INFORMATION FOR READERS:
This resource aims to give a brief overview of developments in Intellectual
Property law and other areas of law relevant to the music and entertainment
industries. Each item is categorised according to relevant areas of the
music or entertainment business, and by the date of uploading. Uploads
are undertaken regularly and are organised on a monthly basis. These updates
are designed to give general information for music and entertainment industry
professionals and students interested in these areas. These Law Updates
are not law reports or detailed references. Users who would like further
information should research the relevant area thoroughly. Relevant references
and links are therefore provided.
Law Updates also provides hyperlinks to other sites which may be of use or interest to legal professionals, academics, students and those involved in the music industry. These are provided at the end of Music Law Updates Archive under 'Music Business Law Links'. You will also find all of these links and other hyperlinks on the links page.
This resource is compiled by Ben Challis. Ben is a UK lawyer specialising in entertainment law and a graduate in law from Kings College London and The City University. He also holds the degree of Master of Arts in Mass Communications from the University of Leicester. Ben is a fellow of the Royal Society of Arts. Ben acts as General Counsel for 3A Entertainments, one of the UK's leading concert promoters, and is Executive Producer for television of the Glastonbury Festival. Glastonbury is the UK's leading music and arts festival attended by over 150,000 people. For Glastonbury, Ben combines the role of managing the Festival's broadcast and other media rights alongside acting as General Counsel for the Festival. Ben's other clients have included the Prince's Trust, the Granada Media Group, Pioneer LDCE and British Telecom. Ben regularly writes articles and other material on music business and intellectual property law, contributes to books and is a regular conference speaker in particular on the live music industry. He is currently preparing a collection of cases and materials on music business law for publication. Ben is a visiting Senior Lecturer in Law at Buckinghamshire Chilterns University College in England and sits as a magistrate (Justice of the Peace) in Hertfordshire, England.
We are interested in your views on the Law Updates resource. Please forward any comments to : musiclaw01@aol.com
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COMPETION
Record labels, music publishers
ARTICLE The European Court annuls the European Commission’s approval of the Sony BMG merger Case T464/04 Independent Music Publishers and Labels Association v Commission of the European Community
By Ben Challis Barrister, Editor Music Law Updates
The European Court of First Instance has annulled the European Commission’s approval of the 2004 merger between Sony Music and BMG, which allowed the music industry to shrink from five major companies to four. The case, brought to court by IMPALAon behalf of European independent record labels, has been closely watched by Warner Music and EMI who must now wait and see how Europe's top antitrust authority will react to the court’s decision.
The court considered two pleas brought by IMPALA: The first plea was in regard to the strengthening of a pre-existing collective dominant position in the market for recorded music and the second plea: creation of a collective dominant position on the markets for recorded music.
The Court noted the case-law of the Court of Justice regarding an alleged collective dominant position which has held that the Commission must assess, using a prospective analysis of the reference market, whether the concentration which has been referred to it leads to a situation in which effective competition in the relevant market is significantly impeded by the undertakingsinvolved in the concentration and where … the undertakings involved … are able to adopt a common policy on the market and act to a considerable extent independently of their competitors, their customers and, ultimately, of consumers (Joined Cases C-68/94 and C-30/95 France and Others v Commission [1998] ECR I-1375).
The Court also noted that The Court of First Instance has held that a situation of collective dominance which significantly impedes effective competition in the common market or a substantial part thereof may therefore arise following a concentration where, taking into account the actual characteristics of the relevant market and of the change to its structure brought about by the completion of the transaction, the concentration would have the consequence that, being aware of the common interests, each member of the dominant oligopoly would consider it possible, economically rational and therefore preferable to adopt the same policy on a lasting basis on the market with the aim of selling at above competitive prices, without having to conclude an agreement or resort to a concerted practice within the meaning of Article 81 EC, without actual or potential competitors, or customers and consumers, being able to react effectively (see, to that effect, Case T-102/96 Gencor v Commission [1999] ECR II-753 and Case T-342/99 Airtours v Commission [2002] ECR II-2585).
The court reached the conclusion that the both first and second pleas “are well founded in that the Decision is vitiated by, first, inadequate reasoning and, second, a manifest error of assessment in so far as the elements forming the basis of the Decision do not constitute all the relevant data that must be taken into consideration and are not sufficient to support the conclusions drawn from them.” The court then went on to say “It follows that, without there being any need to examine the plea relating to the strengthening or the creation of a collective dominant position on the wholesale market for online music licences or the plea relating to the coordination of the respective activities of the parties to the concentration in the sphere of music publishing, the Decision must be annulled.”
The Court held that "The Commission did not demonstrate to the requisite legal standard either the non-existence of a collective dominant position before the concentration or the absence of a risk that such a position would be created as a result of the concentration". The Court said
“… in the present case, the alignment of prices, both gross and net, over the last six years, even though the products are not the same (each disc having a different content), and also the fact that they were maintained at such a stable level, and at a level seen as high in spite of a significant fall in demand, together with other factors (power of the undertakings in an oligopoly situation, stability of market shares, etc.), as established by the Commission in the Decision, might, in the absence of an alternative explanation, suggest, or constitute an indication, that the alignment of prices is not the result of the normal play of effective competition and that the market is sufficiently transparent in that it allowed tacit price coordination .”
The court held that the findings made in the Commission’s decision concerning the transparency of the market were not supported by a statement of reasons of the requisite legal standard and “are vitiated by a manifest error of assessment”. The Court also held that the assertion by the Commission that the markets for recorded music are not sufficiently transparent to permit a collective dominant position is not supported by a statement of reasons of the requisite legal standard and is vitiated by a manifest error of assessment in that the elements on which it is based are incomplete and do not include all the relevant data that ought to have been taken into consideration by the Commission and are not capable of supporting the conclusions which are drawn from them.
When looking at the position post merger (the second plea) the court found that the Commission’s approach had been cursory to say the least noting that the Commission had “devoted less than a page to considering whether the concentration would create a collective dominant position”. The court found that there was sufficient evidence to suggest that the ‘reduction of the majors from five to four represented a change substantial enough to result in the likely creation of collective dominance’, particularly as regards transparency and retaliation and that the Commission’s “few observations, which are so superficial, indeed purely formal” could not “satisfy the Commission’s obligation to carry out a prospective analysis and to examine carefully circumstances which, according to each particular case, may prove relevant for the purposes of assessing the effects of the concentration on competition in the reference market, particularly where, as in the present case, the concentration raises serious problems”
The European Commission now has two options: It has two months to appeal the decision to the European Court of Justice or it can accept the decision and now review the Sony BMG. Any new decision by the European Commission would have to include consideration of current market conditions. The decision, which is critical of the Commission’s decision making process itself, may well lead to even longer periods of consideration of complex mergers by the Commission. Some commentators have suggested that there needs to be a system of ‘provisional’ decisions so companies who plan to merge have some idea of the likelihood of success or failure at the regulatory level.
The decision and may well prove a major hurdle to the proposed Warner Music and EMI tie up (both of course operate in the same market as Sony BMG) and EMI's shares dropped 9.2% on the news in morning trading (13 th July). Having found the first and second please well founded the court held that it did see “ any need to examine the plea relating to the strengthening or the creation of a collective dominant position on the wholesale market for onlinemusic licences or the plea relating to the coordination of the respective activities of the parties to the concentration in the sphere of music publishing” (emphasis added).The pricing of music downloads is already subject to a separate European Commission investigation (and also investigations in the USA) and despite the lack of comment on the ‘sphere of music publishing’ the decision may well prove an obstacle to other potential acquisitions and mergers by the major labels and music publishers such as the potential bids by EMI (the world’s leading music publisher) and Universal (which has a 12% market share) for BMG Music Publishing (the worlds number three music publisher with a 13% market share). EMI have said they would jointly bid with venture capital partners who would own the majority of any acquired company but this may not be enough now to satisfy the admonished European Commission.
See http://msnbc.msn.com/id/13843732/ and see US inquiry into pricing of music downloads at www.guardian.co.uk/frontpage/story/0,,1723218,00.html:
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COPYRIGHT
Internet, record labels
New French law manages to antagonise everyone - consumer groups, online retailers and rights owners.
After a protacted debate The French parliament has finally adopted a law that could force Apple Computer to rethink its digital music business model and move away from its closed system of iPod players and iTunes online music. The controversial law maintains that all electronic devices should be "interoperable", so that consumers can play legally downloaded music on any type of digital player. This means Apple, which has previously called the law "state-sponsored piracy", would have to remove the copy protection measures that prevent consumers playing tracks bought at its iTunes store on music devices that rival Apple's iPod. The final text, a compromise agreed last week, now gives a new regulatory body powers to impose fines of up to 5 per cent of global turnover on companies that refuse demands to publish the source code to their systems.
Industry representatives and consumer groups have savaged the outcome. Those who want interoperability to increase consumer choice say the law has watered down the principle by making the regulatory authority, open only to professional claims, its arbitrator. They say the enw law – the so-called "Loi Vivendi Universal" now favours big companies with the capacity to fight prolonged legal battles and exploit exceptions in the law. But operators and copyright owners are less than pleased as well: Francisco Mignorance, from the Business Software Alliance, said the new fining powers were "something really, really drastic that even competition authorities don't have at the moment," adding, "Many other countries may be inspired by this." Americans for Technology Leadership, a group that includes major US firms like Microsoft, said "while the final version is slightly less severe than the earlier draft, it still illustrates France's complete disregard for intellectual property".
The new law was drafted initially to conform with EU directives on the copyright protection of online works. But, in a concession to months of fierce lobbying by Apple (who threatened to close down iTunes in France) the law also contains a loophole that will allow the US technology company to demand the right to maintain software blocks against competitors. French socialist politicians have said they will tear up the law and draft a much more radical version if they win presidential elections next year. Apple has faced increased pressure from European governments this month with Norway, Denmark and Sweden all saying it must open its closed system under consumer protection laws or stop operating in their countries.
http://www.businessweek.com/ap/financialnews/D8IIKJC00.htm?sub=apn_tech_down&chan=tc
http://news.com.com/France+approves+iTunes+compatibility+law/2100-1027_3-6090368.html
http://www.kfmb.com/stories/story.55458.html
http://networks.silicon.com/webwatch/0,39024667,39160056,00.htm
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TRADE MARK
Internet
French court bars Google from selling trade marks as adwords
The Cour d'appel de Paris found that Google had infringed Vuitton's trade marks, by selling Vuitton’s marks as adwords that were used by sellers of counterfeit or infringing Louis Vuitton products. The most interesting part of the decision is that Google is ordered to refrain from using adwords on its websites if they are accessible in France, regardless of their top level domain extension (such as .com or hk).
From the IPKat - the most excellent and feline friendly IP weblog at http://ipkitten.blogspot.com/2006/07/bonjour-from-france.html
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CONTRACT
Artists
ARTICLE: Seal ordered to pay commission to ex-manager Wadlow v Samuel pka Seal (2006) By Julian Bentley, solicitor, Swan Turton
Multi-million selling solo artist Seal was managed by John Wadlow under a management agreement signed in 1990. In 1995 Seal wanted out. The two of them signed a settlement agreement that year terminating the management agreement and providing for continuing commission to be paid to Wadlow on Seal's first two albums, "Seal" and "Seal II". Seal stopped paying the commission in around 2001. Wadlow issued proceedings. Seal defended the claim alleging amongst other things undue influence and restraint of trade. The judge (Mr Justice Gray) found that Wadlow was entitled to his commission. Under the management agreement Wadlow received commission at the customary rate of 20%. But the agreement was, by today's standards, unusual in two respects. Firstly, Wadlow's entitlement to commission after the end of the term of the management agreement went on forever at the full rate. Almost always these days, there is a tapering or "sunset" provision reducing and then extinguishing the former manager's post-term commission over a period of years. Secondly, Wadlow was entitled to commission on Seal's income from a publishing deal signed in 1989 between Seal and a Wadlow co-owned company. So Wadlow was receiving management commission on Seal's publishing income under the management agreement and also part of the publisher's share of income under this publishing agreement. This is popularly referred to in the music industry as "double dipping" and was even then, as it is now, unusual. The settlement agreement preserved Wadlow's right to perpetual post-term commission for the songs and recordings on the albums "Seal" and "Seal II". It also allowed Wadlow to continue to retain his part of the publisher's share (via his co-owned publishing company) of Seal's publishing income but only for the album "Seal".
Here is a brief look at some of the interesting aspects arising from the judgment:
1. Interpretation of the management agreement
The judge considered the wording of the management agreement in some detail. The agreement only gave Wadlow entitlement to commission for songs and recordings made pursuant to agreements entered into during the currency of the management agreement, ie during its term. Seal's publishing agreement with Wadlow's company and Seal's record deal with ZTT were signed before the management agreement. Seal's position was that Wadlow should not be entitled (and should never have been entitled) to any commission at all on any of the songs and recordings on "Seal" and "Seal II" or any others written or made pursuant to those agreements. The judge reckoned that although this is what the words of the management agreement actually said it could not, in the circumstances, have been the intention of the parties. Elsewhere in the agreement the judge found that there was a strong implication that Wadlow should receive commission on these albums. It looks like an example of the law applying common sense to ambiguous drafting.
2. Perpetual Post-Term Commission - Not Necessarily a Restraint of Trade
Seal's lawyers argued that the obligation to pay commission at 20% forever on the first two albums after the end of the term of the management agreement stopped Seal from effectively plying his trade as a recording artist and was unreasonable. This is because Seal would not be able to afford to pay a new manager commission on his old records and songs. The judge disagreed as did the two experts, Julian Turton of Swan Turton for Wadlow and Richard Bray of Bray & Krais for Seal. They felt that the perpetual post term commission in this instance could not amount to an unreasonable restraint of trade, partly because a new manager would not usually expect to commission old records and songs which were commissionable by a former manager. The judge also differentiated Seal's position from that of Joan Armatrading in a leading 1980s case.
3. Manager Side-Stepping the Artist's Lawyer - Potential Undue Influence
Seal's advisors contended that Wadlow took advantage of his position of trust to persuade Seal to agree the provisions about perpetual post term commission and double dipping in both the management and settlement agreements. The judge did not believe this to be the case for the settlement agreement because Seal had independent legal and managerial advice at the time and the relationship between Wadlow and Seal had broken down before the settlement agreement was concluded. In other words, Wadlow was not in a position of trust at the relevant time. With the management agreement, it looked as though Wadlow had persuaded Seal, through direct discussions with him, to accept the double dipping provision against the advice of Seal's lawyer and the reasons for double dipping had not been satisfactorily explained by Wadlow. The judge thought Wadlow had abused his position of trust in this instance. However, because the judge found that it was the settlement agreement and not the management agreement that gave Wadlow his entitlement to post-term commission this did not affect Wadlow's claim. Managers should nevertheless be careful about persuading artists to act against the advice of their lawyers by having direct discussions. Managers should appoint a lawyer themselves (which Wadlow did not do on a formal basis) to negotiate these issues on their behalf with the artist's lawyer.
4. Public Interest - Delay by Seal
The judge commented that it is generally in the public interest that settlements entered into between parties should be upheld and not revisited. Especially where there is a lengthy delay in bringing the claim: nine years in this case.
The full extent of the commission due to Wadlow is to be decided at a later hearing.
This update is © Swan Turton. 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 Swan Turton website is at www.swanturton.com
Armatrading v Stone & Another (1985). The case is unreported but details can be found in Music TheBusiness (Ann Harrison) and in Music Business Agreements (Richard Bagehot & Nick Kanaar)
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COPYRIGHT
Internet, record labels
New piracy laws come into force in China
Sony BMG and Warners are among record labels that may use a newly enacted criminal law to fight against Chinese Web sites, including Yahoo China, that allegedly infringe copyright laws according to the International Federation of Phonographic Industries. The new law, effective from July 1 st allows for fines for distributors of illegally copied music, movies and other material over the Internet of up to 100,000 yuan ($12,500). About 90% of all recordings in China are illegal, with sales of pirated music worth about $400 million annually, according to the IFPI. The U.S. has threatened to file a case to the World Trade Organization unless China reduces incidents of intellectual property violation. Last year seven record labels filed a civil case against Baidu.com, China's most-used search engine. No outcome has been reached yet. In 2005 Baidu lost a civil case brought by Shanghai Bu-sheng Music Culture Media, the local distributor for EMI. Baidu is appealing the case. The new criminal law adopted by the State Council, China's Cabinet, on May 18 stipulates that a Web site is jointly liable for infringement ”if it knows or should know that the work, performance or sound or video recording linked to was infringing.''
http://www.bloomberg.com/apps/news?pid=20601080&sid=asldghNxz9_I&refer=asia
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COPYRIGHT
Internet, record labels, all areas
Music Industry Group proposes digital age copyright reforms
AIM, the PRS-MCPS Alliance, the Musicians Union, the Music Managers Forum (MMF), British Music Rights and the British Academy of Composers and Songwriters (BACS) have launched a new discussion paper at a July 12 th round table meeting chaired by the Smith Institute. The group, representing 85,000 creative and industry members including artists, musicians, independent record labels, publishers and songwriters, say that they posed the question “is copyright law fit for purpose in the digital age?” and came up with a clear and emphatic “No”. The Group say that the current model for monetising sound recordings works neither for producers of music nor for consumers adding that current DRM systems do not work, that litigation doesn’t work but that a way forward can be found which will benefit both the music industry - which wants the widest possible distribution and enjoyment of its creative products but has every right to be paid fairly for use of its rights; and consumers - who needs to be freed from the threat of criminal prosecution for activity they believe is a proper and legitimate use of technology which they are free to buy legal – a “more enlightened licensing architecture”. With one eye on the UK’s Gowers Review on Intellectual Property, the Group wants to bring Internet Service Providers (ISPs) and Mobile Phone Service Providers (MSPs) into licensing schemes saying that both directly or indirectly benefit from the use of music on their networks – particularly broadband operators. The Group say that presently music creators are not being paid when their music is distributed over unauthorised file sharing networks and at the same time consumers are being sued when they use such networks. Between the two sit digital operators such as ISPs, MSPs and device manufacturers who make MP3 players who profit extensively from the unauthorised distribution of music whilst being protected from legal liability.
The Group are calling for a new Value Recognition Right to be introduced by legislation which would allow the music industry to create a commercial relationship with any company deriving value from either sharing or storing music. AIM had previously suggested Digital PrivateCopying Remuneration right should be introduced into UK law, in conjunction with a system of a digital commercial charge on hardware and blank recording media to deal with private copying and sharing rather than extensive copy-protection systems. The new Right would allow the Group’s members and others to
The concept (and perhaps title) of the Value Recognition Right (VRR) will be revised in the next few weeks and sent to the Gowers Review team which is presently independently reviewing intellectual property law in the UK. However it has to be said that as it stands the VRR looks little more than a levy on ISPs, MSPs, device manufacturers and anyone else acting as an intermediary in the distribution of music. Levies, on blank tapes and black CDs for example, whilst broadly accepted in Europe, are not always accepted by consumers. Whilst simple and often effective there is a strong argument that they are basically unfair. There are those in the UK who argue that the BBC’s licence fee is a levy and unfair on those who do not want to use the BBC’s services but still want a TV monitor. The question here is - why should they fund the BBC – a service they do not watch or listen too? But at least the BBC is a public service broadcaster.
In the commercial sphere there is still the fundamental argument that levies are inherently unfair to some (not all) consumers – and those who suffer tend to be the law abiding citizens! Remembering that something like 90% of all music consumed in the UK is from legally purchased CDs and that not everyone has a MP3 player (honestly for those of you under twenty – its true) then the average fortysomething music lover who neither downloads files, peer-2-peer file swaps, rips n burns CDs or bluetooths music into his or her mobile phone but DOES use broadband and does have a mobile phone (for, er, making phone calls) would be supporting the activities of those who do download etc etc. If ISPs like AOL or BT and MSPs like Orange or Vodafone have to pay a VRR they will, undoubtedly, pass this on to ALL consumers unless there is a mechanism in place to quantify who is using what service for what purpose. If this doesn’t happen the legitimate user is subsidising the activities of the illegitimate user which is somewhat hard to accept. The Grouping pointed out that 60% of blank CDS were used for illegal purposes – in many European territories each and every CD would attract a levy to compensate copyright owners. But this means the purchasers of the 40% of CDS used for legitimate private purposes (storing their own data, recording their own music) are subsidising the 60% who rip n burn!
However and hopefully detail on the mechanics of the workings of the system will explain how the right would work in the next few weeks. To be frank, the presentation left more questions unanswered than answered. However one should not forget that the MCPS-PRS Alliance are members of the group and they have spent many years developing systems of sampling and recording use to ensure the fair treatment when charging businesses for music use and fair treatment when distributing revenues to music creators. Perhaps a scheme can be devised that would be acceptable to rights owners, intermediaries and consumers.
It is interesting to note that the group did not dwell on the issue of micropayments. Music Law Updates has suggested in the past could be a viable way artists, music publishers, songwriters and record labels could monetise their copyrights and creative effort. Most mobile phone bills are amazingly detailed – with all calls and texts logged in – and the telecommunications business (of course one of the targets of the Value Recognition Right) have long been able to monetise ‘use’ even down to 1p or even fractional units. And other ways of monetising music were not really mentioned. The ‘commercial radio’ model was briefly covered and it will be interesting to see if other new methods of monetizing copyrights will be covered by the group or brought into an expanded definition of the value recognition rights. That’s said, the new right – if implemented - may go some way to monetising the digital world.
But at least AIM and the others in the new Grouping are making some efforts to address the problems with copyright as traditional economic models for remuneration collide with new technologies collide. It might be a little late - it was as long ago as 2002 that David Bowie pointed out that in the near future music would be like a available like a utility – and turned his mind to touring, live events and unique situations as the main source of his and other musicians financial future – four years ago is a long time in the digital age! But copyright reform is surely overdue although perhaps so too are the mechanisms to reward creative effort. The obvious absence from the Grouping were representatives from the major record labels which is disappointing. In fact as AIM launched their new initiative, the BPI (British Phonographic Institute) which represents the sound recording industry were squaring up with broadband providers Tiscali and Cable & Wireless asking them to close the accounts of 59 suspected prolific file swapping individuals.
If AIM and the other members of the Grouping really want to develop a new model they will need to bring on board the actual creators of music – artists, songwriters, performers – the music business community – the new distributors of music AND consumers. A few basic starting points might pave the way for a “more enlightened licensing structure”
- That music is fundamental to all our lives
- Creators of music deserve to be fairly rewarded for their creative effort
- Consumers must have the right to a fair return for their investment
- It is wrong to punish honest use – copyright laws do need amending here
- Business that use music and profit from this should pay for that use
- Technology will always present new challenges
The Internet Service Providers Association has already rejected the idea (not unsurprisingly!). The ISPs have pointed out that they are unable to monitor all of the data that is being transferred across their channels, but AIM has argued that they are profiting excessively from infringement.
The IPKat weblog comments that “if third parties are to be made to pay what amounts to a licence fee for acts which would otherwise infringe, it does not seem fair that the copyright owners should be rewarded twice by retaining the right to bring infringement actions as well. If the Value Recognition Right is introduced, the IPKat is convinced that ultimately it will be consumers who will pay for it through increased fees for internet access.”
There is strong argument that that a completely new business model is needed for the sound recording and music publishing industries as a whole. Perhaps this new initiative is one step along that way.
By Ben Challis - Editor of Music Law Updates
http://news.bbc.co.uk/1/hi/technology/5188054.stm
http://www.recordoftheday.com/cgi-bin/rotd-mb/rotd_config.pl?read=81840
http://news.bbc.co.uk/1/hi/entertainment/5172816.stm
Association of Independent Music www.musicindie.com
See also the article by Ben Challis on this site “The Digital Dilemma; How Do We Pay the Piper? - Monetizing Copyrights in the Digital Age” in the Articles section (March 2005 article)
See related discussion “The Great Gig Grab” www.musictank.co.uk and the interview at
“The Great Gig Grab” http://www.cmumusicnetwork.co.uk/interviews/thinktank05.html
http://www.out-law.com/page-7104
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COPYRIGHT
Record labels, internet
ARTICLE LINK: Canadian anti-DRM coalition makes timely debut By Bruce Byfield
A very interesting article explaining the resistance to DRM in Canada and explaining the difference in approaches to copyright protection between Canada and its neighbour, the USA. In particular the copyright levy system in Canada coupled with the strong protection of consumer privacy present major hurdles for the major record labels and film companies to get over if they are to convince legislators to support DRM.
http://trends.newsforge.com/trends/06/06/16/203238.shtml?tid=136
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COPYRIGHT
Record labsl, internet
ARTICLE LINK: Hilary Rosen: Singing a new Song? By Eliot Van Buskirk
This article explores the views of ex RIAA boss Hilary Rosen (“the bogeywoman who brought the law down on Napster”) and ask interesting questions about the former label association executive’s views on the effectiveness of the RIAA’s policy of suing individuals, the usefulness of DRM and how XM radio (Rosen’s new client) is dealing with the major labels and the RIAA.
http://www.wired.com/news/columns/0,71338-0.html?tw=wn_index_4
ARTICLE LINK “Why the music industry’s new piracy tactics will fail” by Bernhard Warner at http://technology.timesonline.co.uk/article/0,,20411-2277187,00.html
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COPYRIGHT
Record labels, internet
BPI asks broadband operators to police file swapping
The British Phonographic Industry has written to Tiscali and Cable & Wireless asking them to shut down the accounts of 59 internet users which the BPI alleges are used for widespread illegal file-sharing activities. BPI chairman Peter Jamison said that the record labels trade association had provided "unequivocal evidence" of illegal file swapping on an "industrial scale". In a separate matter ten British Internet Service Providers including BT and NTL have been ordered by the High Court to hand over details of 150 customers suspected of illegally sharing computer software. The action here was brought by FACT, the Federation Against Copyright Theft .
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COPYRIGHT
Record labels
Russian court find in favour of labels in piracy case
The Arbitration Court of the Moscow Region has ruled that Russobit-Soft, a Moscow-based optical disc plant, had manufactured counterfeit CDs by artists including Depeche Mode, Destiny's Child, Enrique Iglesias, Macy Gray, Michael Jackson, Radiohead, Whitney Houston and Westlife. The company has been ordered to pay four million roubles (US$148,000) in statutory damages. Russobit-Soft will also have to pay compensation for costs, including state duties and experts’ fees in full as well as a substantial proportion of the claimant’s attorney’s fees. The court also issued an injunction preventing Russobit-Soft from manufacturing any of the 30 albums involved in the case. The International Federation of Phonographic Industries (IFPI) acting on behalf of record label members filed eight claims against Russobit-Soft in December 2003.
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COPYRIGHT
Record labels, internet
RIAA loose infringement case as defendant requires details of alleged infringements
As AIM and others lobby for a new approach to copyright in Europe the RIAA’s reliance on litigation has hit the buffers in one case in the US. During a court hearing on infringement matters brought by the RIAA, defendant Debbie Foster requested that the RIAA provide specifics such as the dates of the alleged downloading and the names of the files involved. The RIAA was unable to do so and the case was dismissed. It had been seeking $5,000 in settlement but Foster decided to take the case to court. To date some 18,000 alleged file-sharers have been targeted by the RIAA but only 4,500 of them have reached settlement (with around $4,000 being the average paid out). Whilst the RIAA now say they are embracing education, former RIAA head Hilary Rosen (who initiated the litigation approach in the first place) has said that legal action has gone too far (see link above).
http://arstechnica.com/news.ars/post/20060713-7257.html
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COPYRIGHT
Book publishing
ARTICLE LINK Grateful Dead photographs were covered by fair use doctrine
By Irena A Kushner
In a recent fair use case, the U.S. Court of Appeals for the Second Circuit affirmed the district court’s grant of summary judgment in favor of the defendants, agreeing that their reproduction of copyrighted Grateful Dead images in its book, Grateful Dead: The Illustrated Trip, was "protected by the fair use exception to copyright infringement." Bill Graham Archives v. Dorling Kindersley Limited, Case No. 05-2514-cv (2nd Cir. May 9, 2005) (Restani, J.).
http://www.mondaq.com/article.asp?articleid=41178&email_access=on
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COPYRIGHT / CENSORHSHIP
Film and televison
Commercial Censorship Meets Copyright
On July 6, 2006, the US District Court for the District of Colorado ruled that companies that produce sanitized copies of Hollywood films on DVD are violating copyright law and must stop editing out the content they find offensive. The defendants (by counterclaim) included CleanFlicks, a Utah-based company which creates and publicly distributes copies of the plaintiffs’ movies that have been altered by deleting “sex, nudity, profanity and gory violence”. CleanFlicks sells directly to video stores and to consumers online through its web site. Purchasers are required to buy both the authorized and edited copies.
The plaintiffs (by counterclaim) included major movie studios, such as MGM, Paramount, and Twentieth Century Fox, and a number of high-profile directors such as Robert Altman, Steven Soderbergh and Steven Spielberg. The studios sell and distribute movies to the public on DVD and VHS for purchase and rental. They also sell and distribute edited versions of the movies for use by airlines and network television. The plaintiffs argued that the defendants were violating their right to create derivative works, or edited versions of their films. They did not seek damages but rather an injunction preventing the defendants from copying and distributing the altered versions of their movies. In response, the defendants asserted that they are making “fair use” of the copyrighted works.
In his 16-page decision, Judge Richard Matsch wrote, “The [moviemakers’] objective…is to stop the infringement because of its irreparable injury to the creative artistic expression in the copyrighted movies. There is a public interest in providing such protection despite the injury the infringers may sustain. [The infringers’] business is illegitimate.” He also held that “the right to control the content of the copyrighted work … is the essence of the law of copyright.”
While this action was pending, US Congress enacted the Family Movie Act of 2005, which provides an exemption for the editing of motion pictures by a member of a private household if no fixed copy of the altered version of the motion picture is created [see E-TIPS ® Vol 3 No 19 March 9 th 2005) “New US Copyright Legislation: Congress and the Silver Screen” and E-TIPS Vol 3 No 23 May 11 2005 “DVD Filtering Legalized: Family Friendly or Affront to Artistic Vision?”]. The ruling, therefore, does not affect ClearPlay, another Utah-based company, which sells video filtering software to allow home viewers to skip over any content they find objectionable.
For the full text of the decision (Clean Flicks of Colorado LLC v Cleanflicks LLCet al, Civil Action No 02-cv-01662-RPM), see:
http://writ.news.findlaw.com/hamilton/cleanflickssoder70606opn.pdf
This summary is by Clare McCurley writing for E-Tips a publication of Deeth Williams Wall LLP (www.dww.com) Edited by Richard Potter QC.
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HEALTH & SAFETY
Live event industry
New noise penalties are proposed in UK
Pubs that cause late-night noise will face the threat of a £500 on-the-spot fine under new government plans. If the matter goes to court the penalty for licensees could rise to £5,000 on conviction. Under the proposals, which are part of the Clean Neighbourhoods and EnvironmentAct, councils will be given extra powers to deal with one-off incidents of noise.
The changes, which come into effect in October, have been prompted by residents' fears over later pub opening under the new licensing laws. Ben Bradshaw, local environment minister, explained that the new law will allow for penalties for one off incidents of noise rather than ongoing noise saying "With the new powers, local authorities can deal with one-off incidents of excessive noise from licensed premises in the same way they can from households: quickly and effectively." Licensed premises could be fined for a one-off offence if they are creating excess noise between 11pm and 7am. Licensees have reacted angrily to the new rules. The Publican reports that James Harris (I think I went to school with him, Ed) licensee at the Half Moon in Putney, South London, said: "It's another piece of legislation we could do without. The government is putting more power into the hands of over-zealous local councils and it means that not everybody will be treated the same”. "What will be classed as noise? Will it be on the premises or outside the premises?" The Department for Environment, Food and Rural Affairs is carrying out a consultation on the changes.
www.defra.gov.uk/corporate/consult/noiseact-guidance
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HEALTH & SAFETY
Live event industry
Tunbridge Forum fights off moshpit claim
The Forum venue in Tunbridge Wells has won a legal battle after a judge threw out a claim brought by a member of the audience who was injured whilst ‘moshing’ at a Raging Speedhorn concert. The claim was brought on a "no win, no fee" basis. The venue received massive support from loyal music fans who raised over £10,000 from their own pockets towards legal costs estimated at over £20,000 and also generated a petition with over 15,000 signatures supporting the venue. Spokesman Mark Davyd pointed out that the Forum successfully argued that the venue had a disclaimer about mosh pits on all of their tickets, they had disclaimers on venue walls saying that customers shouldn't get involved in moshing and a very heavily advertised policy that mosh pits were allowed but were by their very nature likely to cause injury. Davyd added that “it's been extremely expensive to defend – but we were left with no choice ….. the other option was to accept that we would regularly have to fork out thousands of pounds to anybody that asked for it on the grounds that we were responsible for whatever they did to themselves. We would also have had to consider banning certain types of bands, massively increasing ticket prices, and basically changing every aspect of what we do to reflect our increased liabilities.” The Forum also had to take legal action against their own insurers to prevent them from paying out for this claim (without challenge) before the case went to court. Davyd said that their public liability insurers would have been happy to settle the claim and simply increase the insurance premium paid by the Forum by an equivalent amount plus 25% (against any future claims) in the following years. The case again shows that the British courts are prepared to make sensible decisions to curb the excesses of the compensation culture. In both Tomlinson v Congleton Borough Council (2004) (archive, December2004])and Lewis v Six Continents (2006) (Archive February 2006) the courts (the House of Lords and Court of Appeal respectively) made it clear that they would restrict ‘compensation culture’ cases where no actual fault lay with (here) the occupier. InTomlinsona young man who was seriously injured after he dived into a lake where swimming was banned failed in his attempt to win compensation from the local authority who managed the park and inLewis an adult male who had an unexplained fall from a hotel window with only a 30cm aperture failed in his attempt to sue the hotel for his injuries.
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© 2006, Ben Challis