Record Labels Secure Big Win in Piracy Lawsuit Against Spinrilla

[Eren]

Several RIAA labels have secured a major win in their court battle against the popular hip-hop mixtape service Spinrilla. A federal court in Atlanta has ruled that the company is liable for direct copyright infringement after it streamed thousands of infringing works. In addition, the mixtape service can't rely on the DMCA's safe harbor since it failed to register an official agent.

spinrillaOperating a mixtape site is not without risk. By definition, mixes include multiple sound recordings that are often protected by copyright.

Popular hip-hop mixtape site and app Spinrilla, which has millions of users, is well aware of these risks. In 2017, the company was sued by several record labels, backed by the RIAA, that accused the company of massive copyright infringement.

“Spinrilla specializes in ripping off music creators by offering thousands of unlicensed sound recordings for free,” the RIAA commented at the time.

Spinrilla Fights Piracy Accusations
The hip-hop site countered the allegations by pointing out that it installed an RIAA-approved anti-piracy filter and actively worked with major record labels to promote their tracks. In addition, Spinrilla stressed that the DMCA’s safe harbor protects the company.

As the case progressed both parties filed motions for summary judgment. The music companies requested rulings to establish, before trial, that Spinrilla is liable for direct copyright infringement and that the DMCA safe harbor doesn’t apply.

Spinrilla countered this with cross-motions, filed under seal, in which they argued the opposite.

Court: Spinrilla is Liable
This week, US District Court Judge Amy Totenberg ruled on the requests. The 47-page order is good news for the music companies, as the court agrees that Spinrilla is liable for direct copyright infringement.

In her ruling, Judge Totenberg writes that Spinrilla admitted that 4,082 copyrighted sound recordings were streamed at least once through its website or app. The mixtape service failed, however, to offer a usable counterargument to this claim.

Spinrilla’s legal team brought up several cases in the company’s defense, but these all deal with uploading and downloading of infringing content, not streaming. Also, the cited cases are not about infringements of the public performance right, contrary to the present lawsuit.

Streaming vs. Downloading
This is a problem because the record labels highlighted cases where courts held that streaming can be a direct infringement of exclusive performance rights, even when the streaming occurs at the request of the user. That’s what happened at Spinrilla.

“Here, Plaintiffs do not rely solely on uploads and downloads of their music to and from Spinrilla. Defendants have created an interactive internet player that streams copyrighted content directly from its website and mobile app,” Judge Totenberg writes.

As a result, Spinrilla is held liable for directly infringing the copyrights of the 4,082 sound recordings that were listed in the complaint.

“Defendants have infringed Plaintiffs’ exclusive right ‘to perform’ their copyrighted sound recordings ‘publicly by means of a digital audio transmission.’ Therefore, Plaintiffs are entitled to summary judgment on their claim of direct infringement of the 4,082 works in suit.”

With the maximum statutory damages of $150,000 per work, this opens the door to an astronomical award of more than $600 million dollars. And that’s not the end of the bad news for Spinrilla.

Limited Safe Harbor
The court also ruled that the mixtape service is not eligible for a DMCA safe harbor defense before July 2017. While the site and app have accepted takedown notices for many years, they didn’t register a DMCA agent with the Copyright Office, which is a requirement.

Spinrilla first registered a DMCA agent in 2017, five months after the lawsuit started. In addition, it didn’t have a repeat infringer policy before July that year, another requirement for safe harbor protection.

“Consequently, the undisputed facts demonstrate that Defendants did not satisfy all of the required elements to be eligible for safe harbor defense until July 29, 2017, which is when they first designated an agent with the U.S. Copyright Office and had adopted a repeat infringer policy,” Judge Totenberg writes.

This means that Spinrilla can only invoke the safe harbor defense for infringement that occurred after that date.

The record labels asked the court to go even further, arguing that Spinrilla’s repeat infringer policy wasn’t “reasonably implemented,” because not all repeat infringers were terminated. However, the court rejected this, as the 4,082 sound recordings didn’t include any tracks that were uploaded by known repeat infringers.

Record Labels are Happy
Overall, however, the record labels are very pleased with this significant win. With streaming becoming the norm today, this case is crucial.

“We are gratified by the court’s decision, which sends a message that online streaming providers cannot hide behind the actions of their users to avoid their own liability for copyright infringement that occurs through their systems,” Kenneth Doroshow, RIAA Chief Legal Officer says.

“The court got it exactly right on several key points of copyright law in the digital streaming context, and we hope that it serves as a lodestar for other courts and service providers alike.”

The RIAA, which represents the major record labels, is also happy that the ruling confirms that mistakes can be just as infringing as posting full sound recordings.

While the ruling is an early win for the music companies, the case isn’t over just yet. There are still matters that have to be decided at trial, including the scale of the damages, if these are awarded. Alternatively, the parties can try to resolve the matter through a mediation process.

At the same time, Spinrilla is also involved in a legal battle with the RIAA directly. The mixtape site sued the industry group earlier this year, accusing it of sending false DMCA takedown notices. That case remains pending.

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