Cloud-based music storage company MP3tunes.com has filed for bankruptcy protection in a US court, after a lengthy dispute with music publishing company EMI Group over copyright issues.
The MP3tunes cloud music service allows users to store music in online ‘lockers’, and Amazon.com, Apple and Google are said to have similar cloud services.
MP3tunes had filed for bankruptcy under Chapter 7 code, which involves liquidation of a company’s operation, reports CNET.
The company, founded by Michael Robertson in 2005, had listed $7,800 in assets and $2.1m in liabilities.
In a blog post, CEO Robertson said EMI spent an estimated $10m with multiple law firms to arm their attack against MP3tunes in an attempt to thwart unlicensed personal lockers.
"They know it’s difficult if not impossible for startups to fight long costly legal battles. Their hope is that the startup cannot fund a protracted legal battle and they win by default," he added.
"This happened with the music search engine Seeqpod, Muxtape, Favtape and many others that have quietly faded away."
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EMI, however, says bankruptcy would not protect MP3tunes from copyright suit and plans to pursue its case against Robertson, to ensure that its songwriters and artists are properly compensated for their creative work.
EMI sued MP3tunes and fourteen other publishers for infringement in 2007.
Last year, EMI lost the case against MP3tunes as a US district judge issued a split ruling saying that the website did not promote copyright infringement and that MP3tunes service qualifies for "safe harbor" protection under the Digital Millennium Copyright Act (DMCA).
The judge, however, said that MP3tunes employees were guilty of copyright infringement as they stored EMI songs in their own accounts.
