Online music storage firm MP3tunes files for bankruptcy

Fri May 11, 2012 12:47am EDT

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(Reuters) - Online music storage firm MP3tunes Inc filed for bankruptcy in a U.S. court, following its prolonged run-in with music publishing giant EMI Group over copyright issues, court filings showed.

MP3tunes is a so-called cloud music service that lets users store music in online "lockers." Amazon.com Inc, Apple Inc and Google Inc have similar cloud services.

EMI's lawsuit against MP3tunes and its chief executive, Michael Robertson, is part of the music industry's efforts to stop websites from letting people download and share music online without paying for it. Fourteen other record companies and music publishers were also part of the copyright case that was filed in 2007.

However, last year, a federal judge in Manhattan said MP3tunes and Robertson did not violate the federal Digital Millennium Copyright Act (DMCA) in permitting downloads, except as to songs specifically identified as having been pirated.

In essence, the judge said it was users rather than MP3tunes that were responsible for any infringements. But the court did find the defendants liable for "contributory" copyright infringement for songs where notices of alleged infringement were provided.

The judge had also said Robertson was liable for having personally transferred songs from unauthorized websites. The copyright case is still pending before the Southern District of New York court.

Based in San Diego, California, MP3tunes was launched in 2005 by Robertson three years after stepping down as CEO of MP3.com, which was also founded by him.

MP3tunes had filed for bankruptcy under Chapter 7 code, which envisages liquidation of a company's operation. In the court filing, the company had listed out assets of about $7,800 and liabilities of $2.1 million.

The bankruptcy case is MP3tunes Inc, U.S. Bankruptcy Court, Case No. 12-06037-MM7, Southern District of California.

Copyright case is Capital Records Inc et al v. MP3tunes LLC et al, U.S. District Court, Southern District of New York, No. 07-09931.

(Reporting by Sakthi Prasad in Bangalore; Editing by Muralikumar Anantharaman)

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