NEW YORK — Indie label TVT Records, whose catalog boasts recordings from Nine Inch Nails and Guided by Voices, scored a victory in its legal fight against embattled music portal MP3.com, supported by a precedent set in court last year by the major labels.
U.S. District Judge Jed S. Rakoff granted TVT a partial summary judgment, affirming the label’s musical copyrights were willfully infringed by MP3’s digital music locker service, My.MP3.com.
Rakoff said MP3 was not permitted to dispute TVT’s infringement claims on the grounds of collateral estoppel, a legal convention that says an issue that has been decided in a prior suit can’t be disputed by the same party (MP3) in another suit.
Punish per song
As with the major-label suits, MP3 could be held liable for up to $150,000 in statutory damages for each of TVT’s copyrighted works that were willfully infringed.
But the judge added that MP3 cannot be held liable for statutory damages on TVT copyrights that were not registered with the U.S. Copyright Office until after they were used on My.MP3. He also deferred deciding which of TVT’s copyrights were valid and applicable to the case until the full trial, set to begin March 26.
The five major label groups, which filed suit against MP3 in January 2000, all ended up settling with the company, receiving cash payments in return for granting licenses to the My.MP3 service.
Four of the majors got a lump sum reported at $20 million each, but Universal Music, which held out longer, received more than $50 million. Including settlements with music publishing groups, MP3 has paid out nearly $170 million.
TVT president Steve Gottleib said Rakoff’s latest order is a victory for all the smaller labels that MP3 chose to leave out of its settlement talks last year.
“When the first judgment came down, MP3’s response was to take down all the majors’ songs and leave everything else up,” he told Daily Variety. “What we’ve been fighting for all along is that our artists should be treated with parity.”
But an MP3 spokesman disputed Gottleib’s claim, saying, “When MP3.com voluntarily disabled My.MP3 (in April), all the content came down.”
MP3’s attitude stood in contrast to that of renegade file-sharing service Napster, which last week reached out to majors and indies alike with its settlement offer, Gottleib added.
Looking for licenses
Napster offered the labels $200 million a year for five years — including $150 million for majors and $50 million for indies — in return for a blanket license to use the labels’ content on its membership-based service, to be unveiled this summer.
The industry balked at the offer, preferring to work the matter out in court. And on Tuesday, it was rewarded for its persistence with a preliminary injunction against Napster, issued by U.S. District Judge Marilyn Hall Patel.
But TVT already had hammered out its own settlement deal with Napster in January, issuing a license to use its songs for an undisclosed amount of money.
“All that we ask is people acknowledge (the) right for artists to be paid for their work,” Gottleib said. “Napster has done that.”