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Music download site BlueBeat hit with a preliminary injunction; site's founder responds

November 18, 2009 |  5:48 pm

BlueBeat_Screenshot_6

A federal judge in Los Angeles granted Capitol Records’ request for a preliminary injunction today against a San Jose-based website that had put the Beatles catalog online for digital downloading at 25 cents a track, without permission from the band or its record label.

U.S. Central District Court Judge John F. Walter said the defendant in the case, BlueBeat.com and its owner, Hank Risan, had failed to demonstrate that it had not violated Capitol’s copyright because it claimed to be selling “psychoacoustic simulations” of the Beatles catalog, not the actual protected recordings.

“Mr. Risan fails to provide any details or evidence about the ‘technological process’ that defendants contend was used to create the ‘new’ recordings or adequately explain how the ‘new’ recordings differ in any meaningful way from plaintiffs' recordings,” Walter wrote in approving the preliminary injunction.

Walter also got to play music critic for a day, noting that “after listening to the CD attached as Exhibit 1….the court, albeit to its musically untrained ear, was unable to detect or discern any meaningful difference between plaintiffs’ recordings and defendants’ recordings.”

Reached Wednesday, Risan claimed he had received the label’s permission to work with the recordings (The full interview with Risan is at the bottom of this post).

“Had we been able to appear in court,  we can show that we obtained that content lawfully,” Risan said. “If you obtain something lawfully, we have the right do things with it, like perform it, display it. We were paying the statutory royalties on it….We’re not pirates.”

A spokeswoman for EMI, Capitol’s parent firm, said Wednesday that the company declined to comment,  “as it is a matter of litigation.”

-- Randy Lewis and Todd Martens

After the jump, a Q&A of Pop & Hiss' brief chat with BlueBeat's Risan:

Can you comment on today's injunction?

I’m shocked, because we worked with EMI directly, and the RIAA [Recording Industry Assn. of America], in secret agreements to create these works lawfully. We’ve been doing so for many, many years. We were about to provide the court with such evidence that EMI knew we had in our possession. We worked with these guys.

The evidence wasn’t presented because we haven’t had a hearing, and the judge made a ruling.

You worked with EMI?

Back in 2002, when we met with the recording industry and the major labels, they were very concerned about digital piracy. At that time, all they had were their CDs, which were very long, lengthy unprotected works.

In secret agreement, we worked together to create protected works that would ensure they would get paid royalties. That’s what we did. We were authorized by EMI and the labels and the RIAA to create such works, which we’ve been using for many years. We did this with their permission.

You created the "psychacoustic simulations" with their permission?

Simulations weren't really our goal. I ended up using simulative work to make the works sound as an independent work. When you take a file like a CD, which is 100 megabytes long, and you have to compress it into a little package of three or four or five megabytes, you lose all the information. So I came up with a new method to do that by independently creating the sounds.

The important thing was, whether it was my independent creation or just merely a re-doing of the original work, we were authorized to do it. We went with our lawyers and spent maybe $20 million to develop this system and create these works, and we have been paying royalties on every single work. 

So, everything on the site was up there with EMI's permission?

And knowledge. We worked together to do this project. Between the five labels at the time, the recording industry, the RIAA, the IFPI [International Federation of the Phonographic Industry], I probably worked with 20 of their [chief technical officers], development and biz dev guys and senior anti-piracy guys to ensure that there would be a system that would be paying  royalties. 

So, they knew you had this site and these simulations?

Yes, but more importantly, whether it was a simulation or their work, they had given us the permission to do so before we went live with BlueBeat back in 2004. All of the labels had special password accounts. They approved of the entire site, from the actual manufacturing of the works – we had to encrypt them and do all sorts of things to these works.

You're saying they approved of these songs being sold?

We never asked them for approval. We had gotten permission to transmit these works. BlueBeat has always been a company that transmitted vis-à-vis direct download. That was the only way we could protect them and part of the design specifications of the BlueBeat delivery system.

What we were selling for a quarter was audio/vision displays that we were giving access to portable devices, so BlueBeat could be accessed through a portable device. That’s what we were doing. I’m talking to my lawyers, and we’re going to find out what we’re going to do. We were expecting to be in court on Friday conveying this information. The court never heard it.

Did we just do this on our own? No. We did it through a very, very controlled process working with all of the labels and the Recording Industry of America in order to create a system that would ensure payment of royalties to copyrights.

But I specifically asked you a couple weeks ago if you had the labels' permission, and you said no.

No, I worked very closely with the labels for many years.

We were designing solutions for them up to 2006.

I said, 'Did you approach any of the majors?' You said, 'For what purpose?' You went on to say you did not need their permission to sell these works.

Well, it’s our opinion that we didn’t.

Regardless, we had a very close relationship with these guys since the beginning of 2003 under secret agreements. We worked with all the major labels, all the heads of the major labels, including the RIAA and their parent organization, the IFPI. We came out with a system in 2003, a secure copy management system, that could not be broken. They tested it and found it to be 100% successful.

Upon their testing, they authorized us to make the BlueBeat sound recordings, which we have done over the years, and we agreed to pay them royalties for works that they weren’t even entitled to. You need a federal copyright registration to get the work paid.

And they were aware of everything you were doing?

We went and actually got permission at each step of the way. The first step was to show them the technology, which they tested and found to be unbreakable. The second step was they authorized us to make the protected sound recordings. The third part, they totally approved the BlueBeat site -- all the major labels and the RIAA.

Why do you keep saying 'secret' agreements?

They were written under a non-disclosure that we could not tell anybody that we had entered into these agreements for a number of years. The agreements have expired.

Where these agreements to sell music?

No, it wasn’t covered. What was covered was that we were going to build them on spec a system they would approve of for high-speed download distribution. I can’t go into all the agreements.

The bottom line that we can show -- had we been able to appear in court -- we can show that we obtained that content lawfully. If you obtain something lawfully, we have the right to do things with it, like perform it, display it. We were paying the statutory royalties on it. We intended BlueBeat to make money as an educational service. We don’t charge for the service and we don’t advertise it.

We’ll see what we can do. We’re not pirates. We’re guys who worked with these guys. It’s an amazing thing that they would give the court no knowledge that we had actually the permission to make these recordings. Whether they’re simulations or not is irrelevant.

EARLIER:

Beatles catalog pulled from download site BlueBeat

Beatles downloads for 25 cents? For now.

Photos: Sreenshot of the Beatles catalog on BlueBeat. Credit: BlueBeat.com.

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