EXCLUSIVE: Publishers Reach Quiet Settlement with Mygazines
Copyright lawsuit against controversial peer-to-peer site dismissed.
A copyright lawsuit brought against a Web site launched earlier this year allowing users to share digital copies of hundreds of magazines has been settled.
Lawyers representing a large swath of consumer and b-to-b publishersâincluding Time Inc., Hearst, Hachette, McGraw-Hill, American Media Inc., Reed Business Information, Bonnier, Ziff Davis and Forbes, among othersâsettled their case against the proprietors of Mygazines.com on September 8, according to court documents obtained by FOLIO:.
Terms of the settlement were not disclosed.
Davis Wright Tremaine LLC, the law firm representing the plaintiffs, declined to comment on the terms of the settlement. Clifford Lax, a lawyer for the defendant, refused to comment.
But according to a source with knowledge of the terms, confirmed later by additional court documents, Mygazines has agreed to remove all of the publishersâ copyrighted content, review and screen uploads for any content not authorized by the publishers and open a channel to allow Mygazines to be notified when copyrighted content appears.
Legal experts had speculated that a case against Mygazines, which lists its address as a post office box on the Caribbean island of Anguillaâa British territoryâwould be difficult to enforce outside of the jurisdiction of U.S. copyright law. But the firm representing the publishers identified a Canadian, Darren Andrew Budd of Toronto, as the siteâs founder, and filed suit against Budd, Salveo Ltd.âthe company to which the site was registeredâits designers and hosting companies in the U.S. Southern District Court of New York on August 21, asking the court to shut down the site in the United States. (A separate suit involving even more publishersâincluding Meredith, IDG, Martha Stewart, U.S. News and Wenner Media et alâwas filed simultaneously in Canada.)
In the complaint [CLICK HERE for the PDF], the publishers said the âscope and audacity of the defendants infringing acts is breathtaking,â and that the site tried to avoid enforcementâswitching its hosts (âvariously locatedâ in the Bahamas, Hong Kong, Russia and Swedenâ) when one was served with a publisherâs cease-and-desist letterâin a âcalculated effort to evade plaintiffsâ demands and detection.â
The U.S. case was settled on September 8 [PDF]; an order upholding the settlement was issued in Toronto on September 9 [PDF]. On Wednesday, the Superior Court in Toronto ordered [PDF] Mygazines to remove content belonging to all members of the Magazine Publishers of America, including those not named in the original suit. (American Business Media, the b-to-b association, says it is investigating "the best way to protect all ABM members from infringement by Mygazines.")
'Mysterious' Business Model
Mygazines is still live, although many prominent titles that were available for free download at the time of the launchâincluding People, Playboy, Dwell, Domino, Allure, Spin, Smithsonian, Popular Science, Martha Stewart Living, New York, Menâs Journal and Esquireâare no longer up. Currently, there are over 127,000 users registered on Mygazines.com.
The site recently introduced a program offering publishers demographic statistics, âexclusive rights and control over your titles on mygazines.comâ and ârevenue sharing opportunities.â
A person claiming to be the siteâs founder wrote in a recent e-mail to FOLIO: that he was hoping to work with publishers to develop the site and, ultimately, share revenue. âWe will reiterate we have every intention of working with the industry to fortify the future of magazines and the industry in general.â
âThe publishers we represent are open to new and innovative opportunities,â said Lance Koonce, one of the lawyers representing the publishers in the U.S. case. âBut the defendants started by infringing on a massive scale, then refused to cooperate when our clients found them to be infringing. Only later did they allude to a mysterious business model. That is not seen as cooperating.â
- Original Complaint [PDF]
- Plaintiffs' Memo [PDF]
- Dismissal [PDF]
- Canadian Court Order #1 | #2 [PDF]
- MPA Order [PDF]
[EDITOR'S NOTE: The Salveo Ltd. named above should not be confused with a U.K.-based company of the same name that sells health and beauty products.]