Legal dispute between Megaupload and Universal Music Group takes interesting turn

As previously reported, Megaupload uploaded a promo video on YouTube a week ago featuring a raft of high profile artists and was quickly removed after Universal Music Group (UMG) complained. After Megaupload sued UMG on Monday in return and asked the court to bar UMG from blocking the distribution or display of the video, the clip was back online. Its reappearance results from UMG’s failing to assert valid ownership rights. In a somewhat interesting turn, the company now states that never claimed copyright ownership, despite using YouTube’s automated tools for copyright owners to request takedowns. However, UMG says that it does have other rights which imply that the company is authorized to request the video removal because of a certain written agreement with YouTube. Details on what the agreement covers and why it applies have not been revealed. UMG’s lawyers turned in a filing on Friday night urging the court to reject Megaupload’s request for a temporary restraining order and submitted a copy of a letter UMG attorney Kelly Klaus sent to YouTube on Wednesday that refers to a specific agreement.

“What actually transpired was UMG’s use of YouTube’s Content Management System, which UMG is contractually authorized to use pursuant to its written agreement with YouTube. That is a matter of contract between two private companies–UMG and YouTube–not a notice sent pursuant to the DMCA.

Your letter could be read to suggest that UMG’s rights to use the YouTube ‘Content Management System’ with respect to certain user-posted videos are limited to instances in which UMG asserts a claim that a user-posted video contains material that infringes a UMG copyright,” Klaus wrote. “As you know, UMG’s rights in this regard are not limited to copyright infringement, as set forth more completely in the March 31, 2009 Video License Agreement for UGC Video Service Providers, including without limitation Paragraphs 1(b) and 1(g) thereof.”

A YouTube representative declined to comment on the matter beyond providing following statement:

“Our partners do not have the right to take down videos from YouTube unless they own the rights to them or they are live performances controlled through exclusive agreements with their artists, which is why we reinstated it.”

Thus, it is likely that the mystery agreement covers artists under contract with UMG who have a live performance that appears in a video on YouTube. Regardless, YouTube apparently doesn’t think UMG’s takedown request was valid. Obviously, Megaupload attorney Ira Rothken has a certain opinion on UMG’s latest move:

“UMG is now claiming that it has a private, automated censorship right–supported by a secret process that can take down any YouTube video with immunity from the DMCA–and there is nothing that this Court could do about it. UMG’s actions and their continuing harm implicate important speech suppression issues, warranting immediate and narrow discovery to test the integrity of UMG’s argument, and the extent of its continued interference with the full and fair display of the video, in preparation for the preliminary injunction hearing.”

Share your thoughts on this delicate matter below.

Source: CNET