Digital Download Fight Heats Up

     LOS ANGELES (CN) – Freeplay Music claims in court that a digital content company that filed extortion allegations against it was caught “red-handed” infringing and chose to sue rather than pay for the copyrights.
      Collective Digital Studio sued Freeplay in February.
     Freeplay attorney Oren Warshavsky, with Baker Hostetler, filed an answer and counterclaim to CDS’s federal complaint on March 3.
     “CDS’s systematic misappropriation of Freeplay Music’s copyrights without authorization has harmed our client. In this action we intend to protect our client’s rights and utilize the remedies and enforcement provisions provided by the Copyright Act,” Warshavsky said in a statement.
     In its February lawsuit, CDS denied infringing on any of Freeplay’s copyrights.
     Collective Digital claimed that Freeplay lures people into a bait-and-switch operation with promises of free music downloads they can use to make YouTube videos. It claims that Freeplay even included tools on its website to help people create content with its music.
     But when people use Freeplay’s music on videos, CDS claimed, Freeplay hunts them down and threatens to sue them for copyright infringement to bully them into paying inflated licensing fees.
     After Freeplay changed its terms of use to ban use of its music on YouTube multichannel networks in October 2014, it started sending “shakedown demand[s]” to multichannel network operators even though they had not downloaded or used Freeplay’s music, CDS said in its lawsuit.
     In its response, Freeplay accuses Collective Digital of “willful blindness” to the facts.
     Freeplay claims that sends demands for licensing fees because use of its music generates profits and Freeplay has the right to that money as the music’s copyright owner.
     When Freeplay caught Collective Digital “red-handed” for using more than 40 of its songs without authorization, CDS “launched a shameless attack” by accusing Freeplay of exploitation and being a “copyright troll” rather than pay for using Freeplay’s music, according to Freeplay’s answer.
     Freeplay claims it has enforced only 2,000 of its copyrights to date. When it started allowing people to use its music on YouTube in August 2013, it says, it enforced copyrights only against those who used it for business or commercial purposes, not for personal use.
     While it acknowledges that it runs an interactive website, Freeplay denied most of Collective Digital’s allegations. It also argued that Collective Digital failed to state a claim and that even if it did, its claims “are barred by the doctrine of unclean hands.”
     In its counterclaim, Freeplay claims that Collective Digital is misappropriating its music copyrights for use on its multichannel network “to capitalize on YouTube’s vast revenue stream.”
     Since Freeplay has “tens of thousands” of songs in its library that generate millions of licenses, it partnered with TuneSat to protect its clients’ music from exploitation, according to the counterclaim.
     When it discovered several multichannel networks using its content without permission, including Collective Digital, Freeplay says, it approached them about the infringement. “But despite its recognition that FPM’s copyrights were being infringed, CDS brought this declaratory judgment action,” the counterclaim states.
     “Going one step further than simple copyright violations, CDS asks this court to sanction its misappropriation of FPM’s music, while using the opportunity of a public filing to besmirch both FPM’s and [CEO Scott] Schreer’s reputations,” the counterclaim continues. “Worse yet, CDS, a company boasting ‘its ability to produce, distribute, and market intellectual property,’ accuses FPM of ‘tricking’ it into believing that, despite the clear language in its licenses and its website’s terms of use, FPM’s music must be ‘free’ because FPM’s name includes the word ‘free.’ Since its inception, however, FPM’s music has only been free for certain uses, such as various personal uses and national television broadcasts. Business or commercial exploitation of FPM’s music has always required a paid license.”
     Freeplay claims that Collective Digital is infringing on copyrights for at least 42 of Freeplay’s songs on its YouTube channels, and refuses to pay the licensing fees.
     “Despite its various protestations, CDS points to no authority allowing it to simply exploit FPM’s copyrighted content without authorization and proper compensation,” and has filed its “shameless lawsuit” to smear Freeplay’s reputation, according to the counterclaim.
     Since its inception in 2001, Freeplay says, it gave free synchronization licenses to those who used its music for personal use, which it defined as “non-commercial purposes” such as family videos. All other uses, including posting videos to YouTube, required a license, it says.
     In light of YouTube’s soaring popularity, Freeplay says, in August 2013 it began allowing people to use around 2,000 of its titles for free noncommercial use in YouTube videos. Though people cannot download its music without choosing a license, the “personal use” license is free, and includes the stipulation that Freeplay has the right to monetize videos that use its music, according to the counterclaim.
     Multichannel networks are “multibillion-dollar businesses” that create and stream content using YouTube’s platform and can invite popular channels to join their networks. In 2014, YouTube issued a policy requiring multichannel networks to ensure that channels designated as “managed” partners comply with copyright law, the counterclaim states.
     After hiring TuneSat to track unauthorized use of its content, Freeplay says, it “uncovered and exposed the systemic unauthorized use of its copyrighted music by MCN managed channels, such as CDS’s managed channels.”
     Freeplay says it sent multiple emails to several multichannel networks identifying the songs they were exploiting without permission and urging them to buy licenses. Though most refuse to comply, only Collective Digital has accused Freeplay of fraud to validate its illegal use of Freeplay’s property, the counterclaim states.
     The counterclaim lists all of the songs that Collective Digital has allegedly used without authorization and the video content on which they appear. [80-81]
     Collective Digital Studio did not respond to requests for comment.
     Freeplay wants a declaration that Collective Digital knowingly infringed on its copyrights and an injunction preventing it from using Freeplay’s music.
     It also seeks $150,000 per instance of copyright infringement and all profits Collective Digital made through unauthorized use of Freeplay’s content.
     Freeplay filed a similar answer and counterclaim to a lawsuit brought by Machinima Inc., another digital content provider.

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