BUSINESS LEGALITY: UNIVERSAL MUSIC GROUP SUES GROOVESHARK

The next big lawsuit in the music biz comes from Universal Music Group, the world’s largest record label, who is suing Grooveshark, a popular music streaming website, for copyright infringement. How much is Universal suing for? The answer to that question is $17,000,000,000, which is what the label declared Grooveshark owes them. The record label insisted that the estimated amount is due to “bulk upload” infringements that came about when Grooveshark’s employees were encouraged to build the company’s servers with a massive number of music files in which a number of the files were allegedly pirated. The employees that produced the most were rewarded with bonuses and now Universal is demanding $150,000 per transaction from damages according to Digital Music News.

This whole lawsuit started when an anonymous blog post by an employee of Grooveshark was discovered. “We are assigned a predetermined number of weekly uploads to the system and get a small extra bonus if we manage to go above that (not easy). The assignments are assumed as direct orders from the top to the bottom,” the blog quoted. This incident has not been the first issue that Grooveshark has encountered. Most of them have been related to their music content not being authorized by record labels or the authors of the music. On one occasion, Grooveshark uploaded music from the rock group King Crimson without official authorization, but the company proclaimed that they had a license agreement from the publishing giant EMI. Truth be told, the publishing company’s license pertaining to King Crimson’s music had expired in 2003 and did not include any digital rights. This complication is stirring up even more issues that reach beyond the Grooveshark’s allegations.

By dismissing all the charges made against them by Universal, Grooveshark is firmly standing behind the notion that they are protected under the U.S. Digital Millennium Copyright Act after insisting that they are a radio service. “While Universal has deliberately engaged the media prior to serving a copy of the Complaint on Grooveshark, Grooveshark intends to fight this battle before the Court, not in the press. Grooveshark welcomes the opportunity to present the facts to the Court and has full confidence that it will prevail in the litigation,” Marshall Custer, the general counsel for Grooveshark, told Digital Music News. This saga will definitely continue, so stay tuned for the rest of the drama to unfold.