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NEW YORK (Reuters) - The online streaming service Grooveshark suffered a legal defeat on Monday when a U.S. judge found its operators liable to nine record companies for having directed employees to upload thousands of copyrighted songs without permission.
The judge held Grooveshark's parent company, Escape Media Group Inc, and its founders Samuel Tarantino and Joshua Greenberg, responsible for the illegal uploads of 5,977 songs by musicians such as Eminem, Green Day, Jay-Z and Madonna.
U.S. District Judge Thomas Griesa in Manhattan pointed to "uncontroverted evidence" of direct infringement, including a 2007 internal announcement where Greenberg asked employees to "please share as much music as possible from outside the office" to speed growth.
"By overtly instructing its employees to upload as many files as possible to Grooveshark as a condition of their employment, Escape engaged in purposeful conduct with a manifest intent to foster copyright infringement via the Grooveshark service," Griesa wrote in a 57-page decision.
Plaintiffs in the case included Arista Music, Arista Records, Atlantic Recording, Elektra Entertainment Group, LaFace Records, Sony Music Entertainment, UMG Recording, Warner Brothers Records and Zomba Recording.
Griesa ordered both sides to propose within 21 days a permanent injunction to hold further infringements.
The decision is the latest in a years-long clash between the recording industry and various websites over how music can be distributed online.
"Escape respectfully disagrees with the court's decision, and is currently assessing its next steps, including the possibility of an appeal," John Rosenberg, a partner at Rosenberg & Giger representing the defendants, said in a phone interview.
Andrew Bart, a partner at Jenner & Block representing the plaintiffs, did not immediately respond to requests for comment. A spokeswoman for the Recording Industry Association of America, a trade group, had no immediate comment.
With offices in Gainesville, Florida, Grooveshark describes itself on its website as "one of the largest on-demand music services on the Internet," with more than 30 million users sharing in excess of 15 million files.
The company does obtain licenses from many music providers. It said its policy is to honor copyright holders' "takedown" requests that comply with the Digital Millennium Copyright Act and other intellectual property laws.
In court papers, the plaintiffs had called Grooveshark a "linear descendant" of Grokster, LimeWire and Napster, all of which had been shut down because of copyright infringement.
The case is UMG Recording Inc et al v. Escape Media Group Inc et al, U.S. District Court, Southern District of New York, No. 11-08407.
Reporting by Jonathan Stempel in New York; Editing by Grant McCool