Category Archives: Music Law

Solutions for the Orphaned Works of Copyright: Google Books Decision Highlights Need for Action

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The recent decision presented by the honorable Judge Chin on the matter of copyright infringement in the case The Authors Guild v. Google Inc. raised numerous issues in the arena of Intellectual Property. In addition to opposing the “opt-out” stipulation written into the settlement, Judge Chin also contested the way Google Inc. approached and viewed “orphan works” in relation to digitizing books where no copyright owner or recipient could be located or reached. In Judge Chin’s opinion, the matter of orphan works should not to be decided by private enterprise, but is rather a matter for Congress to decide. In so deciding, Judge Chin refers to certain opinions issued by the Copyright Office, as well as legislation that was originally proposed back in 2008.

"Orphaned works" are defined as copyrighted works for wSAVEORPHANShich the owner cannot be identified, but which someone wants to use. In other words, works for which the potential user cannot locate or identify the actual owner of the work in order to seek proper permission. Under the current legal structure, even if a potential user makes a diligent effort to find the owner in order to seek permission, the user’s risk of copyright liability for such use is not eliminated because there is always a possibility, however remote, that a copyright owner could bring an infringement action after that use has begun. Although it is difficult to know precisely how many orphaned works are around, one 2009 study conducted by the JISC (Strategic Content Alliance) in the United Kingdom calculated that as many as 25 million such works existed in the libraries, museums and archives of that country. In such situations, productive and beneficial use of the work – something the concept of copyright is designed to encourage – is impeded.  It is such a real problem that many organizations, like the Society of American Archivists, have issued statements of best practices to assist their members in dealing with orphaned works.  But many potential creators are not members of such an organization and don’t know how to approach clearing an orphaned work for use.

Based on a report on orphaned works prepared by the Copyright Office in 2006 at the requests of Senators Orrin Hatch and Patrick Leahy, the “Shawn Bentley Orphan Works Act of 2008” (S. 2913) was ultimately introduced by Senator Leahy on April 24, 2008. It quickly passed by a unanimous vote on September 26, 2008. The act was referred to the House Judiciary Committee, where it unfortunately lies dormant or, more likely, has stalled or died in committee chambers, suffering the fate of many good laws. Several earlier actions which served the same purpose, such as Copyright Modernization Act of 2006 (H.R. 6052) suffered similar fates.  The proposed 2008 act outlined specific guidelines for individuals pursuing and currently using orphan works. The following is a brief overview of the proposed bill and its major provisions.

Under the proposed legislation, in order to use an orphan work, a person would be required to follow very specific steps in order to avoid financial and legal liability for infringement. These rules fall under the section entitled “Conditions for Eligibility,” which outlines the following as steps the person utilizing the orphaned works would need to takes in order to limit liability:

  1. provide extensive evidence that the infringer performed a detailed search in “good faith” to locate and identify the copyright holder and was unable to locate the copyright holder;
  2. acknowledge the copyright holder in an appropriate manner, assuming the copyright holder was known with a reasonable amount of confidence (a form of "moral rights");
  3. provide a mark or symbol in some regard indicating the work is used under this section;
  4. assert in an initial pleading the eligibility for such limitations; and
  5. provides documentation for the search undertaken to locate and identify the copyright holder.

The exceptions to the above guidelines for limited remedy collection do not apply to an "infringer" if: 1) the infringer receives notice of infringement and fails to negotiate in good faith with the claimant or 2) fails to provide payment for the use of the infringed material in a reasonable time period after reaching an agreement with the copyright holder.

Additionally, the individual must search with what the legislation described as "diligent effort” to locate the copyright holder. The phrase "diligent effort" requires, at a minimum: 1) a search of the records at the Copyright Office through the medium of the Internet 2) a search of “reasonably available sources of copyright authorship and ownership information” 3) use of intangible and tangible tools and publications, and where necessary, assistance of others and 4) use of databases available to the public, including those accessible by the Internet.

If someone utilizing an orphaned work follows these guidelines, any award for monetary relief “may not be made other than an order requiring the infringer to pay reasonable compensation to the owner of the exclusive right under the infringed copyright for the use of the infringed work.” Injunctive relief remains an additional remedy offered to the owner in order to prevent or restrain any further infringement action.

The act apparently died its quiet death because of opposition from many copyright groups and, in particular, notable expert Lawrence Lessig, who opposed the bill because of its vague definition of the "diligent efforts" required to avoid liability. Some of these opposition groups even referred to the proposed legislation as a “license to steal.”  The Register of Copyrights at the time, Marybeth Peters, believes to the contrary that the orphans works situation is a problem that is "overdue" and that the "pending legislation is both fair and responsible (See Marybeth Peter’s open letter).

This issue is particularly of concern for musicians and artists, since a large number of old recordings are no longer commercially available because of an uncertainty as to who owns them. In addition, creators of new recordings must often abandon projects if a work is "orphaned," for fear of liability. This is a loss not only for the artists, but for the public and our collective culture, i.e., the continuum.

Officially, legislator still deem the legislation to be "pending."  In his speech in 2009 in from of the World Copyright Summit, Senator Orrin Hatch state he “continue’s to be very active on passing orphan works legislation.”  He continued to say:

For years, I have been working with industry stakeholders and copyright experts, including Marybeth Peters, Register of Copyrights, to pass orphan works legislation. The bill seeks to unite users and copyright owners, and to ensure that copyright owners are compensated for the use of their works. I couldn’t agree more with Register Peters when she said, “A solution to the orphan works problem is overdue and the pending legislation is both fair and responsible.

Judge Chin felt that the Google settlement would have given Google an effective monopoly over orphan works, and that was one of his primary rationales in deciding the way he did.  His rejection of the Google settlement highlights this important issue and brings it to the light of public awareness again.  Anyone with an interest in intellectual property should contact their senators and representatives and ask why a more diligent effort, no pun intended, has not been made to address a problem that still exists, despite the fact that there has been no movement on the bill in three years.  With President Obama’s pro-intellectual property agenda, the time may right to solve this incredible hole in U.S. Copyright law.

The Magical Ring of Gyges: Why Illegal Downloading is So Rampant in the Age of Cyberspace

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NBC Universal recently hired a company called Envisional to study counterfeiting activity over the Internet. The results of this study – despite the fact that it is industry funded – are literally astonishing: 24% of all global Internet traffic involves digital theft!  Stated another way, one in every four people surfing the Internet are stealing intellectual property, i.e., illegally downloading either copyrighted or trademarked materials.  According to the International Federation of the Phonographic Industry, 95% of the music downloaded from the Internet is downloaded illegally!  Imagine how our society would react if one out of every four people in retail malls were carrying out stolen merchandise on a daily basis, or if 95% of the product leaving the mall was stolen.  It would be chaos.

Ring of FrodoNow consider whether these people who so quickly download a song or a movie on the Internet without paying for it would also walk up to an artist selling their painting in the park and steal one of their painting.  I firmly believe the answer to that question is a resounding no!  But why? What is different about the world wide web, i.e. cyberspace, that gives these consumers the feeling that they are entitled to download music and movies through mechanisms like BitTorrent without compensating those who created such product?  What are these people thinking?

I think the answer can be found in the writings of Plato.  In the second book of his Republic, Plato’s student, Glaucon, poses the illustration of the “Ring of Gyges.”  In the story, Gyges is a shepherd who finds a magical ring in a chasm created by a lightning storm.  The ring gives him a cloak of invisibility.  Using his newfound power, Gyges seduces the Queen of Lydia, murders the King, and takes the throne, gaining power, wealth and fame.  In the Republic, Glaucon argues that given a similar opportunity, any person, whether or not they were previously just or unjust, would use the power to commit as many crimes as necessary to get what they want [Book II, 359d].    Glaucon was responding to Socrates’ refutation of arguments put forth by Thrasymachus in Book I of the Repbulic, i.e., that “justice is nothing but the advantage of the stronger”  [Book I, 338c].

I believe Glaucon’s experiment in thought informs us as to why someone who would not normally steal a tangible object in the physical world is nonetheless more than willing to download music or movies, intangible objects, on the Internet for free: because the fear of being punished or getting caught is eliminated in the evanescent world of Cyberspace.  The Internet, like Gyge’s ring, confers upon its users a seeming cloak of indivisibility as it were.  As one astute commentator surmised in response to an interview with Alice in Chain’s lead singer, Sean Kinney, “The real reason people steal music is that they CAN and very easily.”  That this is a truth is evident from the plethora of “how to” guides on the Internet, teaching people “How not to get caught.” There you have it in a nutshell.   All of the commentary about how the record industry has been thieves and how the RIAA unjustly goes after the defenseless people, these are mere justifications for actions people otherwise know in their hearts are wrong.

It’s important to read Plato’s response to his student to understand fully, as Plato did not agree with Glaucon.  Plato’s argument in the remaining portion of the Republic is that the just man would not be tempted by this cloak of invisibility to commit crimes.  Rather, the just man understands that crime itself makes a person unhappy and that he is better off to remain just.   I frequently discuss this issue with my college students at Belmont University when teaching a course on Copyright Law.  One of my students made the following observation, which confirms Plato’s conclusion.  She said:

I do not follow the rules because I am scared of the RIAA busting me for illegal downloading. I follow the rules because I have respect for the people who wrote and recorded the songs, and even more, because I want to work in the music industry.

Another relevant opinion is offered in the excellent blog article found on arbiteronline entitled Illegal downloading: The real cost of ‘free’ music.” In that article, a student at Boise state, Ammon Roberts, is quoted as saying:

“I don’t do it because I don’t feel it’s right.  If I were making the music, I’d be upset if people were downloading it for free.”

For these two students, following the rules is not about whether or not they’ll be caught, it’s about doing the right thing.  It’s about honoring, i.e. compensating, the people who created the music. 03-20-invisible_full_600 This illustrates Plato’s point precisely:  a just person understands that even with a cloak of invisibility, doing the right thing makes a person happy or, in the words of Roberts, makes the person “feel right.”

The Internet is also very much the Land of Oz.  In addition to this cloak of invisibility endowed on us by the Internet, it also deceives us with illusions of anonymity – not so much that the user is anonymous, as that’s merely another form of invisibility – but in the sense that it’s difficult to know who’s behind the curtain.   As Trent Reznor said in an interview, “there is a perception that you don’t pay for music when your hear it . . . on MySpace.”  Because of its sheer vastness and its mysteriousness, Cyberspace gives people false perceptions that their actions on the Internet do not affect real people.   This, in turn, creates an illusion that “resistance is futile.”  Everyone is doing it, so I can too.  In other words, Cyberspace alters our reality in that it makes the real people behind the music an amorphous, anonymous entity.  The result is that it’s much easier to steal from an amorphous, anonymous entity – the man behind the curtain – than it is from a struggling songwriter, particularly when all your friends are doing it.

I truly believe that most of the people who are illegally downloading music from the Internet have no idea who they are affecting or how widespread the effect is.  Most of these people would not even think about walking up on stage after a singer/songwriter in a nightclub takes a break and stealing his guitar, but that very same person doesn’t think twice of taking that same singer/songwriter’s song from the Internet.  They wouldn’t steal the filmmaker’s camera, but downloading the movie doesn’t phase their consciousness.  In fact, many who contribute to the  dialog would argue that these two thefts are not analogous.  But one analysis conducted by the Institute for Policy Innovation states otherwise.  The report indicated that music piracy causes $12.5 billion of economic losses every year.  It further concluded that 71,060 U.S. jobs are lost, with a total loss of $2.7 billion in workers’ earnings.  Such reports abound throughout the industry, yet many of the people guilty of illegal download continue to view these reports as industry-driven and, therefore, skewed.  Take this comment by blogger Michael Arrington as an example:

Eventually the reality of the Internet will force the laws to change, too. One way or another the music labels will eventually surrender, and recorded music will be free.  Until it is, I refuse to feel guilty for downloading and sharing music. Every time I listen to a song, or share it with a friend, I’m doing the labels a favor. One that eventually I should be paid for. Until that day comes, don’t even think about trying to tell me that I’m doing something ethically wrong when it’s considered quite legal, with the labels’ blessing, in China.

resistanceBut what this illusion of anonymity, and such misguided opinions, miss is the fact that very real people – not amorphous masses – are being affected.  And the effect is devastating.  I have clients who are songwriters who are no longer creating art because they are forced to take odd jobs to support their families.  The performance royalties they used to receive from ASCAP, BMI or SESAC are down by half or more from a few years ago.  Their mechanical royalty checks are virtually non-existent.  They simply cannot afford to create simply for the sake of creation.  And now, working sometimes two jobs, they don’t have the time to create.  What will become of the art of songwriting if Mr. Arrington has his way and all recorded music is free?  I believe we will not have the quality of music in this country that we have enjoyed throughout the last millennium.  In this instance, I do not believe that resistance is futile.

Now, getting back to Plato and the Ring of Gyges, in answer to Glaucon, Plato would say that the root of all trouble is unlimited desire.   How true is that in this world of Cyberspace, in this world of rampant illegal downloading.  The wheels really fell off the wagon when the RIAA sued Diamond Multimedia, bringing the MP3 into society’s field of view.  Then, Napster exploded and almost everyone found that almost every song they ever loved was available for free.  It’s as if they were Harrison Ford and discovered the treasure room in an unknown, ancient tomb: everything your heart desires is within your grasp.  It’s yours for the taking.  With its cloak of invisibility and its illusion of anonymity, what the Internet has done, in short, is to return the power – i.e., the control – back to the people.  Everyone is now a creater, a publisher, and distributor.  No one needs the conglomerates anymore – the people have the power.  But, as Lord Acton said, beware:  “Power tends to corrupt, and absolute power corrupts absolutely.”  With power, therefore, comes responsibility.   Unfortunately for the music industry, the power is currently being abused and will, ultimately, mean the end of the recording industry as it existed through the 20th century unless the creators regain that power.

So what does this mean for those of us who have chosen to make our living in the world of creation?  Does it mean the end of our industry?  Does it mean an end to copyright law as it exists?  If we examine the origins of copyright – i.e., the protection of an original idea expressed in a tangible format – as passed down to us from our forefathers, we find a concept on which we can continue to build.  In the now famous Radiohead experiment in which Reznor and crew allowed consumers to pay what and only if they wanted to, 18% of the consumers chose to do so!  That to me, is an encouraging statistic, and one that confirms a believe in the viability of creating art.  At least one in five people, even with the cloak of anonymity provided by the Ring of Gyges of this era, i.e., Cyberspace, chose to pay the creators for their creation.  Take that Glaucon!  Take that Arrington!  What does that say for our society?  It says that there are people who still chose to do the right thing, even when the tide of conformity rises above their heads.

The bottom line is that it really doesn’t matter what laws are passed by society, there will always be a certain percentage of people who will chose to steal, take and plunder, whether it be because they are more powerful or because they are cloaked with invisibility or shielded by anonymity.  But – and here is the important thing – there will also always be a segment of society that recognizes the idea that Thomas Hobbes first advanced hundreds of years ago, i.e., the idea of “giving to every man his own.”    If a man bakes a loaf of bread, is it not his right to trade that to the artist for whose painting he wishes to barter?  This idea was later incorporated by our Forefathers into Article I, Section 8, Clause 8 of the U.S. Constitution, which gives Congress the authority “[to] promote the progress of science and useful arts, by securing for limited times to Authors and Inventors the exclusive rights to their respective Writings and Discoveries.”  Without this Constitutional right, a creator has no hope of protecting his or her property against plunder.  And as long as a segment of society believes this proposition to be beneficial to society as a whole, it will hopefully continue to motivate creators to create, and so profit from their creations, despite the efforts of those who choose to destroy it under a cloak of invisibility and unjustly take for themselves the kingdom of Lydia.

Quotations from Republic are taken from the W.H.D. Rouse translation, Great Dialogues of Plato, Mentor Books, 1956, a quoted in this fine article on the topic.

 


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The Limewire Ruling: New King of the Hill for Illegal Downloading Decisions

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The U. S. District Court for the Southern District of New York ruled against LimeWire and its parent company, Lime Group, finding them liable for inducement of copyright infringement based on the use of their service by subscribers.

U.S. District Judge Kimba Wood issued the 59-page decision Wednesday, siding with the 13 record companies that sued Lime Wire LLC and founder and Chairman Mark Gorton through the RIAA claiming copyright infringement and unfair competition.lime_220x147

In finding the company liable, Wood opined that LimeWire had optimized its application to “ensure that users can download digital recordings, the majority of which are protected by copyright,” and that the company actively “assists users in committing infringement.”  Wood also found that the defendants knew their technology was being used to download copyrighted tunes and took no “meaningful steps” to prevent the infringement. In addition, Lime Wire marketed its software to people “predisposed to committing infringement” and assisted those people, the judge ruled.

Major labels, as represented by the RIAA, were predictably thrilled with the outcome.  “This definitive ruling is an extraordinary victory for the entire creative community.  The court made clear that LimeWire was liable for inducing widespread copyright theft,” RIAA chairman and CEO Mitch Bainwol relayed.

Lime Wire Chief Executive George Searle issued a statement saying the company “strongly opposed the court’s recent decision.”  The statement continued:

“Lime Wire remains committed to developing innovative products and services for the end-user and to working with the entire music industry, including the major labels, to achieve this mission,” Searle said.

Searle did not say whether Limewire would appeal the ruling.

The Recording Industry Association of America proclaimed the decision was “an important milestone” in the battle against online copyright infringement, because Gorton was found personally liable, in addition to the company of which mitch-bainwol-riaa he was the chairman.  Personal liability against a corporate director is rare.

“The court has sent a clear signal to those who think they can devise and profit from a piracy scheme that will escape accountability,” Mitch Bainwol, chairman and chief executive of the RIAA, said in a statement.

LimeWire, launched in 2000, is one of the largest remaining commercial peer-to-peer services left on the Web. The company claims to have more than 50 million monthly users.  The company has managed to defend itself against major label legal action for years.

In issuing her opinion, Wood relied heavily on the 2005 Grokster ruling, in which the Supreme Court said that a file-sharing service was liable when customers were induced to use it for swapping songs and movies illegally.  The test established by the Supreme Court in MGM v. Grokster for provider liability is whether the company actively induced users to commit infringing activities.  While LimeWire argued that it did not, Judge Wood noted that the company actively  “markets LimeWire to users predisposed to committing infringement.”

The record companies that sued Lime Wire included Arista, Atlantic, BMG Music, Capital, Elektra, Interscope, LaFace, Motown, Priority, Sony BMG, UMG, Virgin and Warner Brothers.

“Not Accepting Unsolicited Material”

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What songwriters can do to protect their ideas when submitting demo tapes to publishers

Every songwriter has heard the words “sorry, we’re not accepting unsolicited material” from at least a dozen publishers. In fact, in a recent informal survey conducted by Law On the Row, two-thirds of the thirty publishing companies contacted indicated that they do not accept unsolicited material. Additionally, the survey revealed that none of the “major” publishers accept unsolicited material.

As unfortunate as this information is for the aspiring songwriter, it is a good business model for the publisher because it avoids idle submission claims — the theory that a publisher “stole” an idea from a songwriter’s demo tape and used it to write another song based on the same idea or concept. This genre of litigation is also prevalent in Hollywood, where movie ideas are stolen almost as often as hooks in Nashville. Is there anything a songwriter can do to protect his or her material when submitting it to a publisher? The answer, of course, is yes.

Register the copyright. While the $30 fee is sometimes a burden on the struggling songwriter’s budget, registration of the copyright is a beneficial and necessary first step in the process of protecting a copyright. Even though the copyright effectively exists from the moment a song is created, registering the copyright empowers the writer to collect statutory damages (i.e. proof of actual damages is not necessary) and attorney’s fees in a submission claim.

Keep good records of all submissions. The first element a songwriter must show in an idea submission claim is access by the defendant publisher (hence the reason many publishers do not accept unsolicited material). You can establish access by maintaining accurate business records of communications and submissions. (The second element, substantial similarity, is a more subjective determination which must be proven by expert testimony).

Establish a relationship with a reputable publisher. By establishing a good, working relationship with a reputable publisher, you minimize your risks and increase your chance of success as a songwriter. Of course, this is the “catch 22″: how to establish a relationship with a publisher without submitting material.Exposure, exposure, and more exposure. Play or have your material played at every opportunity you can — showcases, writer’s nights, gigs, etc. Don’t play your best material — play your “B” songs, i.e, those that are good but don’t necessarily “knock your socks off.” This is not to imply that every audience is full of infringers waiting to take your hook into the studio and “steal your song,” but the fact is that the typical Nashville audience is probably full of other songwriters whose subconscious minds might “soak up” your idea and regurgitate it in the form of a new song incorporating your idea.

Hire a reputable song-plugger. Nashville has a generous supply of good song-pluggers — people who pitch your songs to major labels for a fee, usually $150-300 per month. Find one with a good reputation and hire him or her. Remember to have all agreements reviewed by an entertainment attorney.Join NSAI. Nashville Songwriters Association International is a good organization with services that will assist you in developing as a songwriter and reaching reputable publishers.

Of course, none of these suggestions will guarantee that your submitted material will not be used illegally by a publisher or songwriter. If you feel you have been the subject of blatant theft of intellectual property, contact a reputable attorney.

This article originally appeared in the print edition of Law on the Row, Volume 1, Issue 1, on September 9, 1999.

HR 848 passes committee

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Rep. John Conyers, Chair of the House Judiciary Committee brought the Performance Rights Act (HR 848) up for markup this morniJohn Conyersng. 

HR 848 created no small amount of disagreement among radio broadcasters, minority broadcasters, trade unions and civil rights groups.  However, a group  of minority artists, including Duke Fakir of the Four Tops, Dionne Farris and Jon Secada, recently sent a letter indicating support for Rep. Conyers and this legislation.  The letters stated in part: 

As minority artists, we support a strong and vibrant local radio industry. We know that minority broadcasters play a vital role in our communities. And we support efforts to create accommodations in the legislation for small, minority-owned stations. But the creation of a fair performance right cannot be delayed further. We have already waited far too long. “Not now” is not an acceptable answer.

To address the concerns of minority broadcasters, Conyers offered the following amendments at today’s markup:

Affordable payment for small, rural, nonprofit, minority, religious and educational broadcasters

· Any station that makes less than $100,000 annually will pay only $500 annually for unlimited use of music

· Any station that makes less than $500,000 but more than $100,000 annually will pay only $2500 (half of the amount in introduced bill) annually for unlimited use of music

· Any station that makes less than $1,250,000 but more than $500,000 annually will pay only $5000 (the amount in introduced bill) annually for unlimited use of music

Relief for current economic situation

· No payment for 2 years by any station that makes less than $5,000,000 annually

· No payment for 1 year by any station that makes more than $5,000,000 annually

Parity for all radio services

· Establishes a “placeholder” standard to determine a fair rate for all radio services that will encourage negotiations between the stakeholders

Cannot hurt local communities

· Assures that this legislation cannot affect broadcasters public interest obligations to serve the local community

Assures consideration of relevant evidence

· Evidence relevant to small, noncommercial, minority, and religious broadcasters and religious and minority royalty recipients must be considered by the Copyright Royalty Judges

Other minority and civil rights groups that sent letters expressing support for the act included the Leadership Conference on Civil Rights, Pennsylvania Legislative Black Caucus, Rhythm and Blues Foundation and the A. Phillip Randolph Institute.

The executive director of the musicFIRST Coalition, Jennifer Bendall, supported the committee’s decision:

“We applaud Chairman Conyers and Committee members for their work on the Performance Rights Act and for supporting artists, musicians and rights holders in their fight for fair compensation when their music is used by AM and FM radio stations.

The Performance Rights Act will bring fairness to artists, musicians and rights holders and one that’s fair to radio and its counterparts. It also includes accommodations for small and minority-owned broadcasters. musicFIRST looks forward to the next chapter and to Congress to ensure that U.S. artists and musicians receive the performance right they deserve.”

Now that HR 848 has cleared the committee, it will be brought in front of the entire House for debate and vote. 

Politico’s interview with Corgan following his testimony before Judiciary Committee on HR 848

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Link to Politico Interview

As a follow up to my previous post on the subject, the radio widget above should play Politico’s interview with Smashing Pumpkin’s founder and frontman Billy Corgan following his testimony in front of the House Judiciary Committee in support of HR 848, the Performance Rights Act.

Corgan testified on Capitol Hill on behalf of the musicFIRST Coalition yesterday.  Corgan testified that the current sytems is “hurting the music business” because of radio stations’ failure to compensate musicians for performing their music.

My readers know my thoughts on this subject.  While I agree with Corgan’s overall sentiment, I stand by my emphasis yesterday that the legislation as it is written may be drafted in favor of the record labels more so than the performing artists. 

HR 848 should have a provision that provides for direct payment of royalties to the artists who performed on the sound recording and which specifically does NOT rely on the record labels to distribute these royalties “in accordance with the terms of the artist’s contract.”  (See my previous post).  This kind of language contained in the House version of the legislation at Section 6 only assures that the record labels would receive all the performance royalties and that performing artists would have to overcome numerous obstacles to ever see any of the additional income, inevitably leading to more disputes with the record label.   The current artists agreements with record labels simply do not contain provisions addressing payment of these types of royalties and, even if they did, the artists who have unrecouped balances on their ledger sheets would never see a dime. 

My proposal is that the current system for collection and distribution of performance royalties for musical compositions be utilized.  Specifically, why not allow BMI, SESAC and ASCAP to collect and distribute the performance royalties for sound recording copyrights on behalf of member artists, allowing these organizations to pay 50% of the income directly to the artists (the original owners of the sound recordings) and 50% to the record labels (the assignee owners of the sound recordings).  This structure is identical to the distribution of performance royalties for owners of the musical composition copyright.  It’s a systems that has functioned well since the turn of the 20th century and it is a systems that, overall, works fairly well. 

In general, members of the performance rights organizations have fewer royalty disputes with these entities over  than artists do with record labels, since these entities, for the most part, do not function as profit generators.  There is no doubt that this idea has some flaws as well, but in comparing the alternative, it seems to me that this would benefit the artists and musicians much more than giving the money to the record labels.

Judiciary Committee holds hearings on HR 848, the “Performance Rights Act”

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The House Judiciary Committee will hold hearings on H.R. 848 (this year’s version of HR 4789) tomorrow morning at 10:00 a.m.  Although the Committee’s website does not identify any witnesses at this time, I am informed by musicFIRST that Smashing Pumpkins’ founder Billy Corgan and Mitch Bainwol, chairman and CEO of the RIAA will be speaking on their behalf at the hearing.

Billy Corgan H.R. 848 was introduced to the 111th Congress by Rep. John Conyers on February 4, 2009 then referred to committee on the same day.  It was co-sponsored by Tennessee representative, Marsha Blackburn.  If passed, HR 848 would amend The Copyright Act (specifically Title 17) to provide “parity in radio performance rights” under the Copyright Act.  In other words, the Bill would grant a performance rights in sound recordings performed over terrestrial broadcasts (i.e., traditional radio broadcasts, not satellite).   S. 379 is the Senate’s complimentary bill, introduced by Senator Patrick Leahy.

The act has certain provisions to accommodate concerns by the broadcast industry, such as the provision which establishes a flat annual fee in lieu of payment of royalties for individual terrestrial broadcast stations with gross revenues of less than $1.25 million and for non-commercial, public broadcast stations; the provision which grants an exemption from royalty payments for broadcasts of religious services and for incidental uses of musical sound recordings; and the provision which grants terrestrial broadcast stations that make limited feature uses of sound recordings the option to obtain per program licenses. 

The Act specifically states that it will not adversely affect the public performance rights or royalties payable to songwriters or copyright owners of musical works.   In particular, the Act prohibits taking into account the rates established by the Copyright Royalty Judges in any proceeding to reduce or adversely affect the license fees payable for public performances by terrestrial broadcast stations. Requires that such license fees for the public performance of musical works be independent of license fees paid for the public performance of sound recordings.

The full text of the bill can be found at govtrack.us.

One provision I found interesting was Section 6, (1)(A), regarding payment of certain royalties, that states, in full:

A featured recording artist who performs on a sound recording that has been licensed for public performance by means of a digital audio transmission shall be entitled to receive payments from the copyright owner of the sound recording in accordance with the terms of the artist’s contract.

Emphasis added.  This last clause intrigues me.  What I find interesting about it is that under the current structure, the record labels own most, if not all, of the commercial sound recording masters, i.e., they are the “copyright owner of the sound recording.”  This clause entitles the “featured recording artist,” e.g., Madonna, Michael Jackson, etc., to receive payments from the owner “in accordance with the terms of the artist’s contract.” 

In most artists’ contracts, payments are based on a percentage of the gross revenues from sales of physical units – current artist contracts do not have provision for payment of performance royalties on the sound recording.  It would seem that under the Act as written, there is silence as to what happens in this instance where these specific payments of performance royalties are not addressed in the artist’s contract.  One possible remedy would be for the legislators to draft language that would apply, such as what they have done with regard to the “non-featured artists in subsection (B) of the same Section 6.   This Section 6 is not found in the Senate’s version of the legislation.

All of this makes me curious about what will happen to performance royalties that are paid under this Act to the owners of the sound recording copyrights, i.e. the record labels if there is no language in the artists’ recording agreements to specify as to what percentage the artist is entitled?  One thing is certain:  an artist who is not recouped under his artist recording agreement will never see any of these performance royalties under such time as his balance is recouped.

One proposal you might suggest to your representatives is that they consider a payment structure similar to that of the current performance rights organizations that collect and pay performance royalties for musical compositions, wherein one half of the royalties go directly to the songwriter and the other half directly to the publisher.  If this were the case under the new Act, half of the royalty payments would filter directly to the artist and the other half would go to the record labels.  If there truly is a concern about the recording artists not getting paid for his or her performances, this is the only method that would assure this happens.

If you are a recording artist whose performances are being playing on local FM and AM radios, you should investigate the impact this legislation will have on you.  Call you Senators and Representatives and ask them to keep you updated.

Nothing left to lose – the ongoing war on copyrights

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Kris Kristofferson and Fred Foster once penned one of my favorite lyrics in the song Me and Bobby McGee, i.e., “freedom’s just another word for nothing left to lose.”  The sentiment is perhaps appropriate for the ongoing war that is being waged against copyright laws as we know them.  The latest battle in this war was fired by the esteemed Lawrence Lessig, famous lawyer and copyright scholar, in his new book Remix: Making Art & Commerce Thrive in the Hybrid Economy.  If Lessig has his way, the songwriter and music publisher will, indeed, have nothing left to lose.

Remix Lawrence Lessig The main goal of the book is the demolishment of existing copyright laws, which Lessig has described as Byzantine.  He believes our current copyright laws are futile, costly and culturally stifling. The “hybrid economy” is described by Lessig as one in which a “sharing economy” coexists with a “commercial economy.”  See this very humorous interview by Stephen Colbert.  He gives examples such as YouTube, Flikr and Wikipedia, which rely on user-generated “remixes” of information, images and sound to illustrate his point.  This “hybrid economy,” in Lessig-speak, is identical to what he calls a “Read/Write (RW)” culture — as opposed to “Read/Only (RO)” — i.e., a culture in which consumers are allowed to “create art as readily as they consume it.”  Thus, the “remix” to which he refers is the concept of taking another persons copyrighted work and “making something new” or “building on top of it.”  This is what us less-published copyright lawyers like to refer to as a derivative work!  And that is the crux of Lessig’s problem:  the copyright law DOES in fact make provision for this type of creative endeavor, provided that the creator of the derivative work gains the permission of the copyright owner.  This is that with which Lessig seeks to do away.

In the Colbert interview, Lessig drolly points out that 70% of our kids are sharing files illegally and that the “outdated” copyright laws are “turning them in to criminals.”  This reminds me just a bit of what my Daddy used to tell me: just because everybody’s doing it doesn’t make it right!   Or, as Colbert blithely responded, “isn’t that like saying arson laws are turning our kids into arsonists?”  The obvious conclusion is that perhaps the law is simply not the problem.

Colbert then comically crosses out Lessig’s name on the cover of his his advance copy of Lessig’s book, draws a picture of Snoopy inside, and then questions Lessig as to whether the book was now his (Colber’t’s) work of art, to which Lessig says “that’s great,” we “jointly” own the copyright.  That’s a point to which Lessig’s publisher, Penguin Press, would surely not acquiesce.  In the final retort to Lessig, Colbert makes the point that he likes the current system, and I quote, “the system works for me.”  I might add that the system seems to be working extremely well for Lawrence Lessig as well.  Lessig is making a fortune exploiting the very system he criticizes as antiquated – the very essence of free speech, I suppose, but in the final analysis, a bit disingenuous.

While I do admire Professor Lessig for working toward a solution to a perceived problem, it’s very difficult to believe that tearing down the entire system of copyright laws in order to accommodate a large percentage of prepubescent teenagers who are too cheap to pay for their music is the appropriately measured response we need in this instance.   Call me crazy.

Here are several good critiques of Lessig’s work and ideas here for further exploration of this issue:

The Future of Copyright, by Lawrence B. Solum (download PDF from this page)

Lessig’s call for a “simple blanket license” in Remix, by Adam Thierer

Copyright in the Digital Age, by Mark A. Fischer

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musicFIRST defends rights of artists

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By Jennifer Bendall, Executive Director of musicFIRST

Did you know that every time you hear your favorite artist’s hit songs over the airwaves he or she doesn’t receive a single penny from the radio stations broadcasting the song? Sounds crazy, right? While AM and FM music broadcasters rightly pay the writers of these songs, they refuse to compensate the performing artist as the performer of the song.

In fact, AM and FM music radio stations earn a cool $16 billion a year in advertising revenue without compensating the artists and musicians who bring MusicFirstmusic to life and listeners’ ears to the radio dial.

The fight for a fair performance right on radio has been going on in the U.S. for more than 80 years. Frank Sinatra was a leader in this fight 20 years ago, and his daughter Nancy carries the legacy today. In 2008, Nancy Sinatra testified before a House subcommittee on behalf of the musicFIRST (Fairness in Radio Starting Today) Coalition, telling members of Congress about the life of an artist:

Imagine struggling in your job, perhaps for years, to make the best product you can – a product made of your blood, sweat and tears. Now imagine people taking that product to use to build their own hugely successful businesses. Just taking it – no permission, no payment, and no consequence.

A fair performance right is not only beneficial for the musicians and artists behind the music, but also for the U.S. economy. Currently, the U.S. is the only member of the 30-country Organization of Economic Cooperation and Development (OECD) that does not fairly compensate performing artists when their songs are played on the radio. This puts the U.S. in the company of countries such as Iran, China and North Korea who don’t pay royalties to performers for their intellectual property. Plus, since we don’t have a performance right here in the U.S., artists lose out on the royalties collected overseas for the play of American sound recordings.

The musicFIRST Coalition, a group of artists, musicians and music community organizations, supports the creation of a performance right on AM and FM radio. The Coalition formed in June 2007 to ensure that all performers – from aspiring and local artists, to background singers and well-known stars – are fairly compensated when their music is played on the radio. On February 4, 2009, bipartisan legislation – the “Performance Rights Act” – was reintroduced in the House and Senate. MusicFIRST supports this measure and plans to remain at the forefront of the fight for fair pay for airplay.

AM and FM radio remains the lone holdout in providing a fair performance right for artists and musicians. All other music platforms – Internet radio, satellite radio and cable television music channels – pay a fair performance royalty for the use of music. It’s time that radio broadcasters are held to the same standard.

Eighty years is far too long for AM and FM radio stations to refuse to compensate performers for their work. Let this be the year fairness is provided to the talented performers who bring to life the music of our lives.

My special thanks to guest author of today’s article, Jennifer Bendall, and Lindsay Dahl for making this happen.  For more information about musicFIRST and the great work they’re doing, go to www.musicfirstcoalition.org, or click on the picture above.