SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK UMG RECORDINGS, INC., Plaintiff, -against- ESCAPE MEDIA GROUP, INC., Defendant.

Index No. 100152/2010 IAS Part 39 Justice Saliann Scarpulla

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS MOTION FOR SUMMARY JUDGMENT

FILED: NEW YORK COUNTY CLERK 09/23/2014 08:08 PM INDEX NO. 100152/2010NYSCEF DOC. NO. 155 RECEIVED NYSCEF: 09/23/2014

TABLE OF CONTENTS INTRODUCTION..........................................................................................................................1

FACTUAL AND PROCEDURAL BACKGROUND .................................................................4

I. UMGs Exclusive Rights in Its Catolog of Pre-1972 Recordings ........................................4

II. Escapes Infringing Grooveshark Service .............................................................................4

A. Escapes Business Model ...................................................................................................4

B. Escapes Unauthorized Use of UMGs Pre-1972 Recordings ........................................6

C. Escapes Streaming of UMGs Pre-1972 Recordings .....................................................7

D. Escapes Ongoing Copyright Infringement and Its Pretextual Counterclaims Against UMG ......................................................................................................................7

III. Procedural History .............................................................................................................8

ARGUMENT ................................................................................................................................10

I. Applicable Standards for Summary Judgment Under N.Y. C.P.L.R. 3212 ..................10

II. New Yorks Long History of Protection of Pre-1972 Recordings Under Common Law 10

III. UMG Is Entitled to Summary Judgment on Its Common Law Copyright Infringement Claims......................................................................................................................................12

A. Applicable Standards for Common Law Copyright Infringement .............................12

B. UMGs Ownership of the Pre-1972 Recordings ............................................................12

C. Escapes Infringement of UMGs Common Law Rights ..............................................12 1. Escapes Infringing Distribution of UMGs Pre-1972 Recordings ........................14 2. Escapes Infringing Reproduction of UMGs Pre-1972 Recordings .....................15 3. Escapes Infringing Public Performance of UMGs Pre-1972 Recordings ..........16

IV. UMG Is Entitled to Summary Judgment on Its Unfair Competition Claims ..................18

V. UMG Is Entitled to Summary Judgment on Escapes Counterclaims .............................21

A. UMGs Conduct Is Protected by the Noerr-Pennington Doctrine ...............................21

B. UMG Has a Legal Justification for Its Actions .............................................................23

C. Escape Cannot Meet the Standard for Tortious Interference Because UMG Acted Without Malice ......................................................................................................24

CONCLUSION ............................................................................................................................25

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TABLE OF AUTHORITIES

Page(s) CASES

Alvarez v. Prospect Hosp., 68 N.Y.2d 320 (1986) ..............................................................................................................10

Am. Broad. Cos., Inc. v. Aereo, Inc., 134 S.Ct. 2498 (2014) ..............................................................................................................18

Apple Corps. Ltd. v. Adirondack Grp., 124 Misc.2d 351 (N.Y. Sup. Ct. N.Y. County 1983) ..............................................................20

Arista Records LLC v. Greubel, 453 F. Supp. 2d 961 (N.D. Tex. 2006) ....................................................................................15

Arista Records LLC v. Lime Wire LLC, 06 Civ. 05936 (KMW), 2010 WL 10031251 (S.D.N.Y. Aug. 9, 2010) ..................................13

Arista Records LLC v. Myxer Inc., CV 08- Civ. 03935 (GAF)(JCX), 2011 WL 11660773 (C.D. Cal. Apr. 1, 2011) ...................13

Arista Records, LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009) ......................................................................................15

Arista Records v. MP3Board, Inc., 00 Civ. 4660 (SHS), 2002 U.S. Dist. Lexis 16165 (S.D.N.Y. Aug. 29, 2002) ........................24

Barqs Inc. v. Barqs Beverages, Inc., 677 F. Supp. 449 (E.D. La. 1987) ............................................................................................22

BE & K Constr. Co. v. NLRB, 536 U.S. 516 (2002) .................................................................................................................22

Capitol Records, Inc. v. MP3tunes, LLC, 821 F. Supp. 2d 627 (S.D.N.Y. 2011) ......................................................................................19

Capitol Records, Inc. v. Naxos of Am., Inc. 372 F.3d 471 (2d Cir. 2004).....................................................................................................10

Capitol Records, Inc. v. Naxos of Am., Inc. 4 N.Y.3d 540 (2005) ........................................................................................................ passim

Capitol Records, Inc. v. Wings Digital Corp., 218 F. Supp. 2d 280 (E.D.N.Y. 2002) .....................................................................................20

Capitol Records, LLC, d/b/a EMI North Am. v. Escape Media Grp., 12-CV-06646 (AJN)(SN) (S.D.N.Y. May 28, 2014) ....................................................... passim

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Capitol Records, LLC v. BlueBeat, Inc., 765 F. Supp. 2d 1198 (C.D. Cal. 2010) .............................................................................17, 18

Capitol Records, LLC v. Harrison Greenwich, LLC, 4 Misc.3d 202 (N.Y. Sup. Ct. Comm. Div. 2014) .................................................12, 15, 16, 17

Capitol Records, LLC v. Harrison Greenwich, LLC, Index No. 652249/2012 (Dkt. No. 86) .....................................................................................17

Capitol Records, LLC v. ReDigi, Inc., 934 F. Supp. 2d 648 (S.D.N.Y. 2013) ....................................................................15, 16, 17, 18

Collins v. E-Magine, LLC, 291 A.D.2d 350 (1st Dept 2002) ............................................................................................24

EMI Records Ltd. v. Premise Media Corp., Index No. 601209/08, 2008 N.Y. Misc Lexis 7485 (N.Y. Sup. Ct. Aug. 8, 2008) .................15

Firma Melodiya v. ZYX Music GmbH, 882 F. Supp. 1306 (S.D.N.Y. 1995) .........................................................................................14

Flo & Eddie, Inc. v. Sirius XM Radio, Inc., CV 13-5693 PSG (RZx) (C.D. Cal. Sept. 22, 2014) ..........................................................20, 21

Fonotipia Ltd. v. Bradley, 171 F. 951 (E.D.N.Y. 1909).....................................................................................................10

Foster v. Churchill, 87 N.Y.2d 744 (1996) ..............................................................................................................24

Friends of Rockland Shelter Animals, Inc. v. Mullen, 313 F. Supp. 2d 339 (S.D.N.Y. 2004) ......................................................................................22

Goldstein v. California, 412 U.S. 546 (1973) .................................................................................................................10

Jasper v. Bovina Music, Inc., 314 F.3d 42 (2d Cir. 2002).......................................................................................................12

Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413 (1996) ..............................................................................................................21

LondonSire Records, Inc. v. Doe 1, 542 F. Supp. 2d 153 (D. Mass. 2008) ......................................................................................15

Lum v. New Century Mortg. Corp., 19 A.D.3d 558 (2d Dept 2005) ...............................................................................................24

Madden v. Creative Servs., 84 N.Y.2d 738 (1995) ..............................................................................................................12

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McHale v. Anthony, 70 A.D.3d 463 (1st Dept 2010) ..............................................................................................21

Melea Ltd. v. Quality Models Ltd., 345 F. Supp. 2d 743 (E.D. Mich. 2004) ...................................................................................22

Metropolitan Opera Assn v. Wagner Nichols Recorder Corp. 199 Misc. 786 (N.Y. Sup. Ct. N.Y. County 1950) .......................................................... passim

New Stadium LLC, v. Greenpoint-Goldman Corp., Index. No. 600493/2005, 2010 N.Y. Misc. Lexis 1724 (N.Y. Sup. Comm. Div. Sept. 16, 2014) ..................................................................................................................................24

P. Kaufmann, Inc. v. Americraft Fabrics, Inc., 232 F. Supp. 2d 220 (S.D.N.Y. 2002) ................................................................................23, 24

Peralta v. Figueroa, Index No. 28093/06, 2007 WL 4104122 (N.Y. Sup. Ct. Nov. 14, 2007) ................................21

Pitcock v. Kasowitz, Benson, Torres & Friedman LLP, 74 A.D.3d 613 (1st Dept 2010) ........................................................................................21, 25

Primetime 24 Joint Venture v. Natl Broad. Co., 219 F.3d 92 (2d Cir. 2000).......................................................................................................22

Profl Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (1993) ...................................................................................................................21

Rostropovich v. Koch Intl Corp., 94 Civ. 2674 (JFK), 1995 WL 104123 (S.D.N.Y. Mar. 7, 1995) ............................................20

Roy Export Co. Establishment of Vaduz, Liechtenstein v. Columbia Broad. Sys., Inc., 672 F.2d 1095 (2d Cir. 1982)...................................................................................................19

Select Comfort Corp. v. Sleep Better Store, LLC, 838 F. Supp. 2d 889 (D. Minn. 2012) ......................................................................................22

Shapiro & Son Bedspread Corp. v. Royal Mills Assocs., 764 F.2d 69 (2d Cir. 1985).......................................................................................................24

Thryoff v. Nationwide Mut. Ins. Co., 8 N.Y.3d 283 (2007) ................................................................................................................12

UMG Recordings, Inc. v. Escape Media Grp., Inc., 107 A.D.3d 51 (1st Dept 2013) ..........................................................................................9, 10

UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006 (9th Cir. 2013) .................................................................................................13

Vermette v. Kenworth Truck Co., Div. of Paccar, Inc., 68 N.Y.2d 714 (1986) ..............................................................................................................10

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Weissman Real Estate, Inc. v. Big V Supermarkets, Inc., 268 A.D.2d 101 (2d Dept 2000) .............................................................................................22

White Plains Coat & Apron v. Cintas Corp., 8 N.Y.2d 422 (2007) ................................................................................................................25

Winegrad v. N.Y. Univ. Med. Ctr., 64 N.Y.2d 851 (1985) ..............................................................................................................10

Zuckerman v. City of N.Y., 49 N.Y.2d 557 (1980) ..............................................................................................................10

STATUTES

17 U.S.C. 301 ..............................................................................................................................10

N.Y.C.P.L.R. 3013 ........................................................................................................................9

N.Y.C.P.L.R 3212 .......................................................................................................................10

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INTRODUCTION

This case arises from Defendants massive willful copyright infringement and unfair

competition in violation of New York common law. Defendant Escape Media Group, Inc.

(Escape) owns the notorious Grooveshark music service through which it streams, i.e.,

performs, a massive catalog of recorded music for the public. Its unlicensed library includes

virtually the entire catalog of recorded music owned by Plaintiff UMG Recordings, Inc.

(UMG) including the iconic sound recordings created prior to February 15, 1972 at issue

herein (Pre-1972 Recordings). According to Escapes projections, the copyrighted sound

recordings of UMG and the other major record labels accounted for a staggering of the

songs that Escape streamed to of Grooveshark users. Based on these

estimates, Escape infringed UMGs copyrighted works billions of times since it launched the

current iteration of Grooveshark without any license from UMG and in flagrant violation of

UMGs exclusive rights.

Escapes pervasive copyright infringement was part of its premeditated business strategy

to exploit the popular sound recordings owned by UMG and other record labels in order to attract

users to Grooveshark without paying any licensing fees. Escapes Chairman openly admitted the

intentional nature of this infringing business model as follows:

See Affirmation of Gianni P. Servodidio (Servodidio Aff.), Ex. A. According to Escape, it

that it could engage in blatant copyright infringement and then

from UMG and the other major record labels for the use of their content. Id., Exs.

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B-C. Indeed, Escape conceded that

Id., Ex. D.

Given the unlawful nature of its business model, Escape has been sued for copyright

infringement by every major record label.1 In a case filed by Capitol Records, LLC in the

Southern District of New York, the court issued a comprehensive summary judgment decision

finding that Escape intentionally violated New York and federal copyright law by streaming to

Grooveshark users copies of Capitols sound recordings including Pre-1972 Recordings. Capitol

Records, LLC, d/b/a EMI North Am. v. Escape Media Grp., 12-CV-06646 (AJN)(SN), Slip Op.

at 2 (S.D.N.Y. May 28, 2014) (Report and Recommendation) (EMI), Servodidio Aff., Ex. E.2

UMGs claims in this case address one particular facet of Escapes infringement: the

unauthorized exploitation of UMGs Pre-1972 Recordings. Those recordings are not covered by

the federal Copyright Act, but instead are protected exclusively under state law. For more than a

century, New York courts have held that owners of Pre-1972 Recordings are entitled to broad

protection against various acts of infringement and unfair competition that misappropriate the

economic value of the performances embodied in these sound recordings. The EMI decision, as

well as other recent cases, applied this established principle to uphold claims asserted by New

York copyright owners against unauthorized digital streaming services. In doing so, these courts

have affirmed that the common law of this state is both broad and sufficiently flexible to address

new forms of online piracy facilitated by rapid and ever-changing advances in technology.

1 UMG and two other major record labels (Sony and Warner) filed a copyright infringement lawsuit in the Southern District of New York against Escape and its senior officers and employees for directing their employees to upload infringing music to Grooveshark. See Br. for Summ. J., Arista Music, et al. v. Escape Media Grp. Inc., 11 Civ. 8407 (TPG) (Dkt. No. 69) (filed Feb. 18, 2014); see also SUF 18. Plaintiffs Motion for Summary Judgment in that case is currently pending. See Servodidio Aff. 2. 2 At the time of filing of this complaint, Capitol Records was part of EMI Recorded Music, one of the major label groups. Subsequent to the commencement of Capitol Records action against Escape, EMI was acquired by UMG. Affirmation of Darren J. Schmidt (Schmidt Aff.) 26.

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UMG is entitled to summary judgment holding Escape liable for common law copyright

infringement and unfair competition under New York law. There is no dispute that UMG is the

owner of the Pre-1972 Recordings at issue and that Escape has infringed UMGs common law

copyrights in those recordings by streaming copies of these works more than

to its users including nearly streams to users in this state without any

authorization or license to do so. See Schmidt Aff. 2-3, 22; Affidavit of Dr. Horowitz

(Horowitz Aff.) 39-41, Ex. E; see also Joint Statement of Undisputed Facts (SUF) 1, 4,

17. Moreover, Escape has admitted that it competes with UMG in the market for the

dissemination of music over the Internet. Def.s Amd. Answer & Countercls. 58 (Dkt. No. 79)

(hereinafter Amd. Answer). Accordingly, it obtained an unfair competitive advantage over

authorized streaming services by using UMGs sound recordings without a license or payment.

Finally, UMG is entitled to summary judgment dismissing Escapes specious

counterclaims, which are nothing more than a transparent attempt to deflect attention from the

infringing nature of its Grooveshark service. These counterclaims address three discrete

instances where UMG and a related company (which is a non-party to this action)

communicated, in a legally justified way, with third parties to object to their support of Escapes

infringing service. Based on the undisputed facts, these claims should be dismissed because:

(i) under the Noerr-Pennington doctrine, UMG cannot be subjected to liability for actions

undertaken directly or indirectly to enforce its copyrights and related contractual interests;

(ii) under New York law, UMG had an absolute legal justification to enforce its intellectual

property rights to address Escapes ongoing infringement; and (iii) Escape cannot establish that

UMG acted with malice or unlawful means, which is a required element of such claims.

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FACTUAL AND PROCEDURAL BACKGROUND

I. UMGS EXCLUSIVE RIGHTS IN ITS CATALOG OF PRE-1972 RECORDINGS

UMG is one of the oldest, largest, and most respected record labels in the world, and is

the owner or exclusive United States licensee of the rights in thousands of iconic Pre-1972

Recordings. See Schmidt Aff. 2; SUF 1, 4. Some of those sound recordings contain the

performances of the most popular and successful recording artists of the 20th Century, such as

Buddy Holly, The Carpenters, Cat Stevens, Chuck Berry, The Jackson 5, Marvin Gaye, The

Supremes, The Temptations, and The Who. Schmidt Aff. 2. These recordings are not

protected by federal copyright law, but rather by the common law of the individual states. Infra

at 10-12.

UMG and its artists invested enormous time, skill, talent, and effort in creating the Pre-

1972 Recordings, in promoting them, and in distributing them to the public. In addition to

distribution in physical formats, such as CDs or vinyl records, UMGs Pre-1972 Recordings are

available in digital file formats for consumers to purchase and play on computers and mobile

devices. See Schmidt Aff. 20; SUF 2. In addition, UMGs Pre-1972 Recordings are

available for streaming, or contemporaneous playback, from a number of authorized sources

such as iTunes, Amazon, Spotify, Vevo, Rdio, and Rhapsody. SUF 3. Music streaming

services are an increasingly popular and important source for users to access UMGs music

catalog, including its Pre-1972 Recordings. See Schmidt Aff. 20.

II. ESCAPES INFRINGING GROOVESHARK SERVICE

A. Escapes Business Model

Escape owns and operates Grooveshark, a blatantly infringing pirate music service. See

Schmidt Aff. 22; EMI, Slip Op. at 2, 41, 43, 50, 52. Groovesharks stated mission is to provide

its users with unfettered, on-demand access to any song in the world. See Servodidio Aff., Ex.

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H-1; SUF 7-8; Schmidt Aff. 23. Although UMG never has granted a license to Escape, the

Grooveshark service provides users with the ability to stream UMGs entire music catalog,

including its valuable Pre-1972 Recordings. Schmidt Aff. 22.

Grooveshark launched its streaming service in 2008, and now provides over 20 million

users with access to a catalog of over 15 million audio files. Servodidio Aff., Ex. O; SUF 6,

7, 9. Escapes internal projections estimated that % of the streams from Grooveshark are of

works belonging to the major labels, from which Escape had no licenses. Servodidio Aff., Ex. F;

EMI, Slip Op. at 37. These projections further confirmed that Escape has streamed billions of

infringing copies of UMGs works. Escape has profited from this pervasive infringement by

attracting users to Grooveshark and thereafter selling advertising and user subscriptions. See

Horowitz Aff. 15 & n.2; SUF 10; Servodidio Aff., Exs. H-4, H-8, L.

At all relevant times, Escape employed a business model for Grooveshark that was based

upon the use of infringing content. See Servodidio Aff., Exs. A, D, G, H-12, H-4, H-7, I-12,

J-M; EMI, Slip Op. at 37, 49, 50. Indeed, the senior executives of Escape openly acknowledged

that they required but did not have licenses from UMG and other major record labels to

stream their copyrighted sound recordings to Grooveshark users. Servodidio Aff., Exs. A-D, H-

34, H-6. Nonetheless, rather than obtaining such licenses, Escape made a calculated business

decision to launch Grooveshark, utilizing infringing label content in order to grow faster, reduce

costs and attempt to strike more favorable licensing deals. Escapes Chairman underscored this

business strategy in one internal email where he asked facetiously,

Id., Ex. C. Indeed, Escapes officers openly discussed the possibility

that they would never have to pay for their unauthorized use of copyrighted content.

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Specifically, they hoped that by illegally growing their user base, they could collect valuable data

about Grooveshark users listening habits, which they could then sell to the labels for more than

Escape would have to pay in licensing fees. Id., Ex. A.

B. Escapes Unauthorized Use of UMGs Pre-1972 Recordings

As described in the Affidavit of Dr. Horowitz, Escapes Grooveshark service provides

users with on-demand access to an enormous library of unlicensed digital music files stored on

Escapes computer servers, including the Pre-1972 Recordings. Horowitz Aff. 18, 21. In

order to stream sound recordings to its users, Escape engaged in a multi-step process in which it

reproduced, distributed, and performed these music files.

First, Escape programmed its service

Horowitz Aff. 16, 22. In order to ensure that Grooveshark

provided a comprehensive music selection, Escape designed its servers

Id.;

SUF 12. Thus,

Horowitz Aff. 22.

Second, Escape distributed digital copies

of infringing files directly to its users. Horowitz Aff. 23.

Horowitz Aff. 24.

Third,

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Horowitz

Aff. 25-26; see SUF 14.

Finally, as soon as Escape commenced the distribution of files to users, the songs

automatically started to play on the users computers, thereby resulting in the performance of

these files to Grooveshark users. Horowitz Aff. 27.

C. Escapes Streaming of UMGs Pre-1972 Recordings

Escapes database records confirm that it repeatedly infringed UMGs Pre-1972

Recordings. Escape maintained a database containing tables recording Groovesharks activities,

including, inter alia, the streaming of individual files to its users. SUF 17. Based on this data

and other records, see infra at 12, UMG has identified, for purposes of this litigation, a

representative sample of its Pre-1972 Recordings that Escape streamed to its users (hereinafter

the Works-in-Suit).3 Escapes database records confirmed that it streamed this representative

sample of works at least times during the period for which Escape made data

available (from 2009 to 2013) including nearly streams to users located

in New York. Horowitz Aff. 39-41, Ex. E.

D. Escapes Ongoing Copyright Infringement and Its Pretextual Counterclaims Against UMG

Notwithstanding the commencement of this action in 2010 and a related federal case

against Escape in 2011, Escape has continued to date to operate and grow the Grooveshark

service. See Schmidt Aff. 27; SUF 9, 16. Accordingly, UMG has taken appropriate

measures in furtherance of pending litigation to protect UMGs copyrights against ongoing

infringement by Escape and to enforce controlling contractual rights. In addition, a non-party

3 Plainly, the representative sample of works upon which UMG seeks a determination of liability is only a fraction of the total infringements of UMGs catalog by Escape. This can be illustrated by the fact that Escape itself acknowledged that UMG likely owned a of Escapes entire catalog, or as many as million songs. See Servodidio Aff., Ex. F (UMG share of streams by Grooveshark); id., Ex. O (size of Grooveshark catalog).

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with an indirect corporate relationship to UMG has taken similar action. Specifically:

Universal Music Distribution Corp. (UMGD), a non-party with a corporate relationship to

Schmidt Aff. 29-33.

Universal Music Group International (UIM) another non-party with an indirect corporate relationship to

Id. 34-36; SUF 19-20.

UMG owned a majority equity interest in a company called Isolation Network, Inc. (INgrooves), a digital distributor of certain sound recordings owned by UMG and other labels. Given this investment, UMG advised INgrooves that Grooveshark was a highly infringing service and that UMG had filed legal claims against Escape, and asked INgrooves not to support Escape and not to distribute any content owned by UMG to Escape. Schmidt Aff. 37-41.

Having no substantive defense to UMGs infringement claims, Escape filed several

baseless counterclaims against UMG for alleged interference with contracts and business

relations based on the above-referenced communications. As discussed below, the undisputed

record confirms that the communications at issue directly related to the efforts by UMG and

related companies to curtail the massive infringement of its copyrights by Escapes Grooveshark

service and thus were wholly appropriate and justified.

III. PROCEDURAL HISTORY

On January 6, 2010, UMG filed a complaint (the Complaint) in this action asserting

causes of action alleging: (i) infringement of UMGs common law copyrights in the Pre-1972

Recordings, and (ii) unfair competition.4 Compl. 28-34 (Dkt. No. 1).

4 As this Court noted during the conference on June 25, 2014, UMG has properly pled a common law infringement and unfair competition claim against Escape. As such, under the liberal notice pleading standards in New York,

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On June 16, 2010, Escape filed an amended answer to the Complaint asserting two

inapposite federal defenses arising under the Digital Millennium Copyright Act (DMCA) and

the Communications Decency Act (CDA). First Amd. Answer 48-49 (Dkt. No. 34). On

August 30, 2010, UMG moved to strike these defenses. Pl.s Mot. to Strike (Dkt. No. 40).

Thereafter, on January 21, 2011, Escape filed an amended answer and asserted counterclaims

against UMG for alleged violations of state antitrust laws and for tortious interference with

contract and business relations. Amd. Answer (Dkt. No. 79). In March 2011, UMG also moved

to dismiss Escapes counterclaims. Pl.s Mot. to Dismiss Countercls. (Dkt. No. 84).

On July 10, 2012, the Court issued an order: (i) granting UMGs Motion to Dismiss

Escapes affirmative defense under the CDA, but denying UMGs Motion to Dismiss Escapes

DMCA defense (this latter portion was reversed on appeal)5; (ii) granting UMGs Motion to

Dismiss Escapes antitrust counterclaim; and (iii) denying UMGs Motion to Dismiss Escapes

tortious interference claims, finding that it could not dismiss those counterclaims at [that]

stage, before the parties had an opportunity to take discovery. Memo. & Order at 25 (Dkt.

No. 121). Since the Courts ruling, Escape has not conducted any discovery on these

counterclaims. Servodidio Aff. 3.

UMG was not required to allege a separate and distinct claim for Escapes violation of each of UMGs exclusive rights. N.Y. C.P.L.R. 3013 (pleading need only provide a party with notice of the facts and transactions underlying the claims at issue and material elements of each cause of action), 3017(a) ([T]he court may grant any type of relief . . . appropriate to the proof whether or not demanded, imposing such terms as may be just.); Siegel & Connors, N.Y. Practice 208-09; see also infra at 12 (elements of common law infringement). 5 On April 23, 2013, the First Department reversed the Courts Order and dismissed Escapes DMCA defense because it conflicted with the plain language of the Copyright Act, which left protection of the Pre-1972 Recordings exclusively to New York common law. UMG Recordings, Inc. v. Escape Media Grp., Inc., 107 A.D.3d 51, 57-58, 964 N.Y.S.2d 106, 110-12 (1st Dept 2013).

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ARGUMENT

I. APPLICABLE STANDARDS FOR SUMMARY JUDGMENT UNDER N.Y. C.P.L.R. 3212

New York Civil Practice Law and Rules 3212 provides that summary judgment shall be

granted if, upon all the papers and proof submitted, Plaintiff has established the elements of the

cause of action as a matter of law. See Zuckerman v. City of N.Y., 49 N.Y.2d 557, 562 (1980);

Winegrad v. N.Y. Univ. Med. Ctr., 64 N.Y.2d 851, 853 (1985). When moving for summary

judgment, the proponent must first make a prima facie showing of entitlement to judgment as a

matter of law. Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324 (1986); Zuckerman, 49 N.Y.2d at

562. Such a showing can be made by tendering sufficient evidence to demonstrate the absence

of any material issues of fact. Alvarez, 68 N.Y.2d at 324.

If a prima facie showing has been made, the burden shifts to the opposing party to

produce evidence sufficient to establish the existence of material issues of fact. Id.; Vermette v.

Kenworth Truck Co., Div. of Paccar, Inc., 68 N.Y.2d 714, 717 (1986); Zuckerman, 49 N.Y.2d at

562.

II. NEW YORKS LONG HISTORY OF PROTECTION OF PRE-1972 RECORDINGS UNDER COMMON LAW

It is well established that Pre-1972 Recordings are protected exclusively by state law.

See 17 U.S.C. 301; Capitol Records, Inc. v. Naxos of Am., Inc. (Naxos), 4 N.Y.3d 540, 558-

60 (2005); UMG v. Escape, 107 A.D.3d at 57-58; see also Capitol Records, Inc. v. Naxos of Am.,

372 F.3d 471, 477-78 (2d Cir. 2004); Goldstein v. California, 412 U.S. 546, 552 (1973)

(recognizing that the Copyright Act does not govern Pre-1972 Recordings).

In part due to the absence of federal protection, New York has a century-old tradition of

providing broad common law protection against infringement of Pre-1972 Recordings. See, e.g.,

Fonotipia Ltd. v. Bradley, 171 F. 951, 961, 964 (E.D.N.Y. 1909) (granting injunctive relief on a

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state law claim of unfair competition based on the defendants distribution of records copied

from plaintiffs recordings). Later, in the seminal case of Metropolitan Opera Assn v. Wagner

Nichols Recorder Corp., the court described the rationale for this common law protection:

To refuse to the groups who expend time, effort, money and great skill in producing these artistic performances the protection of giving them a property right in the resulting artistic creation would be contrary to existing law, inequitable, and repugnant to the public interest. . . . Equity will not bear witness to such a travesty of justice; it will not countenance a state of moral and intellectual impotency. Equity will consider the interests of all parties coming within the arena of the dispute and admeasure the conflict in the scales of conscience and on the premise of honest commercial intercourse.

199 Misc. 786, 802 (N.Y. Sup. Ct. N.Y. County 1950), affd 279 A.D. 632 (1st Dept 1951).

The core principles of New Yorks protection of Pre-1972 Recordings were reiterated and

extended by the Court of Appeals in 2005 in Capitol Records, Inc. v. Naxos of America, Inc.

The defendant in Naxos had digitally re-mastered certain sound recordings owned by the

plaintiffs and then sold the re-mastered recordings to the public without license or authorization

from the plaintiffs. 4. N.Y.3d. at 544, 545. When sued for infringement, defendants argued,

inter alia, that the use of this digital technology provided a complete defense to the infringement

claim. Id. at 546, 564. In a comprehensive opinion, the Naxos court rejected this defense and

confirmed that New York common law provided relief for the infringement of Pre-1972

Recordings upon a showing of the ownership of a valid common law right and the unauthorized

use of the protected work. Id. at 559-60, 563-64.

The Court of Appeals holding in Naxos confirms that New York common law is flexible

and can adapt to protect owners of Pre-1972 Recordings against various forms of infringement

and unfair competition. Thus, as discussed herein, a party may not evade liability under New

York law by utilizing new forms of technology to infringe the rights of owners of Pre-1972

Recordings. See id. at 555 (the common law has allowed courts to keep pace with constantly

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changing technological and economic aspects so as to reach just and realistic results) (internal

quotation marks omitted); see also Thryoff v. Nationwide Mut. Ins. Co., 8 N.Y.3d 283, 291

(2007) ([I]t is the strength of the common law to respond, albeit cautiously and intelligently, to

the demands of commonsense justice in an evolving society.) (quoting Madden v. Creative

Servs., 84 N.Y.2d 738, 744 (1995)).6

III. UMG IS ENTITLED TO SUMMARY JUDGMENT ON ITS COMMON LAW COPYRIGHT INFRINGEMENT CLAIMS

A. Applicable Standards for Common Law Copyright Infringement

Under New York law, a valid claim for common law copyright infringement requires a

showing of: (i) the existence of a valid common law copyright; and (ii) the unauthorized use of

the work protected by the copyright. Naxos, 4 N.Y.3d at 559-60, 563; Capitol Records, LLC v.

Harrison Greenwich, LLC, 4 Misc.3d 202, 204 (N.Y. Sup. Ct. Comm. Div. 2014).

B. UMGs Ownership of the Pre-1972 Recordings

As set forth in the accompanying Schmidt Affirmation, UMG acquired all rights, title,

and interest in each of the Works-in-Suit, either through written assignments or as works-for-

hire. Schmidt Aff. 3-19, Exs. A-B; see also SUF 4. The supporting documents are

sufficient to prove UMGs ownership of each copyright. See Jasper v. Bovina Music, Inc., 314

F.3d 42, 47 (2d Cir. 2002) (signed writings establish copyright ownership). As owner of the

common law copyrights in the Works-in-Suit, UMG possesses the exclusive right to exploit

these works, or to license others to do so. See Naxos, 4 N.Y.3d at 563.

C. Escapes Infringement of UMGs Common Law Rights

Escape is liable for common law copyright infringement because it engaged in the

6 The Naxos court also reaffirmed the ongoing viability of a separate claim for unfair competition based on the unlawful copying of Pre-1972 Recordings. In particular, the court held that unfair competition, in addition to unauthorized copying and distribution requires competition in the marketplace or similar actions designed for commercial benefit. Naxos, 4 N.Y.3d at 563-64 (collecting cases).

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unauthorized use of UMGs copyrighted content with resulting injury to UMG. See Naxos,

4 N.Y.3d at 559-60, 563.

The undisputed facts before the Court confirm that Escape engaged in the massive and

intentional use of UMGs content without its authorization. As set forth in the Affidavit of

Dr. Horowitz, UMG utilized industry standard audio fingerprinting technology from Audible

Magic a leading software vendor to confirm that Escape streamed the Works-in-Suit to its

users. Horowitz Aff. 30-41; Affidavit of Vance Ikezoye 3-6; Affirmation of Lindsay W.

Bowen 4-5.7 Escapes database records further confirm that it streamed copies of the Works-

in-Suit to its users more than times, including nearly streams to users in

New York. Horowitz Aff. 39-41.

Indeed, there was nothing subtle or nuanced about Escapes conduct. Escape created a

thriving pirate business based on its unlicensed use of popular label content. See supra at 4-5. In

order to operate this business and attract users, Escape provided access to virtually the entire

catalog of UMGs sound recordings, including the Works-in-Suit. Escape knew that it required a

license to use UMGs content in this manner and it repeatedly acknowledged this legal obligation

in numerous emails and other communications discussing the need to from

UMG. Supra at 1-2.

The harm to UMG as a result of Escapes infringement is manifest. The viability of

UMGs entire business depends on its ability to maintain the exclusive rights to exploit its sound

7 As multiple courts have recognized, Audible Magics software is based on recognizing the unique content of an underlying audio work and creating an acoustic fingerprint, which is then matched against its Global Rights Registry Database to identify the copyright owner. See, e.g., EMI, Slip Op. at 12-14; UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1012 (9th Cir. 2013); Arista Records LLC v. Lime Wire LLC, 06 Civ. 05936 (KMW), 2010 WL 10031251, at *6 (S.D.N.Y. Aug. 9, 2010) (fingerprinting technology, available from commercial vendors such as Audible Magic, is the most effective available means of content-recognition filtering based on recognizing the unique content of an underlying audio-visual work and detecting and preventing copying of that content); Arista Records LLC v. Myxer Inc., CV 08- Civ. 03935 (GAF)(JCX), 2011 WL 11660773, at *5 (C.D. Cal. Apr. 1, 2011).

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recordings. Schmidt Aff. 20. Here, Escape engaged in the wholesale taking of UMGs entire

music catalog in order to attract users to Grooveshark and profit from sales of advertising and

subscriptions. As a result, Escapes service directly competed with numerous legitimate

services, which paid UMG for the valuable rights to use its content for on-demand streaming to

their users. See id. 20, 24. Absent relief from this Court, there would be little incentive for

any online service to secure such rights from UMG, as opposed to simply taking the content

without authorization and payment as Escape did.

Based on the above, Escape has engaged in infringing conduct as a matter of law. Naxos,

4 N.Y.3d at 555, 563-64. To protect common law copyright interests, New York courts utilize a

flexible and evolving approach that focuses on the nature of the conduct and damage to the

copyright owner. Supra at 10-12. The record before the Court is overwhelming that Escapes

unauthorized use of UMGs copyrighted works, including the Works-in-Suit, was intentional and

widespread and has threatened to destroy the very lifeblood of UMGs business. No more is

necessary for Escape to be found liable for copyright infringement under New York law.

***

Although Escapes massive use of the Works-in-Suit without authorization constitutes

copyright infringement as a matter of law, Escapes conduct invaded a number of distinct and

severable exclusive rights belonging to UMG.

1. Escapes Infringing Distribution of UMGs Pre-1972 Recordings

Under New York law, the owners of copyrights in Pre-1972 Recordings have the

exclusive right to distribute their works. See Naxos, 4 N.Y.3d at 545, 559-60; Metropolitan

Opera, 199 Misc. at 786, 797-99; Firma Melodiya v. ZYX Music GmbH, 882 F. Supp. 1306,

1316, 1318 (S.D.N.Y. 1995).

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In the online context, it is well settled that the distribution of digital files over the Internet

violates a copyright owners exclusive rights. See EMI, Slip Op. at 46-47, 51-52; Capitol

Records, LLC v. ReDigi, Inc., 934 F. Supp. 2d 648, 651, 657 n.8 (S.D.N.Y. 2013) ([A]n

electronic file transfer . . . fit[s] within the definition of distribution of a phonorecord under

New York and federal law (internal quotation marks omitted)); Arista Records, LLC v.

Usenet.com, Inc., 633 F. Supp. 2d 124, 146-49 (S.D.N.Y. 2009) (electronic bulletin board service

infringed distribution right by sending copies of MP3 file to users); see also LondonSire

Records, Inc. v. Doe 1, 542 F. Supp. 2d 153, 169, 173-74 (D. Mass. 2008); Arista Records LLC

v. Greubel, 453 F. Supp. 2d 961, 968 (N.D. Tex. 2006).

Here, it is undisputed that Escape distributed to its users millions of digital copies of

UMGs Pre-1972 Recordings. See Horowitz Aff. 23-25, 39-41, Ex. E. As described by Dr.

Horowitz, Escapes distribution of digital files from its servers to the computers of Grooveshark

users Id. 23.

Moreover, Escapes distribution of these files

Id. 25; see SUF 14. Since Escape had no license

from UMG to engage in this conduct, Escape unquestionably violated UMGs exclusive rights to

control the distribution of its sound recordings.

2. Escapes Infringing Reproduction of UMGs Pre-1972 Recordings

New York common law also protects a copyright owners exclusive right to reproduce its

Pre-1972 Recordings. See Naxos, 4 N.Y.3d at 545, 559-60; Metropolitan Opera, 199 Misc. at

786, 797-99; Harrison Greenwich, 44 Misc.3d at 204-05; EMI, Slip Op. at 43-44; EMI Records

Ltd. v. Premise Media Corp., Index No. 601209/08, 2008 N.Y. Misc Lexis 7485, at *9 (N.Y.

Sup. Ct. Aug. 8, 2008).

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As the Commercial Division of this Court recently held in Harrison Greenwich, it is an

obvious legal conclusion that the unauthorized duplication of digital music files over the

Internet infringes a copyright owners exclusive right to reproduce. 4 Misc.3d at 205 (citing

ReDigi, 934 F. Supp. 2d at 649-50). Other courts similarly have recognized that [i]t is simply

impossible that the same material object can be transferred over the Internet. Thus, logically,

. . . the Internet transfer of a file results in a material object being created elsewhere at its finish.

ReDigi, 934 F. Supp. 2d at 649-50 (citation omitted).

Here, Escape violated UMGs exclusive common law right of reproduction in multiple

ways. First,

Horowitz Aff. 22. Further, Escape reproduced the Works-in-Suit when

it of copies of these works to its users computers for streaming.

Id. 25; see SUF 14.

Because Escape had no authorization from UMG for any of these acts of reproduction, Escape is

liable for violating UMGs exclusive rights under New York law.

3. Escapes Infringing Public Performance of UMGs Pre-1972 Recordings

As recognized by the Court of Appeals in Naxos and reiterated by numerous other courts,

New York protects the common law copyrights belonging to the owners of Pre-1972 Recordings

regardless of the technology used to engage in the infringement. See supra at 11. Indeed, one of

the unique characteristics of New Yorks common law is that it provides broad and flexible

protection against various methods of infringement. Accordingly, as recognized in Naxos, the

protection afforded to Pre-1972 Recordings must be flexible enough to keep pace with

constantly changing technological and economic aspects so as to reach just and realistic results.

Naxos, 4 N.Y.3d at 555 (quoting Metropolitan Opera, 199 Misc. at 799).

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In the instant case, Escapes public performance of UMGs Pre-1972 Recordings via

digital streaming to of users threatens to destroy the commercial value of these

works. In recent years, consumers have increasingly obtained copyrighted music from on-

demand streaming services that provide instant access to sound recordings on any Internet-

connected device. See Schmidt Aff. 20. By providing users with unlimited on-demand access

to UMGs Pre-1972 Recordings, Escape like the defendant in Naxos is simply using a new

form of technology to infringe UMGs intangible property rights.

For these reasons, a number of courts recently have held that New York common law

protects against the unauthorized public performance of Pre-1972 Recordings via digital

streaming. Most notably, the EMI court found that Escape violated the plaintiffs exclusive right

to control the public performance of its Pre-1972 Recordings when Escape streamed copies of

those works to users of Grooveshark. EMI, Slip Op. at 42-43.

In another recent decision, the Commercial Division granted summary judgment holding

that a website operator violated the plaintiffs common law rights by streaming copies of a Pre-

1972 Recording from its website. Harrison Greenwich, 44 Misc.3d at 204-05; see also Index

No. 652249/2012, Slip Op. at 1 (Dkt. No. 86), Servodidio Aff., Ex. N. The court expressly

confirmed that by engaging in unauthorized streaming, the [defendant] committed both an

unauthorized reproduction and public performance of the recording. Id., Slip Op. at 1; see also

Capitol Records, LLC v. BlueBeat, Inc., 765 F. Supp. 2d 1198, 1206 (C.D. Cal. 2010).

Under controlling case law, playing copyrighted music via an Internet website such as

Grooveshark constitutes a performance of that work. As the court in the ReDigi case held,

audio streams are performances because a stream is an electronic transmission that renders the

musical work audible as it is received by the client-computers temporary memory. This

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transmission, like a television or radio broadcast, is a performance because there is a playing of

the song that is perceived simultaneously with the playback. ReDigi, 934 F. Supp. 2d at 652

(internal quotation marks omitted).

Moreover, Escapes streaming of UMGs copyrighted works to millions of users is a

performance of those works to the public because any member of the public can access

Grooveshark in order to receive streams from Escape. See SUF 15. The fact that Grooveshark

users receive streams from Escape at different times or places is immaterial. Escapes streaming

violates the exclusive right of public performance because it communicates the same

contemporaneously perceptible images and sounds to multiple people. Am. Broad. Cos., Inc. v.

Aereo, Inc., 134 S.Ct. 2498, 2501-02 (2014) (Internet video streaming is a public performance

under federal law); ReDigi, 934 F. Supp. 2d at 652 (audio streaming is a public performance).

Here, the undisputed facts show that Escape streamed UMGs Pre-1972 Recordings to

Grooveshark users more than times. Horowitz Aff., Ex. E. In so doing,

Id. 24.

Accordingly, as set forth in the Horowitz Affidavit, Escape was responsible for the performance

of that work to the computers of multiple users. See id. 24-27. Based on the authorities set

forth above, this conduct invaded UMGs rights to control the public performance of its Pre-

1972 Recordings on digital streaming services such as Grooveshark. EMI, Slip Op. at 42-43, 51-

52.

IV. UMG IS ENTITLED TO SUMMARY JUDGMENT ON ITS UNFAIR COMPETITION CLAIMS

UMG also is entitled to summary judgment on its separate claim for unfair competition.

In order to prevail on this claim, UMG must show that Escape (i) used UMGs works without

authorization; and (ii) that it either competed with UMG in the marketplace or acted for

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commercial benefit. Naxos, 4 N.Y.3d at 563 (collecting cases); Capitol Records, Inc. v.

MP3tunes, LLC, 821 F. Supp. 2d 627, 650 (S.D.N.Y. 2011); see also Roy Export Co.

Establishment of Vaduz, Liechtenstein v. Columbia Broad. Sys., Inc., 672 F.2d 1095, 1105 (2d

Cir. 1982) (noting the breadth of New York unfair competition law as encompassing any form

of commercial immorality, or simply as endeavoring to reap where (one) has not sown

(citations omitted)).

Here, UMG has established these elements of unfair competition as a matter of law. First,

as set forth above, Escape has used UMGs copyrighted works without authorization to do so.

See supra at 12-18. Second, Escape affirmatively conceded that Escape is a competitor of UMG

in the marketplace for the dissemination of recorded music over the Internet, including within

New York State. Amd. Answer 58 (Dkt. No. 79). Finally, there is no dispute that Escape

acted for its commercial benefit. Based on only the representative sample of UMGs works at

issue, Escape streamed the Works-in-Suit more than times to its users, thereby

exploiting the appeal of these sound recordings to attract users and generate revenues. See supra

at 5, 7. As its own Chairman admitted, Escape affirmatively used UMGs popular content of

UMG in order to grow its business exponentially Servodidio Aff.,

Ex A.

Escapes unfair competition is analogous to that of the defendants in Metropolitan Opera.

There, the plaintiffs operatic performances had been broadcast on the radio, and recordings of

the performances were licensed by the plaintiff for sale to the public. See 199 Misc. at 789-90.

The Metropolitan Opera defendants copied the same performances from the radio and created

and sold their own recordings. Id. In granting a preliminary injunction, the court found a prima

facie case of unfair competition because:

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Plaintiff Metropolitan Opera derives income from the performance of its operatic productions in the presence of an audience, from the broadcasting of those productions over the radio, and from the licensing to Columbia Records of the exclusive privilege of making and selling records of its own performances. Columbia Records derives income from the sale of the records which it makes pursuant to the license granted to it by Metropolitan Opera. Without any payment to Metropolitan Opera for the benefit of its extremely expensive performances, and without any cost comparable to that incurred by Columbia Records in making its records, defendants offer to the public recordings of Metropolitan Operas broadcast performances.

Id. at 786.

The court held that established precedent [left] no doubt of [the courts] recognition that

the effort to profit from the labor, skill, expenditures, name and reputation of others which

appears in this case constitutes unfair competition which will be enjoined. Id.

Through its unauthorized commercial streaming of UMGs Pre-1972 Recordings, Escape

unquestionably appropriated the labor, skill, and expenditures of UMG and its artists for

Escapes commercial advantage. If users can obtain unlawful access to a particular recording for

free, they are much less likely to visit a licensed streaming website or purchase a CD or a digital

copy from a legitimate online service. Moreover, if a commercial enterprise can make those

recordings available to the public for free, eventually no other enterprise will pay to license those

rights from UMG. Such conduct presents a classic case of unfair competition under New York

law. See, e.g., Capitol Records, Inc. v. Wings Digital Corp., 218 F. Supp. 2d 280, 286 (E.D.N.Y.

2002) (unfair competition where gravamen of complaint [was] that defendants acted in bad faith

by misappropriating copyrighted music for their own financial gain and in order to realize a

commercial advantage over that of the rightful owners of such copyrights); Metropolitan

Opera, 199 Misc. at 786, 803; Apple Corps. Ltd. v. Adirondack Grp., 124 Misc.2d 351, 354-55

(N.Y. Sup. Ct. N.Y. County 1983); Rostropovich v. Koch Intl Corp., 94 Civ. 2674 (JFK), 1995

WL 104123, at *5-6 (S.D.N.Y. Mar. 7, 1995); see also Flo & Eddie, Inc. v. Sirius XM Radio,

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Inc., CV 13-5693 PSG (RZx), Slip Op. at 13 (C.D. Cal. Sept. 22, 2014), Servodidio Aff., Ex Q

(unauthorized public performance via streaming of Pre-72 Recordings constituted unfair

competition under California law).

V. UMG IS ENTITLED TO SUMMARY JUDGMENT ON ESCAPES COUNTERCLAIMS

Under New York law, the elements for tortious interference with contract or business

relations are: (i) the existence of a valid contract or a business relationship with the third party;

(ii) knowledge of that contract or relationship; (iii) intentional procurement of the third partys

breach without justification or solely out of malice or through illegal means; (iv) an actual

breach of the contract or injury to the business relationship; and (v) damages. Lama Holding Co.

v. Smith Barney Inc., 88 N.Y.2d 413, 424 (1996) (elements of tortious interference with

contract); Pitcock v. Kasowitz, Benson, Torres & Friedman LLP, 74 A.D.3d 613, 614-15 (1st

Dept 2010) (interference with business relations).

As discussed below, the undisputed record confirms that UMG as well as UIM (a non-

party related to UMG) engaged in the challenged conduct in order to curtail the scope and impact

of Escapes ongoing infringement pending the adjudication of UMGs claims.8 Accordingly,

UMG is entitled to summary judgment dismissing Escapes baseless counterclaims.

A. UMGs Conduct Is Protected by the Noerr-Pennington Doctrine

The Noerr-Pennington doctrine provides broad immunity from liability for actions taken

prior to and during the litigation of claims. Profl Real Estate Investors, Inc. v. Columbia

Pictures Indus., Inc., 508 U.S. 49, 65 (1993). This immunity applies to tortious interference

8 While the actions of UIM are legally justified on their face, they are the actions of a non-party and cannot be attributed to UMG. See McHale v. Anthony, 70 A.D.3d 463, 465 (1st Dept 2010) (summary judgment for tort defendant where separate entity engaged in the accused conduct); Peralta v. Figueroa, Index No. 28093/06, 2007 WL 4104122, at *13-14 (N.Y. Sup. Ct. Nov. 14, 2007) (dismissing complaint against corporate defendant where corporate affiliate was responsible for the conduct at issue).

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claims under New York state law. Weissman Real Estate, Inc. v. Big V Supermarkets, Inc., 268

A.D.2d 101, 106 (2d Dept 2000); Friends of Rockland Shelter Animals, Inc. v. Mullen, 313 F.

Supp. 2d 339, 343 (S.D.N.Y. 2004).

In applying the doctrine, courts have been mindful of the need to give adequate

breathing space to permit activities comparable to the filing of formal litigation. BE & K

Constr. Co. v. NLRB, 536 U.S. 516, 531 (2002). For example, it is well settled that the Noerr-

Pennington doctrine protects the rights of intellectual property owners to police their copyrights

and trademarks by sending cease and desist letters to third parties. Select Comfort Corp. v. Sleep

Better Store, LLC, 838 F. Supp. 2d 889, 900 (D. Minn. 2012); Melea Ltd. v. Quality Models Ltd.,

345 F. Supp. 2d 743, 758 (E.D. Mich. 2004); Barqs Inc. v. Barqs Beverages, Inc., 677 F. Supp.

449, 453 (E.D. La. 1987); see also Primetime 24 Joint Venture v. Natl Broad. Co., 219 F.3d 92,

100 (2d Cir. 2000) (collecting cases).

As the EMI court found, Escape has engaged in and facilitated copyright infringement on

a massive scale via its Grooveshark service. EMI, Slip Op. at 79. The Grooveshark service has

attracted of users by streaming billions of copyrighted works owned by the

major record labels including UMG. Even though UMG and all the other labels have

commenced copyright infringement litigation against Escape in both state and federal courts,

Escape has continued to operate its Grooveshark service in willful violation of UMGs rights.

See Schmidt Aff. 27; SUF 16.

Given Escapes egregious conduct and the damage Escape continued to inflict during the

pendency of this action, UMG (for itself and for UMDG) and UIM communicated with third

parties to object to their role in supporting the infringement of UMGs sound recordings via the

Grooveshark service. Specifically, the undisputed evidence confirms that: (i) UMG contacted

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Schmidt Aff. 29-33 ; (ii) UIM contacted

, id. 34-36; SUF 19-20; and

(iii) UMG owned a substantial equity interest in INgrooves and therefore objected to INgrooves

business dealings with an egregiously infringing pirate service that was profoundly damaging

UMGs business. Schmidt Aff. 38, 41.

Escape has failed to adduce any evidence during years of discovery to controvert any of

these facts. Nor does it have any facts to support its untenable allegations that UMG or UIM

engaged in any conduct for an improper purpose unrelated to the enforcement of UMGs

copyrights. See Amd. Answer 58 (Dkt. No. 79). Indeed, knowing full well that UMGs

conduct was legally justified, Escape never even took any discovery on the counterclaims after

this Court denied the Motion to Dismiss to give it that opportunity. Servodidio Aff. 3.

Given the body of case law holding that the Noerr-Pennington doctrine protects UMGs

litigation-related enforcement activities, and the undisputed record showing that the activities of

UMG (as well as non-party UIM) were directly related to such enforcement, summary judgment

is appropriate on this basis alone.

B. UMG Has a Legal Justification for its Actions

UMG is also entitled to summary judgment on Escapes counterclaims because the

undisputed facts establish that UMG and UIM had a legal justification to take steps to enforce its

copyrights and the contracts of its related company against the ongoing infringement by Escape.

New York courts have held that [s]eeking to protect a copyright by alerting a third party

that the copyright is being infringed constitutes a justification defense to [tortious interference

with contract or business relations claims]. P. Kaufmann, Inc. v. Americraft Fabrics, Inc., 232

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F. Supp. 2d 220, 225 (S.D.N.Y. 2002) (citing Shapiro & Son Bedspread Corp. v. Royal Mills

Assocs., 764 F.2d 69, 75 (2d Cir. 1985)); Arista Records v. MP3Board, Inc., 00 Civ. 4660 (SHS),

2002 U.S. Dist. Lexis 16165, at *49 (S.D.N.Y. Aug. 29, 2002) (justification applies to notifying

third-party internet service provider of defendants infringement).

Here, as described above, Escapes counterclaims related to three instances where UMG

and UIM communicated with various business partners involved with and otherwise supporting

Escapes egregiously infringing service. The undisputed facts confirm that these

communications directly related to the enforcement of UMGs copyrights in its sound recordings

and related contractual rights. There is not a scintilla of evidence that UMG (or any non-party,

related company) acted out of any motivation other than protecting its copyrighted works.

Accordingly, such conduct simply is not tortious interference. To hold otherwise would subject

virtually every copyright owner who takes steps to protect and police its intellectual property

rights in the marketplace to retaliatory claims for tortious interference. For this reason, the Court

should grant UMGs motion for summary judgment as to both counterclaims.

C. Escape Cannot Meet the Standard for Tortious Interference Because UMG Acted Without Malice

Finally, UMG is entitled to summary judgment because Escape cannot, as a matter of

law, establish that UMG acted with malice or improper means.

Under New York law, where a party acted in furtherance of its own pre-existing business

relationships with a third party, plaintiff must demonstrate that the defendants conduct was

motivated by malice or improper means as a necessary element. See, e.g., Foster v. Churchill,

87 N.Y.2d 744, 750-51 (1996); Lum v. New Century Mortg. Corp., 19 A.D.3d 558, 559

(2d Dept 2005); Collins v. E-Magine, LLC, 291 A.D.2d 350, 351 (1st Dept 2002); New Stadium

LLC, v. Greenpoint-Goldman Corp., Index. No. 600493/2005, 2010 N.Y. Misc. Lexis 1724, at

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*1-2, 14, 19, 20-21 (N.Y. Sup. Comm. Div. Sept. 16, 2014); see also White Plains Coat & Apron

v. Cintas Corp., 8 N.Y.2d 422, 425-27 (2007); cf. Pitcock, 74 A.D.3d at 614-15 (malice or

wrongful means always required to establish tortious interference with economic advantage).

In the present case, there is no evidence whatsoever of malice. Rather, as described

above, the undisputed facts confirm that UMG engaged in the challenged conduct for the legally

justified purpose of seeking to prevent the ongoing infringement of copyrights by Escape. See

supra at 21-14. Tellingly, all communications from UMG and UIM asserting that Escape

operated an infringing service were manifestly accurate. Indeed, the record before the Court is

compelling that Escape flagrantly violated UMGs common law rights by streaming billions of

copies of UMGs works without any license. See supra at 6-7. Escape was fully aware of the

infringing nature of its business model and operations as confirmed by numerous internal emails

and other undisputed evidence. See, e.g., Servodidio Aff., Exs. A-D, F-M.

Given the foregoing, Escape cannot establish a necessary element of its claims that

UMGs actions constituted interference with Escapes contracts or business relations through

malice, improper means, or misrepresentation. UMG is therefore entitled to summary judgment

on Escapes counterclaims for this independent reason.

CONCLUSION

In view of the foregoing, UMG respectfully requests that this Court grant summary

judgment against Escape for common law copyright infringement of UMGs copyrights in the

Works-in-Suit, based on Escapes invasion of its rights of reproduction, distribution, and

performance, as well as for unfair competition, and for UMG on Escapes counterclaims for

tortious interference with contract and business relations.

Dated: September 23, 2014 Respectfully submitted,

I: fl'~.~L. ~ r/ ~

Andrew H. BartGianni P. ServodidioLindsay W. BowenJENNER &BLOCK LLP919 Third Avenue37th FloorNew York, NY 10022tel. (212) 891-1600fax (212) 891-1699

Attorneys for Plaintiff

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