Complaint in Unity Entertainment v. MP3.com.
Date: November 7, 2000.

WALTER J. LACK, ESQ., SBN 57550
ADAM D. MILLER, ESQ., SBN 141808
ENGSTROM, LIPSCOMB & LACK
10100 Santa Monica Boulevard, 16th Floor
Los Angeles, CA 90067
Telephone: (310) 552-3800
Facsimile: (310) 552-9434

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA

PLAINTIFF UNITY ENTERTAINMENT CORPORATION ("UNITY"), by its counsel, alleges as follows:

NATURE OF ACTION

1. Defendant MP3.com ("MP3") is a publically held company which operates commercial Internet websites including the site "My.MP3.com." Consumers may search, sample and download music free of charge and no royalties are paid to the owners of the copyrighted material.

2. Defendant MP3 at all relevant times herein deliberately copied in digital format over 80,000 audio compact discs ("CDs") containing copyrighted musical compositions onto its computer servers without seeking or obtaining the copyright owners’ permission. MP3 is currently using those copies to make unauthorized phonograph deliveries, within the meaning of 17 U.S.C. §115, of copyrighted musical compositions over the internet. Despite notice that its actions constitute copyright infringement, Defendant has continued to make unauthorized copies of Plaintiffs’ (including class members) copyrighted musical works.

3. The Plaintiff is an independent record company that produces, manufactures, distributes and/or sells musical audio CDs containing the copyrighted works of various artists and which have been illegally misappropriated by Defendant’s internet services. The Plaintiff is the exclusive owner of the copyrights of sound recordings contained or embodied therein including, without limitation, those listed in Exhibit "A" attached hereto and incorporated by reference herein ("Copyrighted Recordings"). The Plaintiff has applied for and/or received Certificates of Copyright Registration for its Copyrighted Recordings.

4. This action is also brought on behalf of all other similarly situated entities or individuals who are the owner(s) of copyrighted audio recordings which have been copied and disseminated by Defendant MP3 without the copyright owner’s permission.

5. This action seeks a declaration that MP3.com’s unauthorized copying of Plaintiffs’ (including Class members) copyrighted sound recordings on MP3.com’s computer servers willfully infringes Plaintiffs’ copyrights in violation of the Copyright Act. This action further seeks injunctive relief prohibiting MP3.com from possessing and/or distributing on My.MP3, or any other service, any infringing reproductions of Plaintiffs’ copyrighted sound recordings. This action also prays for statutory damages for willful copyright infringement in the amount specified in Section 504 of the Copyright Act.

JURISDICTION AND VENUE

6. This is a civil action seeking declaratory, injunctive and monetary relief for infringement under the copyright laws of the United States (17 U.S.C. §101 et seq.) The Court has jurisdiction over the subject matter of this action under 28 U.S.C. §§1331 and 1338(a).

7. This Court has personal jurisdiction over the Defendant MP3 because Defendant offers a service to residents of this State and this District which harms copyrights owned by residents of this State and this District and Defendant is otherwise doing business in this state and this District.

8. Venue is properly laid in this District pursuant to 28 U.S.C. §§1391(b) and (c) and 1400(a).

PARTIES

9. Plaintiff UNITY ENTERTAINMENT CORP., is a corporation duly organized and existing under the laws of the State of Delaware with its principal place of business in Los Angeles County, California.

10. Defendant MP3.com, upon information and belief, is a corporation organized under the laws of the State of Delaware with its principal place of business in the State of California. Defendant operates its business through a commercial Website which is (http://www.MP3.com) that provides, among other things, information about music and the use of the "MP3" digital audio format, digital downloads of music and the My.MP3 interactive service.

11. UNITY owns the copyrights to the musical compositions for various musicians such as Keiko Matsui and Paul Taylor. A list of those compositions are attached hereto as Exhibit "A."

12. Plaintiff class members are the United States copyright owners or the owners of the exclusive rights under copyright with respect to certain copyrighted sound recordings. Each plaintiff has applied for and/or received Certificates of Copyright Registration from the Register of Copyrights for its sound recordings. Under Section 106 of the Copyright Act, each plaintiff has the exclusive right, among other things, to reproduce the sound recordings in any manner including digital files.

THE INFRINGING ACTIVITIES

13. Defendant MP3 was incorporated in March 1998. In or about January, 2000, Defendant introduced a new service known as My.MP3 Interactive Service to the public.

14. In order to offer this service, Defendant copied every track from more than 80,000 commercial audio CDs onto its computer servers. The Plaintiff is informed and believes that virtually all of these audio CDs are marked as copyrighted and contain explicit notices prohibiting unauthorized copying. Included among these infringed reproductions are copies of thousands of copyrighted song recordings owned by the Plaintiff Class, none of whom has authorized Defendant to make any such reproductions.

15. Through My.MP3 and other services owned by Defendant, a user can get access to any of the infringing reproductions made by Defendant he or she chooses, listen to the performance made from those infringing reproductions through any device that can access MP3.com’s website (such as a computer) and download copies of those infringing reproductions. The user obtains permanent access to the infringing reproductions by placing an order for or confirming to Defendant that he is in possession of an audio CD containing those sound recordings.

16. The user does not and cannot copy his own CD onto the My.MP3 computer servers. The My.MP3 service utilities and only grants access to the infringing reproductions made solely by the Defendant.

17. Defendant MP3 has copied sound recordings of Plaintiffs’ copyrighted works from CDs onto its computer servers and is making digital phonorecord deliveries of those compositions to consumers over the Internet. Defendant has neither sought nor obtained any license or authorization from Plaintiffs to make such copies or digital phonorecord deliveries of Plaintiffs’ copyrighted works.

18. The Defendant has been advised that (a) copying Plaintiffs’ copyrighted works onto Defendant’s computer server and (b) making digital phonorecord deliveries of Plaintiffs’ copyrighted works over the Internet violates Plaintiffs’ exclusive statutory rights under the Copyright Act. Plaintiffs have urged Defendant to stop its infringing activities. Defendant has refused to do so and continues to maintain copies of the copyrighted works on its servers and to make digital deliveries of the copyrighted works over the Internet.

CLASS ALLEGATIONS

19. UNITY brings this action on behalf of itself and as a Class on behalf of all persons who between November 1, 1997 and the present has been damaged as a result of MP3's unauthorized copying and dissemination of Plaintiffs’ copyrighted recordings.

20. The proposed Class consists of all persons or entities who own the copyright(s) to any sound recordings (as defined in 17 U.S.C. §101 et seq.) which have been copied by Defendant onto any of its servers from which unauthorized copies may be obtained. ("Class") The most common form of sound recordings is the audio CD.

21. Defendant, its officers, directors and subsidiaries are excluded from the Class.

22. The Class is so numerous that joinder of all members of the Class in a single action is impracticable. Although the Class members cannot properly be determined without discovery, UNITY is informed and believes that the Class includes several thousand entities and/or individuals.

23. The preliminary questions of law and fact raised by this Complaint are common to all members of the Class and are centered on issues of whether the Defendant is liable for the unauthorized copying and distribution of sound records as described in this Complaint, and whether the Defendant is liable for damages arising therefrom. In addition, the factual issues pertaining to the illegal practices of MP3 are common to all Class members. The questions of law and fact common to the Class predominate over any questions affecting only possible individual plaintiffs.

24. Common questions of law and fact predominate including whether Defendant (i) engaged in copyright infringement by under Sections 106 and 115 of the Copyright Act; (ii) whether Defendant violated the Copyright Act willfully; and (iii) the extent of an appropriate measure of damages including statutory damages in the amount of $150,000 per infringement.

25. Plaintiff’s claims are typical of those of the Class. Prosecution of individual actions would create a risk of inconsistent adjudications. Plaintiff will adequately protect the interest of the Class. Class action is superior to all available methods for the fair and efficient adjudication of this controversy.

FIRST CAUSE OF ACTION

(Copyright Infringement)

26. UNITY hereby repeats and realleges paragraphs 1 through 25, inclusive, which are incorporated by reference as though set forth in full herein.

27. This claim is brought pursuant to the Copyright Act in 28 U.S.C. §2201(a), seeking declaratory, injunctive and monetary relief. There is an actual controversy between the Plaintiffs and Defendant.

28. Under Section 106 of the Copyright Act, each Plaintiff has exclusive right to reproduce his Copyrighted Recordings in copies or phonorecords, and exclusive right to authorize a reproduction of its copyrighted recordings in copies or phonorecords.

29. Unauthorized reproduction of copyrighted recording constitutes infringement of the exclusive rights under Section 106 of the Copyright Act. Defendant has willfully and with full knowledge of Plaintiffs’ copyrights made infringing reproductions of thousands of Plaintiffs’ copyrighted sound recordings for purposes of operating its commercial My.MP3 interactive service.

30. As a direct and proximate result of the foregoing acts of infringement by Defendant, Plaintiffs have been and will continue to be irreparable injured. As a direct and proximate result of the foregoing acts of infringement by Defendant, Plaintiffs are entitled to damages and profits under Section 504 of the Copyright Act, including statutory damages for willful infringement in an amount to be established at trial.

RELIEF

Wherefore, Plaintiff Unity and the Class pray for judgment and relief as follows:

1. For a declaration that this Class is a proper Class action;

2. For a declaration that Defendant has willfully infringed the copyrights of Plaintiffs and the copyrighted recordings by making unauthorized reproductions of such works as part of websites including its My.MP3 interactive service;

3. For a declaration that the Defendant’s unauthorized digital phonorecord deliveries of Plaintiffs’ copyrighted works over the Internet willfully infringes Plaintiffs’ copyrights in violation of the Copyright Act;

4. For an Order that Defendant remove all copies of Plaintiffs’ copyrighted works from Defendant’s computer servers and website;

5. For an Order that Defendants deliver up or the destruction of all infringing materials, including all discs, drives or storage media that contain infringing copies of Plaintiffs’ copyrighted works;

6. For an award to Plaintiffs, at their election, of either actual damages and profits derived by Defendant as a result of their infringing activities pursuant to 17 U.S.C. §504(b), or (2) statutory damages in the maximum amount of $150,000 with respect to each of Plaintiffs’ copyrighted works, pursuant to 17 U.S.C. §50-4(c);

7. For an Order enjoining Defendant and its respective agents, employees, officers, directors, attorneys, successors, licensees, assignees and all those persons acting in concert and combination therewith from further infringement of Plaintiffs’ copyrights in the copyrighted recordings; and

8. Granting Plaintiffs such other and further relief as this Court deems just and proper.