On appeal, although the Seventh Circuit vacated the district court’s preliminary
injunction based on the other claims, the court agreed that the users who uploaded infringing
copies of the plaintiff’s videos, and myVidster, were the direct infringers.^1597
(c) UMG Recording v. Escape MediaIn UMG Recording, Inc. v. Escape Media Group, Inc.,^1598 several record labels brought
direct and secondary infringement claims against Escape Media and its two founders for the
operation of an online music service known as “Grooveshark.” The plaintiffs sought summary
judgment based solely on the direct upload of the plaintiffs’ copyrighted music by Escape
Media’s employees and officers. The plaintiffs alleged that Grooveshark initially launched as a
peer-to-peer sharing service. Escape Media was aware that its business model depended on the
use of infringing content, but decided to launch its service utilizing infringing content in order to
grow faster and attempt to strike more favorable licensing deals with the plaintiffs later. Because
Grooveshark would not initially have a large user base to leverage as a source for content,
Escape Media directed its employees to obtain and make available the content necessary to
launch Grooveshark. Specifically, Escape Media instructed its employees and officers to create
Grooveshark user accounts and to store hundreds of thousands of digital music files on their
computers in order to upload or “seed” copies of those files to other Grooveshark peer-to-peer
users.^1599
A year later, Escape Media decided to move away from a peer-to-peer model. It started
to use its servers as a vast central storage library for all of the music files available on the
Grooveshark peer-to-peer network. As a result, users could then access all of the music on the
central library regardless of the number of users online at the time. To further enhance the
content in its central library, Escape Media redesigned its peer-to-peer client so that it would
automatically copy every unique music file from each of its users’ computers and upload them to
the central library. Less than a year later, Escape Media re-launched Grooveshark as a new
streaming service that provided users with instant access to all of the songs stored in the central
library without requiring users to create an account or download any software. Within a few
months, Escape Media discontinued its peer-to-peer network.^1600
Soon after the launch of the central library streaming service, Escape Media began
receiving numerous DMCA takedown notices from copyright holders. Because the takedown
notices threatened to diminish the Grooveshark music library, Escape’s officers searched for
infringing songs that had been removed in response to DMCA takedown notices and re-uploaded
infringing copies of those songs to Grooveshark. In addition, Escape Media employees regularly
uploaded files to Grooveshark in order to “test” the functionality of the uploading process, and
all files uploaded as part of the “tests” remained in the central library. Escape Media’s internal
database records of the activities of its users, including the uploading and streaming of files,
(^1597) Flava Works, Inc. v. Gunter, 689 F.3d 754, 758 (7th Cir. 2012).
(^1598) 2014 U.S. Dist. LEXIS 137491 (S.D.N.Y. Sept. 29, 2014).
(^1599) Id. at 2-7.
(^1600) Id. at 12-14.