EMI – Sues Grooveshark For Third Time, Seeks Trial and Damages

by Glenn Peoples

EMI has sued Escape Media Group, parent company of music streaming service Grooveshark, a third time and is seeking a trial and damages for breach of contract and unauthorized use of EMI’s recordings . The complaint was filed in U.S. District Court, Southern District in New York, New York on August 30.

According to the complaint, EMI had entered into an agreement with Grooveshark in 2009 for the digital streaming of certain pre-1972 recordings. Grooveshark has twice been in breach of contract for failure to pay monthly payments and provide sales reports and continues to exploit EMI’s catalog despite EMI’s termination of its agreement.

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This is the third time EMI has sued Grooveshark in 2012. EMI sued Grooveshark for breach of contract in January. It sued the company in March and terminated its distribution agreement, claiming the company failed to pay an agreed-upon $100,000 installment payment on a promissory note of $450,000, it was the party to terminate the agreement “due to EMI’s currently unsustainable streaming rates and EMI’s pending merger with Universal Music Group.”

“Although this is the third time EMI/Capital has sued Grooveshark, we are confident that we will settle this case in a manner that satisfies all parties,” the company told Billboard.biz it had been the party to unilaterally terminate the distribution agreement due to EMI’s involvement in a copyright infringement lawsuit.

Grooveshark may not have licensed the EMI songs in its catalog, but its users could upload EMI’s songs without Grooveshark’s knowledge. EMI appears to have prepared for just a scenario. The complaint argues Grooveshark is not entitled to invoke the “safe harbor” of the Digital Millennium Copyright Act because it had previously agreed it would not stream EMI recordings without a content agreement in place (EMI terminated its distribution agreement in March). The “safe harbor” allows a digital service provider to remove infringing content uploaded by users.

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Controversy has become standard for Grooveshark. It is being sued for copyright infringement by all four major labels. Undeterred, it launched an analytics tool called Beluga in May that provides artists and brands with survey data from its 20 million monthly users. Its mobile app reappeared at Google’s app store last week after a lengthy absence but disappeared three days later (it is still unavailable from Apple). A nifty workaround appeared yesterday in the form of a full HTML5 version of its mobile site.

EMI’s latest complaint does not specify the amount of damages caused by Grooveshark, but it cites the maximum statutory to which EMI is entitled of $150,000 per work infringed.

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