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for the Southern District of New York

Court Finds Infringements of Copyrights Other Than Copyrights-in-Suit Irrelevant for "Red Flag" Notice

In a January 29, 2014 ruling, Judge William H. Pauley III disposed of nineteen motions in limine in plaintiffs Capitol Records, Inc.’s and other music publishers’ long-running copyright infringement action against MP3tunes, Inc. The Court characterized some of the motions as seeking to “resurrect discovery disputes and legal determinations this Court decided previously. Others level an impressive array of claims and defenses, including perjury, fraud, and witness harassment. Many seek determinations on the merits rather [than] a ruling on the admissibility of evidence.”

Of note are some of the substantive rulings that Judge Pauley made while addressing the evidentiary issues. First, Capitol Records sought to introduce evidence of MP3Tunes’ alleged infringement of copyrights other than copyrights-in-suit as so-called “red flag” or “willful blindness” evidence that would strip the defendant of the safe harbor provisions (for internet service providers) under the Digital Millennium Copyright Act. Relying on the Second Circuit’s controlling decision in Viacom Int’l v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2013), Judge Pauley ruled that “only ‘specific infringements’ that correspond to songs-in-suit are relevant to a determination of liability under a willful blindness or red flag knowledge theory.” The Court added that even “if the evidence were relevant, its probative value would be substantially outweighed by the danger of unfair prejudice to Defendants,” and concluded that “evidence of the infringement of copyrights not owned by Plaintiffs is excluded as to Defendants’ liability.” Judge Pauley further ruled, however, that because “evidence of general infringement is relevant to the issue of willfulness [for the assessment of statutory damages], but irrelevant to infringement liability, this Court will bifurcate liability from willfulness and damages at trial.”

Second, although the Court rejected on summary judgment the “argument that Plaintiffs’ free distribution of certain songs pursuant to ‘viral’ marketing campaigns defeated their claims for copyright infringement,” Judge Pauley nevertheless found that the “argument concerning the relevance of promotional downloads to Plaintiffs’ willful blindness/red flag knowledge claims has traction” because “Plaintiffs’ practice of making copyrighted music available for free, such that ‘internet users, including MP3tunes’ users and executives, have no way of know for sure whether free songs on the internet are unauthorized’ is relevant.” The Court also noted that evidence “of promotional downloads is also relevant to the issue of statutory damages” because such “damages can be reduced if the infringer ‘was not aware and had no reason to believe that his or her acts constitute an infringement of copyright.’”
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