Late yesterday afternoon, U.S. District Judge Harold Baer of the Southern District of New York ruled in favor of the record companies listed in the federal lawsuit against newsgroup provider Usenet.com.
According to court documents (PDF warning), the Usenet service is guilty of direct infringement, inducement of infringement, contributory infringement, and vicarious infringement. The ruling also said that Usenet.com cannot claim protection under the 1984 Sony Betamax decision which states that companies selling devices cannot be held liable for infringement despite the actions of the buyer.
In addition to the Sony Betamax decision, Usenet.com attempted to find refuge under the Digital Millennium Copyright Act, a 'safe harbor provision' that keeps internet service providers from taking the blame for illegal activities conducted by subscribers. However, the DMCA plea was denied, leaving Usenet.com wide open for prosecution. As reported by CNET, Baer said that Usenet.com failed to understand the difference between Sony selling a Betamax and terminating a relationship with the end-user, and Usenet.com keeping a relationship open with the end-user while also retaining some control over the service.
The RIAA's lawsuit against Usenet.com began back in October 2007, and accused the company behind the newsgroup service of enticing potential subscribers with copyrighted music, and enabling them to download the illegal files via one of its subscription plans. Recently Usenet has been a hot topic for many organizations as of late, and several internet service providers have discontinued newsgroup access to subscribers because of their inability to police child pornography. Because of Usenet's overall worldwide network structure, the RIAA has had trouble tracking down pirated music sources despite its success with peer-to-peer networks.
But now the RIAA celebrates a small victory. 'This decision is another example of courts recognizing the value of copyrighted music and taking action against companies and individuals who are engaging in wide scale infringement,' said Steven M. Marks, the RIAA's executive vice president & general counsel. 'We hope that other bad actors who are engaging in similar activity will take note of this decisive opinion.'
Looking back over the last few years, it seems that RIAA's victorious outcome was inevitable. Usenet.com tactics were questionable, with the judge issuing several counts of discovery misconduct. According to evidence provided by the RIAA, Usenet.com intentionally destroyed evidence on seven hard drives, sent many employees to Europe in order to avoid depositions, and even provided false information. Obviously, the Fargo, North Dakota newsgroup service was clearly hiding something.
The court documents go into further detail, labeling the music companies behind the lawsuit:
This action arises out of allegations of widespread infringement of copyrights in sound recordings owned by Plaintiffs Arista Records LLC; Atlantic Recordings Corporation; BMG Music; Capitol Records, LLC; Caroline Records; Elektra Entertainment Group Inc.; Interscope Records; LaFace Records LLC; Maverick Recording Company; Sony BMG Music Entertainment; UMG Recordings, Inc; Virgin Records America, Inc.; Warner Bros. Records Inc; and Zomba Recording LLC (“Plaintiffs”), copies of which are available for download by accessing a network of computers called the USENET through services provided by Defendants Usenet.com, Inc. (“UCI”), Sierra Corporate Design, Inc. (“Sierra”), and spearheaded by their director and sole shareholder, Gerald Reynolds (“Reynolds”) (collectively, “Defendants”). Specifically, Plaintiffs brought this action alleging (1) direct infringement of the Plaintiffs’ exclusive right of distribution under 17 U.S.C. § 106(3); (2) inducement of copyright infringement; (3) contributory copyright infringement; and (4) vicarious copyright infringement.
Yesterday's ruling could spell trouble for other Usenet newsgroup providers. As previously mentioned, ISPs are quickly shutting down access to the twenty-year-old Usenet network, leaving consumers no other choice but to choose external subscription services such as Usenet.com.