Disclosure: Through my consulting firm CopyByte I offer DMCA agent services, which are discussed in this article.
In the ruling, the judge granted summary judgment to the various record labels and found that Spinrilla was liable for copyright infringement for some 4,082 songs listed in the lawsuit.
The judgment did not determine damages, setting that up to be an issue to be decided either at trial or mediation. However, even at the minimum damages, which is $750 per infringement, it amounts to some $3,061,500 in damages. At the maximum of $150,000 per infringement that comes to $612.3 million.
Though any damages will likely be much closer to the former than the latter, it is still a significant loss for Spinrilla.
The case, more than anything, is a warning. It’s a warning about the hazards of creating streaming services, the importance of having a Digital Millennium Copyright Act (DMCA) agent and about ensuring you comply with the law.
To understand why, we must dive into the case a bit.
The Basics of the Case and Ruling
Spinrilla is a hip-hop streaming service where users create mixtapes for others to listen to.
However, the service is far from a free-for-all. Of the 19 million registered users, only 14,000 have permission to upload. In December 2015, the company implemented Audible Magic to scan uploaded audio files and block infringing uploads. This was at the request of UMG Recordings.
According to their claims, they regularly took action when the received a DMCA takedown notice (this is disputed by the record labels) and tried to work to keep their service clean.
In February 2017, a group of record labels filed a lawsuit against Spinrilla, alleging that the site was committing both direct and secondary copyright infringement. Initially, they alleged some 21,000 songs that they considered to have been infringed but, as the case went on, only identified the 4,083 involved in the lawsuit.
To be clear, Spinrilla’s actions were not wholly innocent. Not only did founder Jeffery Copeland upload several mixtapes himself to help users, the record labels have long called into question their repeat infringer policy, especially as it existed before July 2017.
Perhaps worst of all was that Copeland offering help to users in circumventing their copyright protections, including telling one DJ to slow down a track to get past the software.
However, the ruling hinged on a separate issue: The fact Spinrilla did not have a registered DMCA agent. According to the lawsuit, the DMCA agent was not registered with the U.S. Copyright Office until July 2017, well after the lawsuit was filed.
As such, Spinrilla was unable to invoke DMCA safe harbor at all and, as such, was denied protection under the DMCA. Given that Spinrilla had created the streaming platform and none of their arguments addressed the issue of public performance, the judge ruled that Spinrilla was a direct infringer on all the tracks.
It is a major blow for Spinrilla, but it should also be a cautionary tale for anyone else that hosts content provided by users.
A Reminder: You Need a DMCA Agent
To be clear, we don’t know how the court would have ruled on the safe harbor issues if Spinrilla had maintained a DMCA agent registration for their entire run.
Their action in other areas certainly question whether safe harbor would have applied and that includes uploading tracks for users, advising on how to circumvention copyright protection and their lack of a repeat infringer policy.
It’s very likely that, even with a proper DMCA agent registration, they may have been held liable for at least some of the tracks at issue. That said, the issue was moot as, due to their lack of a registered agent, they had no safe harbor at all.
It’s also possible that this ruling could be altered or overturned on appeal. However, that seems unlikely as the ruling lists several other cases that back up this decision.
Last month, we discussed why you need a DMCA agent if your site hosts content uploaded by users. There, we focused on small copyright holders (mostly photographers) targeting hosts as part of an increasingly aggressive campaign against infringement.
This case puts an exclamation point on that article. It emphasizes with a much bigger lawsuit and a much larger damages amount.
While Spinrilla certainly isn’t innocent in its other actions, it doesn’t even get to argue them due to the lack of a DMCA agent. Though we will likely never know how the court or a jury would have decided with a proper registration, it’s clear Spinrilla would be in a better position if it had registered one on day one.
Yes, Spinrilla should have had a registered DMCA agent from day one. However, they are FAR from alone in overlooking that detail.
If you go to the U.S. Copyright Office website right now, the process takes only a few minutes and costs just $6. Best of all, you can register unlimited sites and services under one company. There is no excuse.
If you don’t want your personal information in the database, then you can either use secondary contact information or hire an outside DMCA agent. This is a service I provide at CopyByte.
No matter how you get this done, get it done. Otherwise, the next Spinrilla could be you.