American Copyright law to get 21st century remix

American Copyright law to get 21st century remix

In my previous post, I wrote about the European Union’s sweeping new Directive on Copyright in the Digital Single Market, which is currently in draft stages. But copyright legislation is getting an update on the other side of the pond, too.

Since 1909 — before recordings of music even existed — Section 115 of the Copyright Act has regulated the licencing of musical works. Many songwriters and music publishers have trouble collecting royalties for the use of their songs played via digital streaming services. Amongst other things, the proposed Music Modernisation Act will modernise how compensation for mechanical licenses, which include digital streaming, is determined.

Last week, The United States House Judiciary Committee voted unanimously (32-0) to approve House Bill 4706, “to provide clarity and modernize the licensing system for musical works under section 115 and to ensure fairness in the establishment of certain rates and fees.” More commonly known as the Music Modernization Act (“MMA”), the bill now heads for consideration by the full House of Representatives. The MMA has received wide bipartisan support from Democrats and Republicans alike, and appears to be “on the fast track” for approval.

Importantly, the MMA will create an American agency or “mechanical licensing collective” that would house all music publishers under one roof. It is expected that the agency will have a database of ownership information, which will increase transparency and help identify music creators who are owed royalties.

Once established, the digital streaming services will pay the mechanical licensing collective, which in turn tracks and collects royalties on behalf of the artists. As explained by Committee Chairman Bob Goodlatte (a Republican from Virginia), the MMA “boosts payments for copyright owners and artists by shifting the reasonable costs of a new mechanical licensing collective onto digital music services, who themselves benefit from reduced litigation costs as a result of other provisions in the bill.”

Speaking to ABC news, John Simson noted that Americans “…have a 1909 statue trying to govern 2018 technology, and it doesn’t work.” Mr Simson is a professor at the American University and founding member of Sound Exchange, a non-profit organisation set up to collect and distribute performance royalties.

Intellectual Property Subcommittee Vice Chairman Doug Collins (a Republican from Georgia) noted that “the current music licensing landscape undervalues music creators and under-serves music consumers. Outdated copyright laws have produced unnecessary liabilities and inefficiencies within the music licensing system, and stakeholders across the music industry have called for reform. This bill moves the music industry towards a freer and a fairer market, enabling it to leverage the present and future benefits of the digital age.”

  • The first section of the bill concerns how modern digital music services operate, and will create a “blanket licensing system” to quickly license and pay for musical work copyrights. A key aim includes discouraging lawsuits in favour of simply ensuring that artists and copyright owners are paid in the first place without such litigation (see “No lawsuits over unpaid royalties after 1 January 2018?” below).
  • The second section, “Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society (CLASSICS) Act” will focus on public performance rights for pre-1972 recordings. In particular, musicians with pre-1972 recordings will receive royalty payments when their tracks are played on the radio, online, or on television.
  • The third section, “Allocation for Music Producers (AMP) Act,” will ensure that record producers, sound engineers, and other creative professionals also receive compensation for their work.

No lawsuits over unpaid royalties after 1 January 2018?
Of course, the MMA is not without its detractors who are quick to point out several key issues. Firstly, the bill sets out a broad limitation of liability clause which essentially shuts down any potential lawsuits filed after January 1st 2018. That’s not a typo – Section 2(10)(A), the MMA really does apply a retrospective restriction on legal action.

Without the possibility of litigation, songwriters (and other copyright holders) who have unpaid royalties have one sole and exclusive remedy: they must go through the process set out in the legislation, governed by the dispute resolution committee of the mechanical licensing collective.

And while the mechanical licensing collective created by the MMA will have a board of directors, that board will be comprised of ten music publishers (record labels) together with only four songwriters! Furthermore, as currently written, the MMA provides no grievance process for excluded writers and those who receive unjust treatment. Is this likely to hit the right note with independent artists and smaller record labels?

 

Featured image – Francis Barraud, His Master’s Voice.

No more Safe Harbours for EU-ser Uploaded Content?

No more Safe Harbours for EU-ser Uploaded Content?

The European Union is considering a sweeping new Directive on Copyright in the Digital Single Market, currently in draft stages. Industry groups are keen to ensure their opinions are taken into consideration, especially in instances where consumers share content which belongs to artists, authors, record labels, and television channels.

Digital platforms and internet service providers which host User Uploaded Content (UUC) argue that they are not responsible for any copyright infringing material uploaded by their users. However, trade bodies representing various industries believe the incoming Copyright in the Digital Single Market Directive doesn’t go far enough to reform this safe harbour principle.

The E-commerce Directive states that EU Member States shall ensure that internet service providers are not liable for copyright infringements carried out by its customers, on condition that: (a) the ISP does not have actual knowledge of illegal activity or information;  and (b) the provider “acts expeditiously to remove or to disable access” to the illegal content, once they become aware of it (see Article 14).

This article provides ISPs with a “safe harbour” from copyright liability (also known as the “mere conduit” provision). Generally speaking, a safe harbour* is simply a protection available within a regulation that specifies that certain actions do not to violate a given rule, in particular circumstances.

1709 - EU Safe Harbour
In the United States, this principle operates under the “notice-and-take-down system”

About 18 months ago, the European Commission announced its plans to introduce a new Directive on Copyright in the Digital Single Market. As the explanatory memorandum sets out, “the evolution of digital technologies has changed the way works and other protected subjectmatter are created, produced, distributed and exploited. In the digital environment, cross-border uses have also intensified and new opportunities for consumers to access copyright-protected content have materialised. Even though the objectives and principles laid down by the EU copyright framework remain sound, there is a need to adapt it to these new realities.”

Amongst other things, the propsed Directive seeks to rebalance the position of the copyright owner against that of the internet service provider. Last week, various trade groups representing Europe’s creators and creative content producers published an open Letter to the European Council.

The authors suggest that, far from ensuring legal certainty, the Directive as currently drafted “could be detrimental to our sectors,” which include journalism, film and TV, music, and sport. While the authors support the objectives of the proposed legislation, the Letter critiques the latest draft of the directive, and expresses significant concerns about the safe harbour reforms.

In particular, the problems seem to arise with sections addressing the “use of protected content” by ISPs and other platforms which “store and give access to large amounts of works and other subject-matter uploaded by their users”. Put simply, the copyright industries want the safe harbour reformed, so that it no longer applies to user-upload sites (Complete Music Update).

This draws into question how online platforms hosting UUC should monitor user behaviour and filter their contributions. Currently, the platforms review material after it has been published and reported or “flagged” as copyright infringement. This may, as has been discussed with Facebook’s proposed use of artificial intelligence in copyright and hate speech monitoring, “inevitably require an automated system of monitoring that could not distinguish copyright infringement from legal uses such as parody” (The Guardian).

The authors of the Letter voice complaints in respect of the draft forms of Article 2, Article 13(1) and Article 13(4):

  • Article 2 defines which services fall under liability, mentioned further at Article 13. The latest draft could leave most UUC platforms outside the scope, despite the fact they continue to provide access to copyright protected works and other subject-matter. For example, music playing in the background of a makeup tutorial on YouTube.
  • The problem with Article 13(1) as currently written is that it risks narrowing the scope of the right and contravening CJEU jurisprudence. The Letter’s authors argue that “any new EU law should secure that this right is broad,” and “contain no additional criteria which could change via future CJEU rulings.”
  • As for Article 13(4) and its relevant recitals, the authors suggest the language is tantamount to a new safe harbour, which would both “seriously undermine fundamental principles of European copyright,” and pose “unwarranted liability privilege risks breaching the EU’s obligations under international copyright treaties.”

The Letter closes with the authors’ promise to “remain at the Council’s disposal to find solutions to these points.” For more on the proposed Directive, be sure to check out the IPKat’s numerous posts on the subject.

*This “Safe Harbour” in copyright law is not to be confused with the Safe Harbor Data Privacy exemptions between the US and the EU, which have since been declared invalid. On that subject, I might write on the new Privacy Sheild… at some point…

Is Taylor Swift getting a copycat Reputation?

Is Taylor Swift getting a copycat Reputation?

Taylor Swift’s latest music video, Delicate, has been criticised for its obvious similarities to a 2016 Kenzo perfume advert directed by Spike Jonze.

In the Kenzo advert, we see a young woman portrayed by actress and dancer Margaret Qualley at a posh black tie event in a hotel. Looking beautiful in an evening dress but nevertheless seemingly uncomfortable and bored, she quietly slips out of the ballroom to pensively roam the hallways of the hotel alone. What made the advert so memorable was that Qualley suddenly starts a wild and garish dance to an upbeat song. W Magazine lauded the advert as “one of the best perfume commercials of all time,” and the Guardian called itone of the most engaging ads” of the year.

Earlier this month, Taylor Swift released the video for Delicate, the latest single off of her sixth studio album, Reputation. Directed by Joseph Kahn, the video follows Swift as she walks through a glamourous hotel, increasingly fatigued with the attention of the press and her adoring fans. She eventually manages to escape through the corridors and, under the premise of being invisible, performs a bizarre dance routine through the hallways.

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the opening tracking shot in each video shows a beautiful but bored woman in an evening dress, but the similarities don’t end there…

In addition to the plot – in which a bored young woman has a crazy dance party in a fancy hotel – the videos share a colour scheme, choreography, and camera angles. Although Taylor’s dress is blue and Qualley’s is green, both are deep jewel tones and cut a similar, sleeveless silhouette. Twitter users were quick to point out that even the facial expressions of the two women appeared to mirror each other.

Kenny Wassus, New York Magazine’s senior producer of original video, called Taylor’s video “the drunk sorority knockoff” of the original Kenzo advert. Twitter users have been sharing a slew of direct comparisons between the two videos, including:

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“gorilla” dance
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crazy facial expressions
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profile tracking shot of militant stomping

To be fair, there are a few differences. Qualley’s only audience remains the camera, while an “invisible” Swift can dance through crowds. Qualley wears heels, whereas Swift kicks hers off to dance barefoot. Qualley’s performance ends by jumping through a massive logo for the perfume, whereas Swift’s show ends in the rain with her meeting a mysterious person.

The Kenzo advert was a viral success because, as AdWeek explained, “the exuberantly choreographed video was less about technical innovation than about how it changes the way women are portrayed in marketing.” Fans of Swift may therefore be somewhat unnerved that the international pop star, known for being a creative, self-made woman (see Taylor Swift: from saccharine songstress to fearless feminist) has chosen in this instance to be so heavily inspired by another artist’s originality.

Despite claims that Swift’s video is a “blatant rip off”, a Kenzo representative told Dazed that they will not be making a comment on the matter. Accordingly, a lawsuit or formal complaint is unlikely. Taylor Swift’s representation are yet to respond to the criticism.

Delicate is not the first video directed by Joseph Kahn to invite copyright controversy. His earlier project for Swift, Look What You Made Me Do, was compared by many to Beyoncé’s Formation. 

Related image
Swift vs Beyoncé

In my earlier post All the Stars and Constellations, I noted that inspiration is a common and important part of most creative processes. Even the most original ideas borrow from earlier art, expressions, and themes. The question in this instance concerns the grey area between inspiration and copyright infringement. While plagarism can be easy to spot, the Taylor Swift videos present more of a challenge. Remember, copyright law only protects specific expression of an idea, and not the idea itself.

Kenzo and Spike Jonze are unlikely to pursue legal action, because one cannot obtain intellectual property rights for a vibe or feel of a video – or even the “plot” of a woman dancing through a hotel. However, it’s worth noting that this matter is already being heard in the court of public opinion, and the verdict doesn’t seem to favour Swift.

From Stockholm to Stock Market: Sweden’s Spotify set to list on NYSE

From Stockholm to Stock Market: Sweden’s Spotify set to list on NYSE

Music streaming giant Spotify recently filed its application to put shares on the New York Stock Exchange. The 264 page document details the company’s key risks and challenges: I’ve read them so you don’t have to!

The Securities Exchange Act of 1933, often called the Truth in Securities law, requires that investors receive financial and other significant information concerning financial securities. To avoid misrepresentations and other fraud, any company wishing to place its shares on an American market must submit a prospectus, formally known as an SEC Form S-1 (or an F-1 for foreign companies).

Sweden-based Spotify filed their prospectus for the New York Stock Exchange on 28 February.  Prospectuses are heavily regulated, and accuracy is vital: it is a lawyer’s job to fact-check these documents in a process known as “verification.” To allow investors to make informed decisions, a company must be honest about its particular commercial situation, and explain how share prices may decline. Spotify’s estimated valuation is nearly $20 billion, but it has never made a profit and reports net losses of €1.2bn (£1.1bn).

Spotify clearly needs a capital injection,
but given the risks below, would you invest?

Hitting the right note with listeners.
Spotify’s unique features include advanced data analytics systems and proprietary algorithms which predict music that users will enjoy. These personalised streams rely on Spotify’s ability to gather and effectively analyse large amounts of data, together with acquiring and categorising new songs that appeal to “diverse and changing tastes.” If Spotify fails to accurately recommend and play music that customers want, the company may fail to retain or attract listeners.

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Spotify knows that 71% of my recent tunes are energetic, upbeat, and suitable for a fitness enthusiast. Touché!

Licensing and royalties.
To make its 35 million tracks available for listeners, Spotify requires licenses from the musicians and record labels who own the songs. Additionally, Spotify has a complex royalty payment scheme, and it is difficult to estimate the amount payable to musicians under their license agreements. Even if Spotify secures the necessary rights to sound recordings from record labels and other copyright owners, artists may wish to discontinue licensing rights, hold back content, or increase their royalty fees. In 2014, Taylor Swift removed her songs from the streaming service in protest, although she later added it back.

Technical glitches and data protection.
Spotify’s software and networks are highly technical and may contain undetected bugs or other vulnerabilities, which could seriously harm their systems, data, and reputation. Growing concerns regarding privacy and protection of data, together with any failure (or appearance of failure) to comply with data protection laws, could diminish the value of Spotify’s service. This especially worth noting as Europe nears the General Data Protection Regulation (GDPR) implementation date of 25 May.

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Spotify’s NYC offices

Innovation and skilled employees.
Rapid innovation and long-term user engagement is prioritised over short-term financial gain. Spotify admits “this strategy may yield results that sometimes do not align with the market’s expectations.” The company also depends on highly skilled personnel to operate the business, and if they are unable to attract, retain, and motivate qualified employees, the ability to develop and successfully grow the company could be harmed.

International regulation and taxation.
As Spotify expands into new territories, it must adhere to a variety of different laws, including those in respect of internet regulation and net neutrality. Spotify even admits that language barriers, cultural differences, and political instability can bring share prices down! Furthermore, public pressure continues to encourage governments to adopt tougher corporate tax regimes, and tax audits or investigations could have a material adverse effect on the company’s finances.

Image result for bloomberg spotify

Method of offering.
While Spotify may not be able to successfully overcome each challenge listed in its prospectus, many of the risks are relatively common amongst international technology and media companies. But as an additional risk, Spotify has chosen a relatively unconventional method known as a direct public offering (DPO) to bring its shares to the stock market. Unlike a traditional IPO, in a DPO a company will not use an investment bank to market or underwrite (insure) its offering. While this avoids bank fees, uncertainty can result in a discounting of share prices. This is a really technical point and somewhat nuanced (it gave me headaches in law school!) but a risk worth noting.

I’ve written previously about Spotify’s copyright challenges, as well as its controversial privacy policy

All the Stars and Constellations

All the Stars and Constellations

A music video for the new Black Panther film features scenes of striking similarity to artist Lina Iris Viktor’s Constellations series. Is this inspiration or infringement?

Marvel Studios’ new movie Black Panther features the first black superhero to appear in mainstream comics. It has received widespread acclaim and press, not least because of its positive portrayal of Africans and African Americans as powerful, heroic characters. In its review, The New York Times exclaims that the film “is a vivid re-imagination of something black Americans have cherished for centuries — Africa as a dream of our wholeness, greatness and self-realisation.”

To promote the film and its soundtrack, American rapper and songwriter Kendrick Lamar, together with American R&B singer SZA, recently released a music video entitled “All the Stars.” However, the producers of the music video are now accused of stealing from African artists.

British-Liberian artist Lina Iris Viktor, who currently resides in New York, has garnered praise for her series Constellations. The work is characterised by unique patterning, using what Viktor considers a “purist colour palate” of only black and 24-karat gold. Viktor found out about the music video from friends, who had called her to say they had seen Constellations featured in the video. The alleged infringement begins three minutes into the video, and lasts for about 20 seconds.

a screen shot of the “All the Stars” music video

Viktor’s lawyer Christopher Robinson sent a letter to Lamar’s mentor and label head, Anthony Tiffith of Top Dawg Entertainment. In the letter, as seen and reported by The New York Times, the use of Viktor’s artworks in the “All the Stars” video constitutes “willful and egregious” copyright infringement. In particular, the video “incorporates not just the immediately-identifiable and unique look” of Viktor’s work, but also “many of the specific copyrightable elements in the Constellations paintings.”

Viktor was previously contacted on two separate occasions in respect of using her work in association with Black Panther. In the first instance, a set decorator asked Viktor directly if he could feature Constellations in the film itself. On the second occasion, a public relations firm contacted the Mariane Ibrahim Gallery in Seattle, which represents Viktor. The PR firm wanted Viktor to provide Marvel Studios and Disney with artworks to promote Black Panther. In both instances, Viktor declined the opportunity to be associated with the film, for reasons apparently related to financial terms and exclusivity.

Lina Iris Viktor, pictured here with her artwork for House & Leisure Magazine

Constellations and “All the Stars” call into question the fine line between infringement and inspiration. Style and general colour schemes are not protected by copyright law, regardless of the form in which it is illustrated or embodied (17 USC Section 102(b)).

Segments of Kendrick’s music video clearly appear to have been inspired by Viktor’s artwork. There are several striking commonalities with the patterns and colour schemes used, and certain actors’ poses mimic Viktor’s portraits. One could even argue that the name “All the Stars” echoes Viktor’s Constellations title.

Inspiration is a common and important part of most creative processes. The issue of concern is whether the source of inspiration was transformed to the extent that Lamar’s video was itself “original,” or instead “derived” from Viktor’s work. To answer this question, the two artworks must be compared to determine “substantially similarity.” The legal test for substantial similarity is a subjective, factual analysis called the ordinary observer test, as developed in Peter Pan Fabrics, Inc. v. Martin Weiner Corp., (2d Cir. 1960):

The Court will analyse if the ordinary observer, unless he set out to detect the disparities between the works, would be inclined to overlook them and regard the aesthetic appeal of the two works as the same. This means looking at the overall visual effect — the total concept and feel — regardless of the individual elements that may have been changed, added or even removed.

Left, an image from the video for “All the Stars” (Universal Music Group); right, the painting “Constellation I” by Viktor (Mariane Ibrahim Gallery).

At present, no official lawsuit has been filed at court. The letter simply asks the “All the Stars” crew to discuss a resolution of Viktor’s claims, “consisting at a minimum of a public apology for the unauthorised use and a license fee.” In her interview with The New York Times, Viktor explained that these allegations are “an ethical issue” and not about monetary compensation. She noted that the film’s creators focus on black empowerment and African excellence, but at the same time appear to support what she considers cultural appropriation. Lamar, Top Dawg, Marvel Studios and Disney have not yet responded to the allegations.

In an attempt to settle this allegation as quickly as possible, and indeed – to protect the narrative of promoting African and African American artists in general – Black Panther producers may simply choose to give Viktor an apology and a considerable licence fee. Given that the film is expected to smash box office records, and the Black Panther soundtrack has likewise become a hit with audiences, coming up with compensation is unlikely to be too much of a problem.

That robot took my theatre ticket!

That robot took my theatre ticket!

The UK’s Digital Economy Act 2017 is to be amended by the Breaching Limits on Ticket Sales Regulations, which will criminalise use of internet bots to bypass limits on ticket purchases set by event organisers. 

In practice, the problem is not necessarily how the tickets are purchased – by bots or otherwise – but rather, the crazy prices fans are forced to pay on the secondary market.

When tickets first go on sale for an event, they hit the primary market. If somebody resells their ticket, they do so on the secondary market. This secondary market is estimated to be worth more than £1bn ($1.4b) per year in the UK alone. When resales are done on a large scale or for considerable profit, it’s known as “touting” or “scalping”.

Touting in the digital age.  “Bots” are software applications that run automated tasks (scripts) over the internet, used for years to quickly buy up thousands of tickets at lightening speed. By way of example, American company Prestige Entertainment is alleged to have bought over 300,000 tickets in a two-year period. This included 30,000 Hamilton Tickets and, in another instance, bought over 1,000 tickets to a U2 concert in less than one minute (see Ticketmaster v Prestige Entertainment, case 2:2017cv07232).

High and dry.  When ticket supply is drastically limited, the bot masters (“power sellers”) can resell the bot-obtained tickets to fans at high mark-ups. Tickets for Radiohead’s 2016 show had a face value of £65, but were placed on Viagogo for £3,934. A ticket for Adele’s concert in London was listed on Get Me In! for an eye-watering £24,840.

Continue reading “That robot took my theatre ticket!”

Facebook won’t stop the music

Facebook won’t stop the music

Before I started law school, I spoke to a lawyer at Universal Music about licensing, copyright, and other fascets of law pertaining to the music industry. Since becoming a lawyer myself, I’m even more fascinated by the ways in which commercial contracts, digital strategy, artists’ rights and expression interact with and shape each other: Facebook’s new global, multi-year agreements with Universal and Sony Music are perfect examples of such dynamism.

Facebook first inked a deal with Universal Music in late December 2017. The deal with Sony,  the largest music publisher in the world, was announced on 9 January. These deals allow Facebook and Instagram users to upload homemade video clips containing songs owned by Universal or Sony, without generating a takedown notice.

Continue reading “Facebook won’t stop the music”