9 Comments

Summary:

In what feels like a throwback to the days of Napster and Grokster, a jury imposed a massive statutory damages verdict on the former CEO of a defunct music service.

Michael Robertson MP3tunes
photo: Michael Robertson

Michael Robertson, an early innovator in cloud-based music services, can’t catch a break in court. A jury last week found that Robertson had ignored “red flags” of copyright infringement at his defunct file-locker service, MP3Tunes, and this week it reportedly imposed a whopping $41 million damages verdict.

The details of the verdict are still unavailable, but Reuters reports that it included an unusual $7.5 million of punitive damages on top of ordinary statutory damages — automatic penalties of up to $150,000 per infringement set out in the Copyright Act. The verdict was awarded to a group of music companies that acquired EMI, which sued Robertson and MP3Tunes in 2007.

Robertson is expected to appeal but, for now, the music industry can celebrate MP3Tunes as the latest pelt it has nailed to a wall of dead technology services, alongside earlier defendants like Grokster and Napster. Before it filed for bankruptcy in 2012, MP3Tunes provided a way for users to store music collection in the cloud and, more controversially, to “sideload” songs from other sites.

In the bigger picture, the MP3Tunes case amounts to a strategic victory for content owners because it appeared to shrink the so-called “safe harbors” that protect websites from copyright violations by their users. The verdict, however, is unlikely to help the music industry address deeper problems related to an outdated royalty collection system.

  1. MP3Tunes was doing essentially what Google Play and Apple both do now by storing your music in the cloud. But they did it 7-8 years ago. Sad that innovation at that time is still being vilified today. This gets me worried about the patent troll stuff going on today with podcasts when that finally goes to court.

    Share
    1. This is why I and lots of people I know vilify and avoid the cloud because you never know who will be next and how many comsumers will be screwed in the process.

      Besides I will never pay for music again after the way the MAFIAA treats consumers!

      Share
  2. sheepeater777 Thursday, March 27, 2014

    when i was an indie artist back in the glory days of mp3.com and personally had to deal with this guy on a business level, i can tell you he is a grade A jerk and deserves every penny of this judgement. he is like 99.99% of the techie buffoons who understand tech but are clueless about the art of music and the business of music. like pandora crying about paying songwriters 1.85% of their freakin income? are you kidding me? they should be paying 90% of their income to the artists and songwriters because the music is responsible for 100% of their income.
    jholes.

    Share
    1. A Ch0w, sneeze Thursday, March 27, 2014

      You obviously know nothing about the costs of doing business online. And why should online streaming cost more than radio?

      Share
      1. You’re aware, of course, that radio stations pay royalties for every piece of music they play. Radio is free only in the sense that the listener pays nothing — unless you subscribe to Sirius — beyond having to listen to commercials, or being a good sport and contributing to public radio.

        Share
        1. A Ch0w, sneeze Friday, March 28, 2014

          I’m talking about royalty rates, not cost to the user. Online streaming rates are currently higher than the rates for terrestrial radio, and this seems to still not satisfy music publishers.

          Share
      2. Will Buckley Friday, March 28, 2014

        Actually the financials are quite simple. Streaming doesn’t scale because so many different songs are being played simultaneously, each play getting a tiny payout.

        Traditional radio plays one song at time resulting in mega smaller payouts.

        Share
  3. Will Buckley Friday, March 28, 2014

    Time to go after Bit Torrent and it may be very expensive for them.

    Share
    1. A Ch0w, sneeze Friday, March 28, 2014

      LOL. Did bittorrent ever host a website to share music? It’s not a crime to invent technology that can be used to pirate music.

      Share

Comments have been disabled for this post