Safe harbour provisions in the US Digital Millennium Copyright Act protect companies when their services are used to make copyrighted material available without permission. If the service provider is just a conduit for the material and takes it down when notified of its existence, it can evade liability for copyright infringement. EU laws take the same approach.
User-generated content sites such as YouTube and MySpace depend on having safe harbour status in order to avoid suits connected with material carried by their networks. Universal is now challenging that with a suit which attacks MySpace directly.
"Businesses that seek to trade off on our content, and the hard work of our artists and songwriters, shouldn't be free to do so without permission and without fairly compensating the content creators,'' Universal said in a statement.
The suit comes at a vital time in relations between record labels and social networking and content-sharing sites. While Google's YouTube has signed deals with Warner Brothers, Universal Music, Sony BMG and TV company CBS on the use of their material, other companies such as Grouper and Bolt.com find themselves on the end of lawsuits from content owners.
Universal argues in the suit that the terms and conditions of the site are designed to absolve it of responsibility for material posted but that they do not. According to news agency AP the suit says that MySpace asks users to agree to grant MySpace a licence to publish all the content that the user uploads. Users, though, have no right to grant such a licence for content they do not own, it says.
"[MySpace] encourages, facilitates and participates in the unauthorized reproduction, adaptation, distribution and public performance,” says the suit, detailing the features on MySpace which allow users to save copies of videos in their pages or to share them with others.
“Our music and videos play a key role in building the communities that have created hundreds of millions of dollars of value for the owners of MySpace,” said Universal in a statement. “Our goal is not to inhibit the creation of these communities, but to ensure that our rights and those of our artists are recognized.”
"It's unfortunate they decided to file this unnecessary and meritless litigation,” said a statement from MySpace, which is owned by Rupert Murdoch's News Corporation. “We provide users with tools to share their own work – we do not induce, encourage, or condone copyright violation in any way.”
The suit comes just months after Universal, a subsidiary of Vivendi and the world's biggest record label, agreed a deal with MySpace allowing the site's users to view videos.
"We are delighted to be working closely with MySpace in combining the creative resources of our two companies to offer the very best in music videos," said Larry Kenswil, head of Universal's new media and technology division, in February. "It's clear that there is huge consumer demand for video-on-demand products, and it is our policy to deliver our artists’ videos and music to fans in as many new and innovative ways as possible. As such, Universal is uniquely positioned to capitalise on the many new opportunities emerging in this rapidly growing area of the marketplace."
YouTube has managed so far to avoid such suits. Struan Robertson, editor of OUT-LAW.COM and a technology lawyer with Pinsent Masons, said that YouTube's process for uploading material offered it more protection than MySpace's does to News Corporation.
"To add videos to YouTube, a user sees a number of prominent warnings against uploading copyright-protected material," said Robertson. "That's a wise thing to do if you run a site that lets users upload content. But to add videos to MySpace, the only prominent warning that a user will see is that his account will be cancelled if he uploads porn. MySpace's prohibition on uploading copyrighted content is buried in terms and conditions that, at eight pages long, most users will never read." "A site with prominent warnings against infringement will find it easier to convince a court that it neither encourages nor condones infringement than one without," said Robertson.
