This case concerns the latest business venture of serial copyright defendant Michael Robertson. In earlier proceedings, a jury ruled against the company, MP3Tunes. Here, the Circuit court considers multiple issues, including repeat infringer policies and red flag knowledge under the Digital Millennium Copyright Act (DMCA). Eric Goldman provides a more detailed summary here.
Regarding the repeat infringer policy, the Second Circuit says: “at trial the plaintiffs could prevail by demonstrating that MP3tunes's failure to track users who created links to infringing content identified on takedown notices or who copied files from those links evidenced its willful blindness to the repeat infringing activity of its users.” It rejects arguments that this standard amounts to a monitoring requirement, in violation of 17 USC 512(m).
Regarding red flag knowledge, the court concludes that the jury could permissibly find willful blindness based on defendant’s admission that he knew no pre-2007 MP3s or songs by The Beatles had been licensed by plaintiffs. Here, too, the court finds no conflict with 512(m), saying that defendant could use the site’s search functionality in a time-limited and targeted manner.
The court also repeats Fung v. Isohunt’s conclusion that inducement claims under the Supreme Court’s Grokster case fall outside the DMCA’s safe harbor.