Judge Rules Grooveshark Employees Committed Copyright Infringement

Los Angeles – A federal judge in New York ruled that Grooveshark, a free online music service that has been a nemesis to major record companies, has in fact infringed copyrights. Grooveshark has been the target of the recording industry’s attacks for hosting music files without permission. The Florida-based Grooveshark, owned by Escape Media Group, makes millions of songs available to listeners for streaming.

In spite of being continually challenged in court by the recording industry, Grooveshark continued to garner a large audience. The company has been around even before the arrival of other streaming outlets. But unlike other outlets such as Spotify, Grooveshark operated without approval from record companies and music publishers. By the end of 2011, Grooveshark boasted 35 million users. It was drawing big-name advertisers such as Groupon and even Mercedes-Benz.

The court ruled that Grooveshark’s actions are not protected by the “safe harbor” provision of the Digital Millennium Copyright Act. On the other hand, Judge Thomas P. Griesa of the U.S. District Court in Manhattan, who granted summary judgment in the case, stated that the company is liable for copyright infringement because its own employees uploaded a total of 5,977 songs without the necessary permission. Grooveshark maintained that its actions were protected by the safe harbor provision.

Grooveshark infringed on the plaintiffs’ exclusive performance rights each time it streamed music from such artists as Jay-Z, Madonna, Eminem and Pink, the court ruled. In addition, the court found that Grooveshark discarded crucial evidence in the case including lists of files that employees and officers had uploaded to the service. When the next phase of this case is resolved, Grooveshark may have to pay millions of dollars in penalties and potentially shut down.

Last week, a federal judge in California ruled that satellite broadcaster Sirius XM violated copyright laws by playing songs by the 1960s band The Turtles without permission. The case is a threat to music streaming companies that have not been paying all royalties on pre-1972 recordings.