep’t 2002); Grunder v. Recckio, 138 A.D.2d 923, 923, 526 N.Y.S.2d 267, 268 (4th Dep’t 1988), which must be accepted as true for purposes of the motion and construed in the light most favorable to Escape, the party asserting the defense, 182 Fifth Ave., LLC, 30 A.D.2d at 199.
7
11, 14 [A86].) Grooveshark is a new form of music distribution service at the
forefront of digital innovation - - i.e., a service that provides storage and
distribution “at the direction of a user of material that resides on a system or
network controlled or operated by or for the service provider.” 17 U.S.C. § 512(c).
As a condition of permitting users to upload sound recordings to
Grooveshark, Escape requires them to confirm that they are the owners or
authorized licensees of the copyrights in any sound recordings they are attempting
to add to the service. (Affidavit of Josh Greenberg in Support of Defendant’s
Opposition to Plaintiff’s Motion to Dismiss Affirmative Defenses (“Greenberg
Aff.”) ¶ 7 [A159].) In addition, in furtherance of its efforts to protect copyright,
Grooveshark has obtained licenses or other contractual authorization for its service
from numerous large-scale owners and licensees of catalogues of sound recordings
(both pre- and post-1972 recordings) (the “Grooveshark Partners”), including
(instructively in the present context) “INgrooves,” a distribution company that
represents, inter alia, a significant portion of UMG’s extensive catalogue. (Id.)
Escape does not charge for its basic service, but obtains the most significant
portion of its revenues - - which, in turn, are shared with the Grooveshark Partners
- - by selling advertising space on the Grooveshark website. (Id. ¶ 8 [A160].)
Because it is Grooveshark’s users and the Grooveshark Partners who add the
content to the Grooveshark database, at any given time, that database contains
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millions of sound recordings, undoubtedly including both pre- and post-1972
recordings. (Id. ¶ 6 [A159].)
Escape’s Compliance with the DMCA
As is discussed in more detail below, the DMCA is intended to foster the
robust growth of the internet by recognizing that it would place an undue, and
indeed impossible, burden on an internet service provider to verify and confirm the
copyright status of the thousands and thousands of works that are uploaded to the
service provider’s website by third parties. In order to permit internet service
providers such as Escape (and YouTube, Google, Facebook and many others) to
survive, the DMCA places the burden on the copyright owner to notify the internet
service provider when copyrighted material is being infringed. In response to its
receipt of such a notice - - generally referred to as a “takedown notice” - - the
internet service provider is required to disable access to the offending material. As
long as a service provider complies with the DMCA’s requirements, it has a “safe
harbor” from liability for copyright infringement for content uploaded to its
website by third parties. The DMCA strikes an appropriate balance between
protecting the rights of copyright owners (while placing the responsibility to
protect their own property on themselves) and the ability of internet service
providers to develop, grow and flourish. MP3tunes, LLC, 821 F. Supp. 2d at 636-
37.
9
Contrary to UMG’s self-serving assertion that Escape is a “pirate website”
(UMG Br. at 3) - - for which UMG (not surprisingly) offers no factual support or
record reference - - Escape operates strictly in conformance with the DMCA.
The Present Litigation
UMG is one of the world’s largest owners and exclusive licensees of
musical recordings. (Compl. ¶ 7 [A76].) UMG commenced the present action on
January 6, 2010, through its filing of a Complaint that asserts two causes of action
arising under New York common law: (1) “Common Law Copyright
Infringement”; and (2) “Unfair Competition.” [A74-A83.] Despite the undisputed
fact that UMG’s enormous catalogue of recordings includes many thousands, if not
hundreds of thousands, of recordings created after February 15, 1972, the sole
focus of UMG’s allegations and claims in this action is on pre-1972 recordings,
which is reflective and confirmatory of its true motivation in commencing this
litigation: to create “bad law” by exploiting a perceived loophole in the DMCA
that UMG hopes will force Escape and other similarly situated internet service
providers out of business.
On June 16, 2010, Escape filed an Amended Answer to UMG’s Complaint,
in which Escape asserted, inter alia, two affirmative defenses related to its status as
an internet service provider: (1) that UMG’s “claims are barred by the safe harbor
immunity granted to service providers by 17 U.S.C. § 512” - - i.e. the DMCA
10
defense (Fourteenth Affirmative Defense); and (2) that UMG’s state common law
claims are preempted by the Communications Decency Act, 47 U.S.C. §§
230(c)(1) and (e)(3), which provides broad immunities to internet service providers
for content uploaded by third parties - - i.e., the CDA defense (Fifteenth
Affirmative Defense). [A84-A91.]
On August 31, 2010, UMG filed a motion to dismiss both of these
Affirmative Defenses. In doing so, UMG advanced internally inconsistent
positions on each of these issues. As to the DMCA defense, UMG argued that an
implicit qualifier should be read into the DMCA’s use of the phrase “infringement
of copyright” in describing the DMCA’s safe harbor protections, so that those
protections are limited solely to the infringement of federally protected rights and
do not apply to pre-1972 recordings. In addressing Escape’s CDA defense,
however, UMG took precisely the opposite position, arguing that the CDA’s
exemption of “any law pertaining to intellectual property” from the immunity it
otherwise provides to internet service providers should be interpreted expansively
to embrace both federal and state law. Through its assertion of these inconsistent
positions, UMG plainly hoped to manufacture a loophole in Congress’ statutory
framework (which includes both the CDA and the DMCA) and thereby deprive
Escape (and similarly situated internet service providers) of any protection from
infringement claims based on the actions of third parties in uploading pre-1972
11
sound recordings. Escape opposed UMG’s motion to strike these dual defenses,
highlighting to the lower court the inconsistency in UMG’s asserted position.2
The MP3tunes Decisions
On August 22, 2011, while UMG’s motion to dismiss Escape’s defenses
remained pending before the lower court, the United States District Court for the
Southern District of New York, through Judge William H. Pauley III, entered a
Memorandum and Order in a litigation pending between, inter alia, EMI, Inc.
(“EMI”) (through its Capitol Records division) and MP3tunes, LLC, that addressed
the very issue raised by the present appeal, i.e., the applicability vel non of the
DMCA’s safe harbor provisions to pre-1972 recordings. Capitol Records, Inc. v.
MP3tunes, LLC, S.D.N.Y. Case No. 07 Civ. 9931 (WHP) at p. 12 n.1.
Instructively, EMI - - which is about to be acquired by UMG - - is represented in
the MP3tunes litigation by the same counsel that represents UMG in the present
proceeding. In his decision, Judge Pauley held “that the plain meaning of the
statutory language makes the DMCA safe harbor applicable to both state and
2 In its Answer (as later amended) Escape also asserted Counterclaims against UMG for
tortious interference (with both contract and business relations) and violations of the Donnelly Act, N.Y. Gen. Bus. Law § 340, the New York State antitrust statute. In those Counterclaims, Escape described a consistent and unlawful pattern of conduct by UMG in interfering with Escape’s relationships with a number of its contractual counterparties and other business associates - - including Hewlett Packard, Apple, INgrooves, Google and the Spanish company MusicAds - - by, inter alia, threatening to cease doing business with those parties if they continued to pursue their relationships with Escape. UMG responded to Escape’s Counterclaims with a motion seeking their dismissal. Neither Escape’s Counterclaims nor UMG’s motion to dismiss are at issue in this appeal.
12
federal copyright claims. Thus, the DMCA applies to sound recordings fixed prior
to February 15, 1972.” Id.
EMI moved for reconsideration of Judge Pauley’s determination on the
DMCA issue. On October 25, 2011, Judge Pauley denied that motion in an
Amended Memorandum and Order, which comprehensively and dispositively
addressed the issue. MP3tunes, LLC, 821 F. Supp. 2d at 640-42. Rejecting the
precise arguments that UMG repeats before this Court, Judge Pauley analyzed and
dissected the language of the DMCA and determined that “the plain meaning of the
DMCA’s safe harbors, read in light of their purpose, covers both state and federal
copyright claims. Thus, the DMCA applies to sound recordings fixed prior to
February 15, 1972.” Id. at 642. In making this determination, Judge Pauley
observed that EMI’s proffered interpretation of the statute - - the precise
construction now pressed by UMG - - “would eviscerate the purpose of the
DMCA.” Id. at 641.
The Copyright Office Report
With UMG’s motion to dismiss still pending before the lower court, on
December 28, 2011 the Register of Copyrights issued a report regarding “federal
copyright protection for pre-1972 sound recordings” (the “Report”). In its present
brief, UMG makes much of the Report’s commentary on Judge Pauley’s decision
in the MP3tunes case. But the Report is of little or no significance to this Court’s
13
determination of the issues raised by this appeal. In the first instance, as New York
courts have made clear (as further discussed below), “the Copyright Office has no
authority to give opinions or define legal terms, and its interpretation on an issue
. . . should not be given controlling weight.” Elektra Entm’t Grp. v. Barker, 551 F.
Supp. 2d 234, 243 (S.D.N.Y. 2011). In any event, UMG’s obsessive focus on a
two-page portion of the 178-page Report vastly overstates the significance of the
Report’s disagreement with Judge Pauley’s decision. In fact, the core of the
Report - - which UMG fails to mention - - is the Register’s recommendation that
“federal copyright protection should apply to sound recordings fixed before
February 15, 1972.” (Report at 175.) Indeed, the Report specifically notes that the
“[Copyright] Office sees no reason - - and none had been offered - - why the
Section 512 ‘safe harbor’ from liability from monetary and some injunctive relief
should not apply to the use of pre-1972 sound recordings,” and that “there is no
policy justification to exclude older sound recordings from Section 512.” (Report
at 130.)
The Lower Court’s Decision
On July 10, 2012, the lower court (Kapnick, J.), entered a 28-page Decision
and Order (“Decision”) jointly addressing UMG’s motion to dismiss Escape’s
DMCA and CDA defenses and UMG’s motion to dismiss Escape’s tortious
interference and antitrust Counterclaims. See n. 2. In its Decision, the lower court
14
first addressed Escape’s DMCA defense. After performing a comprehensive
analysis of the issue, the lower court rejected each of the arguments advanced by
UMG, the same arguments that it repeats in the present appeal. In denying UMG’s
request to strike Escape’s DMCA defense, the lower court held that “there is no
indication in the text of the DMCA that Congress intended to limit the reach of the
safe harbors provided by the statute to just post-1972 recordings.” (Decision at 8
[A15].) Accordingly, the lower court determined (as had Judge Pauley) that the
DMCA safe harbor protections apply with equal force to pre- and post-1972 sound
recordings.
The lower court next addressed UMG’s motion to dismiss Escape’s CDA
defense. Just as it had done in construing the DMCA, the lower court looked to the
language of the CDA and held that the CDA’s exemption of “any intellectual
property laws” from its grant of immunity to internet service providers embraced
“state, as well as federal, intellectual property laws.” (Id. at 10-13 [A17-A20].) As
such, the lower court granted UMG’s motion to dismiss the CDA Defense.3
3 Turning to UMG’s motion to dismiss Escape’s Counterclaims against UMG, the lower
court noted that UMG’s alleged conduct “constituted an economic attack on the whole of Escape’s business” (Decision at 20 [A27]), and consequently denied UMG’s request that Escape’s dual claims for tortious interference be dismissed. The Court dismissed Escape’s antitrust Counterclaim - - not because the allegations of UMG’s misconduct were insufficient, but, rather, “because Escape alleges only an injury to itself, rather [than] an adverse effect on competition.” (Id.)
15
The Notice of Appeal
On July 25, 2012, UMG provided notice of its appeal of the lower court’s
decision denying its motion to strike Escape’s DMCA defense. UMG filed its
brief in support of its appeal on August 6, 2012, and Escape proffers this
submission in response thereto.
ARGUMENT
I. Standard of Review.
In reviewing the lower court’s refusal to dismiss Escape’s DMCA defense,
this Court applies the same standard as governed in the lower court. See Bishop v.
Maurer, 33 A.D.3d 497, 498, 823 N.Y.S.2d 366, 366 (1st Dep’t 2006). In
considering a motion to dismiss an affirmative defense, the court must “liberally
construe the pleadings” - - including the defendant’s answer - - “in favor of the
party asserting the defense.” Fireman’s Fund Ins. Co. v. Farrell, 57 A.D.3d 721,
723, 869 N.Y.S.2d 597, 599 (2d Dep’t 2008). Reflective of the settled preference
to resolve affirmative defenses “on the merits” instead of at the preliminary
pleading stage, the defendant “must receive the benefit of every reasonable
inference” from both the allegations of the pleadings and any submitted proof. 182
Fifth Ave., LLC v. Design Dev. Concepts, Inc., 300 A.D.2d 198, 199, 751
N.Y.S.2d 739 (1st Dep’t 2002) (upholding denial of motion to dismiss an
affirmative defense because “the allegations of the answer, viewed, as they must be
16
. . ., in the light most favorable to defendants . . . state cognizable defenses”);
Grunder v. Recckio, 138 A.D.2d 923, 923, 526 N.Y.S.2d 267, 268 (4th Dep’t
1988) (requiring “all reasonable inferences to be drawn from the submitted
proof”).
The moving party - - here, UMG - - bears the burden of demonstrating that
the “defenses are without merit as a matter of law.” Butler v. Catinella, 58 A.D.3d
145, 148, 868 N.Y.S.2d 101, 104 (2d Dep’t 2008). “If there is any doubt as to the
availability of a defense, it should not be dismissed.” Id. (emphasis added); accord
Fireman’s Fund Ins. Co., 57 A.D.3d at 723.
II. The Relevant Statutes.
In 1971 (effective as of February 15, 1972), Congress “amended the
Copyright Act of 1909 to expressly include ‘[s]ound recordings’ within the classes
of artistic and intellectual works entitled to federal copyright protection (17 U.S.C.
§ 5 added by Pub L 92-140, 85 U.S. Stat 391 [Act of Oct. 15, 1971]).” Capitol
Records, Inc. v. Naxos of Am., 4 N.Y.3d 540, 555, 830 N.E.2d 250, 260 (2005).
“But the 1971 amendments were prospective only, so recordings created before
February 15, 1972 - - the effective date of the Amendment - - were not protected
by federal law (see Pub L 92-140 § 3 [1971]).” Id. at 555. Rather, pre-1972
recordings continued to be “protected by State statute or common law.” Id. at 556.
17
In order to resolve a dispute between the House and the Senate concerning
the appropriate duration of state common law copyright protection for pre-1972
recordings (id.), in 1976, Congress added Section 301(c) to the Copyright Act,
which (as later amended), provides as follows:
With respect to sound recordings fixed before February 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this title until February 15, 2067.
In 1998 - - more than twenty years after it adopted Section 301(c) - -
Congress amended an entirely distinct section of the Copyright Act, i.e., Chapter 5
dealing with “copyright infringement and remedies,” by adopting Section 512
thereof, the so-called Digital Millennium Copyright Act. Section 512 provides a
“safe harbor” under which an internet service provider (assuming compliance with
certain conditions and procedures set forth in the statute) is protected against
liability for “infringement of copyright” for, inter alia, the “storage at the direction
of a user of material that resides on a system or network controlled or operated by
or for the service provider.” 17 U.S.C. § 512(c).
In adopting the DMCA safe harbor, Congress expressly recognized the
substantial burden that would be imposed on an internet service provider - - and
the concomitant chilling effect it would have on the growth and development of the
internet - - if service providers were somehow required to verify the copyright
18
status and ownership of every one of the thousands or millions of works that are
uploaded to their websites by third parties over whom the service provider
exercises no control. As such, the DMCA places the burden on the copyright
holder - - the individual or entity in the best position to know whether it owns a
particular work and whether the placement of that work on an internet website
violates its rights therein - - to identify when infringing content has been uploaded
to an internet service provider and to then give notice to that provider of the
infringing nature of the uploaded content. See Wolk v. Kodak Imaging Network,
Inc., 10 Civ. 4135 (RWS), 2011 U.S. Dist. LEXIS 27541, at *11-*13 (S.D.N.Y.
2011) (“the underlying purpose of the notice requirements is to ‘place the burden
of policing copyright infringement . . . squarely on the owners of the copyright’”)
(quoting UMG Recordings, Inc. v. Veoh Networks Inc., 665 F. Supp. 2d 1099,
1110 (C.D. Cal. 2009)). Upon its receipt of a proper takedown notice, the service
provider is required to promptly disable access to the protected content. The
construct created by the DMCA thus reflects a balance that Congress felt was
appropriate between the right of copyright holders to police and protect their
copyrights, and the ability of internet service providers to develop and expand their
internet websites unfettered by potentially crippling risks of liability.
In general, the DMCA safe harbor protections apply to internet service
providers “who offer[ ] online tools permitting users to interact with user-
19
submitted content.” Id. at *8. Section 512(c) “sets forth a detailed notification
scheme that requires service providers to ‘designate[ ] an agent to receive
notification of claimed infringement, [17 U.S.C.] § 512(c)(2), and specifies the
components of a proper notification, commonly known as a ‘takedown notice,’ to
that agent, see id. § 512(c)(3).” Viacom Int’l Inc. v. YouTube, Inc., 676 F.3d 19,
27 (2d Cir. 2012). Thus, it is the copyright holder (such as UMG) who is required
to provide notification to the internet service of allegedly infringing content: the
fundamental “principle underlying the DMCA safe harbor [is] that the burden is on
the copyright holder [i.e., UMG], not the service provider [i.e., Escape], to identify
copyright violations.” Veoh Networks Inc., 665 F. Supp. 2d at 1111.
To a service provider that complies with the requirements of section 512,
“the DMCA gives a safe harbor, even if otherwise he would be held as a
contributory infringer under the general law.” Viacom Int’l Inc. v. YouTube, LLC,
718 F. Supp. 2d 514, 526 (S.D.N.Y. 2010), rev’d on other grounds, Viacom Int’l
Inc., 676 F.3d 19 (2d Cir. 2012). Escape deserves the opportunity, as this action
proceeds, to demonstrate its compliance with section 512 and to enjoy the
DMCA’s safe harbor protections against UMG’s state common law claims.
III. The Language, Legislative History and Intent of the DMCA Confirm Its Applicability to Both Pre- and Post-1972 Recordings.
UMG makes two separate, but interrelated arguments in support of its
strained position that the DMCA - - despite its plain language, legislative history
20
and intent - - does not grant safe harbor to internet service providers in respect of
pre-1972 recordings. Reversing the logical order of its arguments - - in apparent
sub silentio recognition that, in fact, by its very terms the DMCA plainly does
apply to pre-1972 recordings - - UMG first argues that application of the statute to
such recordings is violative of 17 U.S.C. § 301(c), the provision of the Copyright
Act concerning the annulment or limitation of state law rights and remedies in
respect of pre-1972 recordings. Following that argument, UMG next avers that,
based on its language, the DMCA does not apply to pre-1972 recordings.
UMG is incorrect on both counts: the plain language of the DMCA clearly
embraces both pre- and post-1972 recordings without drawing any distinction
between the two; and application of the DMCA to pre-1972 recordings does not
contravene Section 301(c). Addressing UMG’s arguments in a more logical order
than the order in which they are presented in its brief, Escape will first address the
applicability of the DMCA to pre-1972 recordings, and then refute UMG’s
argument that such an application runs afoul of Section 301(c).
A. The Language of the DMCA Makes No Distinction Between the Application of Its Safe Harbor Provisions To Claims of Infringement Based on Pre- and Post-1972 Recordings.
17 U.S.C. § 512(c)(1) provides that, assuming compliance with the other
requirements of the statute, an internet service provider “shall not be liable . . . for
infringement of copyright by reason of the storage at the direction of a user of
21
material that resides on a system or network controlled or operated by or for the
service provider.” (Emphasis added.) In his decision addressing these issues,
Judge Pauley specifically observed that “The text of the DMCA limits immunity
for the ‘infringement of copyrights’ without drawing any distinction between
federal and state law.” MP3tunes, LLC, 821 F. Supp. 2d at 641. Justice Kapnick
similarly noted in her opinion that “the term ‘infringing,’ found in 17 U.S.C. §
512(c)(3)(A)(iii), is no less applicable to common-law copyright than to statutory
copyright.” (Decision at 7 [A14].) As these two courts found, the DMCA, by its
plain and unambiguous language, offers its safe harbor protection from copyright
infringement to internet service providers irrespective of whether the
“infringement” is predicated on state statutory or common law, or the United States
Copyright Act.
In an unavailing attempt to avoid the plain meaning of the phrase
“infringement of copyright,” UMG misleadingly advises the Court that Chapter 5
of the Copyright Act “begins with the definition of the term ‘infringement of
copyright,’ namely, the violation of ‘any of the exclusive rights of the copyright
owner as provided by Sections 106 through 122’ of the Copyright Act. 17 U.S.C.
§ 501(a).” (UMG Br. at 24; emphasis added.) Building on this faulty premise (a
matter that is discussed below), UMG then argues that since Sections 106 through
122 of the Copyright Act do not confer rights on the owners of pre-1972
22
recordings, “by definition, the term ‘infringement of copyright’ as used in the
Copyright Act only includes violation of federal rights . . . .” (Id.) This argument
is predicated upon UMG’s purposeful mischaracterization of the very provision
upon which it relies, i.e., 17 U.S.C. § 501(a).4
In fact, the phrase “infringement of copyright” is not defined in Section
501(a) - - or in the “Definitions” section of the Copyright Act (17 U.S.C. § 101),
or, for that matter, anywhere else in the statute. Rather, Section 501(a) simply
provides, unremarkably, that “Anyone who violates any of the exclusive rights of
the copyright owner as provided by Sections 106 through 122 . . . is an infringer of
the copyright or right of the author, as the case may be.” As Judge Pauley
observed in rejecting the identical argument raised by EMI in the MP3tunes case,
“Section 501(a) does not provide a comprehensive definition of copyright
infringement. It simply states that anyone violating the rights established by
Sections 106 through 122 is an infringer, without suggesting it is all inclusive.”
4 UMG’s strained construction of the term “infringement of copyrights” is inconsistent
with the position that it offered in arguing that Escape’s CDA defense should be stricken. As discussed above, while the CDA provides broad immunity to internet service providers for content uploaded by third parties, it exempts from that protection “any law pertaining to intellectual property.” 47 U.S.C. § 230(e)(2). UMG argues in support of its present position on the DMCA defense that the phrase “infringement of copyright,” though plainly susceptible of interpretation to include both state and federal infringement claims, should be limited to federal rights only. UMG’s argument in support of its motion to strike the CDA defense, however, was precisely to the contrary, i.e., that the words “any law pertaining to intellectual property” should embrace both state and federal laws. By advancing these internally inconsistent arguments, UMG plainly hoped to deprive Escape of any possible immunity under both the CDA and the DMCA, a position that would defeat Congress’ intent in adopting those dual statutory schemes. Not surprisingly, the lower court was unpersuaded.
23
MP3tunes, LLC, 821 F. Supp. 2d at 641. Stated another way, that the violation of
certain enumerated rights provided by the federal Copyright Act may constitute
“copyright infringement” plainly does not compel the conclusion that every
reference in Title 17 to “infringement of copyright” refers solely to those rights.
As UMG argues elsewhere in its brief, New York has a developed body of
common law regarding copyright infringement, see, e.g. UMG Br. at 17-19, and
there is nothing in Section 512(c)’s use of the term “infringement of copyright”
that suggests, let alone mandates, the limitation of that phrase solely to federal
rights.
It is well established that a common law term “comes with a common law
meaning, absent anything pointing another way.” MP3tunes, LLC, 821 F. Supp.
2d at 641. As both Judge Pauley and Justice Kapnick noted, the term
“infringement of copyright” is such a term, and thus is infused with a meaning that
embraces both state common law and federal rights. UMG has offered nothing
that would counsel abandoning that broader, well-settled construction by cabining
the unqualified phrase “infringement of copyright” as it is used in the DMCA to
mean solely the violation of rights provided by the federal Copyright Act. In fact,
Judge Pauley - - the only federal jurist to address this question of federal law - -
considered it “beyond dispute that the common law meaning of the term ‘copyright
24
infringement’ encompasses violations of both federal and state protections.” Id.
(emphasis added).5
UMG continues in its effort to contort the plain language of the DMCA to fit
UMG’s self-serving construction of the statute by similarly suggesting that the
DMCA’s use of the unqualified phrase “copyright owner” somehow refers only to
the ownership of federal copyright interests and thus compels the conclusion that
the DMCA’s safe harbor protection is unavailable to pre-1972 recordings. It is
true that the DMCA makes reference to “the copyright owner,” i.e., it provides
(again unremarkably) that a party submitting a DMCA takedown notice to an
internet service provider must confirm his “good faith belief that use of the
material in the manner complained of is not authorized by the copyright owner, its
agent, or the law.” 17 U.S.C. § 512(c)(3)(A)(v). UMG’s strained argument that
this reference to a “copyright owner” somehow creates an otherwise non-existent
limitation on the DMCA’s safe harbor provisions is once again predicated on a
mischaracterization of the definition of the term “copyright owner” as it appears in
the Copyright Act.
17 U.S.C. § 101 provides that a “copyright owner, with respect to any of the
exclusive rights comprised in a copyright, refers to the owner of that particular
5 While Judge Pauley’s analysis of the issue is unquestionably compelling, even if this
Court did entertain some doubt on the matter - - and Escape offers that there is none - - in the context of a motion to dismiss an affirmative defense, that doubt must be resolved in favor of permitting Escape’s DMCA defense to stand. Butler, 58 A.D.3d at 148.
25
right.” Plainly, there is nothing in that definition that limits the owner of a
copyright solely to the possession of rights under federal law. Rather, the
definition simply confirms the obvious, i.e., that a copyright owner is the party that
owns any exclusive rights in copyright, without distinguishing between such rights
created by state law and federal law. Indeed, in distorting the Copyright Act’s
supposed (albeit non-existent) definition of the term “infringement of copyright,”
as discussed above, UMG noted the specific reference in 17 U.S.C. § 501(a) to
“any of the exclusive rights of the copyright owner as provided by Sections 106
through 122 of the Copyright Act.” (UMG Br. at 24; emphasis added.) Had
Congress intended to limit the term “copyright owner” to the owner of only federal
copyright interests, it readily could (and would) have similarly qualified its
definition of that term to a party possessed of the exclusive rights created by
federal law, i.e., those embodied in Sections 106 through 122 of the Copyright Act.
Its decision not to do so is dispositive, i.e., the fact that the definition of the term
“copyright owner” in the Copyright Act is not limited in any fashion can only be
construed to mean that no such limitation was intended. See Small v. Gen.
Nutrition Co., 388 F. Supp. 2d 83, 93 (E.D.N.Y. 2005) (“It is well-settled that
when Congress uses different language in different sections of a statute, it does so
intentionally.”).
26
Most simply stated, and as Justice Kapnick observed in rejecting UMG’s
argument on the issue, the “phrase ‘copyright owner,’ found in 17 U.S.C. §
512(c)(3)(A)(v), is applicable to the owner of a common law copyright, no less
than to the owner of a copyright under the Copyright Act.” (Decision at 7 [A14],
citing MP3tunes, LLC, 821 F. Supp. 2d at 641; Naxos of Am., 4 N.Y.3d at 558;
Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 654 F.3d 958, 964 (9th Cir. 2011)). As
such, the appearance of that unremarkable phrase in the DMCA does nothing to
advance UMG’s asserted position.
UMG’s linguistic contortions notwithstanding, the fact is that the plain
language of the DMCA - - which, as UMG itself concedes, is the fundamental
predicate for the construction of any legislative provision (UMG Br. at 23) - -
confers, broadly and without limitation, safe harbor protections to an internet
service provider against any claims for “infringement of copyright,” regardless of
whether those claims arise under state or federal law. The DMCA draws no
distinction between state and federal rights, and there is nothing in the language of
the DMCA that counsels that its safe harbor provision should arbitrarily be limited
to post-1972 sound recordings.
B. The Statutory Intent and Legislative History of the DMCA Further Undermine UMG’s Asserted Position.
Although the DMCA’s “plain language is dispositive” of the matter (Polan
v. State Ins. Dep’t, 3 N.Y.3d 54, 58, 814 N.E.2d 789, 790 (2004)) (holding that the
27
text of New York’s Insurance Law is “the best evidence of the Legislature’s
intent,” and accordingly, “dispositive”) it is also manifest that construing the
DMCA in the manner that UMG urges, i.e., exempting pre-1972 recordings from
its safe harbor provisions, would eviscerate the very statutory protections that the
DMCA created, ignore its legislative history and defeat its purpose.
Section 512 is intended to “protect qualifying service providers from
liability for all monetary relief for direct, vicarious and contributory infringement.”
Viacom Int’l Inc., 718 F. Supp. 2d at 520 (quoting Senate Judiciary Committee
Report, S. Rep. No. 105-190, at 40 (1998); House Committee on Commerce
Report, H.R. Rep. No. 105-551, pt. 2, at 50 (1998) (emphasis added)). In passing
the DMCA, Congress explicitly acknowledged that:
In the ordinary course of their operations service providers must engage in all kinds of acts that expose them to potential copyright infringement liability. For example, service providers must make innumerable electronic copies by simply transmitting information over the Internet. Certain electronic copies are made in order to host World Wide Web sites . . . . [B]y limiting the liability of service providers, the DMCA ensures that the efficiency of the Internet will continue to improve and that the variety and quality of service on the Internet will continue to expand.
Id. at 527 (quoting S. Rep. No. 105-190, at 8 (1988)).
In adopting the DMCA, Congress also recognized that there have been
“several cases relevant to service provider liability for copyright infringement.” Id.
at 519 (quoting S. Rep. No. 105-190, at 19 (1998)). Nonetheless, Congress
28
decided, “rather than embarking upon a wholesale clarification of these [copyright]
doctrines, . . . to leave current law in its evolving state and, instead, to create a
series of ‘safe harbors,’ for certain common activities of service providers.” Id.
In order to provide this protection to internet service providers, Congress
determined that the burden would reside on the copyright owner, not the service
provider, to identify potentially infringing works posted on a particular website by
a third party, and to take affirmative steps, i.e., the provision of a takedown notice
to the service provider, to ensure that unauthorized access to the copyrighted works
was disabled. As such, the DMCA is “explicit” that “it shall not be construed to
condition ‘safe harbor’ protection on ‘a service provider monitoring its service or
affirmatively seeking facts indicating infringing activity . . . .’” Id. at 524 (quoting
17 U.S.C. § 512(m)(1); and citing S. Rep. No. 105-190, at 44 (1998); H.R. Rep.
No. 105-551, pt. 2 at 53). The requirement that it is the copyright holder who is
obligated to provide a takedown notice in respect of allegedly infringing content
underscores the fundamental “principle underlying the DMCA safe harbor,” i.e.,
“that the burden is on the copyright holder, not the service provider, to identify
copyright violations.” Veoh Networks, Inc., 665 F. Supp. 2d at 1111.
UMG’s suggestion that this Court make unavailable to service providers the
DMCA safe harbor protections in respect of pre-1972 recordings would lead to an
absurd result, and would entirely undermine the purpose of the statute, i.e., to
29
facilitate, nurture and promote the development of services for the exchange of
information on the internet. In passing Section 512, Congress explicitly
recognized that it is impossible for internet service providers like Escape to
monitor the content uploaded by their users in order to determine the copyright
status of that content or confirm whether the user is an owner or authorized
licensee of the copyright therein. Internet service providers such as Escape (and
YouTube, Google, Facebook and many others) regularly receive hundreds of
thousands, if not millions, of uploads of user-delivered content. (Greenberg Aff. ¶
6 [A159].) If, as UMG contends, Escape is not protected by the DMCA safe
harbor for pre-1972 sound recordings, it would be forced to investigate
individually each of the millions of user-posted sound recordings uploaded to its
service to somehow confirm (1) whether the recording being posted was created
before or after February 15, 1972 (which information may not even be available
from public sources); (2) whether the work has entered the public domain; and (3)
if created after February 15, 1972 and not a public domain work, whether the user
posting the sound recording actually is the owner or licensee of the copyright in
that work.
It is obviously impossible for internet service providers to shoulder such a
burden for each of the millions of instances of user-posted content uploaded to
their services. (See id. ¶ 9 [A160].) This is precisely why Congress, in enacting
30
Section 512, placed the burden on owners and licensees of copyrights (like UMG)
to identify and substantiate infringement. If the availability of the safe harbor is
somehow made contingent on whether a recording uploaded by a particular user
was created before or after February 15, 1972, the purpose of the safe harbor
would be defeated, and the protections afforded by Section 512 would be rendered
entirely illusory, as internet services like Escape would be put to a burden that
Congress expressly recognized they would be unable to meet, i.e., to police the
copyright status of every item of content added by their users.
Judge Pauley - - in a compelling passage of his decision that was also
endorsed by Justice Kapnick - - perhaps best summarized the issue when he
observed that the position presently advanced by UMG (the identical position
urged by EMI in the MP3tunes case) would lead to an “absurd or futile” result:
The DMCA was enacted to clarify copyright law for internet service providers in order to foster fast and robust development of the internet. Limiting the DMCA to recordings after 1972, while excluding recordings before 1972, would spawn legal uncertainty and subject otherwise innocent internet service providers to liability for the acts of third parties. After all, it is not always evident (let alone discernible) whether a song was recorded before or after 1972. The plain meaning of the DMCA’s safe harbors, read in light of their purpose, covers both state and federal copyright claims. Thus, the DMCA applies to sound recordings fixed prior to February 15, 1972.
MP3tunes, LLC, 821 F. Supp. 2d at 642; see also Decision at 8 [A15] (same).
31
C. The Copyright Office Report Is Not Entitled To Deference.
UMG selectively cites to the Copyright Office Report in an effort to save its
unpersuasive interpretation of the DMCA. Instructively, and no doubt
purposefully, UMG entirely ignores the Report’s conclusion that “the section 512
‘safe harbor’ from liability from monetary and some injunctive relief should . . .
apply to the use of pre-1972 sound recordings” (Report at 130), and its
concomitant observation that “there is no policy justification to exclude older
sound recordings from Section 512.” (Id.) In effect, then, UMG is asking this
Court to conclude that Congress consciously passed a law that makes no sense and
for which there is no policy justification.
After glossing over the true import of the Report, UMG focuses this Court’s
attention solely on the Report’s disagreement with Judge Pauley’s decision in the
MP3tunes case. But that disagreement is of no moment in the present context, and
this Court (as the lower court chose to do)6 should disregard the Report, both as it
does not change the state of the law and as its statutory analysis is, in any event,
unpersuasive.
6 Contrary to UMG’s assertion (UMG Br. 32-33), the lower court did not ignore the
Copyright Office Report. Rather, the lower court carefully analyzed the Report and determined that ultimately “it is for the Courts to interpret the applicable statute and decide the issues raised by [UMG’s] motion,” and thus confirmed “that the safe harbor provision codified by Section 512(c)(1) of the DMCA is applicable to pre-1972 Recordings.” (Decision at 10 [A17].)
32
In the first instance, as Justice Kapnick noted (Decision at 10 [A17]), it is
the courts, not the Register of Copyrights, which are charged with the task of
interpreting and enforcing statutes, including Section 512 of the Copyright Act.
The Register is a political appointee who manages the U.S. Copyright Office.
Without detracting from the Register’s capability within the scope of her
administrative mandate, the Report’s commentary on Judge Pauley’s decision
simply has no legal effect. Indeed, this Court need not accord any, let alone
significant deference to the Report. As Judge Karas of the United States District
Court for the Southern District of New York observed in the recent case of Elektra
Entm’t Grp. Inc. v. Barker, he was “unpersuaded by Plaintiff’s suggestion that the
opinion of . . . the Register of Copyrights should influence the Court’s
interpretation of” a provision of the Copyright Act, as
[t]he Second Circuit has made it clear that the Copyright Office has no authority to give opinions or define legal terms, and its interpretation on an issue never before decided should not be given controlling weight.
Elektra Entm’t Grp., Inc., 557 F. Supp. 2d at 243 n.7 (quoting Bartok v. Boosey &
Hawkes, Inc., 523 F.2d 941, 947 (2d Cir. 1975) and Morris v. Bus. Concepts, Inc.,
283 F.3d 502, 505 (2d Cir. 2002)). In the final analysis, the fact remains that the
only judicial determinations on this issue - - Judge Pauley’s original and amended
MP3tunes decisions, and Justice Kapnick’s decision below - - held that the DMCA
33
safe harbor does apply to both pre- and post-1972 sound recordings. The
Register’s contrary observations, buried in two pages of a nearly 200-page Report,
do not alter that fact.
In any event, even if the Report somehow was deemed to be on an equal
footing with the decisions of Judge Pauley and Justice Kapnick (and it plainly is
not), the Report’s central analysis mirrors UMG’s contorted argument that the
phrase “infringement of copyright” as employed in the DMCA is somehow
“expressly defined” in 17 U.S.C. § 501(a) to mean solely a “federal copyright
infringement claim.” (See Report at 131.) As discussed above, there is, in fact, no
definition of the phrase “infringement of copyright” in the Copyright Act,
notwithstanding UMG’s repeated and misleading suggestion to the contrary; and
there is nothing in the DMCA that suggests that the phrase, as it is used in the
statute, should be construed other than in accordance with its plain meaning, i.e., to
embrace both state and federally created copyrights.
As such, and recognizing the (at most) modest level of deference to which
the Report is entitled, see Elektra Entm’t Grp., Inc., 551 F. Supp. 2d at 243 n.7.,
this Court should reject the Report’s observations on the present issue as both
irrelevant and unpersuasive.
* * *
34
As the foregoing discussion confirms, the language, intent and legislative
history of the DMCA make clear that the statute does not draw any distinction in
providing safe harbor protections to internet service providers for both pre- and
post-1972 recordings. Indeed, reaching a contrary conclusion would, as Judge
Pauley observed, lead to an “absurd or futile result,” MP3tunes, LLC, 821 F. Supp.
2d at 641-42, one that should not lightly be imposed by this Court on an act of
Congress.
IV. Application of the DMCA To Pre-1972 Recordings Neither Limits Nor Annuls State Law.
In apparent sub silentio acknowledgment that the DMCA, by its language,
intent and history, draws no distinction between pre- and post-1972 recordings,
UMG focuses the majority of its brief on talismanic invocation of 17 U.S.C.
§ 301(c), the provision of the Copyright Act first adopted in 1976 that provides that
rights and remedies under state common law or statute with respect to pre-1972
sound recordings “shall not be annulled or limited by this title” until 2067. Indeed,
UMG cites to Section 301(c) on no fewer than 33 occasions in its brief, going so
far as to offer that Section 301(c) “is dispositive of the instant appeal.” (UMG Br.
at 16).7 Reduced to its essentials, UMG makes the deceptively simplistic argument
7 In similarly hyperbolic fashion, UMG announces that the lower court’s Decision
“amounts to a judicial nullification of Section 301” (UMG Br. at 2); that “there can be no dispute that Escape, in raising its affirmative [DMCA] defense, seeks to ‘annul’ or ‘limit’ UMG’s state claims (id. at 2); that the lower court “impermissibly reads the word ‘limited’ out of [Section
35
that, as application of the DMCA to pre-1972 recordings would provide Escape
with a safe harbor from UMG’s state law claims, that necessarily results in either
the annulment or limitation of UMG’s rights and remedies under state law. As will
be discussed below, UMG’s self-serving pronouncement is unavailing; or, at best,
simply raises, rather than answers, the question of what constitutes UMG’s “rights
and remedies” under state law in this case.
A. Application of the DMCA To Pre-1972 Recordings Does Not Violate Section 301(c).
UMG’s Section 301(c) argument is predicated, in large part, if not entirely,
on an analysis of that statutory provision that is divorced from the language, intent
and purpose of the DMCA safe harbor. When Section 301(c) is read in proper
context, however, it is apparent that it does not bar the application of the DMCA’s
safe harbor to pre-1972 recordings.
As noted earlier herein, Congress did not provide federal copyright
protection for sound recordings until 1972. In amending the Copyright Act to
afford such protection, Congress made clear that it was, as a general matter,
preempting state law on the issue. 17 U.S.C. § 301(a). For reasons that are by no
means apparent - - indeed the Copyright Office Report suggests that it may have
been simply a “mistake” (Report at 15) - - Congress did not extend its grant of
301]” (id. at 21); and that the Decision “effectively excises the word ‘limited’ from the statute” (id. at 23).
36
federal copyright protection to sound recordings that were created before 1972.
That decision - - or, perhaps, mistake - - was reflected in Section 301(c), which, in
its current form, provides that “With respect to sound recordings fixed before
February 15, 1972, any rights or remedies under the common law or statutes of any
state shall not be annulled or limited by this title until February 15, 2067.” UMG’s
facile assertion that, under Section 301(c), recordings first fixed prior to February
15, 1972 are excluded from federal copyright protection (see, e.g. UMG Br. at 2),
in no way addresses the particular issue raised in this appeal, i.e., the applicability
of the DMCA safe harbor to insulate internet service providers from liability in
respect of pre-1972 recordings. In fact, none of the decisions cited by UMG in
support of its presently asserted position even address the applicability of Section
512’s safe harbor to state common law claims concerning pre-1972 recordings;
indeed, some of UMG’s cited decisions pre-date the very existence of the DMCA.
See, e.g. Goldstein v. California, 412 U.S. 546, 552 (1973).
As Judge Pauley observed, the cases relied upon by EMI in the MP3tunes
case (which are cited by UMG before this Court), do not “suggest that Section
301(c) limits Congress’s ability to grant immunity to qualified internet service
providers for the infringement of copyrights in works fixed before 1972.”
MP3tunes, LLC, 821 F. Supp. 2d at 641. In this regard, Section 301(c) does not
(as UMG incorrectly avers) exempt pre-1972 recordings from any regulation by
37
federal law; rather it prohibits the annulment or limitation of state law rights and
remedies, an entirely different matter.
When properly read within the context of the entire DMCA statutory
scheme, it is apparent that “Section 301(c) is an anti-preemption provision
ensuring that the grant of federal copyright protection did not interfere with
common law or state rights established prior to 1972.” Id. As such, by its very
terms, and considered in the context of the “language and design of the statute as a
whole,” McCarthy v. Bronson, 500 U.S. 136, 139 (1991), “Section 301(c) does not
prohibit all subsequent regulation of pre-1972 recordings,” and there simply is no
basis to conclude that Section 301(c) was somehow intended to deprive internet
service providers of the full benefits of the DMCA’s safe harbor provisions.
MP3tunes, LLC, 821 F. Supp. 2d at 641.
Indeed, UMG’s proffered interpretation of Section 301(c) “would eviscerate
the purpose of the DMCA.” Id. But, “[w]here an examination of the statute as a
whole demonstrates that a party’s interpretation would lead to absurd or futile
results . . . plainly at variance with the policy of the legislation as a whole, that
interpretation should be rejected.” Id. at 641-42 (quoting Yeardon v. Henry, 91 F.
3d 370, 376 (2d Cir. 1996)). Stated another way, UMG would have this Court
accept that Section 301(c) of the Copyright Act - - first passed over twenty years
prior to the DMCA and before the general availability of the internet - - was
38
somehow intended to destroy the critical and central safe harbor component of the
Digital Millenium Copyright Act. This Court plainly should not endorse such an
absurd and futile result.
In any event, application of the DMCA to pre-1972 recordings does not limit
UMG’s rights or remedies under New York State copyright law. With safe harbor
protections available to internet service providers, UMG will still possess all of the
“rights” attendant to its common law copyright interests in the pre-1972 recordings
that it owns, e.g., it may exploit those works, license them, create works derivative
thereof and otherwise enjoy all of the benefits that copyright ownership confers.
At the same time, UMG will also retain its remedies, i.e., it may assert a claim
against a party responsible for the alleged infringement of one of its pre-1972
recordings: a user who misrepresented his or her interest and rights in that
recording before uploading it to Escape’s Grooveshark website.
Thus, rather than “limiting” UMG’s rights and remedies under state law, the
DMCA simply provides a safe harbor from liability for infringement for a very
limited category of innocent intermediaries - - internet service providers - - that is
plainly within Congress’ power to regulate and protect.8 Both the case law
8 Escape’s services and all internet services, by their very nature, affect interstate
commerce. It is therefore well within Congress’ power to pass legislation governing the activities of such parties. See Am. Library Assoc. v. Pataki, 969 F. Supp. 160, 173 (S.D.N.Y. 1997) (finding that “the Internet represents an instrument of interstate commerce” and therefore “impels traditional Commerce Clause considerations”).
39
interpreting Section 512 and the statute’s legislative history confirm that, in
adopting the DMCA’s safe harbor provisions, Congress intended to leave the
“general law” untouched and, instead, offer a safe harbor to internet service
providers irrespective of whether they would otherwise be held liable for
infringement under such laws. See Viacom Int’l Inc., 718 F. Supp. 2d at 526. As
noted above, such a safe harbor does not “annul or limit” UMG’s rights or
remedies - - UMG still can (and does) pursue claims against those internet users
who are responsible for the infringement of its copyrights in pre- (or post-) 1972
sound recordings. Rather, Section 512 merely establishes, as Congress
unquestionably was empowered to do, that internet service providers, under certain
circumstances, should not be the parties that bear that liability. In other words,
although UMG retains all of its rights and remedies under state law in respect of
pre-1972 recordings, it simply cannot sweep within the reach of its claims internet
service providers like Escape who comply with the DMCA’s conditions for the
statute’s safe harbor protections.9
While Escape submits that the foregoing is dispositive of UMG’s Section
301(c) argument, in the event that this Court has any lingering concerns on the
issue, there would not be a sufficient basis on the current record for the Court to
9 Escape does not suggest, nor did Justice Kapnick, that the DMCA repealed Section
301(c). Rather, as discussed above and in Justice Kapnick’s decision, the application of the DMCA safe harbor to pre-1972 recordings simply does not violate Section 301(c).
40
determine whether application of the DMCA to pre-1972 recordings may limit
UMG’s rights and remedies under state law in derogation of Section 301(c). It
would appear axiomatic that in order to determine whether application of the
DMCA to pre-1972 recordings limits UMG’s rights or remedies under state law, it
is first necessary to articulate what those rights and remedies are. UMG’s brief is
glaring, however, in its omission of any discussion of this foundational predicate.
The fact of the matter is - - and UMG does not assert otherwise - - that no court of
this state has ever addressed, let alone determined and articulated, the standards
that govern the liability vel non of internet service providers for content uploaded
to their websites by third parties.
Even if the DMCA somehow constituted a limitation on rights and remedies
(and it does not), in order to determine whether that limitation runs afoul of Section
301(c) in this case, it must first be determined what “rights and remedies” exist
under New York law - - i.e., whether state law affords internet service providers,
including Escape, with any form of safe harbor, immunity or other protection from
liability based on the uploading of content to their websites by third parties. If, in
fact, the lower court determines that, as a matter of New York State common law,
internet service providers such as Escape are immune from suit in such
circumstances, or that their liability is limited in a manner that is either coextensive
with or broader than the protections afforded by the DMCA, then it would appear
41
self-evident that the application of the DMCA to pre-1972 recordings would in no
way limit, or even affect UMG’s rights or remedies under New York law.
Nor is it idle speculation to believe that a New York State court might
import a protection afforded by federal copyright law to infringement claims
arising under state law in respect of pre-1972 recordings. In EMI Records Ltd. v.
Premise Media Corp., L.P., Index No. 601209/08, 2008 N.Y. Misc. LEXIS 7485
(Sup. Ct. N.Y. Co. 2008), the Supreme Court of New York County (Lowe, J.)
addressed the issue of the applicability of the fair use doctrine - - one of the federal
Copyright Act defenses (embodied at 17 U.S.C. § 107) that UMG cavalierly argues
is unavailable to pre-1972 recordings (UMG Br. at 29-30) - - to an infringement
claim that was predicated on the alleged copying of John Lennon’s pre-1972
recording of the iconic work “Imagine.” In analyzing whether a fair use defense
was available in that case, the Premise Media court observed that it “finds
guidance in looking to the federal statute to inform the inquiry as to the contours of
common law fair use,” 2008 N.Y. Misc. LEXIS 7485, at *16 - - i.e., it looked “to
the analysis of fair use under the guidance of case law applying the statutory
factors under 17 U.S.C. § 107” to inform it as to the existence of similar state law
protection. Id. at *18. After performing an exhaustive analysis of the issue, the
Premise Media court imported the federal doctrine of fair use as a defense to an
infringement claim brought under state law in respect of pre-1972 recordings.
42
It may well be that, similar to the Premise Media court, the lower court here,
on a fully developed record, would determine that it is appropriate to import into
the body of this state’s common law of copyright a “safe harbor” concept similar
to, if not coextensive with, the DMCA’s safe harbor provisions. On the other
hand, the lower court might hold that additional or different protections should be
accorded to internet service providers or, for that matter, that no such protections
should be available at all.
The point is that if this Court is disinclined to accept Escape’s arguments on
Section 301(c) - - and the decisions of Judge Pauley and Justice Kapnick on the
301(c) issue - - it will not be in a position on the current record to determine
whether the application of the DMCA to pre-1972 recordings limits state law, as
the contours and parameters of that law have not yet been articulated. As such,
Escape respectfully submits that, in such circumstances, it would be premature for
this Court to reach the Section 301(c) issue raised by this appeal and that it should
remand this case to the lower court so that a full record may be developed on the
issue.
43
CONCLUSION
WHEREFORE, for the foregoing reasons, defendant-respondent Escape
Media Group, Inc. respectfully submits that this Court should affirm the lower
court’s determination that the DMCA’s safe harbor applies to recordings fixed
prior to February 15, 1972 and that the same is not violative of 17 U.S.C. § 301(c).
In the alternative, if this Court is disinclined at the present juncture to hold - - as
Escape urges it should and as Judge Pauley and Justice Kapnick found - - that
application of the DMCA safe harbor does not violate Section 301(c), it should
remand this matter to the lower court to determine the nature and scope of the
protections and immunity from liability that properly should be accorded internet
service providers with respect to content uploaded to the service providers’
websites by third parties.
ROSENBERG & GIGER P.C.
By:_______________________ John J. Rosenberg Matthew H. Giger Brett T. Perala 488 Madison Avenue, 10th Floor New York, NY 10022 212-705-4824
Attorneys for Defendant-Respondent Escape Media Group, Inc.
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PRINTING SPECIFICATIONS STATEMENT
I hereby certify pursuant to 22 NYCRR § 600.10 that the foregoing brief
was prepared on a computer.
Type: A proportionally spaced typeface was used as follows:
Name of typeface: Times New Roman
Point Size: 14
Line spacing: Double
Word Count: The total number of words in the brief, inclusive of point headings
and footnotes and exclusive of pages containing the table of contents, table of
authorities, proof of service, printing specifications statement or any other
authorized addendum containing statutes, rules, regulations, etc. is 10,698.