Cloud-based music services do not have to obtain special licensing from record companies, according to the recent ruling in a lawsuit between major label EMI and MP3tunes, a website that enables users to store songs in the internet "cloud."
In 2007, EMI sued MP3tunes, alleging that by allowing users to search for free songs via the internet and store them in personal cloud-based "lockers," MP3tunes engaged in copyright infringement.
Judge William Pauley's ruling allowed both parties to claim a partial victory. Pauley ruled MP3tunes is not liable for copyright violations committed by its users, according to the "safe harbor" provision of the Digital Copyright Millennium Act. This means the site can remain operational, and the ruling could also provide legal cover for cloud-based music sites developed by Google and Amazon.
However, Pauley also ruled MP3tunes is liable for contributory copyright infringement in 500 cases where the company did not comply with EMI's requests to remove specific unlicensed tracks from the site. The judge also held MP3tunes liable for unauthorized tracks its users accessed through the site's "sideload" search feature.
While he could eventually be fined millions of dollars for infringing tracks found on his personal account, MP3tunes founder Michael Robertson said the ruling validated his business model.
Another internet music provider, Grooveshark, is currently defending itself in a lawsuit brought by Mark Farner of Grand Funk Railroad and other Nashville area musicians, who say the site infringes on their copyrights by making their music available for streaming.