sound recording

The Music Modernization Act Passes the House and Includes the CLASSICS Act

MMA House Judiciary Tamera Bennett #createprotect.jpg

Patrick Lewis contributed to this post.

The Music Modernization Act

The Music Modernization Act - HR 5477 (the “MMA Legislation”) unanimously passed the U.S. House of Representatives on April 25, 2018. The MMA legislation now moves to the Senate for review and hearings. 

The MMA Legislation unifies and serves as an umbrella for four previously introduced bills—the Allocation for Music Producers (AMP) Act, the CLASSICS Act, the Fair Play Fair Pay Act, and a songwriter-specific version of the Music Modernization Act. The goal is to overhaul the U.S. Copyright Act in relation to music licensing and fair compensation. It’s a joint effort of music publishers, songwriters, artists, record labels, radio, digital services, producers, and engineers to reach a workable solution for content owners and content users.

The CLASSICS ACT

(Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act Title II, Sections 201-203, Chpt. 14)

Most importantly to me, the CLASSICS Act, which I authored, is included in this package. It corrects a decades old injustice through which performers have been arbitrarily deprived of royalties on songs recorded prior to 1972.
— IP Subcommittee Chairman Darrall Issa - House Judiciary Committee Press Release, April 25, 2018

Sound recordings were not protected by Federal Copyright Law in the United States until February 15, 1972 (Pre-72 Sound Recordings). There's a hodge-podge of state copyright laws that artists and record labels use to fight bootleg recordings and piracy of those legacy recordings.

The Problem Pre-72 Sound Recording Artists and Copyright Owners Face:

A new issue arose for artists and sound recording copyright owners when digital services such as Spotify, SiriusXM, and Pandora announced they would not pay digital sound recording public performance royalties for the performance of Pre-72 Sound Recordings. State law litigation related to public performance rights for Pre-72 Sound Recordings has resulted in a split in the courts based on how each state interprets their own common law or statutory laws. Some states find there is a digital public performance right and others not.

Goal of the CLASSICS Act:

If the MMA Legislation becomes law, Title II, Sections 201-203, Chapter 14, which encompasses the CLASSICS Act, will pull Pre-72 Sound Recording copyrights under the protection of federal copyright law for purposes of digital public performance of sound recordings.  Digital music services like Spotify, SiriusXM, and Pandora will have to pay to perform sound recordings fixed on or after January 1, 1923, and before February 15, 1972.

The MMA Legislation applies the same analysis used for Post-72 sound recordings to determine if the performance of a Pre-72 Sound Recording is interactive or non-interactive and whether or not the statutory digital transmission license is applicable to the performance. The MMA Legislation grants Pre-72 Sound Recordings the same safe harbors as post-1972 recordings: protection under the Digital Millennium Copyright Act and section 230 of the Communications Decency Act.

Copyright Filings and Damages for Infringements:

A requirement to open the federal court house doors for a copyright infringement claim is a U.S. Copyright Registration (or in some circuits proof of filing an application). Since Pre-72 Sound Recordings are not currently protected under U.S. Copyright Law, there is no procedure for filing a copyright application or a way to sue for copyright infringement in federal court.

The MMA Legislation does not go so far as to allow or require a copyright registration to be filed for the Pre-72 Sound Recordings.  Infringement remedies found in Sections 502-505 of the Copyright Act may be applicable if “the rights owner [files] with the Copyright Office a schedule that specifies the title, artist, and rights owner of the sound recording and contains such other information, as practicable, as the Register of Copyrights prescribes by regulation; and the transmission is made after the end of the 90-day period beginning on the date on which the information filed under subclause (I) is indexed into the public records of the Copyright Office.”

Questions and Concerns with the CLASSICS Act Portion of the MMA Legislation:

I’m concerned with how the Copyright Office recording provision will be implemented. This could be a very burdensome process on the Pre-72 Sound Recording owners.  And, what about the less sophisticated Pre-72 Sound Recording owners that may not even know that they need to comply with this provision?

The U.S. Register of Copyright will be required to implement the recordation procedure. The U.S. Copyright Office has suffered repeatedly from technology challenges and this seems like one more technology hurdle to overcome.

Next Steps For the MMA Legislation:

The MMA Legislation, which includes the AMP Act, the CLASSICS Act, the Fair Play Fair Pay Act, and a songwriter-specific version of the Music Modernization Act, is in the hands of the U.S. Senate.  Hopefully the bi-partisan treatment in the House will continue as the Senate committee starts its review.

Entertainment Law Update Podcast Episode 82 - Tamera Bennett and Gordon Firemark

#podcast #createprotect Entertainment Law Update Podcast Episode 82 Tamera Bennett Gordon Firemark

Listen to Dallas-area music lawyer Tamera Bennett and Los Angeles film lawyer Gordon Firemark discuss the latest entertainment law issues on the Entertainment Law Update Podcast.

Click the arrow below to listen or click the "Apple" below to subscribe in iTunes.

Entertainment Law Topics In This Podcast Episode:

In Episode 82 of the Entertainment Law Update Podcast, Tamera and Gordon discuss the latest news and cases involving copyright, trademark, film, TV, and other entertainment law issues.

These cases and much more on this episode of the Entertainment Law Update Podcast.

Please leave us listener feedback at the iTunes store. Your comments will help other folks find our podcast.

This post contains affiliate links. That means if you click on the link I may receive a benefit.

Music and Podcasts: How Do I Clear The Music Rights For My Podcast?

Music Rights and Podcasts How Do I Clear The Music Rights For My Podcast? #createprotect attorney-Tamera-Bennett

Media and music lawyer Tamera Bennett presented Legal Issue of Podcasting with attorney Gordon Firemark. You can watch the CLE at TexasBarCLE.  You can listen to the CLE as part of the Entertainment Law Update Podcast. Below is an excerpt from the CLE materials on Music and Podcasting.

Music Issues In Podcasting

Podcasting’s closest relative in the media world is traditional terrestrial radio.  A typical podcast may have the feel of a talk radio show. Podcast topics run the gamut from news, sports, health, the law, politics, religion, technology, entertainment and much more. Like talk radio, music can play an integral part in the feel and a presentation of a podcast. The podcast might be solely focused on music such as a “count down” of this week’s hits, or music may be a little “icing on the cake” for transitions during the podcast.

Just like the podcast is protected by copyright, so are any songs or sound recordings that you may include in an episode of the podcast.

Exclusive Rights of Copyright Owner

The owner of a copyright has a bundle of exclusive rights:

  1. to reproduce the copyrighted work in copies or phonorecords;
  2. to prepare derivative works based upon the copyrighted work;
  3. to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
  4. in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
  5. in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
  6. in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.  17 U.S.C. § 106.

These rights can be licensed by the copyright owner individually or as a whole; exclusively or non-exclusively.

Song Copyright and Sound Recording Copyright In Podcasts

Whether you’re talking intro and outro bumper music, or a whole podcast dedicated to music, you have to understand the different rights attached to a music copyright along with the different music licenses that may be involved.

When discussing the music and who owns what rights, it's important to note that there are two copyrights involved in each musical recording. 17 U.S.C § 102.  The copyright that attaches to the song covers the words, music, and the arrangement. Sound recordings are defined as “works that result from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work.” 17 U.S.C. § 101.  The song copyright is owned by the songwriter or a music publisher who was assigned the copyright.  The copyright in a particular version of a recording is owned by the artist or record label who was assigned the copyright. 

As an example of the difference between owning the song copyright and the master/sound recording copyright, recall that Dolly Parton is the songwriter of the hit song “I Will Always Love You.” Neither Dolly Parton nor the music publishing company that owns the song copyright for “I Will Always Love You,” have any ownership in the sound recording copyright for the version of the song recorded by Whitney Houston for the movie “The Bodyguard.” Nor does the record label or Whitney Houston’s estate have any ownership in the song copyright.  The song and the sound recording are two distinct copyrights with different owners.

Streaming vs Download For Music In Podcasts

Because podcasts can be delivered to consumers in two different manners - streaming or download – multiple rights are triggered and need to be licensed. These multiple rights and licenses apply separately and distinctly to the song and sound recording.

Songs – Musical Compositions In Podcasts

A song copyright encompasses the words, music, and the arrangement. The copyright owner of a song has an exclusive right to license the public performance of the song as well as the mechanical reproduction of the song. A public performance of a song occurs when it is streamed as part of the podcast. This is analogous to listening to the song on the radio.  If the podcast can also be accessed by download, the exclusive right of reproduction – or mechanical right – is also triggered.  In traditional media, we think of a mechanical license being needed when a music compact disc or music download is purchased.

What does this mean for the podcaster who wants to include music in her podcast? In short, if the podcast can be consumed by both streaming and download, the podcaster needs both a public performance license and mechanical license whenever a song or a portion of a song is included in the podcast.

Public Performance Right For Songs In Podcasts

A public performance of a song occurs when the song is transmitted to the public; for example, radio or television broadcasts, music-on-hold, cable television, and by the internet.

In the United States, we have three major societies that collect all of the public performance payments for the various different licensees of music. Radio stations, TV networks, and nightclubs are a few of the types of businesses that publicly perform music and need a license.  What is nice about the public performance licensing scheme is that you can secure a blanket license which will allow you to publicly perform all songs in the performance right society’s catalog. You don’t have to go back for individual song licenses.  If you have a variety of music in your podcast and are unable to limit your music selections to those licensed by one performance rights society, you will need web licenses from ASCAP, BMI and SESAC.  While license fees will vary, you can estimate a minimum annual license around $300.00 for each society.

Most podcasts are embedded or streamed from a blogging or website platform. When you go to license the rights for public performance in the United States, the licenses are not typically named a “podcast license.”  At www.ascap.com the licenses are labeled for “website and mobile apps.” Search www.bmi.com under the “digital licensing center.” And, search www.sesac.com for “internet licensing.”

Mechanical Reproduction Right of Songs In Podcasts

Potentially two different mechanical uses are triggered when a podcast is accessed. If a podcast that contains music is downloaded, a permanent digital download (PDD) occurs with each individual digital delivery transmission resulting in a reproduction made by or for the recipient which may be retained and played by the recipient on a permanent basis. PDDs are sometimes referred to as full downloads or untethered downloads.  Even though the song is part of and incorporated into the podcast, the use is considered a PDD and requires a mechanical license and mechanical royalty.

The second mechanical right is triggered by interactive streaming. Streaming means listening to the podcast (which contains music) in real time, instead of downloading a file to your computer or mobile device and listening to it later.  There are two types of streaming: interactive and non-interactive. Streaming of content is considered interactive, or on-demand, when the listener can request the specific recording they wish to hear and the digital file is transmitted electronically to a computer or other device contemporaneously with the user's request.  17 U.S.C. § 114(j)(7).  Because the end user can control when they stream the podcast, the action is considered interactive. Other examples of interactive streaming include services such as Spotify, Beats Music, Google Play Music All Access, and Xbox Music.

Both the PDD and interactive streaming of the songs require a mechanical license. Does it matter how much of the song is used? Probably not. Unless the podcaster is able to fit within a fair use exemption for using the song, a mechanical license will be required. (See 17 U.S.C. § 107 for more on fair use). The leading collective for securing mechanical licenses is the Harry Fox Association (HFA). It is very important to realize that HFA does not have the rights to every song that a podcaster might want to include. Unlike a public performance license, there’s no ability to secure a blanket license for the podcast. Individual licenses must be secured for each song. Visit “digital licensing” at harryfox.com for more information on mechanical licenses for songs in podcasts. Because HFA does not have the rights to license every song, the podcaster may have to contact individual music publishers for the rights needed.

The current mechanical rate for a PDD is 9.1 cents per song per download. The rates for interactive streams are determined by a number of factors. These include service offering type, license type, service revenue, recorded content expense, and applicable performance royalty expense. 

Keep in mind the rights, licenses and rates are only for the United States. Each country has its own licensing procedures. As an example, in the UK and Australia, podcasters can license the public performance right and mechanical rights from a single organization in each respective country.

Sound Recordings or Master Recordings for Music In Podcasts

If securing the rights for the song wasn’t tough enough, a podcaster must also secure the rights for the version of the song – the recording – she wants to use. Performing the song in the podcast is a “digital audio transmission” of the sound recording. 17 U.S.C. § 106(6). With the master, two different rights are triggered.  A digital public performance right and a reproduction right – more commonly known as a master use.

A podcast is considered an interactive stream because the consumer can select when they play the podcast. A podcast is not the same thing as internet radio. Internet radio is non-interactive meaning the user cannot choose the track or artist they wish to hear.  The Digital Performance in Sound Recordings Act of 1995 created a statutory license for subscription-based, non-interactive digital audio transmissions.  17 U.S.C. § 114.  In 1998, Congress passed the Digital Millennium Copyright Act, which expanded the statutory license to include non-subscription, non-interactive digital audio transmissions.  License fees for non-interactive uses are pre-determined by a rate determining body called the Copyright Royalty Board, are non-negotiable and paid by the internet radio stations, webcasters and satellite radio stations to SoundExchange (the entity designated to collect the royalties) as a digital performance royalty. 37 C.F.R. Part 380.

You need to understand that SoundExchange cannot help you license sound recordings for a podcast.  In fact, SoundExchange states the following:

Interactive streaming and downloads: In addition, the statutory license administered by SoundExchange does not cover interactive streaming or downloads of any kind, including downloadable “podcasts” of archived programming. If you are offering podcasts that include sound recordings, then you may need to obtain a direct license.
— SoundExchange Memo to All Commercial Broadcasters dated Nov. 21, 2014

Because of the interactive nature of on-demand services, there is no statutory scheme or Copyright Royalty Board determining licensing rates.  The on-demand services must secure direct sound recording licenses from the owners of the sound recording copyrights in order to stream.  Royalty rates for on-demand services are negotiated between the sound recording copyright owner and the podcaster.

What does this mean for the podcaster? It means you have the obligation to secure a direct license for each sound recording that is in an episode of a podcast. You will have to negotiate direct licenses that will cover the digital public performance right and the reproduction/master use right. There are some companies that provide clearing house licenses for interactive sound recording uses. While I do not endorse or recommend any particular services, MediaNet (mndigital.com) is used by many large interactive streaming services for clearing popular music rights.  Their pricing may or may not be practical depending on the reach and scope of your podcast.

Possible Solutions For Music In Podcasts

Don’t give up hope yet. You may still be able to have music in your podcast.

The easiest solution to using music in your podcast is to secure music from a stock music library that has already pre-cleared all the necessary rights. It’s your job to read the license from the stock music library to determine if you have the rights for a digital interactive public performance of the song, permanent digital download of the song, interactive digital public performance of the sound recording, and master use/reproduction of the sound recording.  Keep in mind, most choices from a music library will probably be original music tracks created for the library. This means, using the latest Beyoncé track is probably not an option.

Another option is to hire musicians to record original music and sound recordings for you. Again, you need to secure in writing all of the appropriate rights.

You might also hire musicians to re-record some popular songs for you. Make sure you secure in writing the ownership and all copyrights in the re-record. In this situation, you would only need the public performance licenses from ASCAP, BMI and SESAC; and mechanical licenses from HFA.  By re-recording the popular songs, you’ve eliminated the need for any negotiated licenses for using the original sound recordings.

If you're interested in more hot topics in podcasting legal issues, visit the Google+ Community hosted by Tamera Bennett and Gordon Firemark.  Also, subscribe to the Entertainment Law Update Podcast so you don't miss any updates.


This post contains affliate links. That means if you click a link I may receive a benefit.

Music In Political Campaigns - What Licenses Do I Need?

music-in-political-campaigns-tamera-bennett-createprotect.com

As the 2015/16 presidential election campaign trail heats up, we will hear more and more music and perhaps see more and more demand letters from artists/songwriters to the presidential candidates.

In the podcast below, Dallas copyright and music attorney Tamera Bennett explores questions related to public performance licenses, synchronization licenses, master use licenses and right of publicity -- all related to music used in presidential campaigns.

Theme Songs |

Presidential candidates love to pick theme songs. That's all fine and dandy when the artists and songwriters behind the selected tune support the candidate - - Bill Clinton and Fleetwod Mac ("Don't Stop").

So far this season, Donald Trump's campaign has heard from REM and The Rolling Stones.  Neil Young wasn't thrilled about Trump using "Rockin' in the Free World." And,  Aerosmith front man, Steven Tyler asked Trump to stop dreaming and stop using "Dream On."

Legal Issues Stay The Same |

There's nothing new to the legal issues. Do you remember the band Heart being so upset that candidate Sarah Palin used "Barracuda" in the 2008 presidential campaign? How about Newt Gingrich using "Eye of the Tiger?"

The podcast above will answer your questions on how you can use music in a political campaign.  Want to hear even more from Tamera Bennett and Gordon Firemark on the topic - click here for the Entertainment Law Update Podcast where they discuss the latest on Trump and Steven Tyler.

Join Us |

Leave a comment below with your favorite campaign song.

Copyright Update Part 4: Digital Music Streaming

Image Ryan McGuire

Image Ryan McGuire

This paper was written and presented by Tamera H. Bennett at the 28th Annual Technology Law seminar hosted by UTLaw CLE. It has been edited into multiple blog posts. Enjoy Part 4 below, Part 3, Part 2, and Part 1.

While music publishers and record labels are fighting their own issues on getting paid (and sometimes against each other), this series of posts focuses on new media recent legal issues facing sound recording copyright owners.

ARE PRE-72 SOUND RECORDINGS PROTECTED?

Sound recordings are the fixation of a series of musical, spoken, or other sounds capturing a particular performance of an underlying musical composition. Congress acted in 1971 to grant federal copyright protection to sound recordings by extending federal protection prospectively to recordings created on or after February 15, 1972 (“Post-72” sound recordings). Sound Recording Act of 1971, 85 Stat. at 392. Sound recordings fixed before February 15, 1972 are protected by a patchwork of differing state laws (“Pre-72” sound recordings). (Bringing Pre-72 recordings under Federal Copyright Protection is outside the scope of this paper. Learn more by reading the December 2011 Copyright office report: Federal Copyright Protection for Pre-1972 Recordings).

One of the current hot litigation topics is whether or not Pre-72 recordings include a digital “public performance” right. Sound recording copyright owners for Post-72 works enjoy the exclusive right to control the public performance of their works by means of a digital audio transmission and be paid for such performances. 17 U.S.C. §106 (6). This means when you listen to a Post-72 sound recording on a non-interactive streaming services such as Sirius XM or Pandora, a payment should be made by the streaming service to Sound Exchange  - the entity that collects the payments and distributes the royalties to the sound recording copyright owners and recording artists. See Webcaster Settlement Act of 2008 and 2009.  As discussed in Part 3, interactive streaming services such as Spotify and Grooveshark must secure direct licenses with the sound recording copyright owner.

Sirius XM plays music of all genres and all decades. Sirius XM has never paid public performance royalties for digital streams of Pre-72 recordings. In 2014, three courts—two in California and one in New York—held that Sirius XM’s unauthorized public performance of Pre‐72 sound recordings violates applicable state law. Because there’s no federal copyright protection for Pre-72 sound recordings, the Pre-72 copyright owners must rely on statutory or common law rights that vary from state-to-state.

The Central District of California Court ruled that sound recordings published prior to February 15, 1972 include a public performance right under common law and codified under Cal. Civ. Code § 980

A California federal district court ruled that Sirius XM infringed rights guaranteed to plaintiffs by California state statute. See Flo & Eddie Inc. v. Sirius XM, No. 13‐cv‐5693, 2014 U.S. Dist. LEXIS 139053, at *22‐23 (C.D. Cal. Sept. 22, 2014). Flo & Eddie of the musical group The Turtles sued Sirius XM in August 2013 for infringement of sound recording copyrights because Sirius XM was not paying public performance royalties, yet performed the sound recordings owned by Flo & Eddie, Inc.  The Central District of California Court ruled that sound recordings published prior to February 15, 1972 include a public performance right under common law and codified under Cal. Civ. Code § 980  and such right may be infringed if permission is not secured before the sound recording is played on satellite radio. The Flo & Eddie No. 13cv5693 Fed. Cal. case continues on other grounds with the assumption the summary judgment ruling will be appealed by Sirius XM. 

In Flo & Eddie litigation in federal court in New York, the district court indicated that the public performance of Pre-72 sound recordings constitutes common law copyright infringement and unfair competition under New York law. See Flo & Eddie Inc. v. Sirius XM, No. 13‐cv‐5784, 2014 U.S. Dist. LEXIS 166492, at *40‐44, *50‐52 (S.D.N.Y. Nov. 14, 2014) (denying Sirius XM’s motion for summary judgment, and asking Sirius XM to show cause why judgment should not be entered on behalf of plaintiffs), reconsideration denied, 2014 U.S. Dist. LEXIS 174907 (Dec. 12, 2014).  The court held:

the New York Court of Appeals would recognize the exclusive right to public performance of a sound recording as one of the rights appurtenant to common law copyright in such a recording.

Id.  An interlocutory appeal in the case was granted on April 15, 2015.

A settlement was reached in June 2015 in similar pending litigation in a California state court case brought by major record labels against Sirius XM.   Capitol Records, LLC v. Sirius XM, No. BC520981 (Cal. Super. Ct. Oct. 14, 2014) (order regarding jury instructions).  Arguably many of the plaintiffs that settled out with Sirius XM would have joined the Turtles class action which was certified in May 2015. How does that impact the Turtles and their ability to reach a settlement?

Taking cases coast-to-coast, Flo & Eddie, Inc. also sued Sirius XM in Florida.  Flo & Eddie, Inc, v. Sirius XM Radio, Inc., No. 1:13-CV-23182 (S.D. Fla. filed Sept. 3, 2013).  

Conclusion:

New media always brings about new questions on how far copyright protection extends.  When looking at interactive and non-interactive digital services, the courts may be applying federal or state law depending on what year the sound recording was “fixed.”  In addition the courts have to look at the DMCA to determine how far the Safe Harbor provisions reach to protect the services providing the digital content.

Again, this article does not address the concerns of the music composition copyright owner.  That side of the equation has its own issues, some similar and some different, that are also being addressed via the court system and the Copyright Royalty Board.  In addition to the cases discussed, there’s plenty of pending litigation to keep an eye on for the future. 

To find links to most of the cases and articles cited herein (and bonus materials) visit https://delicious.com/tamerabennett/utlaw15.

Other cases to watch:

Flo & Eddie, Inc. v. Pandora Media, Inc., No. 2:14-cv-07648-PSG-RZ (C.A.C.D. filed Oct. 2, 2014).

Capitol Records, LLC v Pandora Media, Inc., No. 651195/2014 (N.Y. Sup. Ct. filed Apr. 17, 2014).

Zenbu Magazines LLC v. Escape Media Group, Inc., No. 1:15-cv-00349-MKB-RER (N.Y.E.D. filed Jan. 22, 2015).

Zenbu Magazines LLC v. Sony Computer Entertainment America LLC, No. 3:15-cv-00310-VC (C.A.N.D. filed Jan. 22, 2015).

UMG Recs., Inc. v. Escape Media Group, Inc., No. 1:2011cv08407 (N.Y.S.D. filed Nov. 18, 2011).

Copyright Update Part 3: Digital Music Streaming Issues.

Image Ryan McQuire

Image Ryan McQuire

This paper was written and presented by Tamera H. Bennett at the 28th Annual Technology Law seminar hosted by UTLaw CLE. It has been edited into multiple blog posts. Enjoy Part 3 below, Part 2 here and Part 1.

While music publishers and record labels are fighting their own issues on getting paid (and sometimes against each other), this series of posts focuses on new media recent legal issues facing sound recording copyright owners.

What Are Interactive Locker Services?

If we are not consuming music via non-interactive services like Pandora and Sirius XM or interactive services like Spotify, we are probably listening to the tunes we’ve stored in a music “Cloud.” iTunes Match, Amazon Cloud and Google Play are the leading providers of Cloud storage of music – locker services.

Locker services are either 1) free cloud storage for purchased music such as Apple, Google, and Amazon; or 2) paid locker services which are subscription-based music lockers providing on-demand streaming and downloads and include Spotify, Amazon Cloud Drive, Apple’s iTunes Match, Grooveshark, or the music component of Google Play.

Issues begin to arise with locker services when the services allow someone who did not upload a track the ability to stream and/or download that track. Because a specific track can be selected, the service is “interactive” and direct licenses are required. The paid locker services can attract greater numbers of consumers if they offer varied and larger quantity of tracks for streaming and downloads.

Locker services, when sued for online copyright infringement can always assert the defense known as the DMCA “Safe Harbor.” The Safe Harbor protects online service providers, which include locker and streaming services, from liability for songs posted or transmitted by subscribers to the service if, after receiving what is called a “take down notice,” the locker service promptly removes or disables access to material identified in a copyright holder's complaint.  See 17 U.S.C. § 512.


MP3Tunes

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The courts continue to make it clear that intentional actions by employees or owners of locker services in uploading unlicensed content will not be tolerated.  A U.S. District Court judge in New York ruled in August 2011 that online music locker service MP3Tunes and its founder Michael Robertson were liable for copyright infringement for content they uploaded.  Capitol Records, Inc. v. MP3Tunes, LLC, 2011 WL 5104616 *14 (S.D.N.Y. Oct. 25, 2011). The court also held MP3Tunes was not entitled to DMCA safe harbor protection for infringing content that was readily identifiable in DMCA take-down notices from the plaintiff but not removed from MP3tunes after notice was received. 

The damage phase continues in the MP3Tunes case into 2015.  An original jury award of 48 million was modified by the Judge on September 29, 2014 and on April 14, 2015 the court reduced the judgment to a little more than 23 million. Capitol Records, Inc. v. MP3Tunes, LLC, No. 1:07-cv-09931-WHP-FM, Doc 692 (S.D.N.Y., filed Apr. 14, 2015).


Grooveshark

Locker service Grooveshark was embroiled in litigation battles over the unlicensed songs and sound recordings stored, streamed and downloaded via its locker service. See Capitol Records, LLC v. Escape Media Group, Inc., No. 1:12-cv-06646-AJN-SN, (S.D.N.Y, filed Aug. 30, 2012).   Grooveshark let users upload songs that can then be streamed or downloaded by anyone.  This is in contrast to locker services such as Google Play, iTunesMatch and Amazon Cloud Player which restrict a third-party from streaming or downloading songs from somebody else’s locker unless a license has been secured with the label and publisher for that specific use.  Because Grooveshark is an interactive service, similar to a music-only YouTube, compulsory licenses are not an option and negotiated licenses must be secured. 

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The only major label that entered into a license with Grooveshark was EMI.  Three lawsuits later, EMI terminated their deal with Grooveshark.  Id. The labels and publishers have multiple arguments why Grooveshark’s actions constitute copyright infringement and Grooveshark is not protected by the DMCA Safe Harbor provisions. The labels accuse Grooveshark of uploading roughly 100,000 recordings to the online music service, without payment or licenses.  Id. In light of the MP3tunes decision, the labels/publishers asserted the employees of Grooveshark were baiting Grooveshark by uploading unlicensed content.  Arguably, intentional actions of the employees and/or executives should not be protected by the DMCA. 

On March 24, 2015 the judge granted EMI's motion for summary judgement on claims that Grooveshark's parent company Escape Media Group, Inc. infringed its copyrights.  See id. at Doc. No 104.   Relying on the MP3tunes decision, the court found Escape's repeat infringer policy did not meet the conditions of the DMCA Safe Harbor, Escape had an insufficient record keeping system, failed to terminate repeat infringers, and "actively" prevented copyright holders from collecting information needed for the takedown requests required by the DMCA.  See id.  Total damages could amount to $420 million based on the court's finding that 2,807 EMI-copyrighted sound recordings existed on Grooveshark's servers. 

Until May 1, 2015, music locker service Grooveshark was embroiled in litigation battles over the unlicensed songs and sound recordings stored, streamed and downloaded via its locker service. See Capitol Records, LLC v. Escape Media Group, Inc., No. 1:12-cv-06646-AJN-SN, (S.D.N.Y, filed Aug. 30, 2012).

Grooveshark reached a settlement with labels and the Grooveshark website is down after eight years

Copyright Update: Part 2 Digital Music Streaming Issues

copyright-part2-digital-streaming-tamera-bennett

This paper was written and presented by Tamera H. Bennett at the 28th Annual Technology Law seminar hosted by UTLaw CLE. It has been edited into multiple blog posts. Enjoy Part 2 below and Part 1 here, Part 3 at this link and Part 4.

While music publishers and record labels are fighting their own issues on getting paid (and sometimes against each other), this series of posts focuses on new media recent legal issues facing sound recording copyright owners.

II.         Types of Digital Music Consumption

The music industry is no longer focused on consumers owning physical product, but rather focused on how consumers consume music. 

A.        Streaming:

The fastest growing area of music consumption is streaming. Billboard 200 Makeover: Album Chart to Incorporate Streams & Track Sales, BILLBOARD, Nov. 19, 2014. This area is growing so fast that for the first time in 23 years, BILLBOARD revamped its algorithms to calculate the weekly Top 200 albums chart to include digital streams and individual digital tracks.

Internet radio is non-interactive streaming - meaning the user cannot choose the track or artist they wish to hear.

Streaming means listening to music (or watching a video) in real time, instead of downloading a file to your computer or mobile device and listening to it later. There are two types of streaming: interactive and non-interactive. Both are defined below and are treated differently when it comes to licensing and royalty amounts.  Prior to the Digital Performance in Sound Recordings Act of 1995 (“DPRA”), recording artists and sound recording copyright owners in the U.S. did not have a performance right in digital transmissions such as internet radio, webcasting or satellite radio.   

i.          Non-interactive – Internet Radio/Webcasting/Satellite Radio: 

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Internet radio is non-interactive streaming - meaning the user cannot choose the track or artist they wish to hear. The DPRA created a statutory license for subscription-based, non-interactive digital audio transmissions.  17 U.S.C. § 114. In 1998, Congress passed the Digital Millennium Copyright Act (“DMCA”), which expanded the statutory license to include non-subscription, non-interactive digital audio transmissions. License fees, predetermined by the Copyright Royalty Board, are non-negotiable and paid by the internet radio stations, webcasters and satellite radio stations to Sound Exchange (the entity designated to collect the royalties) as a digital performance royalty. 37 C.F.R. Part 380.

Sound Exchange reported digital performance royalty payments to artists and labels of $773 million in 2014 (up 31 percent from $590 million the prior year). These numbers include satellite radio as well as webcaster and internet radio. SoundExchange Wraps Record-Setting Year with $773 Million in Payments to Recording Artists and Record Labels, Sound Exchange, (Jan. 28, 2015).

Pandora and iHeartRadio are the two leading internet radio services in the US.  New players in the Internet radio space include Spotify, Rdio, and iTunes Radio.  Remember some of these providers offer multiple services which may include non-interactive streaming and interactive streaming. Satellite radio, such as Sirius XM, is also treated as a non-interactive service with fees predetermined by the Copyright Royalty Board.  17 U.S.C. § 114.

ii.         Interactive - On-Demand Streaming:

Streaming of content is considered interactive, or on-demand, when the listener can request the specific recording they wish to hear and the digital file is transmitted electronically to a computer or other device contemporaneously with the user's request.  17 U.S.C. § 114(j)(7).  The major on-demand streaming services include Spotify, Beats Music, Google Play Music All Access and Xbox Music.  The latest entry into the market is Tidal launched in March 2015 by artist and entrepreneur Jay Z.  Other offerings include Rdio and Slacker.

Streaming of content is considered interactive, or on-demand, when the listener can request the specific recording they wish to hear.

Because of the interactive nature of on-demand services, there is no statutory scheme or Copyright Royalty Board determining licensing rates.  The on-demand services must secure direct sound recording licenses from the owners of the sound recording copyrights in order to stream.  Royalty rates for on-demand services are negotiated between the sound recording copyright owner and the service provider.

How Do You Define Interactive?

There’s not been much litigation exploring the precise definition of “interactive.” We do know allowing users to create music playlists and access to listen to particular audio visual works and their accompanying sounds fit directly into the definition of an interactive service found at 17 U.S.C. § 114(j)(7).  See Capitol Records, LLC v. BlueBeat, Inc., 765 F. Supp. 2d 1198 (C.D. Cal 2010).

Compare the facts to a situation where a webcasting service provides users with individualized internet radio stations and the user rates the songs, artists, and albums.  The Second Circuit affirmed the lower court’s decision finding that voting up or down a song, artist or album on a service is not interactive so long as the user 1) cannot control precisely what song plays, and 2) cannot determine the next song with some amount of predictability. Arista Records, LLC v. Launch Media, Inc., 578 F.3d 148 (2d Cir. 2009).

In Part 3 we will discuss cloud/locker services and the demise of Grooveshark and Mp3Tunes.  You can read Part 1 here.

Copyright Update: Digital Music Streaming Issues

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This paper was written and presented by Tamera H. Bennett at the 28th Annual Technology Law seminar hosted by UTLaw CLE. It has been edited into multiple blog posts. Enjoy part 1 below, Part 2 here, Part 3 at this link and Part 4.

I.          Streaming Pennies Are Hard to Divide

While most songwriters and artists thrive on the creative process of crafting their next song or production, the creative process by itself often does not put money in the bank.  The songs and sound recordings need to be commercially exploited with the hope and goal of securing licensing fees.

Whether you’re a label, artist, music publisher or songwriter, you either know or are quickly realizing the music business is a business of pennies. Those pennies are often so sliced and diced the music business has become a business of percentages of pennies.  Copyright owners often spend as much time tracking down payment for licensed uses as they do tracking down unlicensed content on the web. 

In 2014, for the first time revenues from digital channels equaled revenues of physical format sales with both accounting for forty-six percent of global revenues.

The new media – or digital space is huge and growing. In 2014, the music industry’s global digital revenues increased by 6.9 per cent to US$6.85 billion. IFPI DIGITAL MUSIC REPORT 2015 at 6. For the first time, revenues from digital channels equaled revenues of physical format sales with both accounting for forty-six percent of global revenues.

Thirty-two percent of digital revenues are from subscription and ad-supported streaming services, up from 27 per cent in 2013. Digital downloads still account for the majority of digital income coming in at 52 percent of global digital revenue. An estimated 41 million people paid for music subscription services in 2014, five times the level of eight million people in 2010. Once the royalties for digital downloads and streams are collected, they have to be distributed to the copyright owners.

When discussing the music business and who owns what rights, it's important to note that there are two copyrights involved in each musical recording. 17 U.S.C. § 102. The copyright that attaches to the song covers the words, music, and the arrangement. Sound recordings are defined as “works that result from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work.” 17 U.S.C. § 101. The song copyright is owned by the song writer or a music publisher who was assigned the copyright. The copyright in a particular version of a recording is owned by the artist or record label. 

As an example of the difference between owning the song copyright and the master/sound recording copyright, recall that Dolly Parton is the songwriter of the hit “I Will Always Love You.” Neither Dolly Parton nor the music publishing company that owns the song copyright for “I Will Always Love You,” have any ownership in the sound recording copyright for the version of the song recorded by Whitney Houston for the movie “The Bodyguard.” Nor does the record label or Whitney Houston’s estate have any ownership in the song copyright. 

While music publishers and record labels are fighting their own issues on getting paid (and sometimes against each other), this article focuses on new media recent legal issues facing sound recording copyright owners.

Stay tuned for additional posts in this series.

Grooveshark Closes in Wake of Court Ruling - What does it mean for artists and songwriters?

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Until May 1, 2015, music locker service Grooveshark was embroiled in litigation battles over the unlicensed songs and sound recordings stored, streamed and downloaded via its locker service. See Capitol Records, LLC v. Escape Media Group, Inc., No. 1:12-cv-06646-AJN-SN, (S.D.N.Y, filed Aug. 30, 2012).

Grooveshark reached a settlement with labels and the Grooveshark website is down after eight years.  Grooveshark closing its doors is a win for content creators and owners. If you read the history below you'll see damages were estimated in the millions. What we don't know is if money changed hands as part of the settlement. Interestingly, Grooveshark admits in a public statement to handing over its mobile app, patents and copyrights to the labels. I just wonder how the various labels are going to divide that technology pie.

What about the indie labels, publishers and songwriters?

As part of a settlement agreement with the major record companies, we have agreed to cease operations immediately, wipe clean all the data on our servers and hand over ownership of this website, our mobile apps and intellectual property, including our patents and copyrights.

— Groovshark Settlement

And, what does it mean for music publishers, artists and songwriters? The typical artist or songwriter agreement would allow for the artist or songwriter to share to some extent in a lawsuit recovery. I get it that the legal fees in these cases probably extend far beyond any cash recovered.  But, will the labels be the only ones profiting from acquiring the technology? How will the benefit trickle down to the artists and songwriters?  And, what about indie artists and publishers, are they now at the mercy of the majors that acquired the Grooveshark technology if it is relaunched? Food for thought. Feel free to comment below.

Here's more background on the case(s).

Grooveshark let users upload songs that could then be streamed or downloaded by anyone. This is in contrast to locker services such as Google Play, iTunesMatch and Amazon Cloud Player which restrict a third-party from streaming or downloading songs from somebody else’s locker unless a license has been secured  with the label and publisher for that specific use.  Because Grooveshark is an interactive service, similar to a music-only YouTube, compulsory licenses are not an option and negotiated licenses must be secured.

The only major label that entered into a license with Grooveshark was EMI.  Three lawsuits later, EMI terminated their deal with Grooveshark.  The labels and publishers have multiple arguments why Grooveshark’s actions constitute copyright infringement and Grooveshark is not protected by the DMCA Safe Harbor provisions. The labels accuse Grooveshark of uploading roughly 100,000 recordings to the online music service, without payment or licenses. In light of the MP3tunes decision, the labels/publishers are asserting the employees of Grooveshark were baiting Grooveshark by uploading unlicensed content.  Arguably, intentional actions of the employees and/or executives should not be protected by the DMCA.

On March 24, 2015 the judge granted EMI's motion for summary judgement on claims that Grooveshark's parent company Escape Media Group, Inc. infringed its copyrights.  Relying on the MP3tunes decision, the court found Escape's repeat infringer policy did not meet the conditions of the DMCA Safe Harbor, Escape had an insufficient record keeping system, failed to terminate repeat infringers, and "actively" prevented copyright holders from collecting information needed for the takedown requests required by the DMCA.  Total damages could amount to $420 million based on the court's finding that 2,807 EMI-copyrighted sound recordings existed on Grooveshark's servers.


Entertainment Law Update Podcast Episode #59

Click the arrow below to play the Entertainment Law Update Podcast Episode 59

Entertainment Law Update Podcast co-hosts Tamera Bennett and Gordon Firemark are joined this month with music litigation attorney Robert Allen. Robert brings us up-to-speed on the Turtles pre-72 sound recording litigation.

Keep listening for an update on DMCA litigation in the US and changes to the Canadian copyright law. As well as those monkey selfies .....

Episode 57 - Entertainment Law Update Podcast - Tamera Bennett & Gordon Firemark

Click the arrow below to play the Entertainment Law Update Podcast Episode 57

Dallas Music and Trademark lawyer Tamera Bennett and LA Film and TV lawyer Gordon Firemark bring you the updates on copyright, trademark and entertainment law matters in their monthly podcast by entertainment lawyers for entertainment lawyers. Listen this month to see if there are any "Blurred Lines" or blurred photos.  You might hear the strains of "Rocky Top" and decide you need some sassy new shoes.


Grooveshark Lost Copyright Infringement Case to Majors

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A Manhattan District Court found online music service Grooveshark liable for copyright infringement.

The lawsuit filed by the UMG family of record labels in 2011 is not over yet as damages must be determined.  The clincher in this case was the fact that Grooveshark directed its officers and employees to upload unlicensed tracks.  Sounds very similar to the situation in Mp3 Tunes.

With over 5000 tracks uploaded by employees, Grooveshark could not claim a "safe harbor" under the Digital Millennium Copyright Act (DMCA) as that provision would only protect Grooveshark if it had no knowledge of the uploads.  The actions of the employees was willful and with knowledge.

We will continue to watch the pending state court litigation over Pre-72 copyrights and pending federal court cases.

Here's the Court's opinion in UMG Recordings, Inc. v. Escape Media Group, Inc., 11 Civ. 8407, SDNY, Sept. 29, 2014.