July 6, 2012 – Crosby & Higgins LLP Fights Hard for Preliminary Injunction on Behalf of Music Copyright Owners in Digital Streaming and Conditional Downloading Case
July 6, 2012
Crosby & Higgins LLP and its co-counsel Grauberger, Green & Associates, PLLC, acting on behalf of eight successful sound-recording copyright holders in an action pending in the United States District Court for the Southern District of New York before the Honorable Judge Gardephe against online music distributorship MediaNet Digital, Inc., pressed the Court to issue a preliminary injunction arising out of MediaNet’s alleged ongoing and unlicensed transmission of Plaintiffs’ copyrighted works.
According to its website, MediaNet offers a catalog containing millions of musical recordings to third-party Internet music services, including some of the digital music industry’s biggest players such as iMesh, Inc. and MOG, Inc. As alleged in Plaintiffs’ Complaint, MediaNet failed to secure licenses for its commercial use of Plaintiffs’ copyrighted works before it ingested, copied, stored, and transmitted those works to MediaNet customers, in contravention of applicable copyright statutes. Equally concerning, and a basis for the preliminary injunction request, MediaNet—even if it wanted to abide by relevant copyright law by properly noticing copyright holders of its use before distributing copies, or by blocking in advance distribution of compositions for which it has not secured a license—could not readily do so because MediaNet is not in control of its importation of music.
As Judge Gardephe explained in his ruling on the motion:
“MediaNet’s agreements with record labels address the method by which the record labels’ digital music tracks are delivered to MediaNet’s servers – a process referred to as ‘ingestion.’ MediaNet is required to comply with the record labels’ ingestion requirements and cannot alter the ingestion process. During the ingestion process, the record labels deliver ‘metadata,’ which includes . . . fields that indicate what sort of delivery methods MediaNet is permitted by the record labels to use with the track, such as whether the track may be streamed of downloaded. The record labels use this ingestion process on a regular basis to add new digital music tracks to MediaNet’s servers and/or to refresh the tracks’ metadata. More than 100,000 new tracks are ‘ingested’ each week by MediaNet.”
Once “ingested” pursuant to its agreements with the record labels, a work becomes available in MediaNet’s catalog. As Judge Gardephe noted, however, record labels’ licenses cover only one aspect of the rights embodied in a musical recording. The “right to reproduce and distribute musical compositions embodied in sound recordings is commonly referred to as the ‘mechanical right,’” a right belonging to copyright owners (frequently the compositions’ artists).
Incredibly, briefing, multiple affidavits, and several days of oral argument on the motion, revealed that at no point in the ingestion process does MediaNet verify, or even attempt to verify, that it holds the necessary mechanical licenses for the songs it ingests. Given this, and in light of the unsuccessful remedial steps MediaNet offered to the Court during preliminary injunction briefing, Judge Gardephe concluded that there were “repeated instances of Plaintiffs compositions becoming available through Defendants’ catalog,” such that:
“The Court finds that it is likely that were will be at least isolated instances of Plaintiffs’ compositions becoming available through Defendants’ catalog as this litigation proceeds.”
Ultimately, however, Judge Gardephe concluded that MediaNet’s actions in repeatedly making Plaintiffs’ compositions available through its catalog, even after notice of infringement, would not result in irreparable harm and Plaintiffs could be made whole later for the alleged infringement through monetary damages. As a result, the motion for a preliminary injunction was denied.