[JURIST] A judge for the US District Court for the Southern District of New York [official website] on Monday ruled [opinion, PDF] that a music file-sharing site could be held liable for contributory copyright infringement. EMI [corporate website], along with a number of record companies and music publishers, sued MP3tunes [official website], a music site offering “cloud” music services, for copyright infringement. Judge William Pauley, however, ruled in favor of the defendants on several key issues, holding that MP3tunes qualified for safe harbor under the Digital Millennium Copyright Act (DMCA) [text, PDF] with respect to certain sideloaded music and that MP3tunes complied with DMCA guidelines for responding to certain takedown notices. Michael Robertson, founder of MP3tunes, called the ruling a “99 percent victory” [press release] for his company:

Today a ruling was published in EMI v MP3tunes and it is definitely a victory for cloud music and MP3tunes’ business model after a multi-year litigation battle. Consumers can have confidence that they’ll be able to store, play, and enjoy music using cloud-based services like MP3tunes. Those in the industry that are building or contemplating personal music service like Amazon, Google, Grooveshark and Dropbox will surely have renewed confidence in offering similar unlicensed services.

The case will proceed to trial [NYT report] to determine damages, which could amount to tens of millions of dollars. Robertson indicated that he is currently exploring appeal options.

The US music industry has been actively litigating alleged copyright infringement in person-to-person online file sharing. In July, a federal judge reduced [order, PDF] a $1.5 million jury verdict against a Minnesota woman who was found to have willfully shared music files to $54,000. Chief Judge Michael Davis of the US District Court for the District Court of Minnesota [official website] called the award “appalling” and inconsistent with due process. Davis emphasized that the defendant was an individual consumer who downloaded music for her own use and not for profit and also said that the damages to the plaintiffs, members of the Recording Industry Association of America, did not support the verdict. The RIAA appealed the damages reduction Tuesday. In May, several major record companies announced that they had reached a $105 million settlement [JURIST report] with music file-sharing website LimeWire [website]. In 2008, the RIAA said that it would discontinue its controversial policy [JURIST report] of suing suspected file-sharers and instead will seek cooperation with major Internet service providers to cut off access to repeat offenders.