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RIAA Members Sue Allofmp3.com Over Infringement 323

Posted by Zonk
from the long-time-coming dept.
fair_n_hite_451 writes "To the surprise of no one, several members of the RIAA have filed suit against MediaServices, the operators of Allofmp3.com. The suit was filed for Wednesday, primarily by Arista Records LLC, Warner Bros. Records Inc., Capitol Records Inc. and UMG Recordings. The language of the litigation was very confrontational; The companies claim the site sells millions of songs without paying them 'a dime'. 'The defendant's entire business ... amounts to nothing more than a massive infringement of plaintiffs' exclusive rights under the Copyright Act and New York law.' AllofMp3 has always maintained that a Russian licensing group makes their business legitimate, while the RIAA here claims the organization has no authority to make such a deal."
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RIAA Members Sue Allofmp3.com Over Infringement

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  • by Fallen Kell (165468) on Thursday December 21, 2006 @03:48PM (#17328432)
    AllofMP3.com pays the correct proceeds under Russian law to ROMS (Russian Organization for Multimedia and Digital Systems a.k.a. similar to the RIAA in Russia). ROMS is a non-for-profit organization that handles all copyright payment transactions in Russia, including collecting for foreign interests. All the money is held until it is requested by the appropriate parties with proof that they are the correct owners of the copyrighted material. All requests can also be retro-active requests for payment, (i.e. if you have been the owner of the work, and have not received your cut for the last 4 years, you simply request that you receive your payments for the entire time that you have been the copyright owner).

    The RIAA knows this and so do their member groups. The issue is that they do not want to request the payment because they think doing so will give legitimacy to places like AllofMP3.com who are following the Russian rules to copyright payments. The RIAA does not like the Russian rules and seeks to circumvent them. By not requesting for their payments they are trying to use that as a means for the lawsuit(s) you are now witness to over the last few months against different Russian sites.
  • by slobber (685169) on Thursday December 21, 2006 @03:49PM (#17328450)
    Even if they manage to shut allofmp3.com down, they'll be playing a Russian version of whack-'em-all for a while. Check out its sister site alltunes.com [alltunes.com] - you should even be able to transfer your credits from allofmp3 there.
  • by Ironsides (739422) on Thursday December 21, 2006 @03:51PM (#17328482) Homepage Journal
    Since when does German law [findarticles.com] apply in other countries?
    Since when does French law [com.com] apply in other countries?

    I'm pretty sure I could come up with a few other things as well. Oh yes, in this particular case it might be since Russia started to join the WTO.
  • by GodInHell (258915) * on Thursday December 21, 2006 @04:12PM (#17328808) Homepage
    Q: What does New York / U.S. law have to do with a Russian company.

    A: U.S. courts have juridiction in cases where the party to be sued has "such miminal contacts" that allowing the suit would not violate traditional notions of fairness and justice. The US courts have allowed jurisdiction when it is clear that the offending company has intentionally directed buisiness into, and solicited buisiness from, the United States and her citizens.


    Here allofmp3 has all the hallmarks of past cases which have succeeded - site is in english, offers prices in U.S. dollars, advertises on U.S. websites and media.


    Since their acts take effect here, laws which govern the effect will rule.


    Q: How will they enforce the ruling?

    There are several ways - the RIAA companies could freeze allofmp3's funds with a court order, and call upon Russia (through the effect of U.S. - Russia treaties) to supply the amount demanded by the judgement. They can asses the value of AllofMp3's domain name and seek to have it sold off to cover the damages. U.S. credit cards and pay-pal could be ordered to cease making payments to allofmp.


    Q: How will they get these guys in custody? Russia won't hand them over.


    This is a civil case - jail time is not on the table.

    -GiH

  • How about mine then? (Score:2, Informative)

    by TheAxeMaster (762000) on Thursday December 21, 2006 @04:14PM (#17328846)
    I buy there because its DRM free and I can get it in any file format I want. If they charged 50 cents a track, I'd still buy there ($1 is ridiculous for lossy audio, I'd pay it for FLAC files, but not for OGGs or MP3s). Its about the DRM for me.
  • FAQs (Score:3, Informative)

    by jubalj (324624) on Thursday December 21, 2006 @04:16PM (#17328880) Homepage
    The faqs at allofmp3 seem to detail and debate the various laws involved..

    Link to FAQ [allofmp3.com]
  • by shark72 (702619) on Thursday December 21, 2006 @04:19PM (#17328940)

    "What I'd heard is that allofmp3 PAYS royalties, but the American firms refuse them, as they're "not enough"."

    Well, one issue is that by law, composers and songwriters must be payed "mechanical royalties" which are typically $0.08 per track. That is, of course, much less than ROMS is getting per track -- if allofmp3 is paying ROMS 10%, then that's about a sixth of a cent per track. I sure the hell ain't no lawyer, but if the record companies start taking that sixth of a cent per track, the publishing companies (which collect the mechanicals on behalf of the composers and songwriters) might sue to collect their $0.08. When you make a sixth of a cent per track and must pay $0.08 per track in royalties, there is absolutely no way to make that back in volume. You will lose money on every track sold.

    The ironic thing here is that a common sentiment around here is that the record companies should take a cue (and/or clue) from allofmp3 and sell tracks for around $0.10 a song. Yet the current law, which dictates $0.08 for mechanicals, would not allow that to happen. And when a few weeks ago it made the news that the record companies were trying to lower mechanicals, the news was not well received by the Slashbots.

    My guess is that the "the artists are needy" crowd are OK with the statutory rates staying as they are -- but they'll still download from allofmp3 anyway, with the logic that if composers and songwriters are only making $0.08 a track, there's not much difference between $0.08 and zero. The "the artists are greedy" crowd are probably hoping for the day that the record companies can get that statutory rate lowered. That might open up the possibility of record companies recognizing ROMS or other third-party licensing organizations that pay at less than the US statutory rate.

  • by baudbarf (451398) on Thursday December 21, 2006 @04:32PM (#17329130) Homepage
    Didn't this story [slashdot.org] already seal AllOfMP3.com's fate? Russia agreed to shut them down by mid 2007. So, is this just about squeezing a few bucks out of them before they die?
  • by tshak (173364) on Thursday December 21, 2006 @04:50PM (#17329400) Homepage
    Does the site have a presence in the US? Well? If it doesn't then they can get bent.

    It's called "international copyright law". In parciular, the Berne Convention [cornell.edu], was not developed in the US, but was an international effort. Russia is a member of the Berne Union. The RIAA, hate them as I may, clearly has grounds to file a suit here.
  • by (A)*(B)!0_- (888552) on Thursday December 21, 2006 @04:55PM (#17329488)
    Ignorance of the law is no excuse. Likewise, willful blindness is no defense either. (U.S. v. Jewell, 532 F.2d 697, 700-701 (9th Cir. 1976), cert. denied, 426 U.S. 951 (1976). Cited with approval in U.S. v. Lara-Velasquez, 919 F.2d. 946, 950-951 (5th Cir. 1990).)
  • by melikamp (631205) on Thursday December 21, 2006 @05:16PM (#17329828) Homepage Journal

    (I am not really discussing at this point, just chatting.)

    It sounds like you are a fan of bigger names. It is problematic, of course, that the bigger names do not go everywhere, and I see how having recordings is important for you. As for me, I just stopped caring. Local punk and indie rock bands here in San Jose kick ass. There's not a night without a band or two playing in a downtown bar. Many of these people are live-performance-only, they don't even bother to record CDs, and they promote through the word of mouth and, recently, MySpace.

    I by no means imply that everyone should enjoy this selection, but I firmly believe that everyone could. Most people just have their tastes tilted because they pay too much attention to the broadcast advertisement. The local bands may sound somewhat rough compared to the big hitters with their $100'000 studios and armies of sound wizards, but they are no worse musicians. The best music is the free flight of the human spirit, and it doesn't require much money to make.

    Although some would say that the truly great music requires an uninterrupted supply of coke, which is rather costly.

  • by RockyMountain (12635) on Thursday December 21, 2006 @05:20PM (#17329888) Homepage
    ... instead there's a term for it "uslovnaya edinitsa" which translates roughly as "conventional unit".

    Is this very recent? When I was in Russia 2.5 years ago, I saw almost all prices quoted in rubles, with only a few in dollars. And not a single mention of uslovnaya edinitsa anywhere.

    In practice, the two currencies were completely interchangable: whichever currency was asked, they'd gladly accept the other at a widely agreed exchange rate. I forget what the rate was, but there was never any arguement over it -- whichever direction you applied it, everybody agreed on the same number. Now, this was only in 2 cities and only over a space of 2 weeks, so I'm sure YMMV.

    One big surprise was that dollars were NOT at a premium. Everyone would gladly accept either currency, give you change in whichever currency you requested, etc. I'd heard stories of how much more motivated people would be to accept dollars than rubles, but I guess that was a thing of the past, by then.

    Oh, and further nitpicking the grandparent post... I don't think there's such a thing as a kopek anymore. At least, I don't _recall_ any fractional rouble coins. Perhaps my memory is faulty?
  • by 31415926535897 (702314) on Thursday December 21, 2006 @05:21PM (#17329904) Journal
    The ironic thing here is that a common sentiment around here is that the record companies should take a cue (and/or clue) from allofmp3 and sell tracks for around $0.10 a song. Yet the current law, which dictates $0.08 for mechanicals, would not allow that to happen. And when a few weeks ago it made the news that the record companies were trying to lower mechanicals, the news was not well received by the Slashbots.

    This is where most of the money for a track should be going--to the creative talent. If you look at the breakdown for the $1 that gets spent on an iTunes track, about $0.70 goes to the RIAA member [cite: Fox [foxnews.com]]. They have to give $0.08 - $0.16 out for mechanicals (by law you say). That means, at worst they get to keep $0.54 per track for producing nothing (especially true in the case of digital distribution). They want to lower mechanicals so that they can increase their profit margin, not so that consumers get reduced prices. That is why Slashdot readers (nice Ad Hominem with the 'Slashbots' by the way) did not receive the news well.

    If they did manage to get mechanicals reduced to $0.001, they still wouldn't offer a service like AllOfMp3; they still wouldn't accept payment from AllOfMp3. I agree with your argument that they can't under the current conditions, but my argument is that they never would under any circumstances.

    I feel like a compromise can still be reached. I think the labels--at least the major labels--are looking at this the wrong way. The true creative talent can still receive their "high" mechanicals, the label can take their fair share of profits, and the final distributor can make a nice profit too. What if you offered songs at $0.55, with a breakdown of $0.16 for mechanicals, $0.14 for the label and $0.25 for distribution (I made this last number up because it seems to be the amount needs for Apple to break even)? Especially if you offered non-DRM, variable bit-rate files (like eMusic)--I have to imagine a service like this would crush Apple and be highly profitable for the recording industry. I also imagine that if the RIAA itself was the digital distributor that they could offer distribution at much less than $0.25 / track, and could make even more profit there.

    I firmly believe that the reason this doesn't happen is because all of the labels are run by old-time executives that fear change and want to maximize their profits while minimizing their efforts. They don't even see that with a little bit of effort they could double their profits.

  • by Poruchik (1004331) on Thursday December 21, 2006 @05:32PM (#17330078) Homepage
    Don't bring McDonalds suit into this discussion. It actually had a lot more merit than this one does. http://en.wikipedia.org/wiki/McDonald's_Hot_Coffee [wikipedia.org]
  • by ben there... (946946) on Thursday December 21, 2006 @05:38PM (#17330162) Journal
    You can "transfer" (spend) them over there now. AllTunes is the software for browsing AllOfMp3.com's catalog. It is the same company. Same catalog. Different browsing/download method.
  • by dasunt (249686) on Thursday December 21, 2006 @05:46PM (#17330294)
    Actually, I thought that US law states that it is illegal to leave the country for the purpose of participating in sexual activity with a minor. So the crime isn't sex with a minor (that's outside US jurisdiction) but leaving the country for that purpose. Disclaimer: IANAL.
  • by arniebuteft (1032530) <buteft@gmail . c om> on Thursday December 21, 2006 @06:35PM (#17330974)
    Those are criminal cases, not civil cases. Someone who knows bluebook citation should also know that these sorts of copyright cases that the RIAA is pursuing are all civil cases, not criminal ones (obviously - criminal cases are prosecuted by the government!). When the feds knock on your door, then you can start worrying about doctrines like "willful blindness".

    Not to say that such concepts wouldn't necessarily be argued in a civil copyright infringement case, but there's really no law on the subject. It's tough to say how a fair use analysis would be affected if the user believed they were not making any infringing copies (but in fact were). Current fair use law doesn't really care whether or not you thought you were infringing when you made your 'illegal' copy. I'm not sure that there's much legal difference between downloading a song from a P2P network, or Allofmp3, when neither download is sanctioned by the RIAA. It'll be interesting to see if the RIAA tries to go after Allofmp3's customers in the U.S....

  • Re:Sure... but... (Score:5, Informative)

    by Alsee (515537) on Thursday December 21, 2006 @09:28PM (#17332608) Homepage
    if the RIAA companies never ceded the right to contract their copyrights to this orginization, will U.S. courts respect the establishment of a foreign orginization given that power by law?

    They damn well better!

    AllOfMP3.com operates under a statutory license in Russian law.
    Pandora.com operates under a statutory license in American law.

    Russian law says that AllOfMP3.com is licensed to send music by any artist (including American artists) even if the copyright holder explicitly wants to forbid it.
    American law says that Pandora.com is licensed to send music by any artist (including Russian artists) even if the copyright holder explicitly wants to forbid it.

    Russian law says that AllOfMP3.com may send that music in any format they wish, obviously including MP3 format.
    American law says that Pandora.com is may send music in any format they wish, obviously including MP3 format. (Note: You can find these MP3 files in your TEMP folder with no file extension.)

    Russian law says that AllOfMP3.com must pay a government-set royalty rate to ROMS, a collection body that then distributes those payments to copyright holders.
    American law says that Pandora.com must pay a government-set royalty rate to CARP, a collection body that then distributes those payments to copyright holders.

    This Russian law is operating under the exact same legal principals as US law. The RIAA is lying out their ass when they bitch and scream that there is something wrong with sending stuff without permission from the copyright holder.... virtually every country on earth has statutory licensing in their law. RIAA is lying out their ass when they bitch and scream that there is something fundamentally wrong with Russian law.

    Oh, by the way.... the statutory licensing fees imposed on AllOfMP3.com by Russian law are about 20 TIMES HIGHER than the licensing fees imposed on Pandora.com by US law.

    But here's the really obnoxious part... the RIAA bullshit about AllOfMP3.com being evil Pirates Pirates Pirates because RIAA artists are "not getting paid a dime". It's true that American artists signed with the RIAA are not getting a singe dime out of AllOfMP3.com sales. AllOfMP3.com is paying the royalty fees to ROMS... so why aren't US RIAA signed artists getting paid? Because the RIAA refuses to accept the payments from ROMS. And the RIAA contracts require artists to sign over the copyrights to the RIAA member companies. The RIAA contracts say that only the RIAA companies can accept royalty payments for the work, and that the RIAA companies then pass on the artists share of teh payments to them. The RIAA contracts FORBID the artists to directly go and collect any payments themselves.

    So teh RIAA is deliberately screwing over their own artists and is refusing to accept these payments and pass them on to their artists.... because that way they can manufacture this bullshit argument that AllOfMP3.com is evil and illegitimate and illegal and Pirates Pirates Pirates because RIAA-signed artists are not getting paid.

    The RIAA's primary tactic is to simply chant the word "Pirate" over and over and over again until they get what they want... even if they have to LIE OUT THEIR ASS and SCREW OVER THEIR OWN ARTISTS in the process.

    (Note that I am not yelling at you, I am yelling about the RIAA and at the RIAA.)

    A US judge might rule on some of the complicated cross-national issues involved here, but I seriously doubt that any US judge would be stupid enough to rule that AllOfMP3.com was itself illegitmate or that Russian law was itself illegitmate. To do so would be a direct blow against US law operating on the exact same principals and a calamity for US radio stations and thousands of other US businesses operating under US law statutory licenses.

    -
  • by Alsee (515537) on Friday December 22, 2006 @03:37AM (#17334644) Homepage
    It is unclear whether you are asking about my statements in the post you replied to, or if you are asking about my statements in my other post elsewhere. If the former, you should have noticed that I put a link in my post and you should have checked it. If the latter, it would have been more clear had you replied to the post that you were questioning... and to breifly answer you you can directly confirm the existance and operation of Pandora.com [pandora.com] under US law or check the Wikipedia page on Pandora.com [wikipedia.org], if you want to verify the US law I discussed you can go directly to the official US government copyright webpage on CARP law [copyright.gov], if you were asking about Russian law and ROMS here is the official ROMS website [www.roms.ru] but I would have to Google for an "authoratative" english reference on ROMS, and if you were questioning the RIAA contracts for their artists... that would be odd... but I'm sure I could Google several artist websites explaining and ranting about the evil contracts the RIAA members impose.

    Is that adaquate? If not, could you be more specific about what points you are questioning?

    -
  • by Duds (100634) * <dudley&enterspace,org> on Friday December 22, 2006 @06:10AM (#17335288) Homepage Journal
    She wasn't a member of allofmp3 then, they don't do unlimited downloading for a set fee any more than itunes does.
  • by xsuchy (963813) on Friday December 22, 2006 @07:51AM (#17335680)
    > What I never understood is why anybody would use this service.

    Why? Because when you buy it, you have it legaly (as far as I understand Anglo-Saxon laws). RIAA can not sue you. They can sue AllOfMP3 (which they try), but it'll be hard, because they operate legaly in russia. Why it is legal? I give you brief explanatory how it work in my country (Czech Rep.), which have similar laws like Russian.

    We had organization called OSA which stand in for all musicans (unless they opt out). And when you operate radio you give them list of songs you play and money according to their price list and OSA distribute money (do not ask me how and to who). You pay OSA for playing radio on public place like your market, pub... You pay them for each blank CD you sell (owner of the blank CD can record there some music, so you should pay in advance). You pay for selling copy machine, printer (new owner can make copy of some copyrighted text). You pay for lots of things. And it is not penny - for blank CD it can be 30% of its price. In exchange our law do not criminalize you from downloading, copiing CD, books, movies. If somebody publish it (even on P2P) you can downloaded. But you have to have right to publish it (or you-the publisher are criminalized). Often you have no right to publish it (P2P), but you can make agreement and pay OSA whatever you and they agree (like 0.000000000001$ per song) and it is OK according to law. Well OSA then should pay to holder of rights. But it is blackbox. Nobody knows what they do with that money. And similar situation is in Russian with AllOfMP3. Owner of right (or RIAA) should care. They should sue organization which allow it (like OSA in Czech). Or they should sue country for bad law. But they rather sue seller like AllOfMP3 becouse it is easier.

A penny saved is a penny to squander. -- Ambrose Bierce

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