A 2000 ruling found MP3.com's copying of CDs was not fair use

The audio task

A platform deciding whether it needs a license before storing, converting or replaying a user's uploaded audio, even when that user claims to already own the source recording, is facing the same question a federal court answered in 2000, when a subscription service let users unlock server-side copies of CDs they said they owned.

What the documents show

The liability opinion in UMG Recordings v. MP3.com states that MP3.com launched its My.MP3.com service around January 12, 2000, letting subscribers prove ownership of a CD by briefly inserting it into a computer drive, after which they could stream a copy MP3.com had already made, without the labels' authorization, from a purchased CD onto its own servers. The court, in an opinion by Judge Rakoff, states that it granted the plaintiffs' motion for partial summary judgment on April 28, 2000, holding MP3.com liable for copyright infringement, and rejected a fair-use defense because the service simply repackages the original recordings rather than adding new expression, and because it copied the recordings in their entirety. A related damages opinion in the same litigation states that, by order dated July 31, 2000, statutory damages under 17 U.S.C. section 504(c)(1) must be calculated per compact disc, not per individual song, because the statute treats all parts of a compilation as one work.

Rights status

The court's holding is specific: copying an entire copyrighted sound recording onto a commercial server to replay it for subscribers is infringement, and a user's ownership of the physical CD does not convert that server-side copy into a licensed use on the service's part. The opinion does not address a scenario where a platform processes a user's own file without ever making a central copy of its own, and it predates any cloud-storage or AI-processing framework built specifically around user-owned media.

What to check before you use it

This is an editorial checklist. Before assuming a modern upload-and-process feature is shielded by a user's CD or file ownership, confirm whether the service makes and retains its own central copy, as MP3.com did, or only processes a file the user retains control of. Check whether a platform's terms of service address AI-assisted processing of uploaded audio separately from simple storage. And verify which entity, the label, the artist, or a distributor, actually holds the relevant recording right before assuming a user's ownership claim resolves the question.

• Does the service retain its own central copy of the uploaded recording, or only process the user's file?
• Do the platform's terms address AI-assisted processing of uploaded audio separately from storage?
• Has ownership of the relevant recording right been confirmed independently of the user's claim?

UMG v. MP3.com remains a clear statement that a claimed ownership of a physical disc does not, on its own, authorize a platform's own copy of the recording it contains. Decades on, that distinction still frames how uploaded-audio features get built and licensed.