Jury slaps $41M copyright verdict on MP3Tunes founder

Michael Robertson, an early innovator in cloud-based music services, can’t catch a break in court. A jury last week found that Robertson had ignored “red flags” of copyright infringement at his defunct file-locker service, MP3Tunes, and this week it reportedly imposed a whopping $41 million damages verdict.

The details of the verdict are still unavailable, but Reuters reports that it included an unusual $7.5 million of punitive damages on top of ordinary statutory damages — automatic penalties of up to $150,000 per infringement set out in the Copyright Act. The verdict was awarded to a group of music companies that acquired EMI, which sued Robertson and MP3Tunes in 2007.

Robertson is expected to appeal but, for now, the music industry can celebrate MP3Tunes as the latest pelt it has nailed to a wall of dead technology services, alongside earlier defendants like Grokster and Napster. Before it filed for bankruptcy in 2012, MP3Tunes provided a way for users to store music collection in the cloud and, more controversially, to “sideload” songs from other sites.

In the bigger picture, the MP3Tunes case amounts to a strategic victory for content owners because it appeared to shrink the so-called “safe harbors” that protect websites from copyright violations by their users. The verdict, however, is unlikely to help the music industry address deeper problems related to an outdated royalty collection system.