COPYRIGHT INFRINGEMENT

UMG Vs MySpace
On November 17, 2006, Universal Music Group (UMG), a leading music publishing and record
company sued MySpace, a popular social networking site in the US, for copyright infringement
of the work of its artists.

The lawsuit, filed in the U.S. District Court for California's Central District, alleged that
MySpace helped its users to upload music videos and participated in the infringement process by
re-formatting the videos so that they could be shared among other users.

UMG further alleged that most of the content posted on MySpace was not "user-generated" and
was copied from content owners. Commenting on this, UMG said, "The foundation of MySpace
is its so-called 'user-generated content.' However, much of that content is not 'user-generated' at
all. Rather, it is the 'user-stolen' intellectual property of others, and MySpace is a willing partner
in that theft.”

UMG said that MySpace would have to pay UMG, US$ 1,50,000 as damages for each
unauthorized music or video posted on its site. UMG had already identified 60 copyright
violations. Peter Lofrumento, spokesperson for UMG, said, "Businesses that seek to trade off on
our content, and the hard work of our artists and songwriters, shouldn't be free to do so without
permission and without fairly compensating the content creators."

With over 100 million users, MySpace, based in California, USA and owned by media
conglomerate News Corporation (News Corp.), is a popular social networking site that allows
users to host their personal webpages. It allows users to share photos, create blogs, upload
music / videos, and build their own network of friends. It also has an internal search engine and
an e-mail system.

MySpace felt that UMG'S decision to file a lawsuit was unfortunate and that the fine imposed
was unjust. A spokesperson for MySpace, said, "MySpace provides an extraordinary promotion
platform for artists -from major labels to independent acts -while respecting their copyrights. We
have been keeping UMG closely apprised of our industry-leading efforts to protect creators'
rights, and its unfortunate they decided to file this unnecessary and meritless litigation. We
provide users with tools to share their own work - we do not induce, encourage, or condone
copyright violation in any way."

MySpace also said that it had made efforts to launch a new copyright protection tool, an audio
fingerprinting technology. The technology included a filtering system that automatically
prevented unauthorized music from being copied to another site. A release from MySpace, said,
"We proactively take steps to filter unauthorized music sound recordings and have implemented
audio fingerprinting technology. We will continue working to be the gold standard in protecting
creators' rights."

Analysts cited MySpace as an example of the rising popularity of social networking and user
generated content in the Web 2.0 era. The term Web 2.0 was used to refer to second-generation
websites where in users could design their own pages, contribute content, and be a part of an
online web community.

There was also evidence of the money making potential of these websites. In August 2006,
Google Inc. (Google), the leading online search engine, entered into a deal with Fox Interactive
Media (Fox Media), the parent company of MySpace. As per the deal, Google would pay Fox
Media US$ 900 million over a period of three years for the right to provide web search results
and sponsored ad links in MySpace.

But a main challenge for these Internet firms was the copyright issue as many users would post
music or videos for which they did not have the copyright. Some legal experts opined that
websites like MySpace sought protection through the 1998 Digital Millennium Copyright Act, a
copyright law in the US, which exempted Internet service providers from any liability as long as
they removed the copyright infringing material when notified of the violation. Moreover, given
the backing of a large conglomerate like News Corp., MySpace would have the resources to deal
with any legal challenges. However, some analysts expected MySpace to reach a settlement with
UMG on the lawsuit.

Bibilography:

1] Chris Morris and Carl DiOrio, "Universal Music Sues MySpace Over Copyrights, "
www.hollywoodreporter.com, November 18, 2006.
2] Dawn C. Chmielewski, "MySpace is Sued by Universal Music," www.latimes.com,
November 18, 2006.
3] "MySpace Statement in Response to Universal Music Group Lawsuit,"
http://home.businesswire.com, November 17, 2006.
4] The fingerprinting technology was owned by California based Gracenote, which specializes in
organizing digital music. It uses MusicID software and Global Media Database for checking files
uploaded by users accessing MySpace for the protection against copyright violations.
5] Andrew Orlowski, "UMG Sues MySpace," www. theregister.co.uk, November 17, 2006.

CASE STUDY ANALYSIS

Problem:
MySpace faced a lawsuit when UMG filed a case against it for copyright infringement. UMG
argues that materials posted or uploaded in MySpace are copied and edited by MySpace users.
The materials are hardwork of artists associated with UMG and their efforts are being misused
by MySpace users. UMG filed a case against MySpace and demanded compensation of millions
of dollars for single posting. MySpace has identified more than 60 of such copied and edited
materials for which it is asking compensation.

Analysis:

MySpace feels that case file against it is unjust and unfair on the part of UMG since it has taken
maximum efforts to avoid copyright infringement and has provided users with many tools and
softwares to make their own video and post on MySpace.

MySpace has sought protection from 1998 Digital Millennium Copyright Act, a copyright law in
the US, which exempted Internet service providers from any liability as long as they removed the
copyright infringing material when notified of the violation.

Analysts believe that MySpace may reach for a settlement with UMG on lawsuit which may be
affordable to MySpace as well as justice to the artists associated with UMG.

Recommendation:

MySpace should take initiative to make sure that all the videos and materials posted on MySpace
website is not re-formatted by its users so that efforts and sentiments of all the artists are not put
to stake.

Consumer Right Case

Cadbury vs Consumer
In October 2003, just a month before Diwali, customers in Mumbai complained about finding
worms in Cadbury Dairy Milk chocolates. Quick to respond, the Maharashtra Food and Drug
Administration seized the chocolate stocks manufactured at Cadbury's Pune plant. In defense,
Cadbury issued a statement that the infestation was not possible at the manufacturing stage and
poor storage at the retailers was the most likely cause of the reported case of worms. But the
FDA didn't buy that. FDA commisioner, Uttam Khobragade told CNBC-TV18, "It was
presumed that worms got into it at the storage level, but then what about the packing - packaging
was not proper or airtight, either ways it's a manufacturing defect with unhygienic conditions or
improper packaging." That was followed by allegations and counter-allegations between
Cadbury and FDA.

The heat of negative publicity melted Cadbury's sales by 30 per cent, at a time when it sees a
festive spike of 15 per cent. For the first time, Cadbury's advertising went off air for a month and
a half after Diwali, following the controversy. Consumers seemed to ignore their chocolate
cravings. As a brand under fire, in October itself, Cadbury's launched project 'Vishwas' - a
education initiative covering 190,000 retailers in key states.

But what the company did in January 2004 is what really helped de-worm the brand. By
investing up to Rs 15 crore (Rs 150 million) on imported machinery, Cadbury's revamped the
packaging of Dairy Milk. The metallic poly-flow, was costlier by 10-15 per cent, but Cadbury
didn't hike the pack price. Bharat Puri, managing director, Cadbury's India says, "While we're
talking about a few bars of the 30 million we sell every month - we believe that to be a
responsible company, consumers need to have complete faith in products. So even if it calls for
substantial investment and change, one must not let the consumers confidence erode."

Simultaneously, Cadbury's roped in brand ambassador Amitabh Bachchan to do some heavy

duty endorsement putting his personal equity on the line for the brand.The company upped ad
spends for the Jan-March quarter by over 15 per cent. The recovery began in May 2004, and by
June, Cadbury's claimed that consumer confidence was back.These experts believe that the
reason for Cadbury's success was that it took crisis head-on. And the consumers were more
forgiving, because the brand enjoyed an emotional equity in India. Santosh Desai, former
president, McCann-Erickson says, "The nature of the relationship that Cadbury's has built with
the consumer is responsible for latitude the consumers are giving it. "They are seeing it as a
lapse, not a breach of trust - this difference is key. What Cadbury's set out to deliver, it goofed up
once but it seemed to be very sincere in its intent to get things right."

Biblography:

http://www.rediff.com/money/2006/dec/24cad.htm

http://www.mbaknol.com/management-case-studies/case-study-cadbury-crisis-management-
worm-controversy/
 CASE STUDY ANALYSIS

Problem:

Mr Sebastin has purchased a Cadbury chocolate from a pick and bay in vile parle. He found
worms in it (batch no : 28f3110703). Fernandes complained to the shopkeeper Jitendra Shah who
later informed Pravin Marve, vice-president, Andheri Vyapar Manch. Marve then contacted the
FDA and gave them the sample. FDA Joint Commissioner Hindurao Salunkhe said Cadbury's
Talegaon plant will also be inspected.

Analysis:

The state Food and Drug Administration has ordered seizure of Cadbury's Dairy Milk chocolates
from all over Maharashtra after worms were found in two of them in Mumbai. The Food and
Drug Administration had then seized the company's stocks and the Cadbury India management had
explained it was bad storage practices by retailers and distributors that had led to the worms and
even the government got into the act with the central health ministry asking for a report on the
controversy.

Cadbury went into overdrive to tell consumers that improper storage of what is essentially a
perishable commodity might lead to worm infestation. As a result Cadbury improved the
packaging and paid more attention to the way its chocolates were stored by nearly 650,000
retailers across the country.

The larger Cadbury Dairy Milk packs came in poly-coated aluminium foil, which was heat-
sealed and then wrapped in the branded outer package. Both these initiatives are country specific
and Cadbury invested nearly Rs 25 crore (Rs 250 million) this year on new machinery for the
improved packaging.

Recommendation:

Cadbury should take care this small packaging mistake can make bad image of the company.
They should always see to it that they maintain the quality of the chocolates and take care of
humanity.