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Business News Digital Labels & Publishers Legal
New York court allows boosted copyright case against Peloton, sought damages double to $300 million
By Chris Cooke | Published on Monday 30 September 2019
A New York judge last week celebrated the lacklustre arrival of US fitness firm Peloton on the city’s Nasdaq stock exchange by allowing a consortium of music publishers to double the damages they are seeking in a copyright dispute.
More than a dozen independent publishers sued Peloton earlier this year accusing it of making use of their songs without licence. Peloton makes fitness machines that come with screens via which users can access workout videos. The lawsuit alleged that some of those videos contained unlicensed music controlled by the plaintiffs.
Peloton then countersued in April, mainly on competition law grounds. It alleged that it had previously had good relationships with most of the publishers involved in the legal dispute and was negotiating licensing deals with many of them. Those relationships only fell apart, it then claimed, because of interference by America’s National Music Publishers Association. The publishers were disparaging of those claims.
Last week the music firms got court approval to amend their original lawsuit adding more plaintiffs and allegedly infringed songs. In doing so, the statutory damages being pursued in the litigation double to a neat $300 million.
The publishers also sought court assistance in gathering evidence from the fitness firm, in particular access to the videos that contained the allegedly unlicensed songs. Peloton has offered the plaintiffs a free subscription in order to access its video library, but also admitted that it had removed any clips that contained songs listing in the original lawsuit.
The music firms want Peloton to provide copies of the removed videos on CD, something the fitness outfit said would prove costly and time-consuming. But, according to Law360, the judge hearing the case wasn’t impressed with that argument, noting that the alternative proposal of a free subscription was a pretty “empty” offer, given most of the offending videos had been taken offline.
Earlier in the proceedings Peloton took issue with how long it had taken for the publishers to amend their lawsuit, reckoning that they were “playing games” by filing their boosted claim on the eve of its IPO. But the judge said that, given the number of videos containing allegedly unlicensed songs, the delay on the publishers’ side was reasonable.
She then asked how the Peloton IPO was going, the company having officially listed earlier that day. Legal reps for the firm said they didn’t know. The answer was “not well”. The firm’s share price slipped 11.2% of its first day of trading. And while there are various reasons for that, the pending $300 million copyright infringement claim doesn’t help.
The case continues.
