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Only the Westlaw citation is currently available.
United States District Court,
S.D. New York.
CAPITOL RECORDS, LLC, d/b/a EMI Music North
America, Plaintiff,
v.
ESCAPE MEDIA GROUP, INC., Defendant.
No. 12CV6646 (AJN).
Signed March 25, 2015.

(2) its entitlement to a DMCA safe harbor, and (3) the

release of claims under the parties' prior agreements. For
the reasons discussed below, the Court adopts Judge
Netburn's recommendations in full.
I. BACKGROUND
Because Escape objects only to Judge Netburn's
application of the law to the facts of this case, the Court
adopts in full her recitation of the relevant facts. See R &
R 2741.FN1 The Court assumes familiarity with this
material.

FN1. Where the Court cites additional factual

MEMORANDUM AND ORDER
materials, it draws from the Reply Statement of
ALISON J. NATHAN, District Judge.
Undisputed Facts (RSUF), Dkt. No. 85. If
*1 Before the Court is the report and
supported, and if Escape did not controvert the
recommendation (Report or R & R) of Magistrate
fact by pointing to admissible evidence, the
Judge Sarah Netburn dated May 28, 2014, Dkt. No. 90,
Court consider[s] the fact undisputed for
regarding Plaintiff EMI Music North America (EMI)'s
purposes of the motion. Fed.R.Civ.P. 56(e)(2);
motion for summary judgment. EMI moved for summary
Local Rule 56.1(d); see also YingJing Gan v.
judgment as to its First and Sixth Claims for federal and
City of New York, 996 F.2d 522, 532 (2d
common law copyright infringement. By stipulation,
Cir.1993).
Defendant Escape Media Group, Inc. (Escape)
conceded liability as to EMI's Second Claim for breach of
the parties' September 24, 2009 Digital DistributionII. STANDARD OF REVIEW
Agreement (Distribution Agreement). Dkt. No. 24. EMI
District courts may designate magistrate judges to
did not move for summary judgment as to its Third Claim hear and determine certain dispositive motions and to
for breach of the parties' September 24, 2009 Settlement submit proposed findings of fact and a recommendation
Agreement
and
Mutual
Release
(Settlementas to those motions. 28 U.S.C. 636(b)(1). Any party
Agreement), Fourth Claim for unjust enrichment, orwishing to object to a magistrate judge's report and
Fifth Claim for unfair competition, so those claims wererecommendation must do so within fourteen days after
not before Judge Netburn and are not before the Courtbeing served with a copy of the report and
now. Judge Netburn recommended denying Escape's recommendation. Id. If a party submits a timely objection
challenge to the declaration of Ellis Horowitz and to a report and recommendation, the district court reviews
granting EMI's challenge to the declaration of Cole de novo those portions to which the party objected. Id.;
Kowalski. She also recommended denying EMI's motion see also Norman v. Astrue, 912 F.Supp.2d 33, 39
for summary judgment as to its claim for direct(S.D.N.Y.2012). Otherwise, if no specific written
infringement of its right of reproduction, but granting the objection is made, the district court may adopt those
motion as to its remaining copyright infringement claimsportions as long as the factual and legal basis supporting
and as to Escape's affirmative defenses under the Digital the findings and conclusions set forth ... are not clearly
Millennium Copyright Act (DMCA) and under theerroneous or contrary to law. Norman, 912 F.Supp.2d at
parties' Distribution and Settlement Agreements. Escape 39 (quoting Eisenberg v. New England Motor Freight,
objects to Judge Netburn's recommendations regarding (1)Inc., 564 F.Supp.2d 224, 22627 (S.D.N.Y.2008)). A
challenges to the Horowitz and Kowalski Declarations,decision is clearly erroneous' when the reviewing Court

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is left with the definite and firm conviction that a mistake Giammettei, 34 F.3d 51, 54 (2d Cir.1994)).
has been committed. Courtney v. Colvin, No. 13 Civ.
02884(AJN), 2014 U.S. Dist. LEXIS 4559, at *34III. DISCUSSION
(S.D.N.Y. Jan. 14, 2014) (quoting Luster v. Mancini, No.
As noted, Escape objects to Judge Netburn's
07 Civ. 8265(DAB), 2013 U.S. Dist. LEXIS 138599, atrecommendations regarding (1) challenges to the
*67 (S.D.N.Y. Sept. 25, 2013)).
Horowitz and Kowalski Declarations, (2) its entitlement
to a DMCA safe harbor, and (3) the release of claims
*2 Summary judgment is granted if the movantunder the parties' prior agreements. EMI does not object
shows that there is no genuine dispute as to any material to Judge Netburn's Report, including her recommendation
fact and the movant is entitled to judgment as a matter of that the Court deny its motion with respect to direct
law. Fed.R.Civ.P. 56(a); see also Celotex Corp. v. infringement of its right of reproduction. The court will
Catrett, 477 U.S. 317, 32223 (1986). A genuine disputeturn to issues relating to the declarations first and will
as to any material fact exists if the evidence is such that a then analyze the merits of the dispositive motion.
reasonable jury could return a verdict for the nonmoving
party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248A. Objections to the Horowitz and Kowalski
(1986). On a motion for summary judgment, a court Declarations
views all evidence in the light most favorable to the nonBefore delving into the merits of EMI's summary
movant, Overton v. NY. State Div. of Military & Naval judgment motion, Judge Netburn addressed challenges
Affairs, 373 F.3d 83, 89 (2d Cir.2004), and resolve[s] allconcerning two declarations submitted by the parties.
ambiguities and draw[s] all permissible factual inferences Judge Netburn recommended (1) denying Escape's
in favor of the party against whom summary judgment is challenge to the Horowitz Declaration and (2) granting
sought, Sec. Ins. Co. of Hartford v. Old Dominion EMI's challenge to the Kowalski Declaration. R & R 7.
Freight Line, Inc., 391 F.3d 77, 83 (2d Cir.2004).
*3 Escape objects to both recommendations and
The movant always bears the initial responsibility of contends that they should be reviewed de novo as if it had
informing the district court of the basis for its motion, and made an objection to a dispositive matter. The Court
identifying those portions of the pleadings, depositions, disagrees. Both Escape and EMI argued to Judge Netburn
answers to interrogatories, and admissions on file, that the challenged declarations violated Rule 26, the
together with the affidavits, if any, which it believes Federal Rule of Civil Procedure governing discovery, and
demonstrate the absence of a genuine issue of material Judge Netburn properly noted that both parties' attempts
fact. Celotex, 477 U.S. at 323. But [e]ven where factsto preclude the Court from relying on the declarations
are disputed, in order to defeat summary judgment, the were based primarily on Rule 37, which provides certain
nonmoving party must offer enough evidence to enable a sanctions for failures to make disclosures or to cooperate
reasonable jury to return a verdict in its favor. Byrnie v. in discovery. Magistrate judges may, and often do, rule on
Town of Cromwell Bd. of Educ., 243 F.3d 93, 101 (2dnondispositive pretrial matters, including discovery
Cir.2001). And if a plaintiff uses a summary judgment disputes. Fed.R.Civ.P. 72(a). Contrary to Escape's
motion, in part, to challenge the legal sufficiency of an suggestion, such nondispositive pretrial matters are
affirmative defenseon which the defendant bears thereviewed for clear error. Id.; see also 636(b)(1)(A).
burden of proof at triala plaintiff may satisfy its Rule
56 burden by showing that there is an absence of evidence
Moreover, the fact that Judge Netburn efficiently
to support [an essential element] of [the non-moving
resolved the Rule 37 sanctions in the same Report in
party's case]. Nw. Mut. Life Ins. Co. v. Fogel, 78
which she provided recommendations as to the motion for
F.Supp.2d 70, 7374 (E.D.N.Y. 19990 (quoting FDIC v.

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summary judgment does not change the standard ofinfringement that Escape raises is a footnote in its
review applied to the Rule 37 sanctions. See Cardell Fin. objection brief arguing that Judge Netburn overlooked an
Corp. v. Suchodolski Assocs., 896 F.Supp.2d 320, 324important distinction between federal and New York law
(S.D.N.Y.2012) (A district court evaluating a magistrate concerning public performance rights in sound
judge's report may adopt those portions of the report recordings. Obj.FN2 18 n. 11. But Escape did not raise this
addressing non-dispositive matters as long as the factual point in its opposition to summary judgment, and it is
and legal bases supporting the findings and conclusionswell established that a party may not raise an argument in
set forth in those sections are not clearly erroneous or an objection to a report and recommendation of a
contrary to law. (citing Fed.R.Civ.P. 72(a)); see also magistrate judge that was not fairly presented to the
Arista Records, LLC v. Doe, 604 F.3d 110, 116 (2dmagistrate judge in the first instance. See, e.g., U.S. Bank
Cir.2010) (Matters concerning discovery generally are N.A. v. 2150 Joshua's Path, LLC, No. 13CV1598 (SJF),
considered nondispositive of the litigation. (quoting2014 U.S. Dist. LEXIS 127596, at *4 (E.D.N.Y. Sept. 10,
Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522,2014) ( A district court will generally not consider
525 (2d Cir.1990)); RMED Int'l, Inc. v. Sloan's arguments that were not raised before the magistrate
Supermarkets, Inc., No. 94 Civ. 5587(PKL)(RLE), 2000judge. (quoting Diaz v. Portfolio Recovery Assocs.,
U.S. Dist. LEXIS 4892, at *4 n. 1 (S.D.N.Y.2000) (A LLC, No. 10 Civ. 3920, 2012 U.S. Dist. LEXIS 72724, at
decision to admit or exclude expert testimony is *5 (E.D.N.Y. May 24, 2012)). Therefore, because Escape
considered nondispositive of the litigation. (collectingdid not raise this argument before Judge Netburn, the
cases)). Therefore, the Court reviews Judge Netburn's Court reviews Judge Netburn's conclusion on this point
recommendations concerning the Horowitz and Kowalskifor clear error.
Declarations for clear error. Finding none, the Court
adopts her recommendations to deny Escape's challenge
FN2. Obj. stands for Escape's objection to Judge
to the Horowitz Declaration and to strike the Kowalski
Netburn's Report (Dkt. No. 94).
Declaration under Rule 37(c)(1).
Escape argues that it was error for Judge Netburn to
B. Copyright Infringement
hold that the elements for copyright infringement under
With one minor exception, Escape does not make anyNew York and federal law mirror each other and,
specific objections to Judge Netburn's conclusions of therefore, may be analyzed together. Contrary to Escape's
direct and secondary liability for copyright infringement.suggestion that Judge Netburn cited no authority for her
Rather, Escape primarily contends that there was no conclusion on this point, she relied on Judge Sullivan's
evidence from which copyright infringement could beopinion in Capitol Records, LLC v. ReDigi Inc., 934
found because it argued that the Horowitz Declaration F.Supp.2d 640 (S.D.N.Y.2013), which stated that the
should be excluded from the universe of facts at issue on elements for a direct infringement claim under federal law
this motion. As noted, the Court finds no clear error with mirror those for infringement of common law copyright
Judge Netburn's discovery-related conclusions. Therefore, under [New York] state law. R & R 51. Judge Sullivan,
there is evidence from which copyright infringement canin turn, relied on Capitol Records, Inc. v. Naxos of
be found because Horowitz's analysis of Grooveshark'sAmerica, Inc., 830 N.E.2d 250, 265 (2005) (Naxos ),
system revealed, inter alia, 2,807 EMI-copyrighted soundwhich held that New York provides common-law
recordings were copied on Escape's servers in at least copyright protection to sound recordings not covered by
13,855 separate files, and EMI-copyrighted works were the federal Copyright Act, regardless of the public
streamed 12,224,567 times since March 23, 2012.
domain status in the country of origin, if the alleged act of
infringement occurred in New York. ReDigi, Inc., 934
*4 The only specific objection regarding copyrightF.Supp.2d at 658 n. 8. Like Judge Sullivan, other judges

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in this Court have similarly relied on Naxos to conclude
Because the Court finds no clear error with Judge
that New York would recognize a right of publicNetburn's copyright infringement recommendations, the
performance in sound recordings that would mirror theCourt adopts them in full. But before concluding that EMI
federal copyright in such sound recordings. See, e.g., Flo is entitled to summary judgment, the Court must examine
& Eddie, Inc. v. Sirius XM Radio, Inc., No. 13 Civ.Escape's objections regarding its two affirmative defenses
5784(CM), 2014 U.S. Dist. LEXIS 166492, at *25 under the DMCA and under the parties' prior agreements.
(S.D.N.Y. Nov. 14, 2014) (interpreting Naxos and other
New York authority to predict that the New York Court C. DMCA Safe Harbor
of Appeals would recognize the exclusive right to public
Escape objects to Judge Netburn's recommendations
performance of a sound recording as one of the rights about its non-entitlement to the DMCA safe harbor, so the
appurtenant to common law copyright in such aCourt reviews this issue de novo. The Court notes at the
recording). The Court agrees with this authority and,outset that it agrees with Judge Netburn's careful analysis
therefore, it finds no clear error with Judge Netburn's of this issue, see R & R 5279, and limits its discussion
conclusion that the elements for EMI's federal claims for here to Escape's specific objections regarding Judge
copyright infringement mirror its state law claims forNetburn's conclusions.
copyright infringement.
As Judge Netburn noted, the DMCA added four safe
*5 Because Escape does not make any specific harbor provisions to the Copyright Act in the form of 17
objections to the remainder of Judge Netburn's U.S.C. 512(a)-(d), which shield service providers from
recommendations regarding copyright infringement, theliability for copyright infringement under certain
Court also reviews those conclusions for clear error. See, circumstances. But to qualify for any of the DMCA safe
e.g., Watson v. Geithner, No. 11 Civ. 9527(AJN), 2013 harbors, the service provider must first satisfy the
U.S. Dist. LEXIS 141009, at *56 (S.D.N.Y. Sept. 27, conditions for eligibility described in 17 U.S.C.
2013). Judge Netburn concluded that EMI had established 512(i), which, among other things, require a service
that it owns or has the exclusive right in the United States provider to have adopted and reasonably implemented,
to enforce copyrights in 2,807 sound recordings. She and informs subscribers and account holders of the
further held that Escape directly infringes EMI's right of service provider's system or networks of, a policy that
public performance, but that it does not directly infringe provides for the termination in appropriate circumstances
EMI's right of reproduction. Judge Netburn thenof subscribers and account holders of the service
concluded that Grooveshark users directly infringe EMI'sprovider's system or network who are repeat infringers.
rights of reproduction and distribution, and that Escape is 512(i)(1)(A). Like many courts, Judge Netburn isolated
secondarily liable for this infringement under theories ofeach component of 512(i)(1)(A)'s repeat infringer policy
vicarious and contributory liability. The Court finds no requirement and then analyzed Escape's purported policy
clear error with these conclusions. Finally, because Judge to see if it satisfied the statute. See, e.g., Ellison v.
Netburn observed that common law copyrightRobertson, 357 F.3d 1072, 1080 (9th Cir.2004) (noting a
infringement claims generally mirror those of federalservice provider must (1) adopt a policy that provides for
claims, she found that EMI was entitled to summarythe termination of service access for repeat copyright
judgment on its direct infringement claimsexcept with infringers in appropriate circumstances; (2) implement
respect to its right of reproductionand its secondarythat policy in a reasonable manner; and (3) inform its
infringement claims for its pre1972 recordings undersubscribers of the policy.); Wolk v. Kodak Imaging
New York common law. The Court finds no clear error Network, Inc., 840 F.Supp.2d 724, 744 (S.D.N.Y.2012)
with these conclusions.
(To fulfill the requirements of 17 U.S.C. 512(i), a
service provider must (i) adopt a policy that provides for

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the termination of service access for repeat copyrightadequate records of infringement; (2) Escape's practice of
infringers; (ii) inform users of the service policy; and (iii) actively preventing copyright owners from collecting
implement the policy in a reasonable manner. (citing information necessary to issue DMCA takedown
Corbis Corp. v. Amazon.com, Inc., 351 F.Supp.2d 1090,notifications; and (3) Escape's failure to terminate
1100 (W.D.Wash.2004))).
repeat infringers. Each of these shortcomings, standing
alone, is sufficient to deny Escape's safe harbor defense.
*6 Judge Netburn first noted that the repeat infringer
policy that Escape informs its users of is not the same a) Record Keeping
policy it purports to implement, but she generously
Beginning with adequate recordkeeping, Judge
concluded that Escape has adopted a repeat infringerNetburn correctly noted that because [t]he purpose of
policy based on its so-called one strike policy . She subsection 512(i) is to deny protection to websites that
further concluded, and Escape agrees, Obj. 19, that thetolerate users who flagrantly disrespect copyrights,
relevant repeat infringer policy for 512(i) purposes iscourts have recognized that service providers that
this so-called one strike policy, not the policy set forth purposefully fail to keep adequate records of the identity
in Escape's Terms of Service. Under its one strike policy,and activities of their users and fail to terminate users
Escape purports to disable[ ] account holders' upload despite their persistent and flagrant infringement are not
privileges in response to DMCA notifications, but does eligible for protection under the safe harbor. Capitol
not delete all data or audio files associated with their Records, Inc. v. MP3tunes, LLC, 821 F.Supp.2d 627, 637
account or bar them from signing in to simply and (S.D.N.Y.2011) (MP3tunes ) (citations omitted); see
passively use the Grooveshark website. Obj. 19 (citing also Disney Enters. v. Hotfile Corp., No. 1120427CIV
Hostert Decl. 2429). Judge Netburn concluded that WILLIAMS, 2013 U.S. Dist. LEXIS 172339, at *67
this policy of only barring uploading privileges while (S.D.Fl. Sept. 20, 2013) (Hotfile ) ([A] reasonable
retaining accounts does not satisfy the repeat infringerpolicy must be capable of tracking infringers.). Indeed, if
policy requirement because it does not actuallyrecords of infringement are not kept, it is impossible to
implement a repeat infringer policy within the meaning know whether repeat infringement is occurring
of 512(i), and, even assuming it did, Escape does not
reasonably implement the policy, i.e., Escape does not
*7 Prior to Judge Netburn's Report, Escape
terminate user's uploading privileges in appropriate consistently argued that it did not need to track repeat
circumstances. Cf. Perfect 10, Inc. v. CCBill LLC, 488infringement because repeat infringement could not occur
F.3d 1102, 111015 (9th Cir.2007) (CCBill ) (analyzingunder its one strike policy. For example, Escape's
separately
implementation
and
reasonableopposition to summary judgment stated that because it is
implementation under 512(i)). Escape objects to bothEscape's policy to disable a user's uploading privileges
conclusions, which the Court addresses in turn.
following the receipt of one notice ... there is no necessity
to search for repeat infringers. Opp'n FN3 at 36 n. 14;
1. Actual Implementation
see also Semel Decl. Ex. 1 (Hostert Dep. 136:12140:23).
As Judge Netburn noted, Congress provided littleSimilarly, EMI's Local Rule 56.1 statement noted that
guidance on the meaning of 512(i)'s variousEscape has no policy to try to identify repeat infringers
requirements. But over time, courts have looked at certain that are using Grooveshark. RSUF 91. Disputing this
recurring features to determine whether a service fact in its counter-statement, Escape stated that it has a
provider's repeat infringer policy is implemented withinone strike policy of terminating the uploading privileges
the meaning of 512(i). For the reasons discussed below,of users associated with DMCA takedowns, RSUF 91,
the Court agrees with Judge Netburn that three such but this response does not actually dispute the fact that
features are relevant here: (1) Escape's failure to keep Escape does not try to identify repeat infringers. In

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addition, EMI provided evidence that Escape does not infringer policy was not tied to notices of infringement it
keep an independent record of the instances in which areceived from copyright owners, and the service
user has received multiple DMCA takedown notices. provider did not track the notices and did not base its
RSUF 98. Escape countered this fact by arguing that policy on how many notices were associated with certain
Escape's database includes records of every DMCAusers (such as by flagging them).); see also MP3tunes,
takedown processed, including the associated users, 821 F.Supp.2d at 637.
RSUF 98 (emphasis added), which essentially states that
Escape could review its entire database to identify repeat b) Organization of UserSubmitted Files
infringers, but it does not controvert the fact that Escape
*8 Not only does Escape fail to keep adequate
does not keep an independent record of repeat infringers.records of repeat infringement, but it also employs a
These facts led Judge Netburn to conclude that Escape practice that prevents copyright owners from being able
does not try to identify repeat infringers and fails to keep to identify repeat infringement in the first place. As Judge
records that would allow it to do so. R & R 64.
Netburn explained, Grooveshark's site organizes multiple
files containing the same song together, but only the
FN3. Opp'n stands for Escape's opposition toPrimary File can be streamed by Grooveshark users.
EMI's motion for summary judgment (Dkt. No.RSUF 117. When Escape receives a DMCA takedown
77).
notice for files that infringe a copyrighted work, only the
Primary File linked to a song is removed, and, if there are
Now, however, Escape's objection retreats from its NonPrimary Files associated with that same song, the
earlier contention that it does not need to keep records of song remains available to Grooveshark users because a
repeat infringement under its one strike policy.new Primary File will be selected automatically from the
Nonetheless, like its responses to EMI's Local Rule 56.1NonPrimary Files the next time the song is selected for
FN4
As aptly described by
statement, its objection fails to point to admissible streaming. RSUF 11922.
EMI's
expert,
the
system
acts
as
a technological Pez
evidence showing that it actually tries to identify repeat
infringers who are using Grooveshark. For example,dispenser: Each time a Primary File for a song is removed
Escape's objection provides a detailed description of how due to a DMCA takedown notice, a NonPrimary File is
it records the removal of files in response to DMCA slotted in to take its place, with the process continuing
notices, inter alia, by moving data contained in its until there are no remaining NonPrimary Files for that
UsersFiles' table, which links each file on Grooveshark particular song, and there is nothing to keep the Non
with the accountholder who submitted it, to a related dataPrimary Files from replenishing. Because it is not
table entitled Deleted_UserFiles. Obj. 22. But Escapepossible for content owners to obtain uniform resource
avoids mentioning that this Deleted Database does notlocators (URLs) for NonPrimary Files, RSUF 124, and
distinguish between files deleted due to DMCA takedown because the only URL visible to a user and content
notices and files deleted due to other reasons; i.e., thisowners is the URL for the Primary File for a song, RSUF
125, content owners must submit successive takedown
database is not an independent record of infringement.
notices even for NonPrimary Files slotted behind
Primary Files that have already received takedown
Due to the importance of adequate recordkeeping to
notices. Judge Netburn concluded that this practice may
the repeat infringer policy requirement, the Court agrees
actively prevent copyright owners from collecting
with Judge Netburn that because Escape purposefully
information needed to issue [DMCA] notifications' in a
fails to keep adequate records of repeat infringement, it
manner that would have any meaningful consequence. R
does not satisfy the 512(i) eligibility condition. Accord
& R 65 (quoting CCBill, 488 F.3d at 1109).
Hotfile, 2013 U.S. Dist. LEXIS 172339, at *28 (finding
512(i) not satisfied where the service provider's repeat

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FN4. Escape disputed this statement of fact, butrepeat infringers of the plaintiffs' copyrights, Aimster
its citation to paragraphs 1317 of the Hostert invited them to do so, showed them how they could do so
Declaration did not controvert this fact.
with ease using its system, and by teaching its users how
to encrypt their unlawful distribution of copyrighted
In its objection, Escape latches on to Judge Netburn's materials disabled itself from doing anything to prevent
use of the word may to argue that she made an infringement. In re Aimster Copyright Litig., 334 F.3d
equivocal statement [that] merely identifies a factual 643, 655 (7th Cir.2003). Here, Escape did not teach its
issue for determination at trial, rather than invalidating users how to encrypt their files to hide them from
Escape's DMCA defense as a matter of law. Obj. 24. But copyright ownersit hid the files on its own. Therefore,
Escape does not dispute any of the material facts at issue. the Court agrees with Judge Netburn that the undisputed
Rather, its own description of its whack-a-mole practice facts demonstrate that the way Escape organized userbelies any genuine dispute of material fact: [T]he sole submitted files actively prevented copyright owners from
effect of Escape's primary file practice is that only one being able to issue meaningful DMCA takedown
of the grouped files is available on the website at a time, notifications, which is an independent basis for
and thus visible to content owners [such as EMI]. While concluding that it did not implement a repeat infringer
this may require content owners such as EMI to issue policy as 512(i) requires. Accord CCBill, 488 F.3d at
DMCA notifications seriatimi.e., a notification1109 (We hold that a service provider implements' a
addressed to the primary file, followed by Escape's policy if it has a working notification system, a procedure
removal of the content, and then, if the next primary filefor dealing with DMCA-compliant notifications, and if it
contains the same recording, issuance of a subsequentdoes not actively prevent copyright owners from
notice, etc.it does not prevent copyright owners fromcollecting information needed to issue such notifications.
policing the site. Obj. 2425. Thus, Escape(citing Ellison, 357 F.3d at 1080; Corbis, 351 F.Supp.2d
acknowledges that because of the way it organizes user-at 110203; In re Aimster Copyright Litig, 252 F.Supp.2d
submitted files, content owners can only see URLs for at 659).
Primary Files. It further acknowledges that it forces
content owners to submit successive notifications for the c) Termination of Repeat Infringers
NonPrimary Files slotted behind the Primary File even
On top of the two above-noted problems with the
though the whole purpose of organizing the files in this implementation of Escape's repeat infringer policy, Judge
way is to group together files representing the same song. Netburn found what this Court deems an even more
fundamental problem with Escape's policy: As
*9 Other courts have rejected DMCA safe harbor implemented, it does not actually provide[ ] for the
protection for service providers employing similar termination ... of subscribers and account holders ... who
practices that actively prevent copyright owners fromare repeat infringers. R & R 68 (quoting 512(i)(1)(A)).
enforcing DMCA takedown notifications in a meaningful Here it is important to distinguish between the policy that
way. In In re Aimster Copyright Litigation, for example,Escape informs its users of and the policy it purports to
the defendant service provider instructed users on how tofollow. The policy contained in Grooveshark's Terms of
transfer their files in encrypted form, which led the court Service does provide for terminating the accounts of
to conclude that [a]dopting a repeat infringer policy and repeat infringers:
then purposely eviscerating any hope that such a policy
could ever be carried out is not an implementation as
required by 512(i). 252 F.Supp.2d 634, 659
(N.D.Ill.2002). On appeal, the Seventh Circuit affirmed,
noting that [f]ar from doing anything to discourage

Should [Escape] discover or be informed that you have

posted User Content for which you do not personally
own the copyright or otherwise do not have the
necessary authority from the copyright owner, [Escape]

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may take all appropriate steps to rectify yourerroneous. Rather, in navigating these uncharted waters,
noncompliance, including without limitation, disablingJudge Netburn correctly noted that the DMCA's safe
your ability to upload User Content to the Service, harbors, as with all immunities from liability[,] should be
unless you provide [Escape] with a counter notification narrowly construed. MP3tunes, 821 F.Supp.2d at 636
of your right to upload such User Content in (citing United States v. Texas, 507 U.S. 529, 534 (1993)).
compliance with our Copyright Policy. ShouldWith this in mind, she began with the plain meaning of
[Escape] discover or be informed that you continue to termination, which is defined as [t]he act of ending
upload User Content for which you do not personallysomething; extinguishment and [t]he end of something
own the copyright or otherwise do not have thein time or existence; conclusion or discontinuance.
necessary authority from the copyright owner afterBlack's Law Dictionary (9th ed.2009). This definition
[Escape] has made reasonable efforts to disable your suggests that Congress intended service providers to have
ability to do so, you will be considered a repeat a policy in place that would end or discontinue the
infringer, and [Escape] will terminate your account and accounts of repeat infringers, not something short of that
delete all data associated with your account; remove all such as limiting repeat infringers' user privileges. Escape
of the User Content you have uploaded/submitted to theoffers no textual support for a contrary reading.
Site; and use its reasonable efforts to prohibit you from
signing up for another User account in the future.
Second, Escape criticizes Judge Netburn for looking
at the DMCA as a whole to determine the meaning of
*10 Semel Decl. Ex. 14 at 4. But, as noted above, it is termination under 512(i). Judge Netburn observed
undisputed that Escape does not actually follow thisthat 17 U.S.C. 512(j), which addresses injunctive relief
policy; instead, it follows its one strike policy underavailable under the DMCA, provides that the court may
which it purports to terminate the uploading privileges ofgrant [a]n order restraining the service provider from
first-time infringers and, because it does not track repeat providing access to a subscriber or account holder of the
infringement, it never determines whether a user should service provider's system or network who is engaging in
be deemed a repeat infringer. Thus, under Escape's one infringing activity and is identified in the order, by
strike policy, the most severe consequence for a repeat terminating the accounts of the subscriber or account
infringer is loss of his or her uploading privileges holder that are specified in the order. 512(j)(1)(ii)
Escape has not and will not terminate a repeat infringer's (emphasis added). This language is in contrast to 17
account regardless of the level of repeat infringement. U.S.C. 512(g), which shields service providers from
Examining the statutory text and relevant case law, Judgeliability for taking down content and provides that a
Netburn concluded that such a policy does not service provider shall not be liable to any person for any
implement the type of repeat infringer policy that claim based on the service provider's good faith disabling
512(i) requires. Once again, the Court finds Judge of access to, or removal of, material or activity claimed to
Netburn's rationale persuasive and Escape's objectionsbe infringing or based on facts or circumstances from
without merit.
which infringing activity is apparent. 512(g)(1)
(emphasis added). Thus, Judge Netburn pointed out that
First, Escape contends that no court decision hasCongress knew how to differentiate between terminating
actually held that termination necessarily means account holders and disabling access to material or
complete eradication of a user's account and deletion of activity, e.g., upload capabilities, claimed to be infringing.
all related content, and Judge Netburn does not cite to anyEscape argues that the comparison to 512(g)(1) is
such decision. Obj. 20. But just because there is no court irrelevant because it refers to treatment of content, not
opinion on point does not mean that Judge Netburn's account holders, and thus its language does not illuminate
analysis of the statutory language at issue here was what Congress meant by termination of account holders

Page 10
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
in 512(i). Obj. 20. But that is precisely the point. infringers and that [t]his statutory requirement emanates
Escape's one strike policy prevents the uploading of from Congress' concern that those who repeatedly or
content, but does not provide for the termination of ...flagrantly abuse their access to the Internet through
account holders, which is what 512(i) requires.
disrespect for the intellectual property rights of others
should know that there is a realistic threat of losing that
*11 Moreover, Escape offers no authority for theaccess . Vimeo, 972 F.Supp.2d 500, 51213
point that limiting a repeat infringer's uploading privileges(S.D.N.Y.2013) (quoting H.R.Rep. No. 105551, Pt. 1, at
satisfies 512(i). Although few courts have expressly61 (1998)) (emphasis added); see also S.Rep. No. 105
discussed the meaning of terminationlikely because190, at 52 (1998).
the term is so clear as to be beyond doubtthe Court is
not aware of any authority for the proposition that
Third, Escape contends that Judge Netburn
something short of complete termination of a repeat impermissibly appeals to equity to interpret the
infringer's account satisfies 512(i). Rather, the case law DMCA because she found that upholding Escape's
indicates just the opposite. See, e.g., Capitol Records, practice of disabling uploads would benefit infringers'
LLC v. Vimeo, LLC, 972 F.Supp.2d 500, 513and allow Escape to further profit from repeat infringers'
(S.D.N.Y.2013) (Vimeo ) (finding that defendant content. Obj. 20. The Court disagrees with Escape's
demonstrate[d] that it took a clear position that those characterization of this portion of Judge Netburn's
who chose to violate another's copyright would not beanalysis as an appeal to equity. Rather, Judge Netburn
permitted to avail themselves of the service [defendant] properly recognized that according to Escape the benefit
provides); MP3tunes, 821 F.Supp.2d at 638 (noting thatof the DMCA safe harbor would take all the teeth out of
repeat infringers are blatant infringers that internet the repeat infringer policy requirement. Other courts have
service providers are obligated to ban from theirsimilarly noted that [m]aking the entrance into the safe
websites); Corbis, 351 F.Supp.2d at 1101 (describingharbor too wide would allow service providers acting in
approvingly a policy that informed those accused of complicity with infringers to approach copyright
copyright infringement ... that repeated violations could infringement on an image by image basis without ever
result in permanent suspension from Amazon sites); In targeting the source of these images. Cf. Cybernet
re Aimster Copyright Litig, 252 F.Supp.2d at 659Ventures, 213 F.Supp.2d at 1177 (citing 17 U.S.C.
(describing a repeat infringer as one whose access should512(c)(1)(C)).
be terminated); Perfect 10, Inc. v. Cybernet Ventures,
Inc., 213 F.Supp.2d 1146, 117778 (C.D.Cal.2002)
*12 Thus, for all the reasons described above, the
(Cybernet Ventures ) (The Court does not read [ ] Court agrees with Judge Netburn's conclusion that Escape
512 to endorse business practices that would encourage does not implement a policy providing for the
content providers to turn a blind eye to the source oftermination of repeat infringers as 512(i) requires. Nor
massive copyright infringement ... until a court orders the does the Court find any merit in Escape's objections to
provider to terminate each individual account. (citingJudge Netburn's thorough and well-reasoned analysis.
Costar Grp., Inc. v. Loopnet, Inc., 164 F.Supp.2d 688, 705Moreover, Escape's improper recordkeeping, its primary
(D.Md.2001))).
file practice, and its failure to actually terminate repeat
infringers each provide an independent ground for finding
Furthermore, Escape is incorrect that Judge Netburn'san absence of evidence to support Escape's entitlement to
interpretation fails to serve the goals of the statute. To the the DMCA safe harbor.
contrary, multiple courts have noted that the service
provider must first establish that it adopted a policy 2. Reasonable Implementation
providing for the termination of access for repeat
Likewise, the Court agrees with Judge Netbura that,

Page 11
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
even assuming Escape's one strike policy could satisfy demonstrating how the vast majority of DMCA takedown
512(i)'s implementation requirement, its implementation notifications were effective enough for Escape to identify
of that policy is not reasonable, i.e., it is not carried out the user-submitted file, but so defective that they did not
in appropriate circumstances. See Io Grp, Inc. v. Veoh warrant terminating the user's uploading privileges.
Networks, Inc., 586 F.Supp.2d 1132, 1144 (N .D.
Cal.2008) (noting that [a] service provider reasonably
*13 But perhaps the strongest indicator of Escape's
implements its repeat infringer policy if it terminates failure to terminate the uploading privileges of repeat
users when appropriate. (quoting CCBill LLC, 488infringers in appropriate circumstances is the undisputed
F.3d 1102 at 1111). For this portion of the analysis, thefacts showing that hundreds or thousands of users were
Court assumes that Escape's purported policy and not stripped of their uploading privileges after receiving
practice of disabling the uploading capabilities of repeat notices of infringement. Notably, 1,609 users received
infringers constitutes termination under 512(i)(1)(A).DMCA takedown notices for an upload that occurred
R & R 74. Therefore, the relevant question is whether after the user had already received a prior DMCA
Escape actually terminates the uploading privileges oftakedown notice. RSUF 143. These 1,609 users
repeat infringers under appropriate circumstances.
submitted 2,339,671 files that are still available in
Grooveshark's active library. RSUF 143. And at least
Although Judge Netburn cited multiple examples of 3,323 users for whom there is documentation of
Escape's failure to bar the uploading privileges of repeat infringement in Escape's database still have their
infringers, see R & R 7478, perhaps the most troubling uploading privileges enabled. RSUF 131. The failure of
example is Escape's so-called DMCA Lite procedure. Escape's purported one strike policy is all the more
Under this procedure, if Escape receives a DMCAalarming when one considers that 21,044 users who have
takedown notification, but concludes that it is defective,received multiple DMCA takedown notices account for
it will categorize it is a DMCA Lite takedown, which does7,098,634 uploads, or 35%) of all uploads to
not result in disabling the user's uploading ability. Escape Grooveshark's active music library. RSUF 140.
deems takedown notifications defective if, for example,
they are not signed under oath or do not adequately
In response to these statistics, Escape admits that
identify the location of the alleged infringement on EMI has shown ... that, in operating its one strike
Grooveshark. Opp'n 39. But to be effective under the policy, Escape does not have in place a process to check
DMCA, a notification of claimed infringement must be awhether certain repeat infringers' have slipped through
written communication provided to the designated agent the cracks. Obj. 23. Escape then states that [t]o the
of a service provider that includes substantially sixextent that [its] practice does not work as intended on any
delineated components. 512(c)(3)(A) (emphasis added).given occasion, for whatever reasonEMI has identified
These six components help the service provider locate the1,609 such instances (or a mere 4.2% of the number of
infringing content and determine whether the request isrecorded infringers) (see Report at 63)it is likely that
made in good faith on the part of a copyright owner. Id.those accountholders who do fall through the cracks will
Since February 13, 2013, Escape has removed only 6,861 properly be recorded as a result of the next DMCA
files, but 94.2% of these have been removed under its so- notification addressed to one of their uploads. Obj. 23.
called DMCA Lite procedure. RSUF 147. As JudgeBut there is no reason to assume this would occur: As
Netburn noted, the fact that Escape deemed 94.2% of noted above, Escape argues that because it is Escape's
DMCA notifications defective, but was still able topolicy to disable a user's uploading privileges following
identify and remove the files, belies its contention that the the receipt of one notice ... there is no necessity to search
notification did not substantially comply with 512(c)for repeat infringers. Opp'n at 36 n. 14. Thus, Escape
(3)(A). Similarly, Escape offered no admissible evidencewould have no way of knowing if repeat infringers were

Page 12
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
slipping through the cracks because it makes no effort to
track them. This admission alone demonstrates that
Escape does not reasonably implement its own policy
because it does not have a way of checking to make sure
it is actually terminating users' uploading privileges in
appropriate circumstances.

[f]rom and after the date hereof, Escape Media shall not
allow the copying, reproduction, distribution, public
performance, and/or other exploitation of EMI
recordings on, via, and/or in connection with the
Grooveshark sites ... except pursuant to a valid and
binding
agreement
allowing
such
copying,
reproduction, distribution, public performance, and/or
As this extensive discussion reveals, EMI has shown other exploitation of EMI recordings (an EMI Content
that there is an absence of evidence to support Escape's Agreement), in accordance with the terms of such EMI
contention that it actually implements a repeat infringer Content Agreement.
policy or that its repeat infringer policy is implemented in
appropriate circumstances. Therefore, because there is an
McMullan Decl. Ex. 2 1.1. In exchange for
absence of evidence to support Escape's satisfaction of the $825,000, EMI released Escape from any and all causes
512(i) eligibility condition, no reasonable jury couldof action that EMI has, had, or may claim to have,
conclude that Escape is entitled to the 512(c) safeagainst [Escape] from the beginning of time to the
harbor. The Court need not reach the alternative present, through the Effective Date of this Agreement,
arguments that Escape does not satisfy the remainingsolely relating to allegedly infringing or unauthorized use
requirements of 512(c). In addition, because the Courtor exploitation of EMI Recordings on, via, and/or in
concludes that Escape does not meet the eligibilityconnection with the Grooveshark sites. Id. at 5.1.
conditions of the DMCA safe harbor, it need not reach the
issue of whether the DMCA safe harbor extends to sound
The Distribution Agreement granted Escape a license
recordings fixed prior to 1972.
to distribute certain authorized EMI content on
Grooveshark and established detailed terms governing
D. Release of Claims in the Distribution Agreement
that distribution. For example, the Distribution Agreement
*14 Finally, Escape argues that certain agreementsprovided that use of EMI Content obtained from any
entered into between it and EMI limit EMI's possible entity other than EMI or an Approved Source is a material
recovery for copyright infringement. Escape objects tobreach of this Agreement. McMullan Decl. Ex. 3 at
the portions of Judge Netburn's report discussing this4.2. In turn, EMI agreed to supply Escape with EMI
issue, so the Court reviews de novo. Although the CourtContent, which is defined as any ... materials containing
agrees with Judge Netburn's recommended outcome on any content made available by EMI to [Escape] owned or
this issue, the Court reaches this conclusion under slightly controlled by EMI. McMullan Decl. Ex. 3 at Ex. 1 19.
different reasoning.
In exchange for this license, Escape was to make certain
payments and produce regular sales reports for the
By way of background, EMI first sued Escape forcalculation of those payments.
copyright infringement in May 2009. Capitol Records,
LLC, et al. v. Escape Media Grp., Inc., 09 Civ.
On April 21, 2011, following EMI's notice of breach
04458(LMM) (S.D.N.Y. May 8, 2009). The parties of the Distribution Agreement, the parties entered into a
ultimately settled that lawsuit and executed two separate First Amendment to the Settlement and Distribution
contracts on September 24, 2009:(1) the SettlementAgreements. McMullan Decl. 1617; Tarantino Decl.
Agreement; and (2) the Distribution Agreement. The30, Ex. D. The Amendment contained a release providing
Settlement Agreement provides that
that EMI ... hereby remises and releases Escape Media of
any and all claims and liability for or in respect of the
Content/Usage/Accounting Claim for all periods prior to

Page 13
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
and including December 31, 2010, excepting only claims 2012 if those streams were from files that Grooveshark
arising under this Amendment. Tarantino Decl. Ex. D users uploaded prior to March 22, 2012.
12. The Amendment further provided that
First, nothing in the parties' agreements can be
*15 [o]ther than as amended hereby and by the Exhibitsconstrued to mean that EMI surrendered its entire bundle
hereto, the Settlement and Distribution Agreements, andof rights under the Copyright Act for all time based on a
all of the terms thereof, remain in full force and effect Distribution Agreement that was terminated on March 22,
according to their terms. For the avoidance of doubt, 2012. EMI provided notice of breach of the Distribution
unless explicitly amended herein, EMI Music's Agreement to Escape and afforded Escape the opportunity
termination rights under the Distribution Agreementand requisite time to cure the noticed breaches. Escape
remain in full force and effect according to their terms. did not do so, which led EMI to terminate the Distribution
Agreement as provided for in the Agreement. Going
Tarantino Decl. Ex. D. 14. Following an additionalforward, whatever rights Escape had in the Distribution
notice of breach, the parties entered into a SecondAgreement to stream EMI copyrighted content, regardless
Amendment of the Settlement and Distributionof when that content was acquired, ceased to exist.
Agreements on November 29, 2011. McMullan Decl.
1617. On January 25, 2012, EMI provided Escape with a
Second, Escape's argument overlooks the fact that the
new notice of breach of the Distribution Agreement.Settlement Agreement, which remains in effect, provides
McMullan Decl. Ex. 5. And on March 22, 2012, EMIthat Escape media shall not allow the copying,
provided Escape with a notice of material breach and reproduction, distribution, public performance, and/or
termination of the Distribution Agreement. Tarantino other exploitation of EMI Recordings ... except pursuant
Decl. Ex. E.
to a valid and binding agreement allowing such copying
reproduction, distribution, public performance, and/or
In short, Escape argues that EMI cannot prevail on its other exploitation of EMI Recordings (an EMI Content
copyright infringement claims for post-March 22, 2012Agreement). (emphasis added). In line with this
streams of copyrighted sound recordings that wereunderstanding, EMI's March 22, 2012 notice of material
derived from files impermissibly uploaded prior to March breach and termination stated that Pursuant to Paragraph
22, 2012, because the Settlement Agreement and 13.3 of the Distribution Agreement, we hereby demand
Amendment to the Settlement and Distribution Agreement that Grooveshark: (1) immediately cease any exploitation
were still in force at this time. It is important to of EMI Content, (b) destroy all EMI Content and EMI
distinguish between claims based on uploads, whichConfidential Information in its possession or control and
would presumably implicate EMI's reproduction and certify the same to EMI in writing. Assuming that EMI
distribution rights, and claims based on streams of those could not bring a breach-of-contract claim based on the
uploads, which would presumably implicate EMI's public impermissible user uploads during the duration of the
performance rights. Escape acknowledges that EMIDistribution Agreement, Escape still did not have the right
explicitly restricted its claims for violation of the right of to allow the ... public performance [i.e., streaming] ... of
public performance to streams after March 22, 2012. EMI Recordings of those impermissible uploads
Obj. 17 (emphasis added). Thus, EMI is not asserting following termination of the Distribution Agreement after
copyright infringement claims for the uploads that March 22, 2012 based on the still-in-force Settlement
occurred during the duration of the DistributionAgreement.
Agreement. But Escape nonetheless contends that EMI
cannot press claims for streamsi.e., infringement of its
*16 Nor is this conclusion regarding post-March 22,
public performance rightsthat occurred after March 22, 2012 streams called into question by the limited authority

Page 14
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
that Escape cites in support of its theory. Escape relies on
2010 as Judge Netburn appeared to believe. R &
Graham v. James for the proposition that [a] copyright
R 41. December 31, 2010 is the purported
owner who grants a nonexclusive license to use his
release-of-claims date while March 22, 2011 is
copyrighted material waives his right to sue the licensee
the agreement's termination date. Thus, while
for copyright infringement. 144 F.3d 229, 236 (2d
EMI is correct that Escape cannot quote any
Cir.1998) (citing Jacob Maxwell, Inc. v. Veeck, 110 F.3d
release language covering the period December
749, 753 (11th Cir.1997); Peer Int'l Corp. v. Pausa
22, 2011 to March 22, 2011, EMI Resp. 16 (Dkt.
Records, Inc., 909 F .2d 1332, 133839 (9th Cir.1990)).
No. 97), the case law is clear that claims for
Graham further observed that, [g]enerally, if the
copyright infringement arising during this time
[licensee's] improper conduct constitutes a breach of a
period would be limited to breach of contract in
covenant undertaken by the [licensee] ... and if such
light of the parties' agreement. But as noted in
covenant constitutes an enforceable contractual
the text, Escape's argument is incorrect insofar as
obligation, then the [licensor] will have a cause of action
it concerns continued exploitation of EMI
for breach of contract, not copyright infringement. Id.
content that it received prior to March 22, 2011.
at 236 (citing 3 Melville B. Nimmer & David Nimmer,
Nimmer on Copyright 10.15[A], at 10120). However,IV. CONCLUSION
as the several courts of this Circuit have found, use of
For the reasons stated herein, Judge Netburn's
copyrighted material after a license to use the material has recommendations are adopted in full. Therefore, EMI's
expired gives rise to [a] claim for copyrightmotion for summary judgment as to its Fifth and Sixth
infringement. FN5 Clinical Insight, Inc. v. Louisville Claims for federal and common law copyright
Cardiology Med. Grp., PSC, No. 11CV6019T, 2013infringement is GRANTED except with respect to its
U.S. Dist. LEXIS 97689, at *33 (W.D.N.Y. July 12, 2013)claims for direct infringement of its right of reproduction.
(citing Marshall v. New Kids On The Block Partnership, This resolves Dkt. No. 71.
780 F.Supp. 1005, 1009 (S.D.N.Y.1991) (Case law in
this Circuit indicates that a copyright licensee can make
The Court hereby schedules a case management
himself a stranger to the licensor by using the
conference for Friday, May 8, 2015 at 11:30 a.m. No later
copyrighted material in a manner that exceeds either the
than May 1, 2015, the parties shall submit a joint letter to
duration or the scope of the license.); Wu v. Pearson
the Court providing proposed trial dates and a proposed
Educ, Inc., 277 F.R.D. 255, 267 (S.D.N.Y.2011) (After
schedule for pre-trial submissions. The letter shall also
expiration of a license, further exercise by the licensee of
indicate when further settlement talks will take place and
the licensed exploitation rights constitutes copyright
whether the parties would like a referral to the Magistrate
infringement.);
Basquiat
v.
David
DeSanctis
Judge or the Court-annexed mediation program for
Contemporary Art, Inc., No. 09 Civ. 1025(PKC), 2010
settlement.
U.S. Dist. LEXIS 116292, at *3 (S.D.N.Y. Oct. 29, 2010)
(A sale by a licensee after the expiration of a license may
*17 SO ORDERED.
amount to copyright infringement.)). In sum, the parties'
agreements do not prevent EMI from bringing copyright
REPORT AND RECOMMENDATION
infringement claims based on the continued exploitation
SARAH
NETBURN, United States Magistrate Judge.
of user uploads that occurred prior to March 22, 2012.
TO THE HONORABLE ALISON J. NATHAN:
FN5. For this reason, the relevant cut-off date for
EMI's copyright claims based on streaming
content is March 22, 2011, not December 31,

INTRODUCTION
In 1999, a teenage college dropout finished writing

Page 15
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
software for an internet service called Napster that would LLC, d/b/a EMI Music North America (EMI), brought
allow people to swap music stored on their computers. Six this action against Escape Media Group, Inc. (Escape),
months after the service was released, 18 record alleging claims for: (1) copyright infringement, in
companies filed a lawsuit to shut it down. Since then, violation of the Copyright Act of 1976 (the Copyright
content-sharing websites have proliferated. Listening toAct), 17 U.S.C. 101, et seq.; (2) breach of contract as
music obtained free from others over the internet hasto the parties' Digital Distribution Agreement; (3) breach
become increasingly common; so too have lawsuits that of contract as to the parties' Settlement Agreement; (4)
pit corporate copyright owners against emergent onlineunjust enrichment; (5) unfair competition; and (6)
service providers in disputes over the use of copyrighted common law copyright infringement. Escape answered
musical works. This is such a lawsuit.
the complaint on October 15, 2012, asserting several
affirmative defenses, including that Escape is immune
Before the Court is the plaintiff EMI's motion for from EMI's copyright infringement claims under the
summary judgment on its copyright infringement claimssafe harbor provisions of the Digital Millennium
against Escape Media Group, which operates the free Copyright Act (the DMCA), 17 U.S.C. 512, et seq.
music-streaming website Grooveshark.com. Like manyOn July 16, 2013, Escape stipulated to liability on EMFs
recent copyright lawsuits against online serviceclaim for breach of the Digital Distribution Agreement but
providers, this case turns not on whether Grooveshark left open the question of damages. The Honorable Alison
exploits EMI's copyrighted works without authorization,J. Nathan referred this matter to me for dispositive
but on whether Escape can secure immunity from motions on October 24, 2013.
monetary liability for any infringing activity under the
Digital Millennium Copyright Act.

*18 Motions for summary judgment in this action

were due on December 20, 2013. Because the parties
After considering the papers submitted in support of indicated that they might seek to seal portions of EMI's
and in opposition to EMI's summary judgment motion, as anticipated summary judgment motion, the Court
well as the arguments advanced by the parties at the April permitted the parties to exchange their motion papers
29, 2014 hearing, the Court recommends that EMI's privately and then confer on the issue of a motion to seal,
motion for summary judgment be GRANTED IN PARTwhich the Court would resolve before allowing any
FN1
and DENIED IN PART. Specifically, the Courtmotion papers to be filed on ECF. On March 4, 2014,
recommends finding that Escape, as a matter of law, is not the Court received paper copies of all briefs and evidence
entitled to an affirmative defense under the Digital submitted in support of and in opposition to EMI's motion
Millennium Copyright Act, and that summary judgment for summary judgment.
should be granted in favor of EMI on its claims for direct
infringement of the right of performance under federal
law, secondary infringement under federal law for both
contributory and vicarious infringement, and direct and
secondary infringement under New York common law for
copyrighted works not covered by the Copyright Act.
The Court recommends that EMI's motion be denied with
respect to its claim for direct infringement of its right of
reproduction.

FN1. On March 11, 2014, the parties emailed the

Court a joint application for leave to file certain
documents under seal or with redactions. The
Court held a conference on that application on
May 15 and issued a related order on May 16,
2014. Consistent with that order, the parties filed
their motion papers on ECF on May 21, 2014.

In support of its motion, EMI submitted the following

PROCEDURAL BACKGROUND
documents: (1) Statement of Material Facts (SMF); (2)
On August 30, 2012, the plaintiff, Capitol Records,Declaration of Benjamin Semel (the Semel

Page 16
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
Declaration), attaching Exhibits 1 through 20; (3)
Declaration of Ellis Horowitz (the Horowitz
Declaration), attaching Exhibits 1 through 13; and (4)
Declaration of Alasdair McMullan (the McMullan
Declaration), attaching Exhibits 1 through 32.

FN2. Unless otherwise noted, all Rules cited in

this report refer to the Federal Rules of Civil
Procedure.

The moving party bears the initial responsibility of

In opposition to EMFs motion, Escape submitted theinforming the district court of the basis for its motion
following documents: (1) Response to Statement ofand identifying the matter that it believes demonstrate[s]
Material Facts (Response SMF); (2) Declaration ofthe absence of a genuine issue of material fact. Celotex,
Matthew Giger (the Giger Declaration), attaching477 U.S. at 323. The substantive law governing the case
Exhibits A through F; (3) Declaration of Samuel Tarantinowill identify those facts that are material and [o]nly
(the Tarantino Declaration), attaching Exhibits Adisputes over facts that might affect the outcome of the
through E; (4) Declaration of Colin Hostert (the Hostert suit under the governing law will properly preclude the
Declaration); and (5) Declaration of Cole Kowalski (the entry of summary judgment. Anderson, 477 U.S. at 248.
Kowalski Declaration).
Even where facts are disputed, in order to defeat
summary judgment, the nonmoving party must offer
In its reply, EMI submitted a Reply Statement of enough evidence to enable a reasonable jury to return a
Material Facts (Reply SMF), and a second Declarationverdict in its favor. Byrnie v. Town of Cromwell, Bd. of
of Benjamin Semel (the Reply Semel Declaration),Educ., 243 F.3d 93, 101 (2d Cir.2001).
attaching Exhibits 1 through 11.
*19 In determining whether summary judgment is
The parties appeared for a hearing on EMI's summaryappropriate, the Court must resolve all ambiguities and
judgment motion on April 29, 2014.
draw all reasonable inferences in the light most favorable
to the non-moving party. See Scott v. Harris, 550 U.S.
372, 378 (2007); Matsushita Elec. Indus. Co. v. Zenith
DISCUSSION
Radio Corp., 475 U.S. 574, 587 (1986). Summary
I. Legal Standard
Under Rule 56 of the Federal Rules of Civiljudgment is improper if there is any evidence in the
Procedure 56,FN2 the Court shall grant summaryrecord from any source from which a reasonable inference
judgment if the movant shows that there is no genuinecould be drawn in favor of the non-moving party. See
dispute as to any material fact and the movant is entitled Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 37 (2d
to judgment as a matter of law. Fed.R.Civ.P. 56(a); see Cir.1994). To create a disputed fact sufficient to deny
Celotex Corp. v. Catrett, 477 U.S. 317, 32223 (1986).summary judgment, the non-moving party must produce
The moving party must show that under the governing evidence in the record and may not rely simply on
law, there can be but one reasonable conclusion as to the conclusory statements or on contentions that the affidavits
verdict. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,supporting the motion are not credible[.] Ying Jing Gan
250 (1986). [T]he trial court's task at the summaryv. City of New York, 996 F.2d 522, 532 (2d Cir.1993).
judgment motion stage of the litigation is carefully limited [R]ather his response, by affidavits or otherwise as
to discerning whether there are any genuine issues of provided in the Rule, must set forth specific facts
material fact to be tried, not deciding them. Its duty, in demonstrating that there is a genuine issue for trial.
short, is confined at this point to issue-finding; it does not Wright v. Goord, 554 F.3d 255, 266 (2d Cir.2009) (citation
extend to issue-resolution.
Gallo v. Prudential and internal quotation marks omitted).
Residential Servs., LP, 22 F.3d 1219, 1224 (2d Cir.1994).

Page 17
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
In addition, the district court may not rely solely onmust show that the evidence supporting its claims is so
the statement of undisputed facts contained in the moving compelling that no reasonable jury could return a verdict
party's [Local Civil] Rule 56.1 statement. It must be for the defendant. SEC v. Meltzer, 440 F.Supp.2d 179,
satisfied that the citation to evidence in the record 187 (E.D.N.Y.2006); accord G Investors Holding LLC,
supports the assertion. Vt. Teddy Bear Co. v. 1800 2012 WL 4468184, at *4.
Beargram Co., 373 F.3d 241, 244 (2d Cir.2004) (citing
Giannullo v. City of New York, 322 F.3d 139, 143 n. 5 (2d II. Evidentiary Objections
Cir.2003) (stating that not verifying the assertions in the
*20 In its opposition, Escape objects to the following
Rule 56 .1 statement would derogate the truth-finding portions of the declaration of Ellis Horowitz, EMFs
functions of the judicial process by substituting expert witness: (1) statements that rely on analyses of
convenience for facts)). The Court of Appeals has longEscape's data conducted using Copysense, software
recognized that [because] summary judgment is a drastic created by the company Audible Magic, on the ground
device that cuts off a party's right to present his case to a that Audible Magic is functioning as an expert witness but
jury, ... the moving party bears a heavy burden of was not disclosed properly as such; (2) data analyses and
demonstrating the absence of any material issues of fact.findings that EMI did not disclose timely to Escape; and
Nationwide Life Ins. Co. v. Bankers Leasing Ass'n, Inc., (3) statements concerning the supposed purpose or intent
182 F.3d 157, 160 (2d Cir.1999)) (internal quotationof Grooveshark's design and procedures. (Opp'n at 22
marks and citations omitted); see also Am. Home 23.) In its reply, EMI objects to the Kowalski Declaration
Assurance Co. v. ZIM JAMAICA, 418 F.Supp.2d 537, 542on the procedural ground that Kowalski was not disclosed
(S.D.N.Y.2006) (Because summary judgment is a drastic properly as a witness and the substantive grounds that
device, the movant's burden is a heavy one.).
Kowalski's testimony is diversionary, not accurate,
unsupported by evidence, and submitted to create a
Where, as here, a plaintiff uses a summary judgmentsham dispute over facts. (Reply at 2425.) For the
motion, in part, to challenge the legal sufficiency of an following reasons, the Court recommends (1) overruling
affirmative defenseon which the defendant bears theEscape's objections to the Horowitz Declaration, and (2)
burden of proof at triala plaintiff may satisfy its Rulestriking the Kowalski Declaration under Rule 37(c)(1).FN3
56 burden by showing that there is an absence of evidence
to support [an essential element] of [the non-moving
FN3. The parties' evidentiary objections are
party's case]. Nw. Mut. Life Ins. Co. v. Fogel, 78
based primarily on Rule 37, which generally
F.Supp.2d 70, 73 (E.D.N.Y.1999) (quoting FDIC v.
permits a court to preclude evidence that was not
Giammettei, 34 F.3d 51, 54 (2d Cir.1994)) (brackets in
produced or for which the source was not
original). See also G Investors Holding LLC v. Lincoln
disclosed during discovery in compliance with
Ben. Life Co., Inc., 09 Civ. 2980(ALC)(KNF), 2012 WL
Rule 26. Magistrate judges may rule on
4468184, at *4 (S.D.N.Y. Sept. 25, 2012) (quoting Brady
nondispositive pretrial matters, including
v. Town of Colchester, 863 F.2d 205, 211 (2d Cir.1988)
discovery disputes such as requests for
(When considering a motion for summary judgment, the
preclusion of undisclosed evidence under Rule
district courts must ... be mindful of the underlying
37. See Fed.R.Civ.P. 72(a); 28 U.S.C. 636(b)(1)
standards and burdens of proof ... because the evidentiary
(A) (stating that such rulings are subject to
burdens that the respective parties will bear at trial guide
review under a clear error standard); Arista
district courts in their determination of summary
Records, LLC v. Doe 3, 604 F.3d 110, 116 (2d
judgment motions. ) (internal citation omitted). A
Cir.2010); Thomas E. Hoar, Inc. v. Sara Lee
plaintiff moving for summary judgment on its affirmative
Corp., 900 F.2d 522, 525 (2d Cir.1990).
claims, however, bears a much greater initial burden; it
Nevertheless, because the parties here did not

Page 18
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
file Rule 37 motions, and because the evidentiaryadmissible in evidence. ) (quoting Schaghticoke Tribal
objections are substantially intertwined with the Nation v. Kempthorne, 587 F.Supp.2d 389, 396
summary judgment motion as a whole, I find it(D.Conn.2008)); Masters v. F.W. Webb Co., 03 Civ. 6280L
appropriate in this circumstance to recommend a (DGL), 2008 WL 4181724, at *12 (W.D.N.Y. Sept. 8,
disposition on these issues as part of my overall 2008) (Applying [Rule 56(e) ], courts have ... held that
recommendation on the plaintiff's dispositiveotherwise admissible evidence may be submitted in
motion for summary judgment. Cf. 28 U.S.C. inadmissible form at the summary judgment stage, though
636(b)(1)(B).
at trial it must be submitted in admissible form. )
(quoting McMillian v. Johnson, 88 F.3d 1573, 1584 (11th
Cir.1996)).
A. Legal Standards for Objections to Evidence
2. Objections Based on Failure to Disclose
*21 Before discovery, parties have a duty to make
initial disclosures under Rule 26, which includes
The admissibility of evidence the parties submit in
disclosing the identities of persons likely to have
connection with a motion for summary judgment must be
discoverable information ... that the disclosing party may
resolved as a threshold issue. See Fed.R.Civ.P. 56(e);
use to support its claims or defenses and the identities of
Colon ex rel. Molina v. BIC USA, Inc., 199 F.Supp.2d 53,
persons that may present evidence as expert witnesses at
68 (S.D.N.Y.2001) ([T]he court must evaluate evidence
trial. Fed.R.Civ.P. 26(a)(1)(A)(i), 26(a)(2)(A). After the
for admissibility before it considers that evidence in
discovery phase has begun, a party who has responded to
ruling on a summary judgment motion.) (citing
an interrogatory must supplement or correct its
Fed.R.Evid. 104(a)). Although district courts may rely
disclosure or response ... in a timely manner if the party
only on admissible evidence when granting a motion for
learns that in some material respect the disclosure or
summary judgment, Spiegel v. Schulmann, 604 F.3d 72,
response is incomplete or incorrect, and if the additional
81 (2d Cir.2010), they have wide discretion in
or corrective information has not otherwise been made
determining which evidence is admissible, LaSalle
known to the other parties during the discovery process or
Bank Nat. Ass'n v. Nomura Asset Capital Corp., 424 F.3d
in writing. Fed.R.Civ.P. 26(e)(1)(A).
195, 20506 (2d Cir.2005) (quoting Nora Beverages, Inc.
v. Perrier Group of Am., Inc., 164 F.3d 736, 746 (2d
Under Rule 37(c)(1), if a party fails to make these
Cir.1998)). At the summary judgment stage, district courts
required
disclosures, a district court may prohibit the
have discretion to consider evidence in inadmissible form,
so long as the content would be admissible at trial. See party from using that information or witness to supply
Century Pac, Inc. v. Hilton Hotels Corp., 528 F.Supp.2devidence on a motion, at a hearing, or at a trial, unless the
206, 215 (S.D.N.Y.2007) aff'd, 354 F. App'x 496 (2dfailure was substantially justified or is harmless.
Cir.2009) (Hearsay evidence is admissible at theFed.R.Civ.P. 37(c)(1). The Rule further states that, [i]n
summary judgment stage if the contents would otherwise addition to or instead of this sanction, the court, on
be admissible at trial.) (citing Santos v. Murdock, 243motion and after giving an opportunity to be heard ... may
F.3d 681, 683 (2d Cir.2001)); Pathania v. Metro. Museum impose other appropriate sanctions, including ones that
of Art, 11 Civ. 2119(JMA), 2013 WL 1182076, at *19are less severe or more severe than precluding the
(E.D.N.Y. Mar. 21, 2013) (Even if an affidavit orevidence. Id. Rule 37(c)(1) is intended to to prevent the
declaration would not be admissible at trial, a court may practice of sandbagging an opposing party with new
consider it on a summary judgment motion if it is based evidence.' Haas v. Delaware & Hudson Ry. Co., 282 F.
on personal knowledge and sets forth facts to which the App'x 84, 86 (2d Cir.2008) (quoting Ebewo v. Martinez,
declarant could testify at trial and that would be 309 F.Supp.2d 600, 607 (S.D.N.Y.2004)); see also Am.
1. Objections Based on Inadmissibility

Page 19
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
Stock Exch., LLC v. Mopex, Inc., 215 F.R.D. 87, 93construe the parties' requests to preclude certain witness
(S.D.N.Y.2002) (stating that the purpose of Rule 37(c)(1)declarations under Rule 37(c)(1) and to apply the analysis
is to prevent surprise or trial by ambush) (internal for discretionary application of an appropriate sanction
quotation marks omitted); Gunawan v. Sake Sushi Rest.,prescribed by the Court of Appeals. Cf. Ritchie Risk
09 Civ. 5018(ALC), 2011 WL 3841420, at *4 n. 1Linked Strategies Trading (Ireland), Ltd. v. Coventry First
(E.D.N.Y. Aug. 26, 2011). Exclusion of evidence underLLC, 280 F.R.D. 147, 156 (S.D.N.Y.2012) (Yet despite
Rule 37(c)(1) does not require a showing of bad faith. the seeming self-executing nature of the preclusion
Design Strategy, Inc. v. Davis, 469 F.3d 284, 296 (2dsanction contained in the Rule, imposition of the
Cir.2006).
preclusion sanction remains within the trial court's
discretion.)
(internal
citation
omitted).
These
In Design Strategy, Inc. v. Davis, the Court ofapplications, coupled with the parties' opportunity to be
Appeals affirmed a district court's decision to preclude heard at the April 29, 2014 hearing, allow the Court to
evidence that was not disclosed in accordance with Rulepreclude the challenged evidence or issue other
26, but found that the district court err[ed] in its appropriate sanctions if justified by the following four
determination that preclusion is mandatory under Rulefactors established in Patterson v. Balsamico, which
37(c)(1) once the trial court finds that there is noexpand upon the substantially justified or harmless
substantial justification and the failure to disclose is not inquiry: (1) the party's explanation for the failure to
harmless. 469 F.3d at 297. The Court of Appeals found comply with the [disclosure requirement]; (2) the
the following language from the district court to be a importance of the testimony of the precluded witness[es];
correct statement of the Rule and of the court's discretion (3) the prejudice suffered by the opposing party as a result
of having to prepare to meet the new testimony; and (4)
in applying it. Id. at 298.
the possibility of a continuance. 440 F.3d 104, 117 (2d
Cir.2006) (internal quotation marks omitted, alterations in
Given that Defendants have moved to preclude
original).FN4 The Court is also guided by the observation
Doughty's testimony and that the [c]ourt held a
that most courts in this district have found preclusion of
telephone conference on this matter, it is not necessary
evidence under Rule 37(c)(1) to be a drastic remedy
to invoke Rule 37(c)(1)'s automatic sanction in order to
that should be exercised with discretion and caution,
preclude Doughty's testimony. Rather, Rule 37(c)(1)
Ebewo, 309 F.Supp.2d at 607, and only be applied in ...
provides that [i]n addition to or in lieu of [the
rare circumstances, Grdinich v. Bradlees, 187 F.R.D. 77,
automatic sanction], the court, on motion and after
79 (S .D.N.Y.1999). Accord Ritchie RiskLinked
affording an opportunity to be heard, may impose other
Strategies Trading (Ireland), Ltd, 280 F.R.D. at 15657
appropriate sanctions. The Court precludes Doughty's
(referring to evidence preclusion under Rule 37(c)(1) as a
testimony in an exercise of this discretion.
harsh remedy and citing authorities for imposing the
sanction rarely and cautiously); Granite State Ins. Co. v.
*22 Id. The district court's reference to Rule 37(c)
Clearwater Ins. Co., 09 Civ. 10607(RKE), 2014 WL
(1)'s automatic sanction is derived from the 1993
1285507, at *11 (S.D.N.Y. Mar. 31, 2014). This
Advisory Committee Notes to Rule 37, which the Court
formulation of the procedure for applying Rule 37(c)(1) is
of Appeals found cannot be squared with the plain
consistent with the principles embraced by the Court of
language of Rule 37(c)(1) setting forth a range of
Appeals in Design Strategy v. Davis and Patterson v.
sanctions available to courts upon a motion and after
Balsamico.
affording an opportunity to be heard. Id.
The Court finds the prudent approach here is to

FN4. Courts in this circuit have adhered to the

four factors most strictly when analyzing pre-

Page 20
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
trial motions in limine. See, e.g., Design MP3 files [in Grooveshark's database] embodied sound
Strategy, Inc., 469 F.3d at 29697; Patterson,recordings whose copyrights are owned by EMI. FN5
440 F.3d at 11718; Fitzpatrick v. Am. Int'l Grp., (Horowitz Decl. 6, 77.) Horowitz states that he
Inc., 10 Civ. 0142(MHD), 2013 WL 5718465, atidentified the recordings embodied in the MP3s and
*34 (S.D.N.Y. Oct. 21, 2013). In the summaryidentified the copyright owner of those recordings by
judgment context, however, many courts haveusing Copysense, content-recognition software developed
declined to apply the four-factor test, instead by Audible Magic. Horowitz explains that Audible
focusing on whether the non-disclosure wasMagic's software is based on recognizing the unique
justified and whether it was harmful or content of an underlying audio work and creating a
prejudicial. See, e.g., Granite State Ins. Co. v. psychoacoustic fingerprint, which is then matched
Clearwater Ins. Co., 09 Civ. 10607(RKE), 2014against a Global Rights Registry Database to identify
WL 1285507, at *11 (S.D.N.Y. Mar. 31, 2014);the copyright owner. (Id. 78 (internal quotation marks
Mobileve, Inc. v. Picitup Corp., 928 F.Supp.2domitted).) The Global Rights Registry Database is a
759, 766 (S.D.N.Y.2013); In re Methyl Tertiary large database of sound recording content submitted
Butyl Ether Products Liab. Litig., 00 Civ.directly by content owners, including EMI. (Id.; see also
1898(SAS), 2014 WL 494522, at *24 (S.D.N.Y.AudibleMagic.com,
Content
ID
Databases,
Feb. 6, 2014); 24/7 Records, Inc. v. Sony Music www.audiblemagic.com/content-databases/ (last visited
Entm't, Inc., 566 F.Supp.2d 305, 31819May 22, 2014) (Audible Magic's Music Database is one
(S.D.N.Y.2008). But see Haas, 282 F. App'x atof the most complete content identification registries in
8687 (applying the four-factor test).
the world, containing recognition signatures for tens of
millions of titles that are continually submitted by music
studios and content owners world-wide .).) FN6 In short,
B. Escape's Objections to the Horowitz Declaration
the Horowitz evidence submitted by EMI relies in part on
Audible Magic's technology to demonstrate the fact that,
1. EMI's Allegedly Undisclosed Expert Testimony
and to what extent, EMI content is housed on Escape
servers and streamed to Grooveshark users.
In support of its summary judgment motion, EMI
submits the declaration of its expert witness, Ellis
FN5. MP3s are digital music files created
Horowitz, which contains findings based on data analyses
through a process colloquially called ripping.
Horowitz conducted using Audible Magic software.
Ripping software allows a computer owner to
Escape contends that Audible Magic is functioning as an
copy an audio compact disk ... directly onto a
expert witness whom EMI failed to disclose as required
computer's hard drive by compressing the audio
by Rule 26(a)(2). The Court thus must determine initially
information on the CD into the MP3 format. The
whether Audible Magic is an expert witness for the
MP3's compressed format allows for rapid
purposes of Rule 26(a) disclosures, and, if it is, must then
transmission of digital audio files from one
determine if EMI's failure to disclose Audible Magic was
computer to another .... A & M Records. Inc. v.
either substantially justified or harmless and thus
Napster, Inc., 239 F.3d 1004, 1011 (9th
whether the related testimony should be precluded under
Cir.2001).
Rule 37(c)(1).
*23 In his declaration, Horowitz provides a
description of certain data and statistics concerning the
Grooveshark system and opines on whether certain

FN6. Horowitz cites to the Audible Magic

website in paragraph 78 of his declaration. To the
extent the website's content is not in the record,
the Court takes judicial notice of the information

Page 21
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
on the website under Federal Rule of Evidenceacoustical fingerprints of musical sound recordings....
201 for the purpose of ascertaining the service Companies such as Audible Magic claim to have a
Audible Magic offers. Cf. Hendrickson v. eBay, database of file hashes that are known to contain
Inc., 165 F.Supp.2d 1082, 1084, n. 2 copyrighted content.). Audible Magic's technology is
(C.D.Cal.2001) (taking judicial notice ofoften used by online content providers to filter out
ebay.com as evidence of the the nature ofinfringing content in an attempt to comply with the
eBay's business); Boarding Sch. Review, LLC v. Copyright Act and the DMCA. See, e.g., id.; Myxer, 2011
Delta Career Educ. Corp., 11 Civ. 8921(DAB),WL 11660773, at *5; UMG Recordings, Inc. v. Veoh
2013 WL 6670584, at *1 n. 1 (S.D.N .Y. Mar. 29, Networks Inc., 665 F.Supp.2d 1099, 1103 (C.D.Cal.2009).
2013) (The Court generally has the discretion to
take judicial notice of internet material.).
*24 Given the nature of Audible Magic's services and
its software Copysense, Audible Magic plainly is not an
Audible Magic's software and services involvingexpert
witness
here.
Contrary
to
Escape's
audio and visual content have been cited and described characterizations, EMI did not hire Audible Magic and
similarly in several recent cases. See, e.g., UMG Audible Magic did not provide testimony. (Opp'n at
Recordings, Inc. v. Shelter Capital Partners LLC, 71811.) Audible Magic simply created Copysense, the
F.3d 1006, 1012 (9th Cir.2013) (Audible Magic'ssoftware used by Horowitz to filter Grooveshark's
technology takes audio fingerprints' from video files anddatabase and obtain the results necessary to formulate his
compares them to a database of copyrighted content expert opinion. See Fed.R.Evid. 702. There is no authority
provided by copyright holders. If a user attempts toto support a rule that a party must include the
upload a video that matches a fingerprint from Audible manufacturer of a tool used by its expert in its initial
Magic's database of forbidden material, the video never disclosures, nor could there be without, for instance,
becomes available for viewing.); Arista Records LLC v. executives of calculator companies being subjected to
Lime Wire LLC, 06 Civ. 05936(KMW), 2010 WLconstant depositions. Cf. Henry v. Champlain Enters.,
10031251, at *6 (S.D.N.Y. Aug. 9, 2010) (definingInc., 288 F.Supp.2d 202, 22021 (N.D.N.Y.2003)
Fingerprinting Technology, which is available from(analyzing the reliability of an expert's methodologies,
commercial vendors such as Audible Magic, as the including the use of a software program and the use of
most effective available means of content-recognitionspecific valuation instruments, but not inquiring into
filtering based on recognizing the unique content of anwhether the manufacturers of the software or instruments
underlying audio-visual work and detecting and are third-party experts).
preventing copying of that content); Arista Records LLC
v. Myxer Inc., 08 Civ 03935(GAF)(JCX), 2011 WL
Further, even if Escape's characterization of Audible
11660773, at *5 (C.D.Cal. Apr. 1, 2011) (By running aMagic's services in this litigation were accurate, such
sound file through Audible Magic's Copysense services would likely fall[ ] within the permissible scope
software ..., Myxer can obtain high-level descriptiveof research and data collection done by third-party
information, metadata, about the particular sound assistants to experts. Bd. of Trustees of AFTRA Ret. Fund
recording. This information includes whether the soundv. JPMorgan Chase Bank, N.A., 09 Civ. 686(SAS), 2011
recording is owned by a particular record company, and WL 6288415, at *1011 (S.D.N.Y. Dec. 15, 2011); see
whether the copyright owner seeks to have it blocked also Cedar Petrochem., Inc. v. Dongbu Hannong Chem.
from Myxer's Website) (internal citations omitted);Co., Ltd., 769 F.Supp.2d 269, 285 (S.D.N.Y.2011)
MetroGoldwynMayer Studios, Inc. v. Grokster, Ltd., (finding expert testimony admissible where the experts
518 F.Supp.2d 1197, 120506 (C.D.Cal.2007) (...have based their conclusions on reliable results from tests
Audible Magic has a database of approximately 6 million conducted by independent consultants). Going even

Page 22
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
further and accepting Escape's assertion that Audiblean expert and their factual basis must be detailed and
Magic is a third-party expert, it is still not clear whycomplete ... to ensure adequate trial preparation,
Escape's objection should be sustained. EMI is not including the opportunity for efficient follow-up
submitting Audible Magic's testimony, but rather discovery through deposition, if necessary. Lava
Horowitz's expert opinions, which, arguendo, would beTrading, Inc. v. Hartford Fire Ins. Co., 03 Civ.
found to rely on hearsay evidence from Audible Magic. 7037(PKC), 2005 WL 4684238, at *67 (S.D.N.Y. Apr.
This would be likely permissible under the Federal Rules11, 2005) (quoting Fed.R.Civ.P. 26(a)(2) (B), 1993
of Evidence. See United States v. Mejia, 545 F.3d 179,Advisory Committee Notes, at 160, and citing Rule 26(b)
197 (2d Cir.2008) (Under Rule 703 [of the Federal Rules(4)(a)). EMI does not contest Escape's allegation that the
of Evidence], experts can testify to opinions based on disclosed Horowitz report was not detailed and
inadmissible evidence, including hearsay, if experts in thecomplete, but rather provides grounds for finding that,
field reasonably rely on such evidence in forming their under Rule 37(c)(1), this failure was substantially
opinions.) (internal quotation marks omitted); Century justified or is harmless. At the outset, a review of the
Pac, Inc., 528 F.Supp.2d at 215.
discovery timeline with respect to the data on which
Horowitz relied is necessary for the Court to assess
Finally, Escape fails to show that it suffered any Escape's objection.
meaningful prejudice from EMI's failure to disclose
Audible Magic, regardless of whether such a duty exists.
Escape produced a database table and a hard drive
Escape argues that EMI's failure to disclose Audiblecontaining over 500,000 MP3s from its servers in
Magic's analysis has manifestly prejudiced Escape, as it September 2013. (Reply Semel Decl. 14.) Horowitz's
has prevented Escape from obtaining documents and expert report was served on October 25, 2013, the
deposing Audible Magic on a number of topics affectingdeadline set by the Court. (Id. 19.) On the same say,
the reliability of its analysis. (Opp'n at 11.) Yet, Escape Escape produced additional database tables to EMI,
does not claim that a single MP3 file is incorrectly including
tables
titled
SongFiles
and
identified as an EMI work. Escape submits no evidencedeletedSongFiles. (Id., Ex. 11.) On November 20, 2013,
regarding its own music library and data to try to dispute EMI produced 30 pages of documents containing
the facts related to Horowitz's Audible Magic analyses. Horowitz's data queries and statistical results. (Giger
Escape's hypothetical and unsubstantiated prejudice is farDecl. 8, Ex. F.) Per the Court's order, the deadline for
from adequate to justify preclusion under Rule 37(c)(1),depositions was November 22, 2013, a deadline which
particularly where Escape possesses substantialhad been extended multiple times. On November 25,
information that would allow it to determine whether the 2013, Escape deposed Horowitz. (Id., Ex. A (Horowitz
Audible Magic analyses were reliable, without the need Dep.).) The morning of the deposition, EMI delivered to
for additional depositions and document requests.
Escape corrected versions of some of Horowitz's charts
and graphs. (Horowitz Dep. at 71:474:14.) On December
2. EMI's Allegedly Untimely Disclosure of Horowitz's4, 2013, Escape produced additional database tables to
EMI, including a table titled Files, which is the
Findings
*25 Escape next argues that the Court should exclude complete centralized table Horowitz used to analyze
Horowitz's analyses of Escape's data because they wereEscape's MP3s. (Reply Semel Decl. 20, Ex. 10.)
never properly disclosed by EMI in connection with
Horowitz's expert report. (Opp'n at 20.) Under Rule
Untimely expert submissions are not admissible [at
26(a)(2)(b), a party who has designated an expert witness trial] unless the proponent of the evidence can
for trial must provide the expert report to the opposing demonstrate that his delay in complying with the required
party. [T]he report pertaining to the proposed opinions of deadlines was substantially justified or that it was

Page 23
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
harmless, that is, that it did not prejudice the other side. opportunity to question Horowitz about his findings.
Lava Trading, Inc., 2005 WL 4684238, at *8 (citing RuleTherefore, Escape has not shown sufficiently that
37(c)(1)). Here, it appears that most, if not all, ofHorowitz's data analyses should be stricken, and EMI has
Horowitz's untimely submissions were substantiallyshown that any failure to comply with Rule 26(a)'s
justified, given that Escape produced database tables that disclosure requirements was either substantially justified
were integral to [Horowitz's] analysis after Horowitz or harmless. The Court recommends denying Escape's
could have possibly included them in his expert report. objection.
(Semel Reply Decl. 19, 20.) In particular, Escape did
not produce the full SongFiles database until October 25,
FN7. Escape had the ability to replicate
2013, the day that Horowitz's expert report was due. This
Horowitz's analyses in order to dispute or
database was necessary for Horowitz to run Query No. 1
explain his findings, as demonstrated by
and Query No. 6 of the Grooveshark database (Horowitz
Kowalski's testimony that he arrived at one of his
Decl., Ex. 7), the results of which supported several of
conclusions by running the query disclosed in
Horowitz's conclusions (see, e.g., id. 24, 71, Ex. 9).
Mr. Horowitz's Declaration. (Kowalski Decl.
Escape's argument that Horowitz failed to include in his
14.)
expert report the statistical analyses he submits in his
declaration, and which would have been impossible to
3. Expert Testimony on Purpose or Intent
include in the expert report because of Escape's late data
*26 Lastly, Escape asks the Court to exclude
production, is unavailing. Further, any prejudice to
Horowitz's proffered opinions concerning the supposed
Escape is minimal; there is no risk here of surprise or
purpose or intent of Grooveshark's design and
trial by ambush for the following reasons. Am. Stock
procedures. (Opp'n at 22.) Escape cites the following
Exch., LLC, 215 F.R.D. at 93 (internal quotation marks
examples of the Horowitz Declaration as inadmissible: (1)
omitted). First, Horowitz's findings at issue are derived
Escape uses a database of commercial music content
from Escape's own data and from running that data
metadata to ensure that the artist, album and song
through content-recognition software. Escape had the
information is correct on Grooveshark. The apparent
opportunity to conduct its own analysis on its audio files
purpose is to curate and organize content to accurately
and submit its findings with its opposition to show a
describe commercially released recordings, so that when a
genuine dispute of material fact, but it did not do so. FN7
user searches for [a song] ..., that user is finding that
Second, many of Horowitz's findings that Escape seeks to
sound recording on Grooveshark, and not something else
exclude were produced to Escape before Horowitz's
(Horowitz Decl. 34); and (2) Thus, the only apparent
deposition, thus providing Escape the opportunity to
purpose for storing these additional files is so that they
question Horowitz and challenge these findings. Third,
may be used as a back up to replace Primary Files that
Escape could have, but did not, request leave from the
are removed during takedowns so that the song remains
Court to further depose Horowitz as to any findings he
playable on Grooveshark (Id. 58).
produced after his deposition. Cf. Design Strategy, Inc.,
469 F.3d at 296 (stating that, in determining whether
Horowitz is an expert in computer science and
exclusion for untimely disclosure is appropriate under
software engineering. His opinions quoted above and
Rule 37(c)(1), district courts must consider the possibility
identified by Escape as examples of inadmissible
of continuing the trial). Finally, in opposition to EMI's
evidence provide explanations as to why certain computer
motion, Escape submits excerpts of the Horowitz
processes might be implemented. These opinions are
Deposition that can be interpreted to undermine the
based on Horowitz's technical expertise and would help
weight of Horowitz's findings, thus further mitigating any
the trier of fact to understand the evidence or to determine
prejudice and demonstrating that Escape had the
a fact in issue. Fed.R.Evid. 702(a). In Arista Records

Page 24
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
LLC v. Lime Group LLC, a court in this district denied athat, [i]nstead of objecting, parties should simply argue
similar objection to Horowitz's opinions concerning that the facts are not material) (emphasis in original).
intent, finding that
Escape's objection should be denied.
Dr. Horowitz has not opined on the parties' state ofC. EMI's Objection to the Kowalski Declaration
mind, but rather has provided information on the design
*27 Cole Kowalski is a systems engineer who has
and functionality of the [MP3 streaming] program....worked for Escape since July 2011. Kowalski is
Such expert opinion is proper and aids the finder-of-fact responsible for the physical maintenance of the servers
in understanding [the website's] features. Dr. Horowitz that contain the [Grooveshark] databases, as well as the
does not make any impermissible legal conclusions, maintenance of Escape's database software and the
such as stating that [the defendant] actually intended to schema employed in various tables within databases
facilitate copyright infringement. He also does noti.e., the particular fields of data collected and maintained
cross the line into unreliable speculation about the in those tables. (Kowalski Decl. 2.) As a basis for his
intended purpose of various [website] design features. declaration, Kowalski collected and reviewed certain
data from database tables that were produced in discovery
784 F.Supp.2d 398, 41214 (S.D.N.Y.2011). Further,in this action. (Id. 3.) Kowalski's testimony is offered
unlike fact witnesses, an expert is permitted wide primarily to dispute EMI's proposed facts regarding
latitude to offer opinions, including those that are not Escape's affirmative defense of safe harbor under the
based on firsthand knowledge or observation. Daubert,DMCA. Escape's proposed facts supported by Kowalski's
509 U.S. at 592; see also Nimely v. City of New York, 414testimony include that (1) Escape has removed uploading
F.3d 381, 396 n. 11 (2d. Cir.2005) (stating that anprivileges of nearly 39,000 users who submitted files
expert witness is permitted substantially more leeway associated with a DMCA takedown (Counter SMF 93);
than lay witnesses in testifying as to opinions that go (2) Escape maintains records of every DMCA takedown
processed and the submitting users (id. 98); (3) Escape
beyond the witness's immediate perception).
processed more than 2.1 million DMCA takedowns and
disabled uploading capability for numerous users between
In response, Escape asserts that it explains [in its
November 1, 2010 and March 20, 2012 (id. 99); and (4)
opposition brief] its actual reasons for these processes,
Escape removes all primary and non-primary song files
and the Court or jury is quite capable of determining
when processing a DMCA Lite takedown (id. 122).
Escape's
intent
from
primary evidence,
not
pseudo-expert opinions on what amounts to corporate
psychology. (Opp'n at 22.) Escape is arguing essentially1. Rule 37(c)(1)
In violation of Rule 26(a), Escape did not disclose
that Horowitz's testimony is insufficient to establish any
facts proposed by EMI as to Escape's purpose or intent Kowalski in its initial disclosures as a person likely to
and, even if it were sufficient, the primary evidence have discoverable information. (Semel Reply Decl., Ex.
would demonstrate a genuine dispute as to these material 8.) In violation of Rule 26(e), Escape did not disclose
fact, which would likely result in denying EMI's motion Kowalski in response to EMI's Interrogatory No. 1, which
for summary judgment. This is an argument about the asked Escape to identify all persons with knowledge of
merits of EMI's summary judgment motion, not about thethe ... affirmative defenses set forth in the ... Answer.
admissibility of evidence, and is thus unnecessary to (Semel Deck, Ex. 9 at 5.) Further in violation of Rule
resolve here. Cf. Burch v. Regents of Univ. of Cal., 43326(e), Escape did not disclose Kowlaski in response to
F.Supp.2d 1110, 1119 (E.D.Cal.2006) (finding objectionsEMI's Interrogatory Nos. 5 or 6, which sought the
to evidence that are duplicative of the summaryidentities of custodians of documents relating to the usage
judgment standard itself to be redundant and stating or exploitation of EMI content on Grooveshark.

Page 25
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
Escape therefore has not provided a valid explanation for
The Court thus applies the following four factors to why it did not include Kowalski in its initial disclosures
determine whether the Kowalski Declaration should beunder Rule 26.
precluded under Rule 37(c)(1): (1) Escape's explanation
for its failure to disclose; (2) the importance of Kowalski's
Second, because Escape cites only to the Kowalski
testimony; (3) the prejudice that would be suffered by Declaration in its Counter SMF to attempt to dispute
EMI as a result of having to prepare to meet Kowalski's many of EMI's proposed facts, particularly ones salient to
testimony; and (4) the possibility of a continuance. Escape's DMCA defense, the declaration is particularly
Patterson, 440 F.3d at 117. First, Escape's opposition doesimportant to Escape's opposition. Cf. Haas, 282 F. App'x
not attempt to explain why Kowalski was not identified in at 86. Third, EMI would be substantially prejudiced were
Escape's initial disclosures or in response to EMI's the Court to consider the Kowalski Declaration because
interrogatories, nor has Escape sought leave to file a sur- EMI did not have the opportunity to depose Kowalski or
reply in light of EMI's objection. Cf. Gunawan, 2011 WLto address his testimony in its opening summary motion
3841420, at *4 n. 1 (Defendant's opposition brief did not papers. See id. (finding that a party's explanation for not
address this issue [of its failure to identify a fact witness disclosing a declarant did not diminish the prejudice
in its initial disclosures] and nor did Defendant seek leave caused by waiting until after the close of discovery and,
to file a sur-reply in the face of Plaintiff's objection to the moreover, after [the moving party] had prepared and filed
consideration of the Declarations. Because Federal Ruleits motion for summary judgment). Further, Kowalski
of Civil Procedure 37(c)(1) prohibits the use ofdoes not submit any exhibits with his declaration and
undisclosed evidence in the absence of substantial often fails to explain adequately how he reached his
justification, those Declarations were not considered.). conclusions, thus preventing EMI from substantively
responding in its reply brief.
*28 At the April 29, 2014 hearing, Escape did not
offer an explanation for failing to disclose Kowalski as a
Fourth, granting a continuance at this late stage in the
witness other than to assert that, because his declaration litigation would be inefficient, unduly prejudicial, and an
was offered to rebut or impeach Horowitz's testimony,unwarranted concession to Escape for its violations of
including Kowalski in Escape's initial disclosures was not Rule 26. Fact discovery in this action initially was
required. This explanation is untenable. Rule 26(a)scheduled to close on February 22, 2013, and all fact
requires parties to disclose each individual likely to havewitness depositions were to have been completed by
discoverable informationalong with the subjects of that January 30, 2013. The Court is not inclined to reopen fact
informationthat the disclosing party may use to support discovery well over a year after it was scheduled to close,
its claims or defenses, unless the use would be solely for particularly given the multiple discovery extensions
impeachment. Fed.R.Civ.P. 26(1)(A)(i). The Kowalskigranted and discovery disputes resolved by the Court in
Declaration is submitted as evidence in support of the past year. A continuance, which neither party has
Escape's affirmative defense and to attempt to establish a requested, would not be justified by the circumstances.
dispute of material fact. Nothing in the Kowalski Cf. Chen v. New Trend Apparel Inc ., 11 Civ. 324(GBD)
Declaration is offered to cast doubt on Horowitz's (MHD), 2014 WL 1265916, at *20 (S.D.N.Y. Mar. 27,
credibility and thus is not offered for impeachment 2014) ([G]ranting a continuance at this stage for
purposes. Cf. Cary Oil Co ., Inc. v. MG Ref. & Mktg., purposes of allowing further expert discovery would
Inc., 257 F.Supp.2d 751, 757 (S.D.N.Y.2003). While Ruleprolong what has become a long and tortuous case history,
26(a)(2)(D)(ii) excuses the late disclosure of rebuttal and would reward the ... defendants for disregarding this
[e]xpert [t]estimony, Kowalski has not been presented court's [discovery deadline] orders by imposing on the
as an expert witness, making this exception inapplicable. other parties at this late stage the need to invest significant

Page 26
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
time and expense .... This not only would undermine theFurther, these conclusions are not corroborated by the
court's ability to manage its schedule, but also would extensive deposition and declaration testimony of the
impose a delay that may well have been designed to give people Escape did list in its disclosures and interrogatory
the ... defendants an unwarranted opportunity to forestall responses as being knowledgeable about the relevant
resolution of [the summary judgment] motion.).
subjects.FN8 For these reasons, preclusion is the only
appropriate and equitable remedy under Rule 37(c)(1).
*29 In sum, Escape has provided no justification for The Court therefore recommends that the Kowalski
its repeated failure to disclose Kowalski, despite its Declaration be stricken in its entirety.
obligation to do so, and its non-disclosure would not be
harmless. While preclusion of evidence not disclosed in
FN8. It is particularly notable that the facts
compliance with Rule 26 is a drastic remedy that should
alleged by Kowalski were not provided or
be imposed sparingly, the circumstances here warrant
corroborated by Colin Hostert, Escape's Chief
such a remedy. In addition to addressing Rule 37(c)(1)'s
Information Officer and DMCA Agent, whom
concern with parties circumventing Rule 26 and
Escape disclosed as having information about
sandbagging the opposing party with new evidence,
uploading and streaming music on Grooveshark
preclusion here is also necessary to prevent Escape from
and information about Escape's policies and
circumventing what in this circuit is known as the sham
practices with respect to its compliance with the
affidavit rule. Under this rule, the non-moving party to a
DMCA, including ... Escape's receipt of and
summary judgment motion is estopped from creating
response to DMCA takedown notices, (Semel
disputes of material fact through declaration testimony
Reply Decl., Ex. 8 6), and who was disclosed
that contradicts the declarant's prior deposition testimony.
as the custodian for the data maintained on
See In re Fosamax Products Liab. Litig., 647 F.Supp.2d
Escape servers concerning the audio streaming
265, 281 (S.D.N.Y.2009). Allowing such declarations
and other usage or exploitation of recordings on
would greatly diminish the utility of summary judgment
or through the Grooveshark Service, (id., Ex. 9
as a procedure for screening out sham issues of fact.
at 7). Nor are the key facts alleged by Kowalski
Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 43 (2d
corroborated by Hostert in his deposition
Cir.2000) (internal quotation marks omitted). By the same
testimony in this action, his deposition testimony
principle, Escape should not be able to shield a witness
in a previous action, or his declaration submitted
from deposition by failing to disclose his identity in initial
in opposition to EMI's motion for summary
disclosures and in response to interrogatories, and then
judgment.
offer his uncorroborated declaration testimony as the sole
supporting evidence to create multiple disputes of 2. Admissibility
material facts. This principle is particularly applicable
In the alternative, even if the Court declined to strike
here because Kowalski's declaration adds very few, if any,the Kowalski Declaration under Rule 37(c)(1), it would
new facts based on his personal experience as an Escape find that a substantial portion of Kowalski's testimony is
employee for 31 months or based on recent events inadmissible as lay witness testimony under Federal Rule
involving Kowalski. Rather, his testimony consists almost of Evidence 701 and would be required to meet the
exclusively of conclusions he drew from analyzing data standard for expert testimony under Federal Rule of
collected for the sole purpose of opposing summary Evidence 702 for admission. See Fed.R.Civ.P. 56(e)
judgment, including various statistics and broad (Supporting and opposing affidavits shall be made on
statements about Escape's practices for which he provides personal knowledge, shall set forth such facts as would be
no supporting evidence and threadbare, if any,admissible in evidence, and shall show affirmatively that
explanations of how he arrived at his conclusions. the affiant is competent to testify to the matters stated

Page 27
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
therein.); Hollander v. Am. Cyanamid Co., 172 F.3d 192,was based on his observations during his 20 months as a
198 (2d Cir.1999) (holding that a district court maycompany employee. 490 F.3d at 224.
strike portions of an affidavit that are not based on the
affiant's personal knowledge, contain inadmissible
Much of Kowalski's testimony would be inadmissible
hearsay or make generalized or conclusory statements). unless offered as expert testimony under Federal Rule of
Evidence 702, and then only if he were disclosed properly
*30 Lay opinion testimony under Federal Rule ofas an expert and satisfied the reliability requirements for
Evidence 701 is permissible when that testimonyexpert testimony. See Bank of China, 359 F.3d at 182.
result[s] from a process of reasoning familiar in Kowalski offers testimony as to an investigation he
everyday life. United States v. Rigas, 490 F.3d 208, 224conducted for the sole purpose of rebutting EMI's motion
(2d Cir.2007) (internal quotation marks omitted). This for summary judgment. (See Kowalski Decl. 3 (stating
standard is fact-specific with respect to the experience and that his testimony was based on his review of the
role of the person proffering the testimony. An employee discovery produced to EMI in this action).) His
whose duties included undertaking an investigation into conclusions were derived by running calculations and
his employer's practices, for instance, can offer opinion processes that he would not have otherwise run as an
testimony as to that investigation. This situation arose employee and using data that is only relevant because it is
with respect to a bank employee in Bank of China, New what was produced to EMI in discovery. Indeed,
York Branch v. NBM LLC, in which the Court of AppealsKowalski offers testimony intended specifically to pit his
found, The fact that [the employee] has specializedcalculations and analyses against those of Horowitz,
knowledge, or that he carried out the investigationEMI's expert witness, including testimony based on
because of that knowledge, does not preclude him from replicating one of Horowitz's data queries. (See Kowalski
testifying pursuant to Rule 701, so long as the testimonyDecl. 78, 14, 16.) Federal Rule of Evidence 701(c)
was based on the investigation and reflected his prohibits testimony from a lay witness that is based on
investigatory findings and conclusions, and was notscientific, technical, or other specialized knowledge in
rooted exclusively in his expertise in international order to eliminate the risk that the reliability
banking. 359 F.3d 171, 181 (2d Cir.2004). Thus, therequirements set forth in Rule 702 will be evaded through
court concluded, to the extent that the employee's the simple expedient of proffering an expert in lay witness
testimony was grounded in the investigation he clothing. Rigas, 490 F.3d at 224 (quoting Fed.R.Evid.
undertook in his role as a Bank of China employee, it was 701, Advisory Committee Note to 2000 Amendment).
admissible pursuant to Rule 701 of the Federal Rules ofKowalski's testimony is based on his specialized
Evidence because it was based on his perceptions. Id. atknowledge, not on his personal perception or observations
18182 (emphasis in original). Had the employee'sas an Escape employee. Thus, in addition to striking the
testimony not been a product of his investigation, but Kowalski Declaration under Rule 37(c)(1), the Court
rather reflected [his] specialized knowledge, then it was recommends excluding it from consideration as
impermissible expert testimony. Rigas, 490 F.3d at 224inadmissible expert testimony under Federal Rule of
(quoting Bank of China, 359 F.3d at 182); see also Evidence 701.
Disability Advocates, Inc. v. Paterson, 03 Civ.
3209(NGG)(MDG), 2008 WL 5378365, at *17 (E.D.N .Y.III. Facts
Dec. 22, 2008). Similarly, in United States v. Rigas, the
Court of Appeals found that a former company
A. Uncontroverted Facts
accountant, though possessing the specialized knowledge
to testify as an expert, could testify properly as a lay
*31 The following facts are supported adequately by
witness about the company's books because the testimony

Page 28
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
admissible evidence and are admitted without controversy
for the purposes of this summary judgment motion. See
Local Civ. R. 56.1(c), (d) (stating that facts not
specifically controverted in the non-moving party's
counter-statement of material facts will be deemed to be
admitted for purposes of the motion); Fed.R.Civ.P. 56(e)
(2) (stating that where a party fails to address another
party's assertion of fact properly, the court may consider
the fact undisputed for purposes of the motion).
1. Operation and Functionality of Grooveshark.com
Escape, founded in 2006 by Samuel Tarantino (now
President and CEO) and Joshua Greenberg (now Chief
Technology Officer), developed, owns, and operates an
internet-based
music
streaming
service
called
Grooveshark,FN9
which
is
accessible
at
www.grooveshark.com
(Grooveshark.com
or
Grooveshark). According to Tarantino, one of Escape's
goals in creating Grooveshark was to make music
available free of Digital Rights Managementcommonly
known as DRMtechnology, which is used by major
record labels to prevent copyright infringement. (See
Semel Decl., Ex. 7 (Tarantino Dep.) at 47:2448:8.) Users
of Grooveshark, after accepting Escape's Terms of
Service,FN10 can create free accounts and submit digital
MP3 files to be uploaded to a central library of sound
recordings maintained on Escape's internet servers.
Grooveshark's library is searched and displayed to users
primarily using three metadata fields: Artist, Album and
Song.FN11 Anyone can access Grooveshark.com, search its
library for particular songs, and stream music without
registering an account or providing personal information.
Escape streams files to users by storing a single master
copy of each file in its central library and allowing
multiple users to share access to that same file.

How The Internetworks 22931 (7th ed.2004).

Streaming allows the user to play the recording
only; it does not allow the user to download the
recording, i.e., create a permanent digital file of
the recording on the user's computer. United
States v. Am. Soc'y of Composers, Authors &
Publishers, 485 F.Supp.2d 438, 441422
(S.D.N.Y.2007); Tarantino Decl. 5.
FN10. Under Escape's Terms of Service, a user
creating a Grooveshark account must, among
other provisions, agree to the following:
[U]nless EMG indicates otherwise, by
submitting User Content to the Service you
grant EMG and its affiliates a nonexclusive,
royalty-free, perpetual, irrevocable, and fully
sub-licensable right to use, display, perform,
reproduce, publish, and distribute such User
Content throughout the world via the Service.
You also grant each User of the Service a
nonexclusive license to access your User
Content through the Service, and to use,
reproduce, distribute, display, broadcast and
perform such User Content as permitted
through the functionality of the Service and
pursuant to this Agreement.
(SMF 81.)
FN11. Metadata, often described as data about
data, is, in this context, information stored
electronically in a digital audio file that describes
aspects of that file, such as its name, format,
size, or other information that can be entered
manually. See R.F.M.A.S., Inc. v. So. 271 F.R.D.
13, 45, n. 111 (S.D.N.Y.2010).

FN9. Streaming generally involves

compressing a file to a size small enough to be
transmitted over the Internet and then allowing
Using software provided and controlled by Escape,
the receiving computer to start playing packets
Grooveshark account-holders can submit their MP3s,
of the file while the remaining packets are being
which are then indexed and organized automatically by
transmitted. WPIX, Inc. v. ivi, Inc., 691 F.3d
Escape. Only files that have metadata entries for the artist,
275, 284 (2d Cir.2012) (quoting Preston Gralla,

Page 29
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
album, and song names can be uploaded to Grooveshark. data in the Grooveshark library. Escape also maintains
Before an MP3 is uploaded, it is run through Escape'smetadata filters that allow it to block content based on
content filtering system, which can block certain files due artist, album, and song names, and to exclude duplicative
to their prohibited content or because the user submitting content, i.e., content for which the audio fingerprint
the file has had her uploading privileges revoked. Thematches a fingerprint already in the Escape database.
account-holder also must click a box before submitting Escape records uniformly all file submissions in its
files to verify that she understands the Terms of Service UsersFiles database table regardless of how Escape
and is only uploading content that does not infringe uponhandles the content after it is submitted.
the rights of others. (SMF 83.) Tarantino acknowledges
that, for at least some period, the great majority of
MP3 files containing the same song submitted by
content on Grooveshark came from illegal networks,multiple users are grouped together, but only one file,
which Tarantino was trying to monetize. (SMF 32designated the primary file, appears in searches and will
(quotations from attorney's statements with which be streamed when selected by a user.FN12 The files
Tarantino agreed).)
containing the same song that are not designated as the
primary file (the non-primary files) can be neither
Escape controls what content is housed in the streamed nor accessed through a search.
Grooveshark library and can block files based on their
metadata or their audio fingerprints (information
FN12. The primary files are organized by region,
identifying the audio content of the files based on the way
so the primary file played for a user in the United
the recordings actually sound). Once an account-holder
States will be different than one played for a user
has successfully uploaded an MP3 to Grooveshark.com,
in another country.
she personally cannot remove that file from the website or
edit the file's description or metadata. An account-holder
3. Escape's Policies and Practices Regarding
can select an option on the website to deactivate her
Infringing Works Uploaded to Grooveshark.com
account, but Escape has no procedure for removing
With respect to user-submitted content alleged by a
account-holders' content from the Grooveshark library
copyright owner to be infringing, Escape implements
upon deactivation.
what it calls its one strike policy. Through this policy,
Escape purports to disable the uploading capabilities of a
2.
Escape's
Storage
and
Organization
ofuser after receiving one DMCA notice asserting that the
Grooveshark.com Audio Content
user uploaded infringing content, in addition to removing
*32 Escape uses its servers to house and stream MP3 the file and sending an email notification to the
files submitted by Grooveshark users. Through a submitting user.FN13 Although Escape has no policy to
technology called fuzzy matching, which is applied identify repeat infringers, Escape avers that its one strike
without users' participation, Escape changes the metadatapolicy precludes the possibility of repeat infringers. (SMF
entered by users in order to group together content with 91; Counter SMF 91; Hostert Dep. 137:21138:7.)
similar but not identical names and multiple files thatWhen Escape receives a takedown request that it
appear to contain the same sound recording. To furtherconsiders non-compliant with the DMCA's requirements
organize the content submitted by users, Escapefor such notifications or otherwise deems ambiguous or
downloads to its servers and syncs its audio library to a unofficial, Escape applies a policy it created called
third-party database of commercial music contentDMCA Lite, under which the file is removed but the
metadata called MusicBrainz. If metadata associated withuser who submitted the file does not lose her uploading
Grooveshark content is found to be similar enough to privileges, does not receive a notification email, and is not
listings in MusicBrainz, the MusicBrainz data replaces the recorded. An Escape database titled Takedown Batches

Page 30
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
shows that, since the earliest entry on February 13, 2013, any users who submitted the infringing file afterward. In
94.2% of the takedowns have been recorded in theconnection with this litigation, Escape produced no copies
dmca_lite field, as opposed to the dmca field.
or records of DMCA notifications sent to Grooveshark
users between November 16, 2010, and February 1, 2013.
FN13. The DMCA requires service providers to Escape's database table used to log DMCA takedowns
designate an agent to receive notifications ofcontains no entries from October 31, 2010 through March
claimed infringement, which trigger the20, 2012.
obligation for the service provider to remove the
infringing content. 17 U.S.C. 512(c)(23).
Escape removes primary files from its system only in
These notifications of infringement areresponse to a DMCA takedown. Escape processes
commonly known as DMCA takedowns ortakedowns only when the copyright owner identifies the
notices.
specific web address for the infringing song. FN14 Web
addresses are available for the primary file only; contentEscape has no procedure for terminating a user's owners submitting takedown notices cannot obtain web
account in connection with a DMCA takedown and has addresses for non-primary files. Because the primary file
never terminated a user's account for infringement.exclusively is streamed and located through a search for
Escape has no procedure for terminating, limiting, or the associated song, it is only the primary file that is
restricting any functionality in a user's account beyond identified in a takedown notice and that Escape will
disabling uploading privileges, regardless of how manyremove from its system. The non-primary files grouped
DMCA takedown notices the user receives. Additionally,together for that song are not removed, and Escape takes
Escape has never removed from Grooveshark.com all no action against and makes no record for any of the users
content or data associated with an infringing user's who uploaded the non-primary files of the infringing
account under a repeat infringer policy, nor does Escape song. After Escape removes a primary file for a song, one
have a procedure for removing from its library all content of the non-primary files for the song will automatically
submitted by a user who has received repeated notices of replace it, becoming the new primary file when a user
infringement. After identifying an infringing user, Escapeselects that song for streaming, unless that song has no
has no policy to, and has never attempted to, block that associated non-primary files. When a file is removed
infringing user from creating a new Grooveshark user pursuant to a DMCA takedown, Escape has no policy or
account. Escape does not keep an independent record of procedure for preventing that specific MP3 file, identified
by its unique internal number called a file hash, from
when users receive multiple DMCA takedown notices.
reappearing on its system. According to Tarantino, Escape
has implemented a policy for removing files at the request
*33 Between November 1, 2010, and March 20,
of the user who submitted the files. Tarantino estimates
2012, Escape did not process or record any DMCA
that Escape has removed over 18,000 files in response to
takedowns or disable any users' uploading capabilities in
requests from the submitting user.
connection with DMCA takedowns. Escape does not have
a policy or procedure through which it attempts to
FN14. The web address for a song is an
discover whether users are uploading content after
extension of the web address for the
receiving a DMCA takedown or whether a user who
Grooveshark homepage and will look like, for
receives a DMCA takedown had received prior DMCA
example, http:// grooveshark.com/s/Hello
takedowns for previously submitted files. Additionally,
Zepp/4dTNhl?src=5. (See Semel Decl., Ex. 17.)
when processing a DMCA takedown for an MP3 file,
Escape will not remove files pursuant to a
Escape makes a record of the infringement for the first
DMCA takedown if only the album web address
user to submit the file only; it does not make a record for

Page 31
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
is provided; a copyright owner must refer to the exploitation of EMI Recordings (each, a Comparable
specific song web address. (Id.)
Service), except pursuant to a valid and binding
agreement allowing such copying, reproduction,
distribution, public performance, and/or other
4. The EMIEscape Relationship
EMI owns or has the exclusive right in the United exploitation of EMI Recordings (an EMI Content
States to enforce copyrights in 2,807 sound recordings, Agreement), in accordance with the terms of such EMI
2,579 of which were first fixed on or after February 15, Content Agreement.
1972, and 228 of which were first fixed before February
15, 1972.FN15 On May 8, 2009, EMI sued Escape for
(SMF 16; McMullan Decl., Ex. 2 (Settlement
copyright infringement and unauthorized exploitation ofAgreement).) Simultaneously to the execution of the
EMI's copyrighted sound recordings. Capitol Records, Settlement Agreement, the parties executed the
LLC, et al. v. Escape Media Group, Inc., 09 Civ.Distribution Agreement, which granted Escape the right to
04458(LMM) (S.D.N.Y. May 8, 2009). The parties settled distribute digitally EMI's content on Grooveshark and
the lawsuit through the execution of two contracts established Escape's rights and obligations in connection
effective as of September 24, 2009: the Settlement with that license. Specifically, Escape agreed that use of
Agreement and Mutual Release (the Settlement EMI Content obtained from any entity other than EMI or
Agreement) and the Digital Distribution Agreement (the an Approved Source is a material breach of this
Distribution Agreement).
Agreement. (SMF 19; McMullan Decl., Ex. 3
(Distribution Agreement).) The Distribution Agreement
FN15. Under the Copyright Act, soundprovided that, through EMI's digital supply chain, it
recordings are treated differently depending on would provide to Escape EMI Content, defined as
whether they were first fixed before or after any ... materials containing any content made available
February 15, 1972. See 17 U.S.C. 301(c)by EMI to Distributor [Escape] owned or controlled by
(With respect to sound recordings first fixedEMI. (Id.) In exchange for the rights described in the
before February 15, 1972, any rights or remedies Distribution Agreement, including the right to feature
under the common law or statute of any StateEMI content on Grooveshark, Escape agreed to make
shall not be annulled or limited by this title until certain payments and to produce regular sales reports,
consisting of monthly accounting statements and weekly
February 15, 2067.).
exploitation reports. The Distribution Agreement had an
expiration clause stating that the Agreement, unless
*34 In the Settlement Agreement, the parties set out
terminated earlier, would expire 30 months after the date
the terms of Escape's future conduct with respect to EMI's
of execution, September 24, 2009.
copyrighted recordings:
The terms of EMI's release are described in
From and after the date hereof, Escape Media shall not
paragraph 5.1 of the Settlement Agreement and paragraph
allow the copying, reproduction, distribution, public
12 of the April 21, 2011 amendment to the Settlement and
performance, and/or other exploitation of EMI
Distribution Agreements. Under the Settlement
Recordings on, via, and/or in connection with the
Agreement, EMI released Escape for liability from the
Grooveshark Sites, and/or any other website, server,
beginning of time to the present, through the effective
system, or software under the control of Escape Media
date of this Agreement, solely relating to allegedly
and/or an affiliate of Escape Media on which can occur
infringing or unauthorized use or exploitation of EMI
the unauthorized copying, reproduction, distribution,
recordings on, via, and/or in connection with the
public performance, downloading, and/or other
Grooveshark Sites and/or the Grooveshark service.

Page 32
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
(Settlement Agreement 5.1.) Under the April 21, 2011Agreement remains in effect.
amendment, EMI released Escape on all claims of
liability for the Content/Usage/Accounting Claim for all 5. Grooveshark Data Related to EMI Content
periods prior to and including December 31, 2010,
Since EMI terminated the Distribution Agreement on
excepting only claims arising under this Amendment. March 22, 2012, Escape has had no authorization to copy,
(Tarantino Decl., Ex. D 12.)
stream, or otherwise exploit any rights in EMI recordings.
Escape has retained in its database the fingerprints and
*35 During the term of the Distribution Agreement, metadata for the EMI content it had obtained through a
EMI notified Escape twice that Escape was in breach of license. Since the summer of 2011, Escape has generated
the Distribution Agreement due to, first, Escape's fingerprints for all content on Grooveshark and all newly
exploitation of EMI recordings that were not authorizedsubmitted content, which, in the past, it would match
under the Agreement and, second, Escape's failure to against EMI content.FN16 Between March 23, 2012, and
produce the weekly and monthly sales reports as set forth October 2013, EMI's post1972 copyrighted recordings
in the Agreement. EMI and Escape resolved thesehave been streamed on Grooveshark 10,705,193 times
disputes by executing two amendments to the Settlement and have been uploaded to Escape's servers in 8,996
and Distribution Agreements, one on April 21, 2011, and distinct files, and EMFs pre1972 copyrighted recordings
the other on November 29, 2011. These amendments have been streamed on Grooveshark 1,519,374 times and
altered the terms of the payment provisions of the original have been uploaded to Escape's servers in 4,859 distinct
agreements and extended the term of the Distributionfiles. In the 20 months after the Distribution Agreement
Agreement through September 30, 2012. Escape,was terminated, Escape logged a total of 36,603 files
however, breached the amended Distribution Agreement removed through its DMCA processfewer than the
by failing to render any monthly payments or sales reports 56,740 files removed during one month when the
to EMI as of December 2011, which prompted EMI toDistribution Agreement was in effect (October 2010).
send Escape a notice-of-breach letter on January 25, 2012.
FN16. Because of the conflicting evidence
regarding this fact, it is expanded upon in section
III(B)(2), infra, in connection with paragraph 75
of EMI's statement of material facts.

On March 22, 2012, EMI sent Tarantino a letter

stating that EMI was terminating the Distribution
Agreement because of Escape's material breach and
failure to cure the breaches listed in the January 25 letter.
In addition to Escape's continued failure to submit the6. Grooveshark Data for All Content
sales reports and monthly payments, EMI asserted that
*36 Escape's internal projections estimate that 84.5%
Escape failed to make the single lump payment that the of the streams from Grooveshark.com are of works
parties agreed to under the second amendment to the belonging to the major labels with which Escape has no
Distribution Agreement. In the termination letter, EMI license. In analyzing Escape's records, Horowitz found
demanded that Grooveshark stop any exploitation of EMIthe following relevant statistics:
content immediately, destroy all EMI content in its
possession, and remit the outstanding payments.
There are 3,323 Grooveshark users recorded for
Following these demands in the letter, EMI noted that
infringement who did not have their uploading
any further exploitation of EMI Content is infringing and
privileges revoked.
breaches the now terminated Distribution Agreement as
well as the ... settlement agreement [.] (McMullan Deck,
Escape has recorded 364,318 files removed by DMCA
Ex. 6 at 2.) Though the Distribution Agreement was
takedowns and 37,987 users who submitted files
terminated by EMI's March 22, 2012 letter, the Settlement

Page 33
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
removed by DMCA takedowns.
Users who have been recorded for infringement
account for 22,066,555 file submissions, or 47% of the
total file submissions in Escape's active library, and
9,837,931 uploads (defined as the first record of
submission for a file), or over 48% of all uploads to
Escape's active library. There are 568 users who have
been recorded for infringement in connection with over
100 different recordings.
Fourteen Escape employees have been recorded in
connection with DMCA takedowns of infringing
content13 in connection with multiple works. Four of
these employees were recorded in connection with over
100 works, including Tarantino with 105 works and
Greenberg with 687 works.

503 (S.D.N.Y.2008) (quoting Albrechtsen v. Bd.

of Regents of the Univ. of Wis. Sys., 309 F.3d
433, 436 (7th Cir.2002)) (deeming a party's
proposed material facts in a summary judgment
motion admitted where the opposing party failed
to cite adequately its responsive proposed facts).
Nevertheless, much of the key evidence cited
throughout EMI's statement of material facts is
interrelated and supportive of multiple proposed
facts, thus making an assessment of the evidence
as a whole more reasonable here than in a case
where, for example, the court must sift through
a large court record [on] the possibility that it
will find something ... that the ... party has not
bothered to call to its attention. Morisseau v.
DLA Piper, 532 F.Supp.2d 595, 618
(S.D.N.Y.2008).

1. SMF Paragraph 54
There are 1,609 users who were recorded for a DMCA
EMI submits the material fact that Escape uses its
takedown of an upload that occurred after the user had
servers to make copies of and stream files submitted by
already received a prior DMCA notice of infringement
Grooveshark users. (SMF 54.) To support this
from Escape. These 1,609 users have submitted
proposed fact, EMI cites to the Horowitz Declaration;
2,339,671 files that are still available in Grooveshark's
portions of a deposition taken of former Escape employee
active library.
Edwin Fuquen in a separate and ongoing action, UMG
Recording, Inc. v. Escape Media Group, Inc. et al, 11 Civ.
B. Insufficiently Supported Facts
08407(TPG) (S.D.N.Y. November 18, 2011) (Semel
Escape has not provided evidence sufficient to raise
Decl., Ex. 4); and a portion of the Hostert Deposition (id.,
disputes as to any material facts proposed in EMI's
Ex. 1). This evidence does not support EMI's assertion
statement of material facts. Nevertheless, the following
that Escape make[s] copies of ... files submitted by
facts proposed by EMI are not established by the evidence
Grooveshark users. Rather, the evidence supports the
to which EMI cites in support of the proposed fact. In an
description provided by EMI's expert, Horowitz: [U]sers
exercise of discretion, the Court determines below
provide or seed MP3 files to [Grooveshark's] central
whether EMI's proposed facts are otherwise established
library, after which Escape's database system determines
and undisputed by any evidence submitted by the
which files to accept and stores all the files on its
parties.FN17
servers, and indexes [and] organizes ... these files and
music embodied in the files. (Horowitz Decl. 26.)
FN17. The Court is under no obligation to siftAlthough Escape has provided no evidence to dispute
through evidence that is not cited specifically to EMI's proposed fact (see Counter SMF 54), the Court
support a fact proposed in a statement of material finds that EMI has not submitted evidence sufficient to
facts. Indeed, [j]udges are not like pigs,establish that Escape makes copies of the files submitted
hunting for truffles buried in the record. by Grooveshark users.
Gonzalez v. KMart Corp., 585 F.Supp.2d 501,

Page 34
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
2. SMF Paragraph 75
Agreement. (Counter SMF 75 (claiming that Escape
*37 EMI submits the following material fact that is lost the capability of fingerprint filtering [EMI's]
supported insufficiently by the cited evidence and that content upon the termination of the Distribution
Escape purports to dispute: Content matching theAgreement); id. 72; SMF 146.) Therefore, EMFs
fingerprints of EMI content was blocked until EMIproposed fact at paragraph 75 of its SMF is supported
terminated the [distribution] contract, at which point adequately by the submitted evidence.
Escape removed EMI's fingerprints from its filter. (SMF
75.) To support this fact, EMI cites only to a portion of
Escape purports to dispute EMI's proposed fact, but
the Fuquen deposition from this action. (Id.; Semel Decl.,fails to do so adequately. Escape responds, Disputed, and
Ex. 3 at 70:1177:19.) Fuquen, however, does not discussin so responding, Escape avers that upon plaintiff's
blocked content in the cited portion of his deposition, and, termination of the Distribution Agreement, Escape deleted
in fact, immediately preceding the cited portion, Fuquenplaintiff's content from the Grooveshark library, and
specifically says that fingerprinting was not part of the concomitantly, lost the capability of fingerprint filtering
process for blocking content. (Id. at 70:421.) Fuquenplaintiff's content. (Counter SMF 75.) Escape does not
testified that Escape generated fingerprints for all its provide evidence sufficient to controvert EMI's proposed
content and matched those fingerprints against EMIfact or to support the facts it proposes in response.
contentthat is, he only discussed fingerprinting in the Regarding Escape's purported deletion of and subsequent
context of matching, which could have been done for inability to filter out EMI content, Escape claims (1) to
multiple reasons; he did not discuss fingerprinting in the have lost the capability of fingerprint filtering [EMI's]
context of blocking or filtering. Further, Fuquen provided content (id.); (2) to possess fingerprint filtering
ambiguous testimony as to whether Escape ever stopped capability only with respect to content owned by one
fingerprint-matching EMI content: When asked if Escape record label, which is not EMI (id. 72; Hostert Decl.
had at some point stopped matching the fingerprints 10); (3) that EMI has not provided Escape with data
against EMI content, Fuquen responded, I believe so. Isufficient to permit fingerprint filtering of [EMI's] content
don't recall exactly. I'm not sure. (Id. at 77:1619.)on Grooveshark (Counter SMF 72); and (4) that
Although this fact is not supported directly by EMI's cited Escape deleted ... all audio files and related materials
evidence, the Court finds the fact to be established and delivered by EMI to Escape under the Distribution
uncontroverted for the following reasons.
Agreement (Tarantino Decl. 32). Contradicting these
assertions, Escape concedes that it has in fact retained in
First, the submitted evidence establishes that Escape its database the fingerprints and metadata for the EMI
did, but does not now, block content matching the content it had licensed. (Counter SMF 73, 74.) Further,
fingerprints of EMI content. (See Hostert Decl. 10 (... approximately two months after the termination of the
Escape did engage in fingerprint filtering for EMI in Distribution Agreement, Escape represented that it had
connection with the license agreement between the retained the EMI fingerprints and metadata specifically to
parties[,] but now does so only for a small label with preserve its capability to undertake certain types of
which Escape has an ongoing agreement); Counter SMF filtering of EMI content on the Grooveshark website.
72, 75.) The evidence thus clarifies Fuquen's testimony(Semel Decl., Ex. 19 (May 10, 2012 email from Escape's
regarding matching the fingerprints for EMI content,counsel, Matthew Giger).) Escape has therefore not
establishing that this matching was done to block user-shown that it ever lost the capability to filter out content
submitted EMI recordings as required by the Distribution matching the fingerprints and metadata of EMI content.
Agreement. Second, the evidence establishes that EscapeAt most, Escape's evidence shows that there may be a
stopped blocking content matching the fingerprints of question as to whether Escape has the ability to filter EMI
EMI content upon the termination of the Distribution content that been added to the EMI catalogue or that has

Page 35
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
somehow changed since its associated data was provided things regarding the copyrighted work. 17 U.S.C. 106.
to Escape under the Distribution Agreement.
To establish a claim of [direct] copyright infringement, a
plaintiff must establish (1) ownership of a valid copyright
IV. Whether EMI Is Entitled to Judgment as a Matter and (2) unauthorized copying or a violation of one of the
other exclusive rights afforded copyright owners
of Law
*38 Based on the facts the Court findspursuant to the Copyright Act. Arista Records LLC v.
uncontroverted and established by the submitted Usenet.com, Inc., 633 F.Supp.2d 124, 146 (S.D.N.Y.2009)
evidence, the Court must determine whether EMI is (internal quotation marks omitted); see also ABC v.
entitled to judgment as a matter of law. EMI moves for Aereo, Inc., 874 F.Supp.2d 373, 381382 (S.D.N.Y.2012),
summary judgment, first, on its claim against Escape for aff'd, WNET v. Aereo, Inc., 712 F.3d 676 (2d Cir.2013),
direct infringement of EMI's pre- and post1972 cert. granted 134 S.Ct. 896, 2014 WL 92369 (2014). EMI
recordings, including direct infringement of EMI's right ofhas established that it owns or has the exclusive right in
public performance and right of reproduction. Second, the United States to enforce copyrights in 2,807 sound
EMI moves for summary judgment on its claim against recordings, thus satisfying the first prong. With respect to
Escape for secondary infringement, including on theories the second prong, EMI alleges that Escape violates its
of vicarious liability and contributory liability with right of public performance and its right of reproduction
respect to Grooveshark users' direct infringement. Finally,in its copyrighted works, as discussed below.
EMI moves for summary judgment on Escape's
affirmative defense of safe harbor under the DMCA.
1. Right of Public Performance
A copyright owner has the exclusive right, in the
In opposition to EMI's claims for direct and case of sound recordings, to perform the copyrighted
secondary infringement, Escape's arguments are based work publicly by means of a digital audio transmission.
only on its evidentiary objections, which, as discussed, 17 U.S.C. 106(6). The Court of Appeals has found that
should be overruled, and Escape's assertion that EMI to perform a musical work entails contemporaneous
released Escape for any claims with respect to uploadsperceptibility, meaning that a recording is performed
that occurred before EMI terminated the Distributionwhen it is actually played for a listener, as opposed to
Agreement on March 22, 2012. This assertion is when a recording ... is simply delivered to a potential
unavailing-the undisputed evidence establishes that EMI listener. United States v. Am. Soc. of Composers,
released Escape as to claims for infringement that accrued Authors, Publishers, 627 F.3d 64, 7273 (2d Cir.2010);
before or on December 31, 2010 only, and there is no see also Cartoon Network LP, LLLP v. CSC Holdings,
evidence that Escape was ever released from all claimsInc. (Cartoon Network), 536 F.3d 121, 134 (2d
arising from ... uploads that occurred during a given Cir.2008) ([A] transmission of a performance is itself a
period. (Opp'n at 1213.) Therefore, with respect to EMI'sperformance). Generally, a digital transmission is
claims, Escape does not offer any argument supported bypublic under the Copyright Act if the source of that
facts as to whether EMI has met its evidentiary burden. transmission (e.g., the MP3 file) is capable of producing
Escape's opposition thus turns on its argument that EMItransmissions that are received by the public, rather
has failed to demonstrate that no reasonable jury couldthan producing transmissions that are potentially received
find Escape immune from monetary liability under the by only one subscriber. Aereo, 712 F.3d at 689. Thus,
generally, a transmission is not public where a unique
DMCA's safe harbor provision.
copy of a recording is created for each listener who
wishes to play the recording, making each transmission
A. Direct Infringement
available only to the single subscriber for whom that
The Copyright Act confers upon copyright owners
unique copy was made. Id. at 68990. Files streamed over
the exclusive rights to do and to authorize various

Page 36
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
the internet are typically public under this definition, and
the Court of Appeals has found internet streaming to
EMI provides no legal support for its claim that
produce[ ] public performances. Aereo, 712 F.3d at 692;Escape violated its right of reproduction in its copyrighted
see also Capitol Records, LLC v. ReDigi Inc., 934works. EMI contends that [t]he process by which users
F.Supp.2d 640, 652 (S.D .N.Y.2013) (finding audiosubmit files to Escape's servers makes it clear that Escape
streams to be public performances).
itself can be held responsible for such reproductions.
(Mot. at 8.) Because Escape has discretion over whether
*39 By streaming a song on Grooveshark.com, a useruser-submitted content is uploaded to Grooveshark and
is only able to listen to the song contemporaneously with makes the decision whether to copy, EMI argues,
the stream; a user cannot receive delivery of the file of the Escape can be held directly responsible for the copy that
recording. This constitutes a performance under theoccurs during uploads. (Id.) As discussed regarding
Copyright Act. And that performance is public under theparagraph 54 of EMI's SMF, there is no factual support
Copyright Act because Grooveshark streams content to for EMI's assertion that Escape makes any copies. And
users by storing a single master copy of each recording inthere is no legal support for EMI's contention that
its central library and allowing multiple users to share unauthorized copying by Grooveshark users would result
access to that same file; no unique files capable of in Escape's liability for direct infringement. Indeed, the
transmission to only one subscriber are created. Between Copyright Act allows for secondary liability to address
March 23, 2012, and October 2013, Grooveshark these exact types of factual allegations. See Arista
streamed EMI's copyrighted recordings, withoutRecords LLC v. Doe 3, 604 F.3d 110, 118 (2d Cir.2010)
authorization, to its users over 12 million times.(stating that contributory infringement liability ... exists
Therefore, EMI has presented evidence sufficient to show if the defendant engaged in personal conduct that
that it is entitled to summary judgment on its claim for encourages or assists the infringement) (internal
direct infringement of its right to public performance of quotation marks and citations omitted). EMI's arguments
its copyrighted audio recordings.
and evidence are premised squarely in secondary liability
theory and are insufficient to show that Escape is liable
for direct infringement of EMI's right of reproduction.
2. Right of Reproduction
A copyright owner has the exclusive right to
reproduce the copyrighted work in copies. 17 U.S.C.
*40 The Court notes that EMI's reproduction rights
106(1). Under the Copyright Act, copies are defined asclaim refers only to alleged copying that occurs during
material objects, other than phonorecords, in which auploads. (Mot. at 8.) EMFs argument does not address
work is fixed by any method now known or laterthe unsettled area of law regarding the copying that is
developed, and from which the work can be perceived, inherent in the digital streaming process. See John
reproduced, or otherwise communicated, either directly or Kennedy, et al., Performance by Means of Digital Audio
with the aid of a machine or device. 17 U.S.C.A. 101.Transmission, 1 Internet Law and Practice 12:14 (2013)
The Court of Appeals has found that the Copyright Act( Digital audio streams are transmitted in packets ...
imposes two distinct but related requirements: the work [that] are temporarily stored in [a computer's memory] as
must be embodied in a medium, i.e., placed in a mediumbuffer copies until they are delivered.). Because EMI
such that it can be perceived, reproduced, etc., from that does, however, establish facts regarding Escape's lack of
medium (the embodiment requirement), and it mustauthorization to copy or stream EMI content, the Court
remain thus embodied for a period of more than considers EMI's facts with respect to the relationship
transitory duration (the duration requirement).between digital streaming and rights of reproduction. (See
Cartoon Network, 536 F.3d at 127 (quoting 17 U.S.C. SMF 8, 26.)
101).

Page 37
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
In Cartoon Network, the Court of Appeals addressed uploading process or through the streaming process.
the issue of whether the defendant, Cablevision Systems EMI's motion for summary judgment should thus be
Corporation (Cablevision), infringed the reproductiondenied as to its right of reproduction claim.
rights of copyright owners through its Digital Video
Recording (DVR) streaming system. Specifically, the B. Secondary Infringement
court assessed whether the DVR's process of saving the
*41 Secondary liability for copyright infringement
recording to a computer memory buffer, and thenmay be imposed on a party that has not directly infringed
playing the recording to the viewer from the buffer on a copyright, but has played a significant role in direct
demand, constituted reproduction of the work in copies.infringement committed by others, for example by
Cartoon Network, 536 F.3d at 127133. The court statedproviding direct infringers with a product that enables
that, unless the embodiment requirement and the durationinfringement. Lime Group, 784 F.Supp.2d at 42223
requirement are met, the work is not fixed in the buffer,(citing MetroGoldwynMayer Studios Inc. v. Grokster,
and, as a result, the buffer data is not a copy of the Ltd., 545 U.S. 913, 92930 (2005)). EMI argues that
original work whose data is buffered. Id . at 127. TheEscape is secondarily liable for the direct infringement by
court found that Cablevision did not infringe the Grooveshark users under theories of both vicarious and
copyright owners' reproduction rights because each bit of contributory liability.
data stayed in the DVR buffer for 1.2 seconds only and
was then overwritten as soon as it was processed,
1. Direct Infringement by Grooveshark Users
strongly suggest[ing] that the works in this case are
To recover on a claim based on secondary liability, a
embodied in the buffer for only a transitory period, thus
plaintiff first must establish direct infringement by the
failing the duration requirement. Id. at 130. The court
relevant third party, i.e. the party that received the
thus engaged in a fact-specific inquiry, distinguishing the
infringement-enabling device. Id. at 423. EMI has
1.2 seconds that the data stayed in the computer's memory
established that it owns or has the exclusive right in the
from cases in which the data ... remained embodied in
United States to enforce copyrights in 2,807 sound
the computer's RAM memory until the user turned the
recordings. Between March 23, 2012, and October 2013,
computer off. Id. at 12930. The court also distinguished
Grooveshark users, without authorization, submitted to
between standard set-top DVR[s], through which the
Escape's servers 13,855 distinct files containing
viewer send[s] signals from the remote to an on-set box,
recordings of EMI's copyrighted works. By making
and the on-demand video streaming service at issue,
unauthorized copies and publicly sharing them through
through which the viewer sends signals from the remote,
Grooveshark.com, Grooveshark users directly infringed
through the cable, to ... Cablevision's central facility,
EMI's rights of reproduction and distribution under the
where the buffering occurs. Id. at 125.
Copyright Act. See id. at 42324; A & M Records, Inc. v.
Napster, Inc., 239 F.3d 1004, 1014 (9th Cir.2001); Capitol
There is no submitted evidence that would allow the Records, Inc. v. MP3tunes, LLC, 821 F.Supp.2d 627, 647
Court to reach any conclusions as to whether the process (S.D.N.Y.2011), reconsideration granted on other
by which Grooveshark streams MP3 files results in grounds, 2013 WL 1987225 (S.D.N.Y. May 14, 2013).
unauthorized reproductioni.e., evidence bearing on
whether the streaming process creates copies of the
2. Vicarious Liability
copyrighted work that are long enough or complete
The common law imposes liability for vicarious
enough for the copy to be considered fixed under the
copyright infringement [w]hen the right and ability to
Copyright Act. Therefore, EMI's evidence does not
supervise coalesce with an obvious and direct financial
establish that Escape reproduces EMFs copyrighted work
interest in the exploitation of copyrighted materialseven
in copies, 17 U.S.C. 106(1), either through the
in the absence of actual knowledge that the copyright

Page 38
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
[work] is being impaired. Viacom Int'l, Inc. v. YouTube, infringement by submitting files to be uploaded to
Inc., 676 F.3d 19, 36 (2d Cir.2012) (quoting Shapiro, Grooveshark's library, which users can only do by
Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 307 (2dregistering a Grooveshark account. To register an account,
Cir.1963)); cf. id. at 3638 (finding that, though theusers must agree to Escape's Terms of Service, which
language for common law vicarious liability and DMCA permit Escape to, among other things, terminate accounts,
safe harbor is similar, they are distinct inquiries). A revoke privileges, and remove user-submitted content at
defendant is liable for vicarious copyright infringementits discretion. Like in Arista Records LLC v. Lime Group,
by profiting from direct infringement while declining to Escape has the right and ability to limit the use of its
exercise a right to stop or limit it. Usenet.com, 633product for infringing purposes, including by (1)
F.Supp.2d at 156 (quoting Grokster, 545 U.S. at 930).implementing filtering; (2) denying access; and (3)
Thus, to be vicariously liable for Grooveshark users'supervising and regulating users. Lime Group, 784
direct infringement, Escape must have (1) had the right F.Supp.2d at 435. Escape is able to filter user-submitted
and ability to supervise the infringing conduct and (2) content and currently does so for works owned by one
received a financial benefit directly attributable to the small label with which Escape has an agreement. Escape
infringing conduct. Capitol Records, Inc. v. MP3tunes, can deny access by either terminating a user's account or
LLC, 07 Civ. 9931(WHP), 2013 WL 1987225, at *9disabling a user's uploading capability. Escape is able to
(S.D.N.Y. May 14, 2013) (citing Usenet.com, 633supervise and regulate users by processing their file
F.Supp.2d at 156). Under the common law vicarioussubmissions through different filters and databases, which
liability standard, there must be a causal relationship it currently does for purposes other than to curtail
between the infringing activity and any financial benefit ainfringement. Finally, Escape controls the means of
defendant reaps, regardless of how substantial the benefit infringement ... by hosting the infringing materials on its
is in proportion to a defendant's overall profits. Id.own servers. Disney Enters., Inc. v.. Hotfile Corp., 11
(quoting Ellison v. Robertson, 357 F.3d 1072, 1079 (9th Civ. 20427(KMW), 2013 WL 6336286, at *4 (S.D.Fla.
Cir.2004)).
Sept. 20, 2013).
a. The Right and Ability to Supervise the Infringing b. Direct Financial Benefit
Conduct
Under the common law vicarious liability standard,
*42 The Court of Appeals for the Second Circuit hasthere must be a causal relationship between the
found that a defendant need not have formal power to infringing activity and any financial benefit a defendant
control where a direct infringer depend[s] upon [thereaps, regardless of how substantial the benefit is in
defendant] for direction. Usenet.com, 633 F.Supp.2d atproportion to a defendant's overall profits. MP3tunes,
157 (quoting Gershwin Publ'g Corp. v. Columbia Artists 2013 WL 1987225, at *9 (quoting Ellison, 357 F.3d at
Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir.1971)). Rather,1079). This causal relationship is established when the
[t]he ability to block infringers' access to a particular service provider profit[s] from its ability to attract
environment for any reason whatsoever is evidence of the infringing users, including through increased advertising
right and ability to supervise. Id. (quoting Napster, 239revenue. Lime Group, 784 F.Supp.2d at 435. [T]he law
F.3d at 1023).
is clear that to constitute a direct financial benefit, the
draw of infringement need not be the primary, or even a
The undisputed evidence establishes that Escape has significant, drawrather, it need only be a draw.
the right and ability to supervise Grooveshark users' Usenet.com, 633 F.Supp.2d at 157. Additionally, evidence
infringing conduct, but does not exercise that right to stop of financial gain is not necessary to prove vicarious
infringement. Escape reserves the express right to control liability as long as the service provider has an economic
users' activity on Grooveshark. Users commit incentive to tolerate infringing conduct. See MP3tunes,

Page 39
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
2013 WL 1987225, at *10.

it received. Further, Tarantino acknowledged that the

great majority of content on Grooveshark at one point
*43 Here, infringing content is a substantial draw tocame from illegal networks, and Escape's co-founders,
Grooveshark.com, as demonstrated by the fact that Tarantino and Greenberg, were each recorded for
approximately 84.5% of the website's streams are of infringement of 105 works and 687 works, respectively.
works belonging to major labels with whom Escape has
no license. Approximately 80% of Escape's revenue is
Second, the evidence establishes that Escape
derived from website advertisements, and the more materially contributed to its users' infringement by
visitors Grooveshark attracts, the more advertisingproviding the site and facilities or the environment and
revenue Escape will earn. Escape thus has a clear market for infringing activity. Usenet.com, 633
economic incentive to tolerate the infringing users who F.Supp.2d at 155 (internal quotation marks omitted).
supply Grooveshark with its music content, as Escape provided all the mechanisms to allow for
demonstrated by Grooveshark's promotional materials, infringing activity, including the servers to host and the
which emphasize its large number of visitors and its software to submit the infringing content, the tools for
music library, promoted as the largest of any streamingorganizing the submitted files and facilitating their access
service. (Semel Decl., Ex. 12.)
and searchability, and the interface for users to select and
stream infringing content to their devices.
The undisputed facts establish that Escape receives a
direct financial benefit from copyright infringement
Escape offers no defenses to EMI's contributory
(including the infringement of EMI's content) and that infringement claim. The evidence establishes that Escape
Escape declines to exercise its right and ability to control had knowledge of its users' infringing activity and
or limit infringement on their servers. Accordingly, EMFs materially contributed to it. Accordingly, EMI's motion
motion for summary judgment should be granted as to its for summary judgment should be granted on its claim for
claim for vicarious copyright infringement.
contributory infringement.
3. Contributory Liability
C. Common Law Copyright Infringement
A defendant may be held liable for contributory
*44 Under the Copyright Act, sound recordings
copyright infringement if, with knowledge of thefirst fixed before February 15, 1972 are governed by
infringing activity, it materially contributes to the state common law or statute, not by federal law. See 17
infringing conduct of another. Lime Group, 784U.S.C. 301(c); Lime Group, 784 F.Supp.2d at 436.
F.Supp.2d at 432 (quoting Matthew Bender & Co., Inc. v. [T]he elements for a direct infringement claim under
West Pub. Co., 158 F.3d 693, 706 (2d Cir.1998). To showfederal law mirror those for infringement of common law
material contribution, a plaintiff must establish that the copyright under [New York] state law. ReDigi, 934
defendant (1) had actual or constructive knowledge of the F.Supp.2d at 657 (citing Capitol Records, Inc. v. Naxos of
infringing activity, and (2) encouraged or assisted others' Am., Inc., 4 N.Y.3d 540, 563 (2005)). Thus, the Court's
infringement, or provided machinery or goods thatfindings that EMI is entitled to summary judgment on its
facilitated infringement. Id.
direct infringement claims under the Copyright Act,
except with respect to its right of reproduction claim, also
First, the evidence demonstrates that Escape hadapply under the common law for EMI's pre1972
knowledge of the infringing activity, as shown throughrecordings.
Escape's own projections as to its streaming of unlicensed
content and the DMCA takedown notices of infringement

Courts in this district have also recognized that

Page 40
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
claims for secondary liability are available under state transitory digital network communications, (b) system
common law. See Lime Group, 784 F.Supp.2d at 436caching, (c) information residing on systems or
(quoting Grokster, 545 U.S. at 930, 93436)networks at [the] direction of users, and (d) information
([S]econdary liability for infringement, including claims location tools. YouTube, 676 F.3d at 27 (quoting 17
for ... contributory and vicarious infringement, emerged U.S.C. 512(a)-(d)).
from common law principles. ) (citing Underhill v.
Schenck, 238 N.Y. 7 (1924)). While the elements of
*45 As a prerequisite to eligibility for any of the four
contributory and vicarious copyright infringement undersafe harbor categories, a defendant must first establish
New York common law are not explicitly delineated, the that it satisfies certain criteria, including, as relevant here,
case law indicates that theories of secondary liability demonstrating
the
adoption
and
reasonable
generally mirror federal law. See id. (finding that theimplementation of a repeat infringer policy that
secondary liability theory of inducement of infringement provides for the termination in appropriate circumstances
under the common law mirrors federal law); James v. of subscribers and account holders of the service
Universal Motown Records, Inc., 03 Civ. 4487(LAK),provider's system or network. YouTube, 676 F.3d at 27
2004 WL 2847852, at *1 (S.D.N.Y. Dec. 10, 2004) (quoting 17 U.S.C. 512(i)(1)(A)). If the defendant
(recognizing that common law claims for contributoryestablishes that it meets the threshold criteria of 512(i),
copyright infringement of works fixed after 1972 are the defendant must then show that it satisfies the
preempted by federal claims of contributory infringement requirements of a particular safe harbor category. Id.
under the Copyright Act). Escape does not argue that it is Here, Escape seeks protection under 512(c), which
not liable for common law copyright infringement as tocovers infringement claims that arise by reason of the
EMI's pre1972 works, except to assert its DMCA safestorage at the direction of a user of material that resides
harbor defense. Applying the same analysis as required on a system or network controlled or operated by or for
under the Copyright Act to EMI's common lawthe service provider. Id. (quoting 17 U.S.C. 512(c)
copyright secondary infringement claims for its works (1)).
fixed before February 15, 1972, the Court recommends
granting summary judgment in favor of EMI.
Safe harbor is an affirmative defense and thus
imposes on the defendant the burden of establishing
D. Whether Escape is Ineligible for DMCA Safe that he meets the statutory requirements. Capitol
Harbor as a Matter of Law
Records, LLC v. Vimeo, LLC, 09 Civ. 10101(RA), 2013
WL 5272932, at *6 (S.D.N.Y. Sept. 18, 2013) (quoting
1. DMCA Safe Harbor
Columbia Pictures Indus., Inc. v. Fung, 710 F.3d 1020,
1039 (9th Cir.2013)). [A] finding of safe harbor
The DMCA was enacted in 1998 to clarif[y] the application necessarily protects a defendant from all
liability faced by service providers who transmit affirmative claims for monetary relief . YouTube, 676
potentially infringing material over their networks, F.3d at 41 (citing 17 U.S.C. 512(c)(1)). As courts have
YouTube, 676 F.3d at 2627 (quoting S.Rep. No. 105190emphasized, [t]his immunity ... is not presumptive, but
at 2 (1998)), and to balance the interests of copyrightgranted only to innocent service providers' and should
owners and online service providers by promoting be narrowly construed. MP3tunes, 821 F.Supp.2d at
cooperation [and] minimizing copyright infringement,636 (quoting ALS Scan, Inc. v. RemarQ Communities,
MP3tunes, 821 F.Supp.2d at 636. To that end, [theInc., 239 F.3d 619, 625 (4th Cir.2001)).
DMCA] established a series of four safe harbors' that
allow qualifying service providers to limit their liability
EMI argues that Escape is ineligible for DMCA safe
for claims of copyright infringement based on (a)harbor for several reasons, including that Escape cannot

Page 41
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
satisfy the repeat infringer policy prerequisite under implemented and repeat infringerare not defined in
512(i)(1)(A). Because Escape cannot assert any safethe DMCA. See MP3tunes, 821 F.Supp.2d at 637. Courts
harbor defense if it does not meet this requirement, the have found that a reasonably implemented [repeat
Court first addresses whether EMI is entitled to judgment infringer] policy can utilize a variety of procedures[.]
as a matter of law based on its assertion that Escape failsVimeo, 2013 WL 5272932, at *10 (quoting Perfect 10,
the repeat infringer policy element of the DMCA.
Inc. v. CCBill LLC, 488 F.3d 1102, 110911 (9th
Cir.2007)). Factors that have been applied to determine
whether a repeat infringer policy is reasonably
2. Repeat Infringer Policy
implemented include whether the service provider (1)
has a system for responding to takedown notices, (2) does
a. Legal Standard
not interfere with the copyright owners' ability to issue
notices, and (3) under appropriate circumstances'
To be eligible for immunity from monetary relief
terminates users who repeatedly or blatantly infringe
under any of the DMCA's four safe harbor categories, a
copyrights. MP3tunes, 821 F.Supp.2d at 637 (citing
service provider must demonstrate that it has adopted
CCBill, 488 F.3d at 110910). In addition, service
and reasonably implemented, and informs subscribers and
providers that purposefully fail to keep adequate records
account holders of the service provider's system or
of the identity and activities of their users and fail to
network of, a policy that provides for the termination in
terminate users despite their persistent and flagrant
appropriate circumstances of subscribers and account
infringement are not eligible for protection under the safe
holders of the service provider's system or network who
harbor. Id. Although a service provider must do what it
are repeat infringers[.] 17 U.S.C. 512(i)(1)(A). This
can reasonably be asked to do to prevent use of its service
repeat infringer policy requirement is a fundamental
by repeat infringers, In re Aimster Copyright Litig.,
safeguard for copyright owners and essential to
334 F.3d 643, 655 (7th Cir.2003), the DMCA does not
maintain the strong incentives for service providers to
impose an affirmative duty on a service provider to
prevent their services from becoming safe havens or
police its users, Vimeo, 2013 WL 5272932, at *10
conduits for known repeat copyright infringers.
(internal quotation marks omitted).
MP3tunes, 821 F.Supp.2d at 637 (quoting Perfect 10 v.
Cybernet Ventures, 213 F.Supp.2d 1146, 1178
b. Adoption of a Policy
(C.D.Cal.2002)). The purpose of subsection 512(i) is to
EMI must first show that Escape has not adopted a
deny protection to websites that tolerate users who
policy of terminating repeat infringers' access to
flagrantly disrespect copyrights. Id.
Grooveshark in appropriate circumstances. This statutory
requirement emanates from Congress' concern that those
*46 To fulfill the requirements of 17 U.S.C.
who repeatedly or flagrantly abuse their access to the
512(i), a service provider must (i) adopt a policy that
Internet through disrespect for the intellectual property
provides for the termination of service access for repeat
rights of others should know that there is a realistic threat
copyright infringers; (ii) inform users of the service
of losing that access. Vimeo, 2013 WL 5272932, at *9
policy; and (iii) implement the policy in a reasonable
(quoting H.R. Rep. 105551 pt. 2, at 61 (1998)). [T]he
manner. Wolk v. Kodak Imaging Network. Inc., 840
threshold requirement of the adoption of a repeat infringer
F.Supp.2d 724, 744 (S.D.N.Y.2012); see also Hotfile,
policy should not be an overly burdensome one to meet.
2013 WL 6336286, at *8 (Under the DMCA, Internet
Id.
service providers must reasonably implement a policy
designed to terminate users identified as repeat
The evidence establishes that Escape has adopted a
infringers). Section 512(i)'s key termsreasonably
formal policy providing for the termination of repeat

Page 42
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
infringers' access to Grooveshark. Grooveshark's Terms of d. Reasonable Implementation of the Policy
Service requires account-holders to agree that they are not
Whether the repeat infringer policy is reasonably
submitting infringing content, and specifically states thatimplemented is the threshold issue under 512(i)(1)(A)
if Grooveshark finds an account-holder to be a repeat that has been most analyzed by the courts and is most
infringer, it will terminate [the user's] account andsalient to EMI's motion for summary judgment on
delete all data associated with [the] account. (Semel Escape's safe harbor defense. In light of Congress's
Decl., Ex. 14.) Additionally, Escape maintains a one decision to leave the obligations of service providers[ ]
strike policy, which provides for the disabling of loosely defined, courts have approached the inquiry
uploading capabilities for an account-holder after Escape into reasonable implementation in different ways. Vimeo,
receives one DMCA takedown notification regarding a 2013 WL 5272932, at *9 (quoting Amazon.com, 351
file uploaded by that account-holder. On similar evidence, F.Supp.2d at 1101). Given the nature of the material facts
the court in Capitol Records v. Vimeo found that theat issue here, it is useful to proceed by assessing
service provider, Vimeo, demonstrated that it had adoptedreasonable implementation as two distinct elements
a sufficient policy, stating that, [a]t this stage of the first analyzing whether Escape actually implemented its
analysis, it appears sufficient that Vimeo demonstrate that policy, and, if it did, then analyzing whether the
it took a clear position that those who chose to violate implementation was reasonable, i.e., implemented in
another's copyright would not be permitted to availappropriate circumstances. 17 U.S.C. 512(i)(1)(A).
themselves of the service Vimeo provides. Vimeo, 2013Accord CCBill, 488 F.3d at 111015 (analyzing
WL 5272932, at *9. In light of the language in Escape'simplementation and reasonableness separately).
Terms of Service and the evidence demonstrating
Escape's one strike policy, the Court finds that Escape has i. Whether Escape Implemented Its Policy
likewise met the minimum requirement for adoption of a
This inquiry focuses on whether Escape actually
formal policy that provides for the termination of service implements or would be capable of implementing, in any
access for repeat infringers.
circumstance, the repeat infringer policy that it has
adopted. Adopting a repeat infringer policy and then
c. Informing Users of the Service Policy
purposely eviscerating any hope that such a policy could
*47 The DMCA requires that the service providerever be carried out is not an implementation as required
put users on notice that they face exclusion from theby 512(i). In re Aimster Copyright Litig., 252
service if they repeatedly violate copyright laws. Id. atF.Supp.2d 634, 659 (N.D.Ill.2002), aff'd, 334 F.3d 643
*10 (quoting Corbis Corp. v. Amazon.com. Inc., 351(7th Cir.2003). While there is little guidance in the
F.Supp.2d 1090, 1102 (W.D.Wash.2004), overruled on DMCA or the relevant case law as to when a repeat
other grounds Cosmetic Ideas, Inc. v. IAC, 606 F.3d 612infringer policy is implemented, the cases that do exist
(9th Cir.2010)). In addition to the language in the Terms have examined the following issues that the Court finds
of Service, Grooveshark users must click a box before probative to this matter: whether the service provider
uploading files agreeing that they understand the Terms of actively prevented copyright owners from collecting
Service and are only uploading content that does notinformation necessary to issue effective DMCA takedown
infringe upon the rights of others. Given the explicit notifications, see CCBill, 488 F.3d at 110910; Vimeo,
notice to users in the Terms of Service and the implicit 2013 WL 5272932, at *12; and whether implementation
notice that appears on the screen before a user can submit would result in the termination of repeat infringers, see
content, the Court finds that Escape satisfies the Myxer, 2011 WL 11660773, at *1618; Veoh, 665
requirement to inform Grooveshark that they may be F.Supp.2d at 1118. The Court examines these issues by
subject to Escape's repeat infringer policy.
looking to the facts regarding Escape's record-keeping
practices as to repeat infringers, its organization of user-

Page 43
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
submitted files on Grooveshark.com, and the actions
EMI argues that Escape's record-keeping practices
Escape takes or purports to take against account-holders prevented Escape from implementing its repeat infringer
who submit allegedly infringing files.
policy. The submitted evidence establishes that (1) Escape
does not record users who receive multiple DMCA
*48 To clarify the subject of this discussion at the takedown notices; (2) Escape, in response to a DMCA
outset, it is undisputed that Escape does not implementtakedown for an infringing song, does not record users
the repeat infringer policy stated in its Terms of Service who submitted or who later submit the infringing song
and that the Court found Escape to have formally adopted. other than the one user who submitted the primary file;
Under the Terms of Service policy, if a user (referred to as(3) Escape does not record any users who submitted files
you in the Terms of Service) continues to upload that are taken down under Escape's DMCA Lite
infringing content after Escape has taken action to disableprocedure; (4) in one of the database tables in which
the user's uploading ability, you will be considered a Escape logs DMCA takedowns, 94.2% of the takedown
repeat infringer, and [Escape] will terminate your accountentries are recorded in the dmcalite field, as opposed to
and delete all data associated with your account; removethe dmca field; and (5) one of the database tables in
all the User Content you have uploaded/submitted to the which Escape logs DMCA takedowns contains no entries
Site; and use its reasonable efforts to prohibit you from from October 31, 2010 through March 20, 2012.
signing up for another User account in the future. (Semel
Decl., Ex. 14 at 4.) Escape does not contend that this is
Escape argues that these facts are irrelevant because,
actually its policy, has never taken any of these actions under its one strike policy, which requires disabling
against a user, and does not have any procedures for uploading capability for any user who receives even one
taking these actions against a user. Thus, the relevant notice of infringement under the DMCA, it's not possible
repeat infringer policy for this discussion is what Escape for [the infringer] to repeat her infringing activity.
refers to as its one strike policy.
(Semel Decl., Ex. 1 (Hostert Dep. at 137:1320).) Thus,
because there can't be repeat infringers, keeping the
type of records cited by EMI would be superfluous. (Id. at
1. Record Keeping
A service provider's failure to maintain adequate 137:2325.) According to Escape, [t]his one-time
records of infringement and of users committinginfringer policy is more than is required by the DMCA.
infringement may prevent implementation of a repeat (Opp'n at 35.)
infringer policy, thus disqualifying the service provider
from safe harbor under the DMCA. See MP3tunes, 821
*49 Escape's argument fails for several reasons. FN18
F.Supp.2d at 637 ([S]ervice providers that purposefullyFirst, even if Escape's one strike policy were entirely
fail to keep adequate records of the identity and activitieseffective, the claim that this policy is more than the
of their users and fail to terminate [repeat infringers] ... DMCA requires is misleading. That is, a largely effective
are not eligible for protection under the safe harbor.); one strike policy may be more than is required in the
CCBill, 488 F .3d at 1110 (discussing whether thesense that it would be different than what is required,
defendants prevented the implementation of their while still producing results sufficient to satisfy the
policies by failing to keep track of repeatedly infringing DCMA requirement. It is a dubious proposition, however,
webmasters and stating that a substantial failure to that a one strike policy would be more than is required
record webmasters associated with allegedly infringingin the sense that it would better effect the principles and
websites may preclude a service provider from goals of the DMCA than would a more literal policy of
establishing on summary judgment that it implemented its terminating the accounts of users who have repeatedly
repeat infringer policy).
committed acts of copyright infringement. Congress
enacted the DMCA to update copyright law for the

Page 44
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
digital age, YouTube, 676 F.3d at 26, recogniz[ing] thatS.Rep. No. 105190 at 8; see also Grokster, 545 U.S. at
[i]n the ordinary course of their operations, service 929 (noting the concern that too widely imposing
providers must engage in all kinds of acts that expose liability ... could limit further development of beneficial
them to potential copyright infringement liability, technologies). For this reason of practicality, the
Vimeo, 2013 WL 5272932, at *5 (quoting S.Rep. No.fundamental and primary responsibility of service
105190, at 8 (1998)). For websites that allow users to providers under the DMCA is to prevent repeat
share digital content, some degree of copyright-infringement. See Ellison v. Robertson, 189 F.Supp.2d
infringing activity is all but inevitable. Cf. Aimster, 3341051, 1064 (C.D.Cal.2002) (On its face, subsection (i) is
F.3d at 655 (stating that the DMCA is an attempt to deal only concerned with repeat-infringer termination policies,
with special problems created by the so-called digital and not with copyright infringement in general .);
revolution, including the vulnerability of InternetMP3tunes, 821 F.Supp.2d at 637 (quoting Aimster, 334
service providers ... to liability for copyrightF.3d at 655) (As described by Judge Posner, [t]he
infringement as a result of file swapping among their common element of [the DMCA's] safe harbors is that the
subscribers). Indeed, the Supreme Court has recognizedservice provider must do what it can reasonably be asked
that, [w]hen a widely shared service ... is used to commit to do to prevent the use of its service by repeat
infringement, it may be impossible to enforce rights in the infringers. ); CCBill, 488 F.3d at 1111 (Section 512(i)
protected work effectively against all direct infringers. itself does not clarify when it is appropriate for service
Grokster, 545 U.S. at 92930 (also noting the the numberproviders to act. It only requires that a service provider
of infringing downloads that occur every day using [theterminate users who are repeat infringers. ); Hotfile,
defendants' file-sharing] software); see also Universal 2013 WL 6336286, at *9, *2425 (granting plaintiff's
City Studios, Inc. v. Corley, 273 F.3d 429, 435 (2dmotion for summary judgment as to defendant's DMCA
Cir.2001) (stating that, in enacting the DMCA, Congressdefense because defendant's repeat infringer policy was
was mindful that the ease with which pirates could copy legally insufficient where defendant had official
and distribute a copyrightable work in digital form was policies forbidding infringement but did not
overwhelming the capacity of conventional copyrightsignificantly address the problem of repeat infringement,
enforcement to find and enjoin unlawfully copiedand further noting that, under the policy, whether a user
material).
was the subject of one notice [of infringement] or 300
notices, [defendant] acted no differently in terms of
possible
infringement)
(emphasis
FN18. The Court's conclusions in this section investigating
supplied).
A
policy
that
prioritizes
targeting
first-time
regarding the adequacy of Escape's recordkeeping policy and practice assume that the infringers at the expense of more effectively terminating
action Escape purports to take against infringingrepeat infringers is not more than the DMCA requires in
FN19
Indeed,
users does constitute termination under theany sense that furthers the DMCA's purpose.
Congress's explicit repudiation of any affirmative duty
DMCA, a proposition discussed below.
on the part of service providers to monitor user content
[for] ... facts indicating infringing activity, MP3tunes,
Acknowledging this reality, Congress passed the
2013 WL 1987225, at *2 (quoting 17 U.S.C. 512(m)),
DMCA to limit[ ] the liability of service providers, thus
demonstrates the DMCA's fundamental concern with
fostering the expansion of the variety and quality of
terminating the accounts of user who are repeat
services on the Internet and decreasing the burden on
infringers, Veoh, 665 F.Supp.2d at 1116 (emphasis in
service providers to snuff out each instance of
original). Therefore, even if Escape had presented
infringement in order to make providers less likely to
evidence showing that its one strike policy effectively
hesitate to make the necessary investment in the
terminated most first-time infringers, the policy likely
expansion of the speed and capacity of the internet.

Page 45
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
would be insufficient if it did not meaningfully catch Grooveshark.com was sourced by the 0.15% of accountrepeat infringers.
holders with records of infringement. Further, the 1,609
users recorded for DMCA takedowns after having already
FN19. By contrast, for example, a policy underreceived DMCA takedown notifications from Escape in
which the service provider affirmativelyconnection with previously submitted files are responsible
police[d] its users for evidence of repeatfor 2,339,671 total files in Escape's active library and
infringement, would be more than the DMCA 1,263,394 playable primary files. Thus, on average, these
requires in a sense that might further the Act's 1,609 repeat infringers each submitted approximately
1,454 files that are housed in Grooveshark's active library.
goals. CCBill, 488 F.3d at 1111.
These facts illustrate why a one strike policy is not
meaningfully more than a repeat infringer policy: even
*50 Second, there is significant undisputed evidence
if Escape actively monitored over 99% of its accountthat Escape's one strike policy does not prevent repeat
holders for infringement, and even if Escape terminated
infringement. There are 3,323 users who submitted
the accounts of all one-time infringers within that
content listed in Escape's DMCA takedowns database
monitored group, Escape could still be ignoring the
(users_dmca_ takedowns) who still had the ability to
infringers of multiple works who are responsible for over
upload files to Grooveshark, and 1,609 users who were
one-third of all primary files on Grooveshark.com, and
recorded for a DMCA takedown after having already been
the repeat infringers responsible for over 2.3 million files
sent at least one DMCA notice of infringement from
in Grooveshark's library.
Escape. The evidence further reveals Grooveshark users
who have been recorded for infringement in connection
The above facts, by themselves, may not establish
with over 1,000 recordings. In addition, 568 users were
that
Escape fails to implement a repeat infringer policy
recorded for infringement for over 100 recordings,
including Escape CEO Tarantino, recorded for infringingunder 512(i) as a matter of law. Rather, they establish
105 works, and Escape Chief Technology Officer that Escape's one strike policy cannot justify a failure to
Greenberg, recorded for infringing 687 works. This datakeep adequate records of repeat infringers. Escape does
demonstrates that there is a substantial amount of repeat not try to identify repeat infringers and fails to keep
records that would allow it to do so. Whether service
infringement despite Escape's one strike policy.
providers ... purposefully fail to keep adequate records of
the identity and activities of their users is critical to safe
Third, the small number of repeat infringers are
harbor eligibility, MP3tunes, 821 F.Supp.2d at 637,
responsible for a vastly disproportionate amount of the
because a reasonable policy must be capable of tracking
content Grooveshark maintains in its active library. There
infringers, Hotfile, 2013 WL 6336286, at *21. Escape's
are approximately 24,748,078 user accounts registered on
failure to do anything to identify repeat infringers is
Grooveshark.com. Escape has recorded 37,986 of these
particularly egregious given that Grooveshark users who
users for submitting works removed in a DMCA
have been subject to a DMCA takedown comprise a
takedown, and, of those users, Escape has recorded
fraction of 1% of all Grooveshark account-holders but
21,044 for submitting multiple works removed in DMCA
supply Grooveshark with nearly half of its content. Cf
takedowns. Despite being relatively few in number,
Hotfile, 2013 WL 6336286, at *10 (noting that infringing
recorded infringers are responsible for over 48% of all
activity was carried out by a discreet group of
primary files (i.e., the playable content) in Grooveshark's
problematic users and that, while users with records of
active music library, and users recorded for submitting
multiple infringement comprised less than one percent of
multiple infringing works are responsible for 35% of all
all ... users, they were responsible for posting ... 44
primary files in Grooveshark's active music library. In
percent of all files ever uploaded). By taking a piecemeal
other words, nearly half of all music content playable on

Page 46
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
approach to terminating infringers and not recordingthe user who submitted that file, thus creating a record of
repeat infringers, Escape has effectively prevented itself that user's infringement. In no circumstance is a nonfrom implementing a policy that can target the actual primary file removed or the submitter of the non-primary
source of the infringing content on Grooveshark. Cf. file recorded. A content owner cannot obtain the web
Cybernet 213 F.Supp.2d at 1177 (Making the entranceaddress for a non-primary file. When the primary file is
into the safe harbor too wide would allow service removed, a non-primary file will replace it and become
providers acting in complicity with infringers to approach the playable primary file. If there are no non-primary
copyright infringement on an image by image basis files, the next time a user submits that infringing song, it
without ever targeting the source of these images.);will become the primary file and the user will not be
Hotfile, 2013 WL 6336286, at *21 (It is clear from the recorded. If the same specific MP3 file that was removed
record that Hotfile's repeat infringer policy was not tied to (as identified by its unique file hash) is later submitted, it
notices of infringement it received from copyrightwill be uploaded to the library and the user will not be
owners under the DMCA.... Hotfile acknowledges that it recorded.
made no connection between infringement notices and
acts of infringement. Hotfile explains that it did not track
The following example illustrates how the system
the notices and did not base its policy on how many described above operates in practice. EMI owns the
notices were associated with certain users (such as bycopyright to the song Blueberry Hill by Fats Domino.
flagging them).).
After March 23, 2012, users submitted 107 MP3 files
containing that recording. (Horowitz Decl., Ex. 13 at 7.)
*51 Finally, when Escape processes a DMCAThrough the process of fuzzy matching and the service
takedown, it makes a record of infringement for the first provided by MusicBrainz, Escape is able to effectively
user to submit that song file only; no record is made of the group those 107 files together. The first of those files
users who submit that song after the takedown or users submitted is the primary file, and the 106 other files are
who submitted song files that were stored as non-primarythe non-primary files. Because of this organization, EMI
files. This lack of record keeping has egregious effects, as would only be capable of issuing a DMCA notification
discussed below regarding Escape's organization of its containing the web address of the primary file. Once
central library.
Escape removes that file, the next non-primary file in line
will replace it, and there will then be 105 non-primary
files. That new primary file will be immediately
2. Organization of UserSubmitted Files
The manner in which Escape organizes its musicsearchable and playable. If Escape removes the file under
library may actively prevent copyright owners fromits DMCA Lite policy, which one database indicates it
collecting information needed to issue [DMCA] does 94.2% of the time, the infringer who submitted the
notifications in a manner that would have anyfile will not be recorded or notified. Under any of
meaningful consequence. CCBill, 488 F.3d at 1109.Escape's policies, no record will be made for the users
Escape processes DMCA takedowns only when thewho submitted the 106 non-primary files or for users who
copyright owner identifies the web address for thesubsequently submit an MP3 of Blueberry Hill by Fats
infringing song. This web address is associated with the Domino, including an MP3 with a file hash identical to
primary file for that song. If Escape complies with the the removed file.
takedown, it removes the primary file. If Escape does this
under its DMCA Lite policy, which the evidence indicates
*52 Escape's organization of user-submitted files and
it does in the vast majority of circumstances, no other its DMCA takedown practices would render it all but
action is taken. If Escape removes the file under the impossible for EMI to stop the unauthorized streaming of
regular DMCA takedown policy, a notification is sent to Blueberry Hill on Grooveshark. In In re Aimster

Page 47
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
Copyright Litigation, the district court held that Aimsterinnocent service provider disappears at the moment the
did not satisfy the DMCA's repeat infringer policy service provider loses its innocence, i .e., at the moment it
requirement because it enabled its users to encrypt their becomes aware that a third party is using its system to
file transfers, thus render[ing] it impossible to ascertain infringe.).
which users are transferring which files. 252 F.Supp.2d
at 659. The Court of Appeals for the Seventh Circuit3. Termination
affirmed, finding that Aimster effectively disabled itself
Putting all the aforementioned problems with
from doing anything to prevent infringement. Aimster,Escape's implementation aside, it is still not at all clear
334 F.3d at 655; cf. CCBill, 488 F .3d at 111011 (citingthat Escape has a repeat infringer policy that provides for
Aimster as an example of insufficient implementation the termination ... of subscribers and account holders ...
prior to addressing the question of reasonablewho are repeat infringers. 17 U.S.C. 512(i)(1)(A).
implementation); Vimeo, 2013 WL 5272932, at *1112Escape purports that its policy and practice is to disable a
(discussing Aimster and CCBill' s findings as touser's uploading privileges following the receipt of one
reasonable implementation). Here, by preventingnotice ... of infringement under the DMCA associated
copyright owners from ascertaining which Grooveshark with that account. (Opp'n at 35, 36 n. 14.) If Escape had
users are submitting the non-primary files and fromsubmitted documentary evidence demonstrating the
obtaining the web addresses for the non-primary files, application of this policy to an infringing user (which it
copyright owners are inhibited severely from issuingdid not), that infringing user, according to Escape, would
DMCA notifications that have any meaningfulstill maintain her account and be able to curate ... her
consequences. And by failing to record all but a fraction music collection on Grooveshark by, inter alia, ...
of the users who submitted a song for which a file was adding and removing songs to and from [her] collection,
removed in response to a DMCA takedown, Escape and ... creating sub-groupings of songs in the collection as
disables its capability to identify repeat infringers and playlists. (Opp'n at 37.) And, of course, the infringing
terminate their accounts. As the district court found in user would be able to search for and stream recordings, as
Aimster, [a]dopting a repeat infringer policy and then anyone can do without creating an account. Escape
purposely eviscerating any hope that such a policy could stresses that, once an account-holder's uploading
ever be carried out is not an implementation as required capability is disabled, [t]he remaining account privileges
by 512(i). 252 F.Supp.2d at 659. Such is the case here, merely permit users to associate or disassociate their
albeit as a result of the confluence of several aspects ofaccount from content that already exists on Grooveshark.
Escape's system, rather than a single dispositive fact as in (Id.)
Aimster.
*53 Escape does not provide legal support for the
As an additional matter, bearing in mind the purposeproposition that the actions described above constitute
and principles underlying the DMCA, it is obvious that atermination under 512(i)(1)(A). [T]he DMCA's safe
service provider who has designed a system where it harbors, as with all immunities from liability[,] should be
could receive 106 separate and consecutive notifications narrowly construed. MP3tunes, 821 F.Supp.2d at 636
of infringement from a copyright owner for a single song(citing United States v. Texas, 507 U.S. 529, 534 (1993)).
and still allow that song to be searched and streamed by Congress included plainly flexible language for the
the public is not the innocent service provider DMCA's repeat infringer policy prerequisite, requiring
contemplated by Congress as being eligible for safe that the policy be implemented reasonably and in
harbor. MP3tunes, 821 F.Supp.2d at 636 (internalappropriate circumstances. Courts, however, have not
quotation marks omitted); see also RemarQ Communities, construed the word termination with the same degree of
Inc., 239 F.3d at 625 (The DMCA's protection of an flexibility. See, e.g., Hotfile, 2013 WL 6336286, at *21

Page 48
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
(finding that the service provider failed to reasonablyunsupported by congressional intent given the judiciary's
implement [its policy] by actually terminating users); policy of deferring to Congress on copyright matters. See
Cybernet, 213 F.Supp.2d at 1179 (Because the CourtSony Corp. of Am. v. Universal City Studios, Inc., 464
finds that there is a strong likelihood that Cybernet cannot U.S. 417, 431 (1984) (Sound policy, as well as history,
establish that it has reasonably implemented a policy supports our consistent deference to Congress when major
directed at terminating repeat infringers, even intechnological innovations alter the market for copyrighted
appropriate circumstances, there is little likelihood that materials. Congress has the constitutional authority and
it can avail itself of section 512's safe harbors.)the institutional ability to accommodate fully the varied
(emphasis in original). In fact, Congress and many courts permutations of competing interests that are inevitably
have indicated strongly that termination requires more implicated by such new technology.); ReDigi Inc., 934
than what Escape purports to do.
F.Supp.2d at 660 (stating that deference to Congress
often counsels for a limited interpretation of copyright
First, the plain meaning of the DMCA's language is protection).
that, in implementing a repeat infringer policy, the service
provider must, when appropriate, terminate, or end, a
FN20. Termination is defined as [t]he act of
subscriber's subscription or an account holder's
ending something; extinguishment. Black's Law
FN20
account.
Looking to the DMCA as a whole, Congress
Dictionary (9th ed.2009).
differentiated between terminating accounts, which is
required in 512(i) and is permitted in the scope of
*54 Second, in using the word termination, it is
injunctive relief under 512(j), and disabling [a user's]apparent that Congress intended for service providers to
access to ... activity claimed to be infringing, which disassociate themselves fully from repeat infringers, not
service providers can do in good faith without incurring simply take measures to impede their infringing activity
liability from the user under 512(g)(1). Escape's policywhile allowing them to maintain the type of account
of disabling the ability of a user to upload files, (Opp'n privileges offered by Escape. The mandate for a repeat
at 37), is substantially similar to disabling [a user's] infringer policy as a prerequisite to any safe harbor under
access to ... activity claimed to be infringing. But the DMCA emanates from Congress' concern that those
Congress chose not to use that language in 512(i) whilewho repeatedly or flagrantly abuse their access to the
clearly aware of that option and distinction. It is thusInternet through disrespect for the intellectual property
reasonable to assume that Congress meant somethingrights of others should know that there is a realistic threat
different by termination and would have used other of losing that access. Vimeo, 2013 WL 5272932, at *9
language, as it had elsewhere, if it intended to impose a (quoting H.R. Rep. 105551 pt. 2, at 61 (1998))
flexible standard or to permit disabling the infringing (emphasis supplied). Thus, when courts have used
activity while allowing the infringer's account and other language other than termination, that language has
privileges to remain active. Cf. Veoh, 665 F.Supp.2d atconsistently indicated a total disassociation between the
1112 & n. 16 (distinguishing between 512(c) of the service provider and the repeat infringer. See id. (finding
DMCA, under which the service provider must respondthat, under Vimeo's policy, those who chose to violate
[ ] expeditiously to remove, or disable access to, theanother's copyright would not be permitted to avail
material, and 512(i)(1)(A), under which thethemselves of the service Vimeo provides); MP3tunes,
limitations on liability apply only if a service provider 821 F.Supp.2d at 638 (describing the blatant infringers
has adopted and reasonably implemented ... a policy that that internet service providers are obligated to ban from
provides for the termination .... ) (emphasis in Veoh).their websites); id. at 637 (The purpose of subsection
Further, courts should be particularly cautious in defining512(i) is to deny protection to websites that tolerate users
a term involving copyright protection in a way that iswho flagrantly disrespect copyrights.); id. (quoting

Page 49
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
Cybernet 213 F.Supp.2d at 1178) (Other courts haveperformed for the purpose of facilitating access to userdescribed enforcement of this [repeat infringer policy] stored material. YouTube, 676 F.3d at 39. If Escape
provision as essential to maintain the strong incentives actually terminated the accounts of repeat infringers while
for service providers to prevent their services from maintaining the content submitted by those users in its
becoming safe havens ... for known repeat copyrightlibrary, Escape would face new challenges to its claim
infringers.); Aimster, 334 F.3d at 655 (stating that athat its storage is at the now-terminated user's direction or
service provider must act to prevent use of its service byintended to facilitate access to that content. Given that a
repeat infringers' ); Cybernet, 213 F.Supp.2d at 1178Grooveshark account holder's ability to control and
(Significantly, in its Opposition Cybernet maintains it ... curate his or her music collection is [a]t the center of
remove[s] from the Cybernet search engine and links page those privileges attained by registering an account
any website about which it has received a notice of (Opp'n at 37), the direction that a user gives to
infringement, without addressing its power to stopGrooveshark may very well change after the user's
providing its [age verification system] service to known account is terminated and all the privileges lost. If, on the
infringers.) (internal quotation marks omitted). Indeed, other hand, Escape avoided such direction of the user
Escape may have had the same understanding of what the issues by terminating repeat infringers' accounts and
DMCA requires when it stated in its Terms of Service that deleting their content, Escape's music library would likely
it would terminate [a repeat infringer's] account and be substantially reduced.FN21 Thus, by not actually
delete all data associated with [the] account. (Semel terminating repeat infringers' accounts, Escape avoids
Decl., Ex. 14.) Finding Escape's upload-disabling policyhaving to choose between either weakening its claim that
to constitute termination under 512(i) would beit is storing information at the direction of a user or
unprecedented and antithetical to the principle of considerably constricting the range of music available on
disassociation and revocation of access that has been Grooveshark.
expressed by Congress and many courts both in and
outside of this district.
FN21. As an illustration, Escape claims that it
has terminated the uploading privileges of
Finally, Escape's policy of disabling uploading
nearly 39,000 user accounts[ ] in an effort to
capabilities does not address the concerns of the safe
curb infringement on its site. (Opp'n at 5.) The
harbor provision Escape now invokes to the extent that
evidence establishes that Escape has recorded
actual extinguishment of repeat infringers' accounts
37,986 account-holders for submitting works that
would. Escape asserts its DMCA defense under 512(c),
were removed for possible infringement. If these
the safe harbor intended to protect service providers who,
37,986 account holders were within Escape's
by offering storage services for content at the direction
cited 39,000 terminated accounts, and if
of a user, unintentionally house infringing works on their
termination resulted in deletion of the former
system or network. Congress distinguished this content
account-holder's content, Grooveshark would
from [i]nformation that resides on the system or network
lose approximately half of all the content in its
operated by ... the service provider through its own acts or
active music library. (See SMF 138, 140.)
decisions and not at the direction of a user, which is not
protected under 512(c). H.R.Rep. No. 105551(11) at
*55 In sum, interpreting the word termination to
53 (1998); see also Rock River Commc'ns, Inc. v. not mean ending a repeat infringer's account would not
Universal Music Grp., Inc., 08 Civ. 635(CAS)(AJW),only deviate from congressional intent, established case
2011 WL 1598916, at *16 (C.D.Cal. Apr. 27, 2011).law, and prudential concerns of statutory interpretation,
Additionally, [t]he relevant case law makes clear that the but would also have the inequitable result of benefiting
512(c) safe harbor extends to software functionsrepeat infringers and allowing Escape to further profit

Page 50
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
from repeat infringers' content while at the same time makes further inquiry into the 512(i) prerequisites
facilitating Escape's attempt to seek safe harbor under unnecessary. Nevertheless, in light of the scarce precedent
512(c). While what constitutes termination under 512(i)for ending the inquiry before making a finding on the
may differ from case to case, and may in some situation reasonableness of implementation, the Court discusses
include disabling repeat infringers' uploading capabilities,here whether, had Escape been found to implement its
the undisputed facts show that, under these circumstances, policy, that implementation was reasonable, i.e., carried
the DMCA requires more.
out in appropriate circumstances. Thus, for this
discussion, the Court assumes that Escape's purported
policy and practice of disabling the uploading capabilities
4. Conclusion as to Implementation
Courts have recognized a wide range of procedures of repeat infringers constitutes termination under
and practices for implementing a repeat infringer policy512(i)(1)(A).
that constitute implementation under 512(i)(1)(A),
and they should continue to do so. Thus, there is a high
*56 In response to EMI's evidence demonstrating the
bar for a plaintiff to show that a service provider, as a repeat infringers on Grooveshark whose uploading
matter of law, does not implement its repeat infringer capabilities have not been disabled, Escape does not
policy within the meaning of the DMCA. The undisputed submit any evidence showing that it disabled the
facts before the Court, however, point only to thatuploading capability of any Grooveshark account-holders,
conclusion. Escape does not have a repeat infringer policy much less evidence showing that this policy was effected
or an alternative policy that serves the same purpose; does for repeat infringers .FN22 As Escape would bear the
not keep records of repeat infringement sufficient toburden at trial of establishing that it satisfies the DMCA's
enforce an adequate repeat infringer policy; permits an requirements for an affirmative safe harbor defense,
extensive amount of repeat infringement to occur withoutVimeo, 2013 WL 5272932, at *6, EMI's burden in its
taking action or making a record; depends upon a smallsummary judgment motion is satisfied if [it] can point to
number of repeat and flagrant infringers to supply a an absence of evidence to support an essential element of
substantial amount of the content available onthe non-movant's claim. Meltzer, 440 F.Supp.2d at 187.
Grooveshark; takes action in response to copyrightEMI has satisfied this burden with respect to the element
owners' DMCA notifications of infringement that fails to of reasonable implementation.
actually make the song unavailable or prevent it from
reappearing immediately on Grooveshark; prevents
FN22. Even if the Court were to consider the
copyright owners from collecting the data necessary to
stricken Kowalski Declaration, this testimony
issue DMCA notifications in a meaningful way; and,
would show only that Escape has barred the
finally, has never terminated a repeat infringer's account
uploading privileges of more than 38,900
and has no policy or procedure for doing so. For these
account-holders. (Kowalski Decl. 6; see also
reasons in combination, the Court finds that Escape does
id. 1213.) In addition to providing no
not implement a repeat infringer policy under 512(i)
documentary evidence in support of this claim,
(1)(A) and is thus ineligible for DMCA safe harbor.
Escape does not attempt to explain the
Therefore, EMFs motion for summary judgment as to
circumstances under which it took this purported
Escape's affirmative safe harbor defense should be
action. Thus, accepting Kowalski's testimony as
granted.
true, there would still be no evidence that Escape
ii. Reasonable Implementation
Escape's failure to implement a repeat infringer
policy makes it ineligible for DMCA safe harbor and

ever disabled the uploading privileges for a

repeat infringer, and no evidence on which the
Court could assess whether the circumstances in
which Escape carried out its policy were

Page 51
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
appropriate under the DMCA.

infringement, the submitting user's account was not

terminated or recorded for determination of whether she is
In addition to the evidence showing Grooveshark a repeat infringer, and there is no documentary evidence
users who infringed hundreds of works and who received demonstrating (1) that the DMCA notifications as to any
multiple DMCA takedown notifications, the evidence also of those files were deficient, or (2) that the removal of the
points to an unknown number of infringers whoseremaining 5.8% of the files under the DMCA process
activity, and whether they are repeat infringers, cannot be resulted in Escape disabling the submitting users'
determined as a result of Escape's DMCA Lite procedure.uploading privileges. Accepting Escape's representation
The DMCA Lite procedure, which does not result inthat the uploading privileges were revoked for the users
recording the infringer or disabling her uploading ability,who submitted those 5.8%) of removed files, there is no
is not by itself unreasonable. Under the DMCA, a evidence, and Escape does not contend, that any of those
notification of claimed infringement is valid and mayusers were repeat infringers or among the small group of
trigger an obligation on the part of the service providerblatant infringers responsible for the vast majority of
only when it includes substantially six delineatedGrooveshark's infringing content. Thus, this evidence
components, including [i]dentification of the material reveals a policy that is not implemented in appropriate
that is claimed to be infringing ..., and information circumstances or capable of determining when the
reasonably sufficient to permit the service provider to circumstances would be appropriate, i.e., for cases of
locate the material, and a statement affirming the repeat and blatant infringement.
notification signed under oath. 17 U.S.C. 512(c)(3)(A);
cf. CCBill, 488 F.3d at 111112 (finding that the
*57 Further, Escape did not produce, either in
knowledge requirements under 512(c), which includediscovery or in connection with this summary judgment
knowledge stemming from valid DMCA notifications of motion, any records of DMCA notifications of
infringement, also apply to a determination of whether ainfringements sent to users between November 16, 2010,
repeat infringer policy is implemented in appropriateand February 1, 2013; and Escape's database table used to
circumstances under 512(i)(1)(A)). According tolog DMCA takedowns contains no entries from October
Escape, it applies its DMCA Lite procedure when it 31, 2010 through March 20, 2012. As discussed, under
receives non-compliant infringement notifications, e.g.,Escape's DMCA takedown procedure, Escape purports to
when they are not signed under oath or do not adequatelyremove the allegedly infringing file, send a notification to
identify the location of the alleged infringement on the user who submitted the file, and disable the user's
Grooveshark. (Opp'n at 39 (citing Tarantino Decl. 21, uploading privileges. Taken together, this evidence
22).)
demonstrates a period of at least 16 months during which,
at most, Escape removed user files under its DMCA Lite
The evidence demonstrates that, since February 13,procedure, thus resulting in no notifications to the user, no
2013, Escape has removed 6,861 files, 94.2% of which it record of the infringing user, and no disabling of any
FN23
has removed under its DMCA Lite procedure. Escape has user's uploading privileges .
submitted no evidence demonstrating that any of the
notifications of infringement with respect to these files
were deficient, and the fact that the files were removed
indicates that the notifications identified the allegedly
infringing material and contained information reasonably
sufficient to permit Escape to locate the material. 17
U.S.C. 512(c)(3) (A)(iii). Thus, the evidence
demonstrates that, for 94.2% of the files removed for

FN23. This 16month period is the overlapping

time for which Escape produced no DMCA
notifications of infringement and made no entries
of DMCA takedowns in its database (November
16, 2010 through March 20, 2012). The period
for which Escape produced no DMCA
notifications sent to usersthe more reliable

Page 52
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
indicator of whether Escape applied its DMCA not place the burden of determining whether [materials]
or its DMCA Lite policyis 26 months.
are actually illegal on a service provider. Id. at *4
(quoting CCBill, 488 F.3d at 1114).
Compounding the unreasonableness of Escape's
policy, Escape does not take any action with respect to the
*58 Accordingly, the key fact here demonstrating
thousands of non-primary files that are likely to beunreasonableness under these doctrines is that while
infringing where the primary file is found to be infringing. Escape's matching process, unless it fails to perform as
Nor does Escape take any action with respect to users intended, indicates that if a primary file is infringing, so
who submit an MP3 file with the same file hash as the file too are the non-primary files, Escape takes no action
that was removed for infringement, despite the file hashes regarding the non-primary files and prevents copyright
indicating that they are the exact same file and that the owners from conducting any investigation into whether
user is committing infringement. [A] service provider the non-primary files are infringing. Thus, Escape's
may lose immunity if it fails to take action with regard to willful blindness is not simply due to its failure to
infringing material when it is aware of facts or investigate whether the non-primary files are actually
circumstances from which infringing activity is apparent. infringing, it is due to its active prevention of copyright
CCBill 488 F.3d at 111314 (quoting 17 U.S.C. 512(c)owners from informing Escape that potentially thousands
(1)(A)(ii) and finding that Congress imported [this] red of files in the Grooveshark library are infringing. On these
flag test ... to the analysis of whether a service provider facts, Escape's repeat infringer policy cannot be found to
reasonably implemented its 512(i) repeat infringerbe reasonably implemented.
policy); see also YouTube, 676 F.3d at 3435 (On this
issue of first impression ..., we hold that the willful
Finally, Escape's failure to show that it disabled the
blindness doctrine may be applied, in appropriateuploading privileges of any of the users who submitted
circumstances, to demonstrate knowledge or awareness ofEMI content after March 23, 2012, demonstrates
specific instances of infringement under the DMCA.);unreasonable implementation. In the approximately 1.5
MP3tunes, 2013 WL 1987225, at *4 (withdrawing theyears following EMI's termination of its Distribution
court's previous grant of summary judgment in favor of Agreement with Escape, Escape has uploaded to its
defendant because of YouTube' s holding that somethingservers 13,855 infringing files containing sound
less than a formal takedown notice may now establish red recordings owned by EMI, despite having the ability to
flag knowledge). Courts in the Second Circuit have filter those files and identify the infringing users. Escape,
interpreted the DMCA to allow for a narrow application however, stopped filtering for EMI content after the
of the doctrines of willful blindness and red flagtermination of the Distribution Agreement and thus
knowledge, while recognizing the tension between ignored circumstances in which users submitted content
these doctrines and the DMCA's explicit repudiation of that was plainly infringing. Thus, Escape intentionally
any affirmative duty on the part of service providers to stopped conducting one of the few processes it had that
monitor user content. Id. at *2 (citing 17 U.S.C. could have allowed it to determine appropriate
512(m)). In withdrawing its order granting summarycircumstances for implementing its repeat infringer
judgment in favor of the defendant, the court in policy.
MP3Tunes noted that it does so reluctantly in light of
the defendant's salutary practice of sending instructions
Based on the foregoing facts, EMI has also carried its
regarding DMCA-compliant takedown notices to third
burden of establishing that Escape did not implement its
parties reporting possible infringement and the DMCA's
repeat infringer policy in appropriate circumstances and
disavowal of any duty on the part of service providers to
thus did not reasonably implement its policy. The
monitor user content, as well as the rule that courts do
undisputed evidence establishes that Escape does not

Page 53
Slip Copy, 2015 WL 1402049 (S.D.N.Y.)
(Cite as: 2015 WL 1402049 (S.D.N.Y.))
satisfy either element of 512(i)(1)(A)'s repeat infringerobjections pursuant to 28 U.S.C. 636(b)(1) and Rule
policy as a matter of law. Accordingly, Escape is 72(b) of the Federal Rules of Civil Procedure. See also
ineligible for protection under any of the DMCA's safe Fed.R.Civ.P. 6(a), (d) (adding three additional days when
harbor provisions. Therefore, EMI's motion for summaryservice is made under Fed.R.Civ.P. 5(b)(2) (C), (D), (E),
judgment as to Escape's DMCA safe harbor defense or (F)). A party may respond to another party's objections
should be granted on the ground that Escape does not within fourteen days after being served with a copy.
implement a repeat infringer policy, or, alternatively,Fed.R.Civ.P. 72(b)(2). Such objections shall be filed with
that Escape's implementation of its repeat infringer policy the Clerk of the Court, with courtesy copies delivered to
is not reasonable. Because Escape cannot satisfy thethe chambers of the Honorable Alison J. Nathan at the
prerequisites for a DMCA safe harbor defense, the Court United States Courthouse, 40 Foley Square, New York,
makes no finding as to the requirements of 512(c).
New York 10007, and to any opposing parties. See 28
U.S.C. 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b). Any
requests for an extension of time for filing objections
CONCLUSION
For these reasons, the Court recommends that EMI's must be addressed to Judge Nathan. The failure to file
motion for summary judgment be (1) DENIED as to its these timely objections will result in a waiver of those
claim of direct infringement of its right of reproduction,objections for purposes of appeal. See 28 U.S.C. 636(b)
and (2) GRANTED as to its remaining claims and as to (1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474
U.S. 140 (1985).
Escape's affirmative defense of DMCA safe harbor.
NOTICE OF PROCEDURE FOR FILING
OBJECTIONS TO THIS REPORT AND
RECOMMENDATION
The parties shall have fourteen days from the service
of this Report and Recommendation to file written

*59 SO ORDERED.
DATED: May 28, 2014.