In the long-running case of the RIAA versus music-streaming service Grooveshark, the major labels have this week asked the court for summary judgment in their favor. They claim that Grooveshark's founders instructed employees to upload as much infringing content as possible, even making that a job requirement. Evidence proving greater levels of infringement was subsequently destroyed, the labels say.

With major adversaries Megaupload, Hotfile and isoHunt now part of history, U.S. entertainment companies have one more large local copyright battle to complete – the RIAA’s case against music-streaming service Grooveshark

The case, which sees Arista Music heading up a list of labels including Atlantic, Sony, UMG and Warner, has Grooveshark standing accused of massive copyright infringement. Grooveshark sees itself as nothing more than a music-only version of YouTube with all the legal protections that affords. Needless to say, the music giants frame things quite differently.

Motion for summary judgment

This week the labels went for the throat, moving for an order granting summary judgment against Grooveshark parent company Escape Media and Grooveshark founders Sam Tarantino and Joshua Greenberg.

“By any objective measure, Grooveshark is a linear descendant of infringing music services such as Napster, Grokster, and LimeWire, all shuttered by federal courts for large-scale copyright infringement,” law firm Jenner & Block wrote on behalf of the labels.

“Like those pirate services, Grooveshark illegally provides tens of millions of users with access to a comprehensive library of popular music overwhelmingly comprised of unlicensed copies of Plaintiffs’ copyrighted sound recordings.”

The twist in the Grooveshark story is that the labels say that in order to build a comprehensive catalog of music, the company’s founders “expressly and repeatedly” instructed Escape employees to upload as many sound recordings to Grooveshark as possible, including ones from the plaintiffs’ catalogs.

Encouraged employees to upload music – the early days

Many of the labels’ claims date back to Grooveshark’s early days as P2P sharing software ‘Sharkbyte’, a service they say was trying to grow its catalog of musical offerings.

The labels say that in his deposition Tarantino admitted that the company intended to “vacuum in” all of the infringing music available on other then-current P2P networks with the aim of later monetizing it, “by selling pirated copies of Plaintiffs’ sound recordings to Grooveshark users for profit.”

And this is where the labels’ claims get very serious indeed. The RIAA says that Grooveshark’s founders instructed employees to create user accounts and store “hundreds of thousands of digital music files on their computers” with the aim of uploading these files to other service users.

“Thus, Defendants provided a substantial portion of the infringing content files used for the initial Grooveshark service,” the labels explain.

Citing information reportedly obtained from emails, sundry documents, and testimony from former Grooveshark employees, the labels claim that Tarantino and Greenburg made it very clear that all employees were expected to upload as much music as possible into the Grooveshark system, including the most popular current songs.

The aim, the labels say, was for Grooveshark to get big first, with an eye on striking licensing deals later. Directly quoting comments made by Escape Media’s Chairman, Grooveshark “bet the company on the fact that [it] is easier to ask forgiveness than it is to ask permission.”

Centralizing Grooveshark

Due to its peer-to-peer nature, the system preceding today’s Grooveshark required that users remain online in order to seed plenty of content, meaning that when those users disappeared, so did the music. The labels say that by introducing changes, Grooveshark made their service more commercially viable.

“In order to overcome this limitation, in June 2007, Defendants began to utilize their central servers – internally referred to as their ‘cache’ – as a vast central storage library for all of the music files available on the Grooveshark P2P Network (hereinafter the “Central Music Library”). As a result, users had access to all the music in the Central Music Library regardless of the number of users online at the time,” the labels write.

Those changes, they say, only came about through yet more infringement, with Grooveshark’s founders “repeatedly instructing” employees to upload infringing content.

“Simply put, Defendants made it a job requirement that Escape’s employees engage in copyright infringement in order to attract users and thus benefit Defendants,” they write.

Web-based Grooveshark

The labels add that when Grooveshark introduced its current web-streaming model infringement continued, as “Escape employees regularly uploaded files to Grooveshark (including copies of popular sound recordings owned by Plaintiffs) in order to ‘test’ the functionality of the uploading process.”

In 2009 the record companies say they sent numerous DMCA notices to Grooveshark which “threatened to diminish” the Grooveshark library.

A sample of the alleged uploading activities of Grooveshark employees

“As part of this process, Escape’s senior officers searched for infringing songs that Defendants had removed in response to DMCA takedown notices and re-uploaded infringing copies of those songs to Grooveshark to ensure that its music catalog was complete.”

While the exact number of infringements is redacted in court documents, the labels say that music by Michael Jackson, Prince, Beyoncé, Jay-Z, Green Day, Britney Spears, plus tens of thousands of other popular sound recordings had their copyrights infringed. Virtually all of Escape’s employees were identified as serial infringers, the labels say.

Liability for infringement

As a result of the actions detailed above, the record companies say that Escape Media is liable for both direct and secondary copyright infringement. Vicarious liability (profiting from and failing to prevent infringement), inducement (encouraging employees to infringe), and contributory infringement (assisting employees to infringe) are all in the mix.

The recording firms add that founders Sam Tarantino and Joshua Greenberg share personal liability for all of Escape’s infringing activities since they personally participated in and directed the infringing conduct of Escape’s employees. In addition, Tarantino and Greenberg are being held personally liable for direct infringement over their own infringing uploads to the Grooveshark service.

Destruction of evidence.

In addition to their motion for summary judgment, the labels have filed for evidentiary and monetary sanctions against Escape after the company allegedly engaged in “repeated, willful spoliation of multiple categories of key evidence.” If that evidence had been available it would have shown details of infringement which would’ve “exposed [Escape] to hundreds of millions of dollars” in additional damages.

The labels say that Escape destroyed hundreds of thousands of uploading accounts, including one operated by founder Joshua Greenberg.

“[It] is an undisputed fact that Escape’s Chief Technology Officer, Joshua Greenberg, uploaded a massive volume of infringing copyrighted works to the Grooveshark service. However, despite explicit demands to preserve such evidence, Escape systematically deleted internal database records for Greenberg’s user account.”

It’s further claimed that other Escape employees deleted their uploading accounts and the company created a script to purge uploading records. Important encryption data was also discarded.

“Escape has admitted that it deleted the method of encryption for the Upload Report after the report was produced to UMG thereby rendering it impossible for Plaintiffs to use the report to identify the uploading activities associated with hundreds of undisclosed employee accounts. In other words, Escape knowingly destroyed key evidence of the true scope and scale of its employees’ infringement.”

As a result of these alleged actions the labels ask the court to impose penalties on Escape to not only punish the company, but to “deter others who might view Escape’s bad-faith litigation tactics as a blueprint for future cases.”

Endgame

Whether the case will end in summary judgment is yet to be seen but if the pattern for the Hotfile and isoHunt cases are anything to go by, a Grooveshark-terminating agreement could be on the cards in the months to come.