OPINION OF THE COURT
Defendant Escape Media Group, Inc. developed, owns and operates an Internet-based music streaming service called Grooveshark. Users of Grooveshark can upload audio files (typically songs) to an archive maintained on defendant's computer servers, and other users can search those servers and stream recordings to their own computers or other electronic devices. Defendant has taken some measures to ensure that the Grooveshark service does not trample on the rights of those who own copyrights in the works stored on its servers. For example, it is a party to license agreements with several large-scale owners and licensees of sound recordings. In addition, it requires each user, before he or she uploads a work to Grooveshark's servers, to confirm ownership of the recording's copyright or license, or some other authorization to share it.
Defendant concedes that it cannot ensure that each work uploaded to its servers is a noninfringing work. However, it has operated Grooveshark with the assumption that it is shielded from infringement claims by copyright owners by 17 USC § 512,
Plaintiff UMG Recordings, Inc. is the owner of the rights in many popular sound recordings that have been uploaded to Grooveshark. Many of those recordings were made prior to February 15, 1972
In its answer, defendant asserted as its fourteenth affirmative defense that the pre-1972 recordings sat within the safe harbor of section 512 (c) of the DMCA. UMG moved, inter alia, to dismiss that defense pursuant to CPLR 3211 (b). It argued that the DMCA could not apply to the pre-1972 recordings because that would conflict with Congress's directive in section 301 (c) of the Copyright Act that nothing in the Act would "annul" or "limit" the common-law copyright protections attendant to any sound recordings fixed before February 15, 1972. In response, defendant asserted that nothing in the plain language of the DMCA limited its reach to works fixed after that date. Further, it maintained that a ruling in UMG's favor would eviscerate the DMCA, insofar as companies like it would still need to expend massive resources policing the works posted on its servers, rather than being able to wait until a copyright holder or licensee notified it that its rights were being infringed.
The motion court denied plaintiff's motion (37 Misc.3d 208 ). Relying heavily on Capitol Records, Inc. v MP3tunes, LLC (821 F.Supp.2d 627 [SD NY 2011]), in which the United States district court tackled precisely the same issue and found that the DMCA embraced sound recordings fixed before February 15, 1972, the court stated that "there is no indication in the text of the DMCA that Congress intended to limit the reach of the safe harbors provided by the statute to just post-1972 recordings" (37 Misc 3d at 215). It agreed with the district court that, although section 301 (c) is an antipreemption provision ensuring that the grant of federal copyright protection did not interfere with common-law or state rights established prior to 1972, that section does not prohibit all subsequent regulation of pre-1972 recordings. The court further noted that, as the district
Finally, the court addressed a December 2011 report from the Office of the Register of Copyrights, addressed to the Speaker of the U.S. House of Representatives, recommending that Congress extend federal copyright protection to sound recordings fixed on or before February 15, 1972, and that the safe harbor provisions of section 512 be applicable to such recordings. The motion court acknowledged that the report took the position that Capitol Records, Inc. v MP3tunes, LLC was wrongly decided and that congressional action was necessary before pre-1972 recordings were embraced by the DMCA. Nevertheless, the court concluded that its reading of the DMCA was a reasonable interpretation of what Congress intended.
On appeal, UMG argues that, were the DMCA to be interpreted as protecting services like Grooveshark from infringement liability for pre-1972 recordings, section 301 (c) of the Copyright Act would have been effectively repealed. That is because, it contends, section 301 (c) forbids the Act from "annull[ing]" or "limit[ing]" the common-law rights and remedies of owners of such works, and the DMCA, if it were to bar infringement actions against Internet companies that otherwise comply with the DMCA, would do just that. UMG characterizes section 301 (c) as creating "reverse pre-emption" of state law copyright remedies, meaning that Congress is not permitted to trample on the state of copyright laws in any way.
UMG further argues that the motion court ignored the DMCA's provision that a copyright infringer is, for purposes of
Finally, UMG points to the report of the United States Copyright Office, which was commissioned by Congress as part of its investigation into extending the Copyright Act to pre-1972 recordings. It stresses that the report concluded that the DMCA does not currently apply to such works, and that Capitol Records, Inc. v MP3tunes, LLC, upon which the motion court so heavily relied, was premised on "highly questionable grounds."
Defendant argues that there is no tension between the DMCA and section 301 (c) of the Copyright Act. It contends that any references in the DMCA to "copyrights" and "infringements" thereof are generic, and that there is no indication that Congress intended to limit the statute's reach to works covered by the Copyright Act. It further claims that had Congress intended only to protect companies such as defendant from claims by owners of federal copyright claims, it would have so stated.
Defendant maintains that if UMG's interpretation of the DMCA were adopted, that act would be eviscerated. It points to legislative history stating that the purpose behind the DMCA was to promote efficiency in Internet operations, and argues that Grooveshark, and other Internet companies that provide similar services such as YouTube and Google, would become inefficient if they had to research the provenance of works before permitting them to be posted to their sites. Defendant additionally argues that the DMCA does not annul or limit any of UMG's rights in the pre-1972 recordings, because, notwithstanding the DMCA's safe harbor provisions, UMG still retains its common-law rights in those works, such as the ability to exploit the works, license them and create derivative works.
In interpreting any statute, we are required, first and foremost, to pay heed to the intent of the legislature, as reflected by the plain language of the text (see Majewski v Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577, 583 ). In addition,
Repeal or modification of a statute by implication is disfavored (Matter of Consolidated Edison Co. of N.Y. v Department of Envtl. Conservation, 71 N.Y.2d 186, 195 ).
Initially, it is clear to us that the DMCA, if interpreted in the manner favored by defendant, would directly violate section 301 (c) of the Copyright Act. Had the DMCA never been enacted, there would be no question that UMG could sue defendant in
For defendant to prevail, we would have to conclude that Congress intended to modify section 301 (c) when it enacted the DMCA. However, applying the rules of construction set forth above, there is no reason to conclude that Congress recognized a limitation on common-law copyrights posed by the DMCA but intended to implicitly dilute section 301 (c) nonetheless. Again, such an interpretation is disfavored where, as here, the two sections can reasonably coexist, each in its own "field of operation" (People v Newman, 32 NY2d at 390). Congress explicitly, and very clearly, separated the universe of sound recordings into two categories, one for works "fixed" after February 15, 1972, to which it granted federal copyright protection, and one for those fixed before that date, to which it did not. Defendant has pointed to nothing in the Copyright Act or its legislative history which prevents us from concluding that Congress meant to apply the DMCA to the former category, but not the latter.
To the contrary, reading the Copyright Act as a whole, which we are required to do (see Matter of New York County Lawyers' Assn. v Bloomberg, 19 N.Y.3d 712, 721 ), it is reasonable to interpret the references in the DMCA to "copyright" or "copyright infringers" as pertaining only to those works covered by the DMCA. The DMCA expressly identifies the rights conferred by the Copyright Act in stating who a "copyright infringer" is for purposes of the DMCA. Had Congress intended to extend the DMCA's reach to holders of common-law rights it would have not have provided so narrow a definition. Defendant's argument that by not affirmatively excluding works not otherwise covered by the Act, Congress was implicitly including them, is simply unreasonable, and contrary to the maxim expressio
Moreover, in the same Congressional session as it enacted the DMCA (indeed one day before), Congress amended section 301 (c) of the Copyright Act to extend for an additional 20 years the amount of time before the Act could be used to "annul" or "limit" the rights inherent in pre-1972 recordings. Thus, Congress was acutely aware that the DMCA could be used to modify 301 (c) in the way advocated by defendant, and so, in the absence of language expressly reconciling the two provisions, there is an even stronger presumption that it did not intend for the DMCA to do so (see Alweis v Evans, 69 NY2d at 204-205). We make this determination based strictly on the plain language and context of the statute and its legislative history, and so we need not decide whether the report by the Copyright Office, which reaches the same conclusion, has any authoritative effect.
Finally, we reject defendant's argument that the very purpose of the DMCA will be thwarted if it is deemed not to apply to the pre-1972 recordings. The statutory language at issue involves two equally clear and compelling Congressional priorities: to promote the existence of intellectual property on the Internet, and to insulate pre-1972 sound recordings from federal regulation. As stated above, it is not unreasonable, based on the statutory language and the context in which the DMCA was enacted, to reconcile the two by concluding that Congress intended for the DMCA only to apply to post-1972 works. In any event, defendant's concerns about interpreting the statutes in the manner advocated by UMG are no more compelling than UMG's concerns about interpreting the statutes in the manner advanced by defendant. Under such circumstances, it would be far more appropriate for Congress, if necessary, to amend the DMCA to clarify its intent, than for this Court to do so by fiat.
Accordingly, the order of the Supreme Court, New York County (Barbara R. Kapnick, J.), entered July 10, 2012, which, insofar as appealed from, denied plaintiff's motion to dismiss defendant's fourteenth affirmative defense, should be reversed, on the law, with costs, and the motion granted.
Order, Supreme Court, New York County, entered July 10, 2012, reversed, on the law, with costs, and the motion granted.