Intellectual Property

DOJ Makes Dramatic Change In Music Licensing

DOJ Makes Dramatic Change In Music Licensing

The US Department of Justice (DOJ) formally announced last Thursday that it would not make any changes to the language in the consent decrees that govern the operations of ASCAP (the American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc.), the two largest US performing rights organizations (PROs). This ends a two-year DOJ investigation into public performance licensing that took place at the request of the two PROs.

Happy Birthday, The Coda

Details of the settlement reached in the case concerning ownership of the song “Happy Birthday To You” were released today with a filing in United States District Court. In the settlement, originally announced in December but which the court has only now been asked to approve, Warner/Chappell agreed to pay $14 million to licensors as well as $4.6 million in legal fees for the other parties in the suit.

The case centered on whether Warner/Chappell ever actually owned the lyrics to the song it acquired during its purchase of Clayton F. Summy Co., in 1988. Since then, it’s been estimated that the song generated about $2 million in yearly income through licensing.

“Happy Birthday To You” was written by Patty Smith Hill and her sister Mildred J. Hill in 1893 and will now officially become public domain, free for anyone to use without further permission.

Not a Happy Birthday for Warner/Chappell

In a decision that undoes years of licensing agreements, the United States District Court in California reached a decision on Tuesday in the case Rupa Marya, et. al. v. Warner/ Chappell Music, Inc., ruling that the classic song “Happy Birthday To You” is not owned by publisher Warner/Chappell.

Why the "Dancing Baby" decision is good for the internet.

Why the "Dancing Baby" decision is good for the internet.

Earlier this week, a judgment was finally reached in the long-running dispute between Stephanie Lenz and Universal Music Group (Lenz v. Universal [PDF]) known as the "dancing baby" lawsuit. The decision represents a very important ruling protecting the concept of "fair use" and helps to eliminate a means of censorship on the internet.

Applauding the Fair Play Fair Pay Act

There was very exciting news for creators this week as on Monday, Representatives Jerrold Nadler (D-NY) and Marsha Blackburn (R-TN) introduced the Fair Play Fair Pay Act of 2015. This bill proposes a number of updates to existing legislation that would serve to correct antiquated provisions in the copyright act and bring modernization and fairness to the way performing artists and songwriters are paid.

Most importantly, the bill proposes to finally grant a public performance right for terrestrial radio broadcasts and to ensure that royalty payments are made in connection with streaming of recordings made prior to February 15, 1972.

The current system is antiquated and broken. It pits technologies against each other, and allows certain services to get away with paying little or nothing to artists. For decades, AM/FM radio has used whatever music it wants without paying a cent to the musicians, vocalists, and labels that created it. Satellite radio has paid below market royalties for the music it uses, growing into a multibillion dollar business on the back of an illogical ‘grandfathered’ royalty standard that is now almost two decades old.
— Congressman Jerrold Nadler

The United States does not currently grant a public performance right for radio broadcasts. (A surprising fact when you consider that the other nations that don't are China, Iran and North Korea.) This means that when a song is played on terrestrial radio, neither the singer nor the record company get paid (while the songwriter does). The Fair Play Fair Pay Act would grant that right, allowing artists to make money when their performances are broadcast. 

A side benefit of this could also mean that US performers would become eligible to collect public performance royalties from foreign broadcasts. Currently they do not collect these neighboring rights, as foreign governments don’t allow their PROs to pay on broadcasts of US recordings, their rationale being, “why pay US performers if the US doesn't pay ours?” (This would also require the US signing The Rome Convention, but passage of the Fair Play Fair Pay Act would certainly pave the way.)

Granting a public performance right would finally end a long-standing record business tradition originating from the idea that radio equals free promotion and that performers are ultimately paid through increased record sales. While that may have been true once, as consumers transition from purchasing music to streaming it, that free promotion will no longer mean increased revenue.

Under current law, internet and satellite radio stations are paying a digital public performance royalty. By ensuring terrestrial broadcasters make these payments too, the playing field for terrestrial radio stations and internet and satellite broadcasters will leveled, allowing greater competition and standardization of rates and payments.

To answer critics that suggest the bill will make it difficult for radio stations to make money, it attempts to mitigate the expense by putting in place caps on their royalty payments. Stations with less than one million dollars in annual revenue would not pay more than $500 per year. For non-commercial stations that amount would be $100 per year, and religious stations or incidental uses of music would need no royalty payment at all.

The other very important aspect of the bill is implementing royalty payments for so-called pre-1972 recordings. These recordings are not covered by federal law, and as a result, some digital broadcasters have not been paying any royalties when the recordings are streamed. Several lawsuits are working their way through the courts on this issue, with an important decision rendered against SiriusXM, and a similar lawsuit pending against Pandorabut it remains to be seen as to what the final outcome will be.

While the Register of Copyright’s February 2015 report entitled Copyright and the Music Marketplace [PDF] suggested that the law be changed such that pre-1972 recordings receive protection under federal law, Nadler's and Blackburn's bill would at least insure that uses of those recordings will generate the same royalty payments, even if they don’t get full copyright protection.

A couple of other changes proposed include provisions protecting songwriters and publishers from companies trying to lower rates, as well as streamlining the process of paying producer royalties, and allowing artists to receive direct royalty payments despite how their labels may wish to handle them.

In all, this is a very important step in protecting the rights of performing artists. It will not face easy passage however, as the National Association of Broadcasters will undoubtedly fight it, expressing their resistance to it before the bill was even announced.

"Blurred Lines" Indeed: Jury tells Pharrell Williams and Robin Thicke they "Got To Give It Up"

Copyright lawsuits don't make it to court; they get settled. It's just too dangerous to put copyright law in the hands of a jury.

Unfortunately for producer Pharrell Williams and performer Robin Thicke, this lesson is being learned the hard way with news that their song, "Blurred Lines" has been found to have infringed upon the Marvin Gaye song "Got To Give It Up." The loss means they owe Gaye's family a whopping $7.3 million as damages for copyright infringement.

It should be noted that the infringement was not found to be "willful", and rapper T.I. (Clifford Harris, Jr.), who also contributed to the song, was not found to be liable.

The jury was instructed to compare only the sheet music versions of the two songs in making their decision, so much of the case centered on the testimony of musicologists who dissected passages as short as four notes. It turns out that the jurors also heard audio of parts of both songs, thereby increasing the chance that their judgment would be blurred.

Are four notes sufficient to constitute a claim of infringement? Obviously Williams and Thicke disagreed. And because settlements are costly, they can feel like extortion. To avoid that, Williams and Thicke actually brought suit against the Gaye family at the start, seeking to have any potential claim tossed out well before the case even went to court. That resulted in a counter suit, with Williams and Thicke ultimately deciding to allow the case to be decided by a jury. Unfortunately, doing so resulted in their characters being put on trial, with Thicke having to admit to being high during the time as well as taking credit from Williams.

While I was not in court, I don't think that there is sufficient evidence of infringement. Were they trying to recreate the vibe of a late-1970s Marvin Gaye tune? Yes. Did they do that by stealing his copyrighted work? No.

Music—all art—is a constantly changing medium where the past and present come together to create the future. Musicians are indebted to everything that they hear, conscious or not, and regardless of whether the dialogue they carry on with their influences is explicit in whatever new work is created. Some of what is created will be good. Some won't. Some of it will be timeless. Some of it will be disposable. But it will all eventually get recycled and remade as artists create and tastes shift. Sometimes work that didn't get sufficient interest when originally released will resurface later to lavish praise. Sometimes work will continue to exert influence beyond its creator's lifetime. There is an inherent beauty in this process, as each musician moves the art form forward, synthesizing what has come before while creating new avenues of examination and expression.

This process should not be hindered in any way; it is already a difficult one that moves in fits and starts. Copyright law should be written in a way that protects creators, encouraging them to explore, ensuring they get paid. It should not however curb that exploration.

This verdict is a sign of the later. That Williams and Thicke lost this case will make it harder for artists to create in the future. Instead of being free to do so (without actual infringement), they will now be forced to look over their shoulders, increasingly concerned about whether their work will put them at financial risk. Art is already a risky business. We can't make it more so.