TRADE MARK
Artists
-Eminen Wins Back Domain Name-
Eminem has won a cybersquatting case against a British company who used his name without permission. Eminemmobile.com, which sells ringtones and picture messages, has been ordered to hand the domain name back to the star within ten days. The site featured a disclaimer stating it is unofficial and not connected to Eminem but the ruling made by the United Nation's World Intellectual Property Organisation (WIPO) found that Tim McIntosh and Visitair, which runs the site, had no legitimate rights to the domain name. It must transfer back to the rapper within the ten day period unless the company decides to appeal against the ruling. Eminem is the first rap star to use WIPO in settling a dispute over a domain name. Other singers, including Robbie Williams, Madonna and Celine Dion have used the organisation in the past to settle similar disputes. It is the second legal battle Eminem has been involved in this year, as he pursues a claim against Apple Computer for alleging the company used his hit single Lose Yourself in a TV advert without permission.

See : http://news.bbc.co.uk/1/hi/entertainment/music/3653089.stm

'Abusive Registration' under the Nominet UK Dispute Resolution Policy
In March 2004 Google Inc won an action brought under the Nominet UK Dispute Resolution Service against LWD Internet who registered the domain name froogle.co.uk the day after Google launched its online shopping service 'Froogle'. The independent expert's decision has broadened the scope of the term of 'Abusive Registration' under the Dispute Resolution Policy. To establish that a domain name registration is abusive, a complainant must prove that the registration and the use of the domain name took unfair advantage of or was unfairly detrimental to his rights. For example, pre Google, an offer to sell a domain name for inflated financial consideration or use of a domain name in a manner that damages a complainant's reputation had been considered sufficient proof. However, the independent expert in this case decided that the mere fact that the domain name was registered only one day after Google's launch of their Froogle service was enough to prove that the registration was abusive.

From Pictons 'In The Know' email newsletter May 2004. http://www.pictons.com
Email: ip@pictons.com

For details of recent decisions of the Czech Courts in domain name disputes by Dr Karel Cermak see : http://www.mondaq.com/article.asp?articleid=25549&email_access=on

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COPYRIGHT
Music Publishing, Artists
-EMI Files Lawsuit Against Electronic Arts-
EMI Group Plc, one of the world's largest music companies, has filed a federal lawsuit against Electronic Arts Inc., the world's largest video game publisher, over claims of copyright infringement in EA's highly successful sports games. The suit, filed in federal court in New York on Wednesday, says a number of EA's recent sports titles, like "Madden NFL 2004", "Tiger Woods PGA Tour 2004" and "MVP Baseball 2004" use songs that "embody copyrighted musical compositions that EMI owns, co-owns, administers or otherwise controls." EA and other publishers have increasingly made music an important part of their games, debuting new songs by both up-and-coming and established artists in their games before the artist's CD is released. Some have established divisions dedicated to producing and acquiring music for their titles. "This entire lawsuit is related to a single song that samples lyrics from another song," Electronic Arts said in a statement. "Our use of that song was licensed directly from the artist. We have agreements for every song used in our games." EMI claimed in the suit that EA sought licenses throughout 2003 from EMI for the use of certain songs for its sport games, but then released the games before the licenses were granted. Subsequently, EMI said, EA renewed its license requests in mid-February of this year. EMI countered with a letter in early March claiming its rights had been infringed and withdrawing any outstanding licensing offers. The suit seeks damages and the potential award of a percentage of EA's profits on those games, which EMI said was "believed to be tens of millions of dollars."

See : http://www.reuters.com/newsArticle.jhtml?type=technologyNews&storyID=4912877

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TRADE MARK
Artists, Merchandising
-European Community Trade Mark Registration: Compass Publishing BV v Compass Logistics Ltd (2004)-
This case involved two companies with the same name, the claimant being the pan-European business consultancy Compass Publishing BV ("CP") and the defendant the UK based Compass Logistics Ltd ("CL") who offered management consultancy services. CL had been trading since 1995 using the name "Compass" and "Compass Logistics". The claimants had secured a Community Trade Mark in 1996 for the word 'Compass' in a class including business and management consultancy. The Claimant filed three claims for infringement of its trademark. The defendant argued that the Community Trade Mark should be held invalid as by the date of the registration they, CL, had acquired a valuable and protectable goodwill in respect of the mark "Compass Logistics" and that they could have brought an action against CP using the law of passing off. The defendant argued that the mark should be declared invalid to the extent that it covered any field of business consultancy, particularly relating to logistics, where the use of "Compass" would cause confusion with "Compass Logistics". The defendants argued that they had already built up goodwill in their name before the claimant's registration of the mark Article 8(4) of EC regulation 40/1994 provides that: upon opposition by a proprietor of a non-registered trade mark or another sign used in the course of trade of more than a mere local significance the trade mark shall not be registered where and to the extent that pursuant to the laws of the member stage governing that sign (a) rights to that sign were acquired prior to the date of application (b) that sign confers on its proprietor the right to prohibit the use of subsequent trade mark. Mr Justice Laddie held that at although at common law the claimant of a mark could not claim to 'own' that mark, it would have had a protectable right under the common law and held that this would have entitled CL to use section 8(4) to attack the validity of CP's Community trade mark. But Laddie J accepted that in this case much as CL's goodwill extended only to a reputation with a small number of potential customers in England and Wales. It thus fell within the 'mere local significance' category of use and this in itself was not sufficient to invalidate CP's community trade mark. The Claimant succeeded in relation to its case of infringement of its CTM. The Times 29 April 2004 (Judgement March 24 2004).

COMMENT : One area of the music industry which has created a number of disputes recently is band names - the 'Liberty v Liberty X' and 'Blue v Blue' litigation being good examples. This is an interesting review of how the goodwill attached to say a band's name can be protected. Clearly a Community Trade Mark is a powerful tool to protect a name on a European wide basis in all EU member states. It is usually good advice to any artist or band to seek a trademark for their band or performing name and Robbie Williams has recently secured a trade mark in his name. There is only a limited mechanism to challenge the validity of a registered CTM and here the defendant's claim failed because they had no trademark only goodwill which they could defend by passing off - but this was held to be only a 'more local' significance in their brand - not enough to displace the claimant's Community trade mark which then prevailed. If CL had managed to acquire a UK trade mark this would have invalidated the CTM meaning that CP would have had to register their mark ex-UK by converting their CTM into national marks in those territories where the earlier mark was not registered. An earlier mark would also have prevented any application for a CTM.

See Previous Law Updates:
APRIL 2004: New York Mets Gain UK Mark Registration
APRIL 2004: ARTICLE: United Kingdom: Trade Mark Registration - v - Trade Mark Use: A Costs/Risk Analysis
FEBRUARY 2004: Robbie Williams Trademarks His Name
AUGUST 2003: 'Blue' Name Dispute Results In Out Of Court Settlement

See : http://www.bbc.co.uk/radio1/onemusic/startingout/namesp08.shtml

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TRADE MARK
Record Labels, Music Publishers, Artists, Merchandising, Live Event Industry, Television, Internet
-New Trade Mark Act in Czech Republic-
As of April 1st 2004 a new Trademark Act (No.441/2003) will come into force in the Czech Republic. Although the structure of the Act has been considerably amended, there are only limited substantive changes in the law. However there are completely new are provisions concerning Community Trademarks, which will be automatically extended to the Czech Republic with the date of its accession to the European Union (these provisions will come into force as of May 1st 2004). The most important amendments are detailed in an article by Almut Rohnstock and a link is provided below. The definition of trademarks (Art.1) has been slightly amended, now including the possibility of colour trademarks; Art.2 now regulates which trademarks are able to claim protection in the Czech Republic, including CTMs and well-known trademarks according to Art.6 of the Paris Convention. Community Trademarks with seniority may also claim older rights (Art.3). Grounds for refusal ex officio (Art.4) as well as grounds for opposition (Art.7) and nullity (Art.32) newly include applications filed in bad faith. The provisions concerning oppositions and nullity (Art.7 and 32) based on known trademarks have been reformulated and expanded; the respective motions can now be based not only on "well-known " trademarks, but also on trademarks with a reputation.

See : http://www.mondaq.com/article.asp?articleid=25541&email_access=on

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CONTRACT LAW
Record Labels
-ARTICLE: DISTRIBUTION AGREEMENTS-
by Sarah Waddington
The problems surrounding 3MV's insolvency have brought to a head the sometimes thorny issue of ownership of stock. These problems should prompt every independent label to look at their own distribution agreement.
A number of independent record companies distributed by 3MV may rue the day they did not pay more attention to the clause in their distribution agreement which governs when ownership of stock - records - passes from them to the distributor. Ownership of stock is one of the provisions in standard distribution agreements which need to be reviewed very carefully.
The Sale of Goods Act 1979 allows contracting parties to agree the time at which ownership of goods will pass. In the absence of an express provision, ownership of goods passes when they are delivered. A number of 3MV's distribution contracts expressly provide for ownership of records to pass on their delivery to 3MV and, in some circumstances, on manufacture. From that date those records are assets of 3MV.
This is not in a record company's interest - ownership of these records should be retained by the record company until payment for them is received.
If ownership of records is retained until payment is received, the record company has a right to recover those records in the event of non-payment or reimbursement of their full value, whether the distributor is solvent or insolvent.
If ownership passes and the distributor then becomes insolvent, payment for the sale of records is governed by insolvency law. On insolvency, particularly if (as is likely) the independent record company is an unsecured creditor of the distributor, that company will receive little or nothing, depending on the extent of the distributor's insolvency. Further, if the record company removes its records from the distributor's warehouse, unless there are specific provisions allowing the record company to do this, the record company may open itself up to a variety of claims, including theft.
Many independent record companies will say that even if their distribution agreement provides for ownership of records to pass to the distributor on delivery (or manufacture), their agreement does allow them to collect unsold records on expiry or termination of their agreement (usually provided any outstanding money due to the distributor has been paid). Indeed, 3MV has directed a number of labels to collect unsold records from Pinnacle's warehouse.
That's all well and good but, legally, who owns those unsold records? Unless the distribution agreement expressly states that ownership of unsold records reverts to the record company on collection, the record company may find itself holding the collected records (or the proceeds of their sale) on trust for the distributor. To overcome this, the record company must establish that the collection of records provision in the distribution agreement is meaningless unless a term is implied that ownership of collected records reverts to the record company.
A liquidator, administrator or receiver may not accept this argument without court approval, particularly if the amount of unsold records is significant and comprises records by successful artist(s). In such circumstances, the record company may be forced to bring an action for interference with its property against the liquidator, administrator or receiver.
If a liquidator, administrator or receiver refuses to accept that ownership of unsold records reverts to the record company on collection without court approval, this will lead to delay, possibly the non-return of records and the incurring of legal fees at a time when a record company can little afford it. There are numerous instances of record companies who have folded as a result of their distributor going bust.

Sarah Waddington , solicitor. This update is © The Simkins Partnership.
This bulletin is for general guidance only. Legal advice should be sought before taking action in relation to specific matters.
The Simkin's website is at http://www.simkins.com

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COPYRIGHT
Record Labels, Music Publishers, Internet
-World Piracy News-
Dutch police and the criminal anti-piracy enforcement team of the FIOD-ECD have completed an investigation into organised criminal groups resulting in the seizure of 17,000 pirate CDs and DVDs and the arrest of six people. Over sixty police offers carried out simultaneous raids on different addresses including a CD/DVD plant. A representative of the Indian Music Association was present because over 15,000 of the pirate DVDs seized were in hindi. Other DVDs included pirated copies of Finding Nemo and Lord of The Rings. Greek figures show that over 1.1 million CDs, CDRs and MCs were seized in 2003 under raids organised by the IFPI (an increase of 46.38% on 2002). In addition police sized a further 521,345 units in other raids. In 2003 1,941 individuals were prosecuted in Greece for music piracy offences. In the Ukraine a joint investigation between law enforcement agencies and the IFPI led to a major raid on a illegal warehouse. 210,000 CD and DVD inlays were seized along with more than 26,000 units. The IFPI say that almost all of the pirated material found in the Ukraine, Poland and other eastern European countries originate in Russia and are then 'packaged' locally across the eastern block. As Lithuania joins the European Union the Police Commissioner General has set up a Intellectual Property Protection subdivision within the state Crime Investigation Bureau. The unit is complemented by the introduction of a new criminal code which came into force in 2003. Russia is in the IFPI's 'top ten' of targeted problem markets. Jay Berman, IFPI Chairman has said 'copyright piracy is a critical problem in Russia … Russia has the potential to become a highly successful music market but first it is essential to bring its spiralling levels of piracy and copyright infringement under control". Nigeria and South Africa are two examples of the problems facing the African continent and local music companies face major challenges from imported pirate discs which originate from South East Asia (in particular Malaysia and Thailand). In just two months in 2003 South African police in Durban intercepted six containers holding more than 1,500,000 discs in transit to Nigeria. The IFPI continues to organise raids in countries where the discs originate: The IFPI is continuing a two year long investigation in Malaysia against the countries largest organised pirate distribution syndicate, seizing 350,000 audio discs in 2003. Economic Crimes Division officers in central Bangkok, Thailand, seized 40,000 pirated discs in one raid. Thailand now has a dedicated Intellectual property and Intellectual Trade Court which provides search warrants to facilitate raids.

See : http://www.ifpi.org

Source : IFPI Enforcement Bulletin Issue 22 March 2004, © IFPI 2004

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PRIVACY
Arists
-Naomi Campbell triumphs in privacy battle: Campbell v Mirror Group Newspapers (2004)-
Model Naomi Campbell has won her privacy battle against the UK's Daily Mirror after the newspaper reported her attendance at a Narcotics Anonymous meeting in 2001. The House of Lords re-instated the High Court's award of £3,500. The Newspaper is left with legal costs estimated at £1 million. Editor of the Daily Mirror, Piers Morgan, was reported as saying "this is a good day for lying, drug abusing prima donnas".
By a majority of three to two, the House of Lords has reversed the decision of the Court of Appeal and reinstated the judgement of Mr Justice Morland in the High Court (see our early warning of March 2002) that the Mirror had breached the provisions of the Data Protection Act 1998 and her right to confidentiality in her treatment for narcotics addiction. The Courts held that the details of Campbell's treatment (therapy) were medical records and therefore by their very nature confidential and private.

Reference: See the article by Martin Soames, The Guardian (Media p10), May 10th 2004

COMMENT : Naomi Campbell's argument was that she had and should be allowed to have therapy for drug addiction in private. Campbell's original claim was threefold (1) a claim for a breach of her right to privacy under article 8 of the Human Rights Act 1998 (2) breach of confidentiality and (3) breach of the provisions of the Data Protection Act 1998: It was the final two parts that proved successful and in particular that ruling that her therapy was medical treatment and was therefore confidential and anyone in possession of this information should not pass it on to a third party (or publish the information). The Mirror's argument is equally simple - it has the right to inform its readers the truth about a public figure and that the model had lost any right to privacy by lying about her addiction. The model did accept that the paper had a right to tell its readers she was receiving treatment for addiction - the Mirror argued that this should be extended to a right to give details of her attending Narcotics Anonymous. But the Law Lord extended the fairly dated concept of confidentiality into the new era of 'privacy' - but celebrities must beware that the protection is only limited - courts object to photographs being taken secretly and at a great distance but balance this against the press right to a freedom of expression and to report on matters of public interest.

It has not gone unnoticed that five senior judges (three Lord Justices and two Law Lords) found for the Mirror and only four (three law lords and Mr Justice Morland) for Campbell. The two most experienced law lords sided with the Mirror. This case has been all about balancing the model's right to privacy against the paper's right to publish where in the public interest. The final stage in this story could be a claim to the European Court of Human Rights by the Mirror under the Human Rights Act 1998 - in that their right to a freedom of expression (article 10) has been breached.

ARTICLE: By Jonathan Coad, Solicitor
The action arose from a report and photograph in the Daily Mirror in February 2001 that Naomi Campbell was attending meetings with Narcotics Anonymous in Chelsea to beat her addiction to drugs, an addiction which she had previously denied. The core issue before the court was whether the publication at issue "was legitimate in that the public interest in favour of publication outweighed any public interest in the protection" of Naomi Campbell's rights of confidentiality.

The dissenting judgements came from Lord Nicholls and Lord Hoffman. Lord Nicholls, despite finding against Ms Campbell commented: "The importance of freedom of expression has been stressed often and eloquently, the importance of privacy less so. But it too lies at the heart of liberty in a modern state. A proper degree of privacy is essential for the well being and development of an individual."

After observing that there was no "all embracing" cause of action for "invasion of privacy", Lord Nicholls observed that "the time has come to recognise that the values enshrined in Articles 8 and 10 [of the European Convention on Human Rights] are now part of the cause of action for breach of confidence." He went on to observe that "the touchstone of private life is whether in respect of the disclosed facts the person in question had a reasonable expectation of privacy." Lord Nicholls however concluded that Naomi Campbell's privacy rights were not infringed, and dismissed the appeal.

Lord Hoffman identified the point dividing the House as a narrow one, namely whether in exposing falsehoods on the part of Ms Campbell about her use of drugs "the newspaper went too far in publishing associated facts about her private life."

Lord Hoffman also observed that there is no general cause of action for privacy in this jurisdiction, but stressed that "the right to privacy is in a general sense one of the values, and sometimes the most important value, which underlies a number of more specific causes of action, both at common law and under various statutes". Lord Hoffman endorsed the view expressed by the Court of Appeal when it said that when publication of confidential information is justified in the public interest, "the journalist must be given reasonable latitude as to the manner in which the information is conveyed to the public or his Article 10 right to freedom of expression will be unnecessarily inhibited."

Like Lord Nicholls, Lord Hoffman also dismissed the appeal on the facts, while upholding the general principle that the privacy of the individual should be protected under the UK law. Lord Hope made a strong point of the need for privacy in any battle against an addiction to drugs or alcohol. He also rejected the dismissal by the Court of Appeal of the analogy between information that Naomi Campbell was receiving therapy from Narcotics Anonymous and information about details of a medical condition or its treatment. He said that he thought that the trial judge was right to regard the details of Naomi Campbell's attendance at Narcotics Anonymous as private information which gave rise to a duty of confidence.

Lord Hope also criticised the Court of Appeal's approach of judging whether the disclosure of the information "would have offended the reasonable man of ordinary susceptibilities" on the mind of the reader, rather than the mind of the person who is affected by the publicity. He then looked at striking the balance between the rights according to Article 8 and Article 10 of the European Convention on Human Rights, and concluded that this infringement of Naomi Campbell's right to privacy could not be justified in weighing those two competing rights, and allowed the appeal.

Baroness Hale conducted a balancing exercise between the Article 8 right of Naomi Campbell and the Article 10 right of the Daily Mirror. Baroness Hale drew a distinction between various types of speech, placing political speech as the most important. Here, however, the newspaper had disclosed "intimate details of a fashion model's private life", which they clearly regarded as a rather less public interest. She concluded by citing the Press Complaints Commission Code of Practice as it referred to privacy, and concluded that on applying these principles she should allow the appeal.

Lord Carswell also rejected the distinction made in the Court of Appeal between information concerning therapy at Narcotics Anonymous and details of the treatment of a medical condition. He considered that the decision was a delicately balanced one, but concluded that the information published concerning Naomi Campbell's therapy at Narcotics Anonymous constituted "a considerable intrusion into her private affairs, which was capable of causing substantial distress, and on her evidence did cause it to her." He therefore considered that the balance came down in favour of Naomi Campbell, and also allowed the appeal. The balancing exercise between the rights of privacy and free speech conducted by the House of Lords makes the job of lawyers advising in this field extremely difficult. Two fundamental rights collide when such issues arise, and it is very often not so much a legal judgement but one of instinct and principle which will determine whether the court will intervene on an issue of privacy or not. However, as all the judges agreed, some protection for privacy is essential in the UK law, and that at least has been established by this majority decision of the House of Lords.

Jonathan Coad , Solicitor.

This update is © The Simkins Partnership.
This bulletin is for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court.
The Simkins website is at http://www.simkins.com

See Law Updates May 2004: The New Zealand Court of Appeal Formulates a Law of Privacy: Michael Hosking v Pacific Magazines

ADDENDUM
In France a court order banning the publication of a book containing details about how former French president Francois Mitterand lied about his prostrate cancer has been lifted. The European Court of Human Rights said the ban on the work by Dr Claude Gubler, Mitterand's private doctor, was an infringement to his right to free speech. After Mitterand's death in 1996 Gubler published the book called Le Grand Secret and admitted he had faked Mitterand's medical reports. The ECHR said that as Mitterand was some months dead by the time the injunctive order was made and since the faked report were common knowledge (40,000 copies of the book had been sold) the banning order was disproportionate. Dr Gubler was found guilty of breaking the Hippocratic Oath by the French Order of Doctors and banned from practice, fined and given a suspended prison sentence. Mr Gubler's publishers were awarded their legal costs.
Source: The Times 19 May 2004

ADDENDUM 2
On Saturday 29 May 2004 former Olympic champion and now chair of London's Olympic Bid Sebastian Coe unsuccesfully attempted to obtain a temporary injunction against the Sunday Mirror and the Mail on Sunday to prevent further revelations of his relationship with former lover Vanesa Lander. Mr Justice Fulford rejected the application for the injunction saying that he was not satisfied that Lord Coe would obtain a full injunction after both side's arguments were aired; The newspapers' right to publish outweighed Lord Coe's right to keep personal information private. Lord Coe, who is married with three children, alledgedly had a long-term extra-marital affair with Ms Lander and had paid for her to have an abortion whilst his wife was expecting their third child. Mr Justice Fulwood held that as a public figure recently in the news Lord Coe could not expect to have the right to keep that information private.
see: www.mediaguardian.co.uk

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COPYRIGHT
Record Labels, Internet
-Apple Fights Open Source Software in India-
In an intermittent war between the open-source community and the proprietary software industry, Apple Computers has slammed a legal notice on Sarovar.org for hosting a software tool called Playfair. Sarovar.org, a Thiruvananthapuram based Indian portal dedicated to the open source software community, had hosted Playfair, a tool that enables free download of music files from Apple's properitary online music store, iTunes. iTunes contains around 500,000 music files and offers users the facility to download music by paying 99 cents per song. The downloaded music can be played only on iPods, again a proprietary Apple hardware that permits the playback of such music. However, PlayFair, written by a US programmer, enables a user to play the songs from Apple's iTunes on any operating system. Playfair was first hosted by a US-based website called Sour-ceForge but Apple invoked the DMCA (Digital Millenium Copyrights Act) against PlayFair and asked SourceForge to remove the tool from its site. The tool was almost immediately relocated to Sarovar.org. On April 19, 2004, Sarovar.org received a legal notice from the Indian attorneys of Apple, citing provisions of the (Indian) Copyright Act and the (Indian) Information Technology Act by which they attempted to demonstrate that the hosting of the PlayFair tool on the Sarovar.org servers was in direct contravention of the law.

See: http://www.financialexpress.com/fe_full_story.php?content_id=58495

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COMPETITION/COPYRIGHT
Record Labels, Music Publishers
-EU Commission to Investigate 'One Stop' Licensing Schemes in Europe-
The European Commission has announced that it has warned 16 EU collection societies that an agreement between them to create a "one-stop shop" music licence may be in breach of EU competition rules. The agreement, known as the Santiago Agreement, was signed in October 2000 by five organisations - including the UK's Performing Right Society (PRS) and Broadcast Music Inc (BMI) from the US. The Santiago Agreement is designed to tackle the problems that traditional copyright licensing schemes have faced in light of the growth of new technologies and Internet use, in particular the impossibility of limiting digital services by the notion of territoriality; once uploaded to the Internet, copyrighted music is accessible from almost anywhere in the world so the concept of 'German' or 'British' rights is inapplicable. The traditional licensing framework requires a commercial user wishing to offer such music to obtain a copyright license from every single relevant national society. The Santiago Agreement sought to adapt the traditional framework to the online world by allowing each of the participating societies to grant "one-stop shop" copyright licences which included the music repertoires of all member societies and which were valid in all their territories. The Agreement was notified to the Commission in April 2001 by the collecting societies of the UK, France (SACEM), Germany (GEMA) and the Netherlands (BUMA). These were subsequently joined by all societies in the European Economic Area (except for the Portuguese society (SPA) and the Swiss society (SUISA)). Yesterday the Commission announced that, while it strongly supports the "one-stop shop" principle for online licensing, it also considers that such crucial developments in online-related activities must be accompanied by an increasing freedom of choice for EU consumers and commercial users as regards their service providers. According to the Commission, the structure put in place by the parties to the Santiago Agreement results in commercial users being able to apply for the licence from only the collecting society established in their own Member State. This, says the Commission, could be in breach of competition rules. They should be able to apply in ANY member state for a Europe-wide licence. The Commission have in the past (2002) exempted a similar type of agreement - a simulcasting agreement that established pan-European licensing of musical repetoire for television use without imposing territorial exclusivity. Under this agreement, TV and radio broadcasters can obtain a licence from any of the collecting societies located in the EEA in order to simultaneously transmit their music broadcasts via the Internet. This freedom of choice means that broadcasters can choose the most efficient society in Europe for the delivery of the licence. In addition, the record producers' collecting societies announced in 2003 that they had concluded a standard agreement for the purposes of Webcasting licensing, under which commercial users enjoy a similar freedom of choice as regards the licensor society in Europe. The Commission concern is that the territorial exclusivity afforded by the Santiago Agreement is not justified by technical reasons. The Commission is further concerned that the lack of competition between national collecting societies in Europe hampers the achievement of a genuine single market in the field of copyright management services and may result in unjustified inefficiencies as regards the offer of online music services, to the ultimate detriment of consumers and in breach of EU competition law. The Commission has therefore sent a "Statement of Objections" to each of the EU collecting societies party to the Santiago Agreement although this does not prejudge the final outcome of the investigation. The collecting societies have two-and-a-half months to reply to the Commission's objections. They can also request a hearing at which they would be able to submit their arguments directly to the representatives of the national competition authority.

See: http://www.out-law.com/php/page.php?page_id=musicroyaltiesdeal1083668790&area=news

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COMPETITION/COPYRIGHT
Record Labels, Music Publishers
-European Commission Seeks to Regulate Collection Societies-
The European Commission has launched consultations with a view to regulate collection societies which manage the marketing of copyrighted products such as CDs and DVDs. Collection societies act as trustees for rights holders, but the way they function may vary considerably within the EU and is an obstacle for businesses, the Commission said. This view is supported by the European ICT industry association (EICTA) which says many collection societies are actually slowing down businesses that distribute content online because they have to negotiate with one or more collecting societies in each country to obtain the rights to use content in that territory. EICTA is advocating official recognition and large-scale adoption of Digital Rights Management (DRM) systems. DRMs are used to protect and secure payments of online material such as music. They are based on direct licensing agreements which means that collecting houses could end up being bypassed because the products' copyright would be managed directly by software. But the Commission paper says that those technologies have not yet been developed to a satisfactory level. It states that "a necessary pre-condition for their development is their interoperability and acceptance by all stakeholders, including consumers". The EICTA have said that interoperability of DRMs should be left to market forces to decide and that regulatory decisions were not welcome in this matter. The recording industry association IFPI also looks to DRMs as a great opportunity for developing safe online music distribution and feels DRM standards should emerge from the market alone, not regulation. Civil liberties' groups have warned that DRMs could hamper competition if they are developed by inter-industry cartels seeking to monopolise the market. By calling for DRMs to become interoperable, the Commission is seeking to avoid just that.

See: http://www.euractiv.com/cgi-bin/cgint.exe?204&OIDN=1507566&-tt=in

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CONTRACT
Record Labels, Artists, Music Publishers
-Rapper Ras Kass Launches Action Against Priority Records, Capitol and EMI-
Rapper Ras Kass (real name John Austin) has filed suit against Priority Records, Capitol Records, EMI Music and two Priority executives, claiming breach of contract, unfair competition, restraint of trade and other abuses. The suit, filed in California Superior Court in Los Angeles, seeks a rescission of the musician's contract, and compensatory and punitive damages to be determined. According to the suit, in 1995, Austin, who was then a 22-year-old Patchwerk Records artist, signed a contract with Priority requiring delivery of one album, with an option for five more albums.
The action claims that Priority failed to market and promote the albums "Soul on Ice" (1996) and "Rassassination" (1998). It also alleges that two Priority executives maliciously interfered with Austin's career. The suit further alleges that the releases of Austin's third and fourth albums were sabotaged, and that Priority interfered with a proposed group project for Sony that would have featured Austin, Xzibit and Saafir. According to the suit, owing to "fraudulent accounting practices," Austin has received only $100,000 during the nine years of his contractual agreement, an average of approximately $11,000 per year. The 32-page filing broadly excoriates standard record-industry practices, and calls Austin's contract "unconscionable." It also claims that recording artists do not receive adequate protection under section 2855 of the California Labor Code, which prohibits the enforcement of personal-service contracts after seven years. Entertainment contracts are broadly exempt from this section in California although this position is under review by the Californian Senate.

COMMENT : This action has some similarity to the 1994 'George Michael' case in the UK when Michael took on Sony Music Entertainment in attempt to free himself from a contract for personal services. In that case, Michael failed because an earlier contract amendment had been made to settle potential legal actions. However, in that case, Mr Justice Parker identified the main issues which can blight exclusive record agreements. All exclusive contracts for personal services contain some degree of restraint of trade. Where terms are unreasonable the courts will find the contracts void and set them aside.

For more information in this area of COPYRIGHT on Law Updates see:
Law Updates May 2004 Maverick launches legal action against Warner Music
Law Updates October 2003 Jackson falters in suit against Motown and Universal
Law Updates June 2003 US Court hammers Majors accounting practices
Law Updates June 2003 Michael Jackson launches action against Motown
Law Updates June 2003 California Senate to consider draft law to oblige record labels to calculate royalties

You can see the Recording Artists' Coalition comment on 'Recording Industry Practices' at http://www.recordingartistscoalition.com/rip.html

Panayioutou v Sony Music Entertainment (UK) Ltd (1994) ECC 395
ZTT Records & Perfect Songs Limited v Johnson (1993) EMLR 61
Armatrading v Stone (1994) (in Bagehot & Kannaar [1998] Music Business Agreements)
A Schroeder Music Publishing Co Ltd v Macaulay (1974) 3 ALL ER 616

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COPYRIGHT
Record Labels, Internet
-Warners Wins Chinese Infringement Action but Lament Low Damages-
Warner Music Group may appeal against a court penalty on a Chinese website that offered illegal song downloads because it says it is too lenient to deter piracy. Shanghai Rongshuxia Computer was ordered to pay 15,000 yuan to Warner Music Taiwan by the Shanghai Intermediate People's Court on Monday, less than 10 per cent of the 250,000 yuan the company had sought. Rongshuxia is a partner of Bertelsmann, Germany's biggest media company. Music companies have stepped up legal attacks on unauthorised downloading over the internet after piracy caused global recorded music sales to slump 7.6 per cent to US$32 billion last year. Warner Music and Bertelsmann's BMG unit were among five companies that warned Chinese websites against piracy in March, the Beijing Times reported on April 15. Warner Music, sued Rongshuxia for offering 10 songs by Chinese female singer Na Ying for free download on its website from April 2002. Rongshuxia, mainly an online publisher of Chinese literature - it has more than two million texts on its site - withdrew the music files after Warner complained in March last year. Warner Music's compensation claim was felt to be too high because it was based on the 99 US cents per download that the New York-based company charged in the United States market. China had more than 7,200 websites that allowed free downloading of songs, only about 10 of which had paid copyright fees, state-run China Central Television reported on its website on April 5. Chinese Vice-Premier Wu Yi agreed last month to clamp down harder on piracy of US music, movies, software and other products during trade talks in Washington. US companies say counterfeiting and piracy costs US$200 billion a year in lost revenue, with China the biggest offender. Warner Music won a lawsuit in March against a Beijing-based karaoke operator accused of illegally playing music videos and threatened to sue more violators.

Source: http://www.asiamedia.ucla.edu/article.asp?parentid=11100

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COPYRIGHT
Record Labels, Internet
-Dutch Courts Clear Internet Search Engine of Copyright Infringement in Download Facilitation-
A court in the Dutch city of Haarlem has cleared Techno Design, the operator of music search-engine portal, Zoekmp3.nl, of copyright violation. The charge had been brought by BREIN, the Dutch entertainment industry's anti-piracy association. The Dutch appellate court has already held that Kazaa was not guilty of infringement in a case brought by the Dutch Collection societies, BUMA and STEMRA. Zoekmp3.nl, which appears in the top twenty of the most popular Dutch websites, has access to some 30,000 music links. In its hey-day, Zoekmp3.nl had some 50,000 daily visitors and offered MP3 music files worldwide through an estimated 200,000 web pages. The court ruled that providing links to an MP3 file did not constitute disclosure or publication of contents according to Dutch copyright law. It went on to say that what Techno Design did is not unlawful, largely because providing services or assistance that could subsequently lead to infringement and unlawful trade by third parties is in itself not (yet) unlawful. The verdict means that the portal will not be shutdown and can continue to be used to search for music on the internet, regardless of whether its findings point to music that is legal or illegal to download. According to Techno's lawyer, Alberdingk Thijm: "If BREIN wants to do something against unlawful music on the internet, it should go after the music providers and not the search engine". BREIN is planning to appeal the verdict.

Source: http://www.dmeurope.com/default.asp?ArticleID=1789

See the article by Ben Challis at : http://www.musicjournal.org/03dontshootthemessenger.html

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© 2004 Ben Challis