Grooveshark Ordered to Pay $0.00 for Massive Copyright Infringement

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Last week we learned that Grooveshark could be forced to pay over $736,000,000 for massive copyright infringement. The company decided they didn’t want to license music. They uploaded illegal files to their servers instead.

Guess what? Grooveshark is getting a free pass… as long as they promise they won’t do it again.

Grooveshark’s parent company Escape Media has settled with Warner Music Group, Sony Music Entertainment, and Universal Music Group. As part of the settlement, Escape will hand over Grooveshark’s website, apps, and intellectual property. Grooveshark will cease operations, and all major label music on their servers will be wiped.

If Grooveshark violates the terms of the agreement they’ll have to pay the labels $75 million.

 

Nina Ulloa covers breaking news, tech, and more: @nine_u

Image by Andrew Malone, licensed under Creative Commons Attribution 2.0 Generic (CC by 2.0).

40 Responses

  1. superduper

    How exactly does this happen? Music industry is screwed. Darn.

    • Bob

      The labels have their asses covered, don’t you worry.

      Or did you think the music industry was still about the artists or the music? lol

      • superduper

        Nah I guess you could say its predictable, unfortunately.

    • pickles

      How? Because Grooveshark doesn’t have any money left. They have given everything they have – code, apps, website, everything – to the labels.

      • Bandit

        “code, apps, website, everything” + $3.50 will get you a cup a coffee

  2. Versus

    This is obscene. How are they allowed to get away with this thievery with no penalty at all?

    • Anonymous

      Agree, but now it’s time to move on.

      Next: Sue the ISPs — they are the real pirates.

    • Anonymous

      Because they have no money. You can sue them for anything you want but it they have no money, you are not going to get anything.

    • SickBeatMaker

      Regarding the notion that they are getting off the hook and don’t have to pay — that is what their assets are for. There is a liquidation value for the technology, IP, and users. Likely worth more than $75M, but it has a value.

      • Bandit

        On what planet is that technology worth over $75 million.

        The only value there is the name recognition in Grooveshark. And the majors learned long ago that there is not much value in that either. Napster anyone?

    • SickBeatMaker

      There’s a penalty for sure. It’s the liquidation value of their assets & IP.

    • alexander

      easy they gave all the information on who ever and what ever they keep getting killed over, grooveshark basically gave over all the information to the feds and what not in order to cover their debt, so now i wonder who does the whole privacy issue fall on, maybe now the people who are now targeted even in the least can now try and get back some of the 9.99 grooveshark was charging and make it all most impossible for them or anyone to touch you because you would have a privacy clause and you know how even the government third fourth and fifths out that data

  3. David

    Surely getting Grooveshark shut down (which has now been confirmed) is a better outcome for everyone in music (not just the major labels) than a payment of damages that might not have been enough to put Grooveshark out of business.

  4. Ed Jennings

    Its about that Cease and Desist, No Trouble, No Trouble.

    So long Grooveshark.

  5. Shlomo Rubenstein

    Title is misleading. If they give up all their IP how can they do it again?

    • Paul Resnikoff

      Hate to say this, but there’s now a void for another Grooveshark. It could be hosted overseas, but operated on a similar premise. The ownership structure will be unknown or extremely shady.

      • so

        This is why we can’t lose the free tier of Spotify. And surely the major labels will be quicker on the draw if there is a next time. The amount of time that Grooveshark was able to hang on was totally absurd.

        • Bandit

          Weren’t they operating under the “better to beg forgiveness than ask permission” when it comes to choosing between copying content illegally or getting a license

          Maybe the beg forgiveness from the labels process was working for awhile then fail

  6. Phantom X

    At the end of the day for what the handing over of ownership , patents and copyrights are worth Grooveshark should have worked better with the labels, risen inside the game of chance and positioned for an IPO or merger and acquisition and they may have walked away 700 odd million to the good; They got big-eyed and greedy and roguish to quick and failed to discover and comprehend the big photo opt !

  7. Anonymous

    What about all the indie intellectual property on those servers? Majors just get to keep that?

    • Anonymous

      Who knows. But does it really matter if Grooveshark is dead? There not going to use the content.

      • Anonymous

        Doesn’t matter whether or not they use it. Why do the majors have a right to own my IP which was on these servers illegally?

      • alexander

        Yeah they are dead,i heard when i first joined grooveshark some guy up at the top was murdered and then recently the founder was found dead. So right you are they will not be using the content, now, not as though it matters to me but now credit card infomation addresses and any information plus some is now in the hands of our ever so responsible government. like i said i am not worried about it i hope they like all my 60 some odd play lists, i have some great tunes on there.
        so anyway guess they paid far more than it all was worth. the as in the founder and the other guy.

    • SickBeatMaker

      Taking ownership of the IP might be considered equal to a payout, as it has a liquidation value.

    • Sarah

      No.

      As a rule, you can’t transfer title to something you don’t own – in this case, Grooveshark can’t legally transfer ownership of something it stole from A to B (you can’t legally sell more than you own, etc). Unless something very strange and contrary to pretty long-standing legal principles is going on, your music is still yours, the majors don’t get your music just because it was on Grooveshark’s servers.

      Rather, the IP they’re referring to is primarily code built for the websites, apps, etc, trademarks, patents (if any), possibly user data – Grooveshark’s IP, not yours.

      • Jaime

        A very interesting and clear explanation! Thanks, Sarah.

    • Sarah

      No. The transfer was of Grooveshark’s IP – code, trademarks, domain names, potentially user data – NOT of your IP (your music) that Grooveshark stole.

      Your music is yours, the majors don’t get it through this settlement.

      • Sarah

        oops, sorry for the double comment. It didn’t look like the first one had posted until now.

      • Anonymous

        This makes me feel better. Although the majors would still likely have analytics data on the grooveshark users who were listening to our music? Whatever they probably get that anyway through their equity deals with services

  8. Major Label's

    Wait, Grooveshark has been ripping off artists? THATS OUR JOB!

  9. FarePlay

    How broken are the laws that protect artists and copyright holders from internet piracy? Beyond belief.

    This sends such a bad message to anyone interested in using other peoples work, protected (?) by copyright for financial gain. If we don’t change the laws protecting creators and their work, whats the point in being a professional artists.

    • alexander

      right i am not for stealing be it music(i love music) or anything else though it does somewhat strain my brain to know that very very few of these artist have a new beat of their own,and i looovvveee music. it is to me like they are (the artist) getting a taste of all that money and have no section for the people who lovooovee their music but can not afford to attend a concert because “the artist” allows for exorbitant prices, who of those artist are starving? or not absolutely plush on every indulgence and yet they rarely do a free concert and even that ain’t free, now if there are companies that are making money that is different anyway, i do not like the way the comment deal is set up here because i do not have what i was commenting to in front of me so i am pretty sure i am lost in my comment. oh well it is how i do.

  10. Nilsson

    You all are missing the point. This means the founders are off the hook and won’t have to pay anything out of their own pocket. Grooveshark has been run on autopilot for years while still taking millions in ad rev. Where do you think that money went?

  11. so

    What is the definition of “Grooveshark”? The people who started and were involved with it, that specific name, etc.? Sounds like yet another round in the whack-a-mole saga.

  12. Anonymous

    I’m working with an independent publishing company that recently signed a digital streaming licensing agreement with them. Had over 200 songs were uploaded to the account. I’m guessing it all just…goes away?

    • Sarah

      I’m working with an independent publishing company that recently signed a digital streaming licensing agreement with them.

      Is “them” Grooveshark?

  13. a guy

    Wrong. Sam Tarantino and the other execs complicit in the actual orders (to employees) to upload music bought themselves out of personal liability. They for sure had cash somewhere. But they won’t have to fork any over because when push came to shove, they saved their bacon while fighting years with other peoples’ money. Nice huh?

  14. Maria Hill

    So I paid $5 a month for more storage and such….Where’s that money? Are they going to be returning at least partial month refunds? Paid on April 20, and ten days later they are no more….
    Not a lot of money but still

  15. Anonymous

    This is apparently not true, Grooveshark has to pay $50 million no matter what, the $75 million is just if they break their contract:
    http://www.lexology.com/library/detail.aspx?g=731463c5-7e90-4dc1-917b-543317ac6c26

    The May 1, 2015 consent to judgment and other publicly available information reveals the following concerning the settlement terms:

    Escape must permanently shut down Grooveshark;

    Escape must issue a lengthy apology to the music industry;

    Escape must wipe clean its repertoire of copyrighted recordings and “hand over” (presumably meaning forfeiture of) ownership of the Grooveshark website, mobile applications and intellectual property;

    Escape must pay $50 million to the record companies; and

    Escape must pay $75 million for any violation of the settlement.