The swift gavel of predictable bankruptcy came down on Grooveshark earlier this week and declared that the online streaming service violated copyright laws on thousands of songs that execs asked staff to upload shortly after the site's launch. Not good, not good at all.

There’s enough legal battles brewing and stewing in this litigious-loving country of ours to make heads spin. None are more interesting, or more pivotal in the way the future unfolds, however, than those of the music industry and its predatory ways.

One of the major battles that have been ongoing since 2011 is one between Grooveshark and the three major record labels. It came to a close earlier this week after a judge ruled Grooveshark did, in fact, infringe on copyrights of 5,977 songs from the labels catalogs. For Grooveshark, it looks bad.

After hearing of the outcome and realizing the monetary potential of later rulings, all we could do at the office was cringe and say, “Dayaaaamn” in our best falsetto.*

Grooveshark is an online streaming service that launched in 2007 and uses an eerily similar format as now defunct services LimeWire, Grokster and Napster. It currently boasts more than 30 million users and earns revenue through advertising such companies as Groupon and Mercedes-Benz.

It came under severe legal attack quickly after launch when the music industry found it was sharing music files without the permission of labels. 

The steadily fading service has always maintained that it’s protected under the “safe harbour” provisions of the Digital Millennium Copyright Act (DMCA). In Section 512 of the DMCA there are provisions that may shield a site’s administrators from legal action against copyrighted material given that they aren’t aware of the infringing content, don’t receive a financial benefit directly attributed to the illegal activity and that the content is removed once proper notice is given.

It’s how YouTube works so well, and why one day there can be a few thousand videos of a Super Bowl nip-slip and the next there’s blankness on both a search of “super slips” and in everyone's voyeuristic hearts. There are literal armies of unpaid interns watching out for this kind of thing online, and eventually law happens.

This week, it happened. U.S. District Court Judge Thomas Griesa ruled in the 2011 case against Grooveshark and its parent company Escape Media and found the site was liable for copyright infringement due to its employees uploading 5,977 tracks without permission from labels.

“Each time Escape streamed one of plaintiffs’ songs recordings, it directly infringed upon plaintiffs’ exclusive performance rights,” Griesa remarked in the ruling.

In the 57-page report, Judge Griesa also notes internal memos from Grooveshark executives to their staff that shows blatant and conscious action by the company to upload copyrighted material to grow the company’s database. Knowledge of illegal procedures automatically excludes anyone from being protected by the “safe harbor” clauses, no duh.

One reads:

Please share as much music as possible from outside the office, and leave your computers on whenever you can. This initial content is what will help to get our network started—it’s very important that we all help out! If you have available hard drive space on your computer, I strongly encourage you to fill it with any music you can find. Download as many MP3’s as possible, and add them to the folders you’re sharing on Grooveshark. Some of us are setting up special “seed points” to house tens or even hundreds of thousands of files, but we can’t do this alone… There is no reason why ANYONE in the company should not be able to do this, and I expect everyone to have this done by Monday… IF I DON’T HAVE AN EMAIL FROM YOU IN MY INBOX BY MONDAY, YOU’RE ON MY OFFICIAL SHIT LIST.

Escape Media Group responded to the ruling telling Ruters, “Escape respectfully disagrees with the court’s decision, and is currently assessing its next steps, including the possibility of an appeal.”
It’s next steps, we assume, is going broke. The damages sought by the companies are reportedly in the teens of billions of dollars. The company is also embroiled in two other copyright suits, one concerning songs recorded before 1972 that’s covered under New York state law, an area where the DMCA “safe harbor” rules do not apply

Grooveshark fought the law, and the law won.*

*Under no circumstances is saying “Dayaaaamn” in falsetto considered to be infringing on any known movie copyright and, to our limited knowledge, neither is using old song lyrics for a quick quip on a site posting. We're safe … for now.