The American Lawyer recently reported on a decision by federal district court Judge William Pauley, III that is likely to have a lasting impact in the cloud-based storage and computing industry. Cloud-based computing has been attracting increasing media attention this year, as Google and Amazon rolled out their cloud based music and storage services and Apple announced the availability of iCloud. In 2007, recording giant EMI sued one of the cloud industry trailblazers, MP3tunes, for allowing users to access and store unauthorized music via its service.
The New York Times reports that MP3tunes allows users to buy songs online as well as add to the collections in their cloud based lockers by searching for songs being offered for free by unauthorized 3rd party providers. Judge Pauley recently provided a highly anticipated summary judgment ruling noting that MP3tunes can be held liable for approximately 500 songs that EMI identified as being traded without authorization, but not for unauthorized content that users obtained outside of MP3tunes. The Judge ruled that the Digital Copyright Millennium Act (D.M.C.A.) “does not place the burden of investigation on the Internet service provider.” This affords the cloud-based business model protection, as “the D.M.C.A. shields online companies from copyright violations committed by their customers.” However, MP3tunes’ went a step further by allowing its customers to use a built in search device to find and download free music from 3rd party sites, a service it calls sideload. Judge Pauley ruled that the D.M.C.A. does not protect the company from what could be viewed as actively assisting its customers in obtaining and storing unauthorized music. The ruling should not have an impact on cloud based services that allow users to upload music and/or files that are already in their possession, such as Google Music and Amazon Cloud, or cloud services that negotiate special licenses from record companies, such as iCloud. Notably, Google was among the companies that submitted amicus briefs in support of MP3tunes.
