Michael Jackson once sang, “You can’t win / You can’t break even/ And you can’t get out of the game.”
With that in mind, a group of music publishers including Peermusic, Bug Music and Warner Chappell Music has won $6.6 million in a copyright infringement lawsuit against LiveUniverse, Inc. for displaying lyrics online to such songs as Van Morrison’s “Moondance” and Ray Charles’ “Georgia on My Mind.”
LiveUniverse was a company founded by Brad Greenspan, one of the co-founders of MySpace.
Among LiveUniverse’s properties were lyricsdownload.com, completealbumlyrics.com and lyricsandsongs.com. None of the websites are still operational, which represents some form of victory by the publishers after three years of litigation. On Tuesday, the publishers attained a final ruling on a default judgment from a California federal court awarding them $12,500 for each of the 528 songs that were found to be willfully infringed.
That said, collection could get interesting.
Greenspan is a colorful character, who sued after Intermix Media “undersold” MySpace to News Corp for $580 million, called for an investigation from the Justice Department for “one of the largest merger and acquisition scandals in U.S. history,” battled Rupert Murdoch in a bid for the Wall Street Journal, and donated to the anti-spyware cause before having to pay up to settle a spyware lawsuit brought against him by the New York State attorney general’s office.
In the lyrics case, the litigation was no less bizarre.
Greenspan went through three law firms. One withdrew, citing a “personality conflict.” Another withdrew, citing nearly $85,000 in owed fees and a “breakdown in the attorney-client relationship.” At times, he showed up in court, representing himself and failing to obey proper procedures in submitting motions. At other times, depositions were ignored upon “medical emergencies.”
Initially, the defendants attempted to defeat the lawsuit with defenses including fair use, the first-sale doctrine, unclean hands, laches and statute of limitations.
Ultimately, the judge agreed that LiveUniverse and Greenspan had acted willfully and ordered a preliminary injunction on the lyric websites.
But the injunction was ignored nonetheless, leading the plaintiffs to ask the judge to make an order transferring ownership of the sites to music publishers. The publishers got their wish.
In the latter portions of the case, after a default judgment came, Greenspan seems to have put up much less of a fight.
Ultimately, it was the plaintiffs and the judge arguing with each other over how much money was due.
The publishers, represented by Ross Charap and Paul Fakler at Arent Fox, demanded $100,000 per song. The judge wanted information about what LiveUniverse would have been charged had they properly attained license. The plaintiffs argued that an award should be determined in relation to defendants’ profits. The judge took a look at evidence submitted and saw substantial losses on the part of the websites. The judge might have imposed an award of $30,000 per song at the “low limit of willful infringement,” but he said he wanted to “avoid a ridiculous disproportionate damage award.”
So even though Greenspan’s side was hit with three contempt orders in the case, the unruly behavior amounted to an order of $12,500 per song plus attorney fees.
Still, given 528 songs, that adds up to a nice $6.6 million total, and an even nicer press release touting a “landmark” ruling.
“One of the principal purposes of our lawsuit was to obtain a large statutory damage award which would serve as a warning to persuade illegal lyric site operators that it makes good business sense to become licensed and avoid having their site shut down and damages awarded against them,” said Charap in a statement.
The ruling could just as easily be interpreted as a warning to hire good lawyers and make nice with them during the course of litigation.