## Facts

- Marshall Mathers (Eminem) recorded two early rap tracks, “Oh Foolish Pride” and “So Many Styles,” with Bassmint Productions; the recordings were never intended for public release and contained racially offensive lyrics.
- Mathew Ruby, a group member and custodian of tapes, maintained a compilation tape containing the works.
- A third party obtained the tape under disputed circumstances and sold it; in October 2003, the tape was sold to Source Enterprises, Inc., publisher of *The Source* magazine and operator of its website.
- Source, a long-time critic of Eminem, used the tape in connection with commentary accusing Eminem of racism.
- Source publicly played the works at a press event and published lyrics and audio clips on its website, allegedly amounting to publication of virtually the entire songs.
- Shady Records, Inc. obtained copyright registrations for the works based on asserted assignments from Mathers and Ruby and filed a copyright infringement action in December 2003.
- A temporary restraining order, entered with Source’s consent, limited Source’s further use beginning December 23, 2003.
- An investor in Source, Black Enterprise/Greenwich Street Growth Management, LLC (BE/GS), was also named as a defendant.

## Issues

1. Whether Shady established valid copyright ownership and actionable copying sufficient for summary judgment on infringement against Source.
2. Whether Source’s dissemination of substantial portions of the works in connection with commentary and reporting was protected by the fair use defense at the summary judgment stage.
3. Whether BE/GS, as a financial investor, could be held liable for Source’s alleged infringement on direct, contributory, or vicarious theories.

## Decision

- The court granted Shady partial summary judgment against Source on copyright liability based on undisputed ownership and copying.
- The court did not resolve fair use on summary judgment; the remaining issue was reserved for trial.
- The court granted summary judgment to BE/GS and dismissed all claims against it.

## Legal Principles

- Where ownership and copying are undisputed, extensive online dissemination of copyrighted sound recordings and lyrics may warrant summary judgment on prima facie infringement, subject to affirmative defenses.
- Fair use is an affirmative defense that may require fact development; it need not be resolved on summary judgment where material disputes remain.
- A passive financial investor is not liable for another entity’s copyright infringement absent evidence of meaningful involvement, knowledge, or the right and ability to supervise or control the infringing conduct.

## Conclusion

The court determined that Source’s playing and near-complete online publication of the works established prima facie infringement as a matter of law, left Source’s fair use defense for trial, and dismissed claims against a private equity investor where the record did not show participation in or control over the alleged infringement.


Shady Records, Inc. v. Source Enters., Inc., No. 03 Civ. 9944 (GEL), 2005 WL 14920 (S.D.N.Y. Jan. 3, 2005)