U Music feels cramped by MySpace

Diskery goes after netco for copyright infringement

Universal Music is taking on its biggest opponent yet in its battle against user-generated sites: MySpace.

Diskery on Friday sued the News Corp. company for copyright infringement, seeking up to $150,000 for each alleged infringement and an injunction against the popular site. Suit was filed in U.S. District Court in Los Angeles.

UMG and MySpace had been engaged in negotiations for a revenue-sharing agreement, but talks broke down, prompting the suit.

In a complaint that riffed on the phrase user-generated as “user-stolen,” UMG alleged the site intentionally facilitates the dissemination of copyrighted audio and video — and does so in the name of competitive advantage.

“MySpace and its parent company defendant, News Corp., have consciously built and maintained MySpace’s position as one of the most prominent and valuable Web sites on the Internet through rampant copyright infringement — infringement they fostered, induced and welcomed as part of a publicly announced effort to overtake rival Web sites, such as YouTube.com,” UMG suit says.

Conglom-owned content does routinely crop up on MySpace, but legal experts said the case would turn on whether UMG can prove its claim of willful infringement, or if MySpace can show it has made good-faith efforts to stop it.

Responding to the suit, MySpace said in a statement: “We have been keeping UMG closely apprised of our industry-leading efforts to protect creators’ rights, and it’s unfortunate they decided to file this unnecessary and meritless litigation.”

MySpace has worked on a number of campaigns for Universal artists, which experts said could be used as evidence that UMG is drawing more benefit than harm from the site.

UMG’s complaint alleged that actions were taken knowingly. “MySpace is well aware of its obligation under the U.S. copyright laws,” the complaint read, adding MySpace is a “willing partner in (the) theft.”

Universal Music is turning into the canary in the coal mine for the complicated world of Web 2.0, in which user-generated video can be both a bane and boon for content companies. Some media companies are happy for the attention — NBC famously benefited from interest in “Saturday Night Live” after a skit was posted and became popular on YouTube — but as companies increasingly look to the Web as a distinct source of revenue, they are becoming more anxious about user-generated venues.

Complaint notes, for instance, how easy it is for a user to view an illegal video featuring U2, a band that’s a lucrative source of revenue for UMG on iTunes, which offers a special digital boxed set from the group.

Universal Music previously has sued other video-sharing sites, including Bolt and Sony Entertainment’s Grouper, and seemed poised to sue YouTube before it struck a licensing agreement with the firm.

UMG topper Doug Morris has claimed in public talks that MySpace costs the company millions in damages.

But observers have said it will be difficult to fully stop illegal sharing through the courts; even if sites successfully root out the copyrighted material, traffic would simply migrate to sites that continue to post it.

More likely, they say, content companies will have to work out licensing deals with the sites.

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