Court Rules on Motions for Partial Summary Judgment on MP3.com Copyright Infringement Suit

In late 1999 and early 2000, MP3.com sought to provide a service to its users by making available mp3 files of musical compositions. At the time, technology to rip mp3’s from CDs was not readily available to the public; therefore, MP3.com created “server copies” of thousands of CDs and made them available to users who could prove ownership of the CDs. Country Road Music, Inc. with others brought suit against MP3.com in the District Court for the Southern District of New York for willful copyright infringement. All parties in this case moved for partial summary judgment. The court addressed these motions in this opinion.The plaintiffs sought summary judgment that the defendant’s activities constituted willful copyright infringement. The defendant argued that it had licenses from three major performing rights societies that granted it the right to publicly perform compositions over the Internet, and the license to “perform” implied a license to make the server copies. The court rejected the defendant’s claim. Under the Copyright Act of 1976, 17 U.S.C.A § 106(1),(4) “performance” and “reproduction” are separate rights, and a license authorizing performance does not imply an authorization of reproduction. In addition, performing rights societies do not have the authority to grant the right of reproduction. The defendant’s belief to the contrary was unreasonable and, therefore, is not sufficient support for a defense of innocent intent. Additionally, the doctrine of collateral estoppel entitled the plaintiff to summary judgment without determination of the merits of the defendant’s argument. Because this case involves the same legal claims and the same underlying transactions of previous suits, the defendant is precluded from re-litigating issues resolved in the previous suits. The court concluded, therefore, that the plaintiffs are entitled to summary judgment as to the defendant’s liability for willful copyright infringement based on the merits and as a matter of collateral estoppel.

The defendant sought summary judgment dismissing claims regarding certain works allegedly co-owned by the Harry Fox Agency (HFA). The defendant claimed that a settlement agreement between it and HFA granted it retroactive reproduction rights for certain musical compositions. The court found that the agreement did create retroactive reproduction rights for the defendant, but an issue of fact still remained as to which compositions were co-owned by HFA. The court, therefore, denied summary judgment as to the works in question.

The defendant also sought summary judgment dismissing claims regarding six compositions that were registered with the Copyright Office after the filing of the plaintiffs’ complaint. The court held that it lacked subject matter jurisdiction over the six compositions, and, therefore, dismissed the claims regarding those compositions.

Country Rd. Music, Inc. v. MP3.com, No. 02 CIV.8006(JSR), 2003 U.S. Dist. LEXIS 15005 (S.D.N.Y. Aug. 27, 2003).