Fraudulent DMCA Take-Down Notice May Be Basis For Claim If iTunes Stores Music At Direction Of A User

Distribuidora De Discos Karen, C por A. v. Seijas, No. 13 Civ. 5200 (NRB), 2015 BL 93133 (S.D.N.Y. Mar. 26, 2015).

Denying defendants' motion to dismiss, the Court held that: (1) a misrepresentation claim under the DMCA may be predicated on a technically defective take-down notice; (2) a misrepresentation claim under the DMCA must be predicated on a take-down notice that is not directed towards activity that the DMCA protects; and (3) it was premature to decide whether Apple stores music on iTunes "at the Direction of a User."  Accordingly, a notice sent by Defendants to iTunes stating that certain recordings had not been licensed for distribution can be the subject of a misrepresentation claim under the DMCA even if it did not meet all the statutory requirements for such a notice, but, such a claim could only apply if the notice was “directed at ‘storage at the direction of a user,' ” which might or might not have been true in the instant case.

Here, defendants and plaintiffs disputed who owned certain publishing and sound recording rights.  The artists' counsel sent Apple a take-down notice, saying that “no license has been issued” with respect to the recordings.  Apple then dropped the subject recordings from iTunes, and plaintiffs sued, alleging misrepresentation under the Digital Millennium Copyright Act of 1998, 17 U.S.C. § 512(f).  The DMCA creates a notice-and-takedown procedure for allegedly infringing copies of works posted online, and subsection (f) creates a cause of action for sending fraudulent takedown notices.  Defendants moved to dismiss for failure to state a claim.  The Court found that the communication to Apple “was not so deficient as to fall outside the reach of subsection 512(f).”  But, the remaining issue was whether iTunes falls within the section 512(c) safe-harbor, to wit: "whether Apple stores music on iTunes 'at the direction of a user,' 17 U.S.C. § 512(c) (1)".  The Court found that "the complaint simply does not state enough facts about iTunes for us to say what happens behind the scenes, so we cannot decide at the present stage whether iTunes stores music at the direction of users."  Accordingly, the motion to dismiss was denied.

Apple Succeeds In Having Certain Audio Distribution Patents Deemed Unpatentable As Obvious

Apple Inc. v. Sightsound Technologies, LLC, Related Case Nos. CMB2013-00023 and CMB2013-00020 (PTAB Oct. 7, 2014) [Papers 101 and 105, respectively].

Apple succeeded in having the PTAB hold that certain claims in patents relating to a "system and associated method for the electronic sales and distribution of digital audio or video signals" are unpatentable.  The PTAB concluded that certain claims would have been obvious based on existing publications by non-parties, pursuant to 35 USC 103(a).  However, Apple did not succeed in establishing that the claims were anticipated under 35 USC 102(a).

iTunes Goes DRM-Free on Remaining Majors

Apple reportedly has signed a deal with three more major labels (Sony, Universal and Warner Music) to bring more DRM-free MP3s to iTunes.

As part of the deal, Apple will reportedly be more lax on their strict price fix, breaking MP3s into three tiered pricing: Older catalog tracks,79-cents; newer songs, 99-cents; and hit songs, more.

[Rolling Stone]

Apple and "Subscription" - In the Same Sentence?

The Financial Times reports:

Apple is in discussions with the big music companies about a radical new business model that would give customers unlimited access to its entire iTunes music library in exchange for paying a premium for its iPod and iPhone devices.

Called an "all you can eat" model. Who knew the record industry was turning into an Old Country Buffet?

Accross the Pond, EU Takes Bite into Apple

Item 1: The European Union closed its anti-trust investigation into Apple iTunes operation. However, "some copyright issues remain". Notably, the European Commission refused to address other copyright restrictions in place, i.e., DRM.

Item 2: Apple will eliminate its price discrimination across the EU. Users of iTunes in Britain are charged approximately 9 cents more per download than users in other EU nations that use the Euro currency. In the coming months, users across the EU will be charged a uniform "pan-EU" price per download. However, what this means if the record labels fail to get on board and lower their wholesale prices to Apple is yet to be seen? It seems unlikely that the majors will forfeit the huge market iTunes provides by playing hard-ball and not lowering their prices. Similarly, small and indie labels will likely adjust their prices to maintain their access to their product via a mass-distributor like iTunes.

...so what does this mean to Apple? Are they no longer a "Standard Oil"?