Intellectual Property Law Updates

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

February 2006

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HEALTH & SAFETY
Live concert industry
Court of Appeal decision clarifies occupier’s liability for unforeseeable accidents
Lewis v Six Continents Plc January 20 th 2006

In a decision reminiscent of the common sense approach taken by the House of Lords in Tomlinson v Congleton Borough Council & Others . The UK's Court of Appeal have held that a hotel operator had no duty of care to fit bars or blocks inhibiting the opening of bedroom windows in a hotel so as to prevent injury from a fall. The case may give some comfort to venue operators and promoters who face liability claims from visitors to their premises and events. The appellant, Christian Lewis, had fallen from a second floor window in 2000 and suffered serious injuries. Whilst he had been drinking it was accepted that he was not drunk at the time and the fall was unexplained. The aperture was 68cm. Lewis relied on S2 of the Occupiers Liability Act 1957 and that the hotel had failed in its duty to take reasonable care. The trial judge (Mr Roger Ter Harr QC) held that it was not reasonably foreseeable that an adult occupying the hotel room leaning forward would fall from the window and the court held that there was no duty of care on the defendant to require them to install limiters or blocks on sash windows to restrict their opening. Source: Times Law Reports.

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HEALTH & SAFETY
Live Concert Industry
Diabetic pens cause angst for venue management

A diabetic clubber's anger at being refused permission to keep her pre-loaded insulin pen on her at a nightclub has opened up a debate about whether or not door staff are right to take medication from customers before they enter a club. Lisa Morris, 27, first wrote about her November 2005 experiences at London's The End nightclub in the Balancemagazine. She explained how she was told that she could not take her insulin pens into the club and had to give these to door staff for 'safe keeping'. Lisa had previously taken the pens into the club. Lisa was unhappy about handing over her pens - in case they were tampered with and because of hygiene issues. Lisa was attending as a VIP to write a review on the Club but was asked to leave by door suprvisors. In Balance magazine Lisa admitted that she realised the issue of hightened security post 9/11 and the London bombings and that insulin pens have needles. The End banned all syringes and knives but Lisa countered by pointing out that they were allowed on aeroplanes and that in a club and at events bottles and glasses posed far more of a risk. DJ Magazine (http://www.djmag.com/newsfeat122.php) which reported on the incident noted that London clubs Ministry of Sound, Fabric, and Turnmills, have all made dramatic u-turns in their door policies as a result of their article and that diabetic clubbers could now keep their pre-loaded insulin injection pens on their person inside the clubs and no longer have to leave their medication with staff but the magazine reported that The End nightclub is still refusing to change its 'possibly illegal and discriminatory door policy'. Lisa's article in Balance pointed out that the new provisions of the UK's Disability Discrimination Act make it clear that service providers should not make it difficult for disabled persons to make use of a service. In fact there is a positive duty to make reasonable adjustments to facilitate a service for the disabled. But at least one fellow diabetic clubber disagreed with Lisa and Peter Jones wrote in a letter in the next issue of Balance that "an insulin pen in the wrong hands could be used to devastating effect on unsuspecting innocents", pointing out "how easy it is to have items lost/.stolen from us in darkened nightclubs after a drink or two". This issue will clearly trouble venues, event organisers security and door staff as they balance up new responsibilities under disability discrimination (and other new legislation) against current policies designed to provide safe and secure services and Suzanne Bull of Attitude Is Everything comments that “We'd like to see venues and promoters do a risk assessment and publish any documented cases where an insulin pen has got into the hands of another person and caused them or anyone else damage” and calls on venues to balance this risk against other items which may or may not be prohibited including glasses, bottles and even badge pins and Suzanne adds “An insulin pen is vital to those who use it, so they are going to look after it really carefully” . Venues and promoters are now going to have to carefully balance real safety and security risks against the rights of disabled customers.

Balance Magazine is published by Diabetes UK www.diabetes.org

Attitude is everything: http://www.artsline.org.uk/attitude/

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HEALTH & SAFETY
Live Music Industry
Scottish woman jailed for noise breaches

A warning to promoters – Noise Annoys! Marion Beresford , a 48 woman has been sentenced to 40 days in prison by Glasgow Sheriff Court for flouting an anti-social behaviour order (Asbo). Beresford was first served with the order in June 2004 after complaints about loud music blaring from her flat. She was finally taken to court in October this year and has now been sentenced. She will spend Christmas and New Year behind bars. In court, the Sheriff said that she had rendered the Asbo meaningless and the court was left with little alternative but to imprison. In a statement, the Glasgow Housing Association said it would use any legal means to ensure tenants could enjoy a peaceful life in their homes.

See the Article Noise Annoys by Ben Challis on this site (click on articles)

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HEALTH & SAFETY
Live Music Industry
Local Authorities gain new weapon in fight against fly posting

In July 2004 London's Camden Council targeted two of the majors, Sony and BMG over illegal street flyposting. Sony Music chiefs escaped after promising not to commission any more illegal postering. The executives faced summons on the basis that flyposting has been defined as causing "harassment, alarm or distress" and so could be actioned under the Public Order Act 1986 . Now the Magistrate magazine (January 2006 Vol 62 No 1) reveals that Wolverhampton City Council have been using fixed penalty notices under the 2005 Clean Neighbourhoods and Environment Act and have issued over 220 to flyposters. One festival alone received 139 fixed penalties for a single event resulting in the promoter paying fines of £6,950.00. The Council reports significantly lower levels of flyposting

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CONTRACT
Record labels, artists
Korn launch new band-label-promoter relationship

Korn are launching a new financial model for touring on their new US tour as a financial experiment with promoters. Live Nation Inc (the newly spun-off arm live promoting arm from Clear Channel) who will be the band's exclusive US promoters. Live Nation will get a 6% share of their box office, licensing, publishing, merchandise and CD revenue for their current and next album according to the New York Times. The promoter is treating this as a long-term investment. Live Nation will pay the band's production expenses and the band will also get a share (in certain circumstances) of ancillary sources such as drinks and food sold at concerts. Last September, the band signed a five-year deal with EMI whereby the label gets a share of the band's earnings beyond recorded music. It was suggested at the time that EMI paid a $15M advance for a 25% share in all areas of the band's earnings. This new deal with Live Nation will see all the live-related monies flow into one pot and then profits distributed three ways - to the band, the promoter and the label.

http://www.nytimes.com/2006/01/11/arts/music/11band.html

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The MCPS has introduced its 2006 Production Music Rate Card which includes a new ‘Per-Programme’ rate for TV. This new rate allows users to obtain a licence for as much production music as they require on a ‘per 30 minute production’ basis. MCPS and its library members are promoting the new approach as bringing greater flexibility and value for money. Also new for 2006 are ‘Infomercial’ rates, designed to cater for this growing UK market. The Alliance is also currently in discussions with MTV Networks Europe about a broad-ranging joint MCPS-PRS licence. Unlike previous MCPS agreements with MTV, the new licence is expected to cover the use of music in virtually all of the programming, on all channels operated by MTV from the UK. If concluded the new licence will take effect from 1 January 2006. MCPS members are being asked to refer synchronisation matters with MTV to the MCPS.

http://www.mcps-prs-alliance.co.uk/link/main.asp?pid=4651&sid=834

http://www.mcps.co.uk/productionmusic/

http://www.mcps-prs-alliance.co.uk/apps/ezine/eM24.htm (eM24)

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COPYRIGHT
Live Music industry, record labels
ARTICLE: DJ Digital Grace Period Ends
By Tom Frederikse, solicitor, Clintons

The Phonographic Performance Limited (PPL) grace period, in which the £100 penalty for DJs who have already operated without a licence was waived, ended on 1 January 2006. The “surcharge” is now payable by all DJs obtaining a Digital DJ Licence for the first time. Since September 2005, DJs that play out using digital copies of their records have needed a licence to make and keep a “digital DJ database”. The PPL (the collection society for airplay and public performance royalties which acts on behalf of record companies and musicians) introduced the licence last year to facilitate the fast-growing trend for DJs to perform with computers and MP3-style music files. In the UK, a music consumer (including a DJ) has no legal right to make digital copies of their music even when the original source is a CD legitimately purchased by that consumer. The annual Digital DJ Licence costs £200 per year, plus a one-off 50% surcharge for DJs who have already used their digital database of copies without a licence. Under the Digital DJ Licence, DJs are allowed to copy any sound recording (including CDs, vinyl records and digital downloads, provided they are PPL-controlled) legally onto their computers for use when DJing in public. The licence is limited to the creation of a DJ Database of up to 20,000 tracks at any one time (to allow for updates). A back-up database of the digital copies may also be kept on a separate computer. DJs who take the licence may also have to, on request, give PPL a list of all the tracks on their database (or all tracks played at a particular event) to assist the accurate distribution of licence revenue to the copyright holders. DJs should note that the Digital DJ Licence is not required for those playing only vinyl and/or CD records and, even with the licence, the normal public performance licences are still required (though these are most often obtained by the venue). In some cases, venues may refuse to let a DJ perform if the digital files are not properly licensed.

PPL guidance on the Digital DJ Licence can be accessed at:
http://www.ppluk.com/ppl/ppl_lf.nsf/PDFs/$file/Digital_DJ_Licence_FAQs.pdf

The full text of the Digital DJ Licence can be accessed at: http://www.ppluk.com/ppl/ppl_lf.nsf/PDFs/$file/Digital_DJ_Licence_Terms_and_Conditions.pdf

Clintons website is at www.clintons.co.uk . This article is for general advice only and should not be taken as specific legal advice on this subject.

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As Music Law Updates have previously reported, the European collecting societies are gearing up for some big changes to the way they license their members’ music. To encourage the growth of pan-European online music providers, Europe’s collecting societies are changing their licensing from a country-by-country model to a Europe-wide model. The MCPS-PRS Alliance have announced that they will be at the forefront of these changes. Ultimately this will hopefully mean increased effectiveness in the administration of members' online royalties and ease of use by broadcasters, online retailers, record labels and other users. In the first two moves towards a new licensing model for Europe, the Alliance has announced partnerships with a key publisher and two of Europe’s other major collecting societies. In the first initiative. the Alliance has signed a deal with EMI Music Publishing (EMI). The Alliance will work with German rights society GEMA to build a one-stop shop for the licensing of EMI’s Anglo-American song rights for online and mobile usage across Europe. In the second initiative , the Alliance is partnering with Spanish society, SGAE, to create a new licensing platform for the powerful Anglo-Latin repertoires across Europe. These initial Alliance projects are in line with the European Commission's October 2005 recommendations on the future of licensing for music on the internet.

European Commission Management of Copyright and Related Rights: Recommendation

http://europa.eu.int/comm/internal_market/copyright/management/management_en.htm#20051012

For the VPL/PPL consultation paper to the European Commission’s Report see http://forum.europa.eu.int/irc/DownLoad/kYebARJRmtGGZqKFADHB7ZLxov3Tz-cKcd8LqM

For consultation papers from EMI Music Publishing, GEMA, MCPS-PRS and other interested parties see

http://forum.europa.eu.int/Public/irc/markt/markt_consultations/library?l=/copyright_neighbouring/cross-border_management&vm=detailed&sb=Title

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The BBC recently asked its website users to send in their digital music questions to a panel of industry experts (John Kennedy of IFPI, Peter Jamieson of BPI, Brad Duea of Napster and Steve Knott of HMV). They have all supplied their answers. The main questions focus on pricing, DRM, P2P/piracy and interoperability:

LINK TO: http://news.bbc.co.uk/1/hi/entertainment/4642362.stm#1

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Sales of music via the internet and mobile phones proliferated and spread across the world in 2005, generating sales of US$1.1 billion for record companies – up from US$380 million the previous year - and promising further significant growth in the coming year. The findings are released today in IFPI’s Digital Music Report 2006, a comprehensive review of the development of the digital music market internationally. Music fans downloaded 420 million single tracks from the internet last year – twenty times more than two years earlier – while the volume of music licensed by record companies doubled to over 2 million songs. Digital music now accounts for about 6% of record companies’ revenues, up from practically zero two years ago. the legitimate digital music business is steadily pushing back on digital piracy. In Europe’s two biggest digital markets, UK and Germany new research by Jupiter indicates more music fans (6% of the total user group in the UK) are legally downloading music than illegally file-swapping (5%). The mobile phone became a portable music device in 2005, the first year in which song downloads to mobile phones spread internationally. Mobile music now accounts for approximately 40% of record company digital revenues. Record companies are seeing sharply increased sales of master ringtones (excerpts of original artist recordings) which account for the bulk of their US$400 million-plus mobile music revenues. The Digital Music Report shows how music is helping drive economic activity worth tens of billion of dollars; identifies key challenges, notably over intellectual property protection, that need to be faced if the digital music business is to sustain this success; and assesses the impact of the educational and enforcement actions taken by the music industry in 2005. 2005 has seen the new digital market take shape as courts around the world tipped the scales against unauthorised services and the market diversified into new formats and distribution channels. A series of court judgements against unauthorised file-sharing services in late 2005 – in the US, Australia, Taiwan and Korea - has helped transform the market environment for digital music and consumer attitudes to illegal file-sharing. Illegal activity on peer-to-peer networks has stayed static in the last year in comparison to a 26% increase in broadband use. Actions against illegal file-sharing, which in 2005 were extended to nearly 20,000 cases against uploaders in 17 countries, will be stepped up and spread to new countries in 2006. They are supported by four separate global education campaigns which IFPI launched in 2005 - including the Childnet/Pro-music.org information campaign for young people and Digital File Check, the free software launched to help internet users enjoy music safely and legally on their computers.

A PDF copy of the Digital Music Report and accompanying press materials are available on www.ifpi.org. For the most exhaustive listing of legitimate online music services and information about music online visit www.pro-music.org

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A US District Court judge in New York gave preliminary approval Friday to a settlement for music fans who purchased Sony BMG music CDs containing flawed copy protection programs. Under the proposed settlement, Sony BMG will stop manufacturing CDs with both First4Internet XCP and SunnComm MediaMax software. People who have already purchased the flawed CDs will be offered the same music without digital rights management (DRM), and some will also receive downloads of other Sony BMG music from several different services, including iTunes. The settlement would also waive several restrictive end user license agreement (EULA) terms and commit Sony BMG to a detailed security review process prior to including any DRM on future CDs, as well as providing for adequate pre-sale notice to consumers in the future.

Consumers can exchange CDs with XCP software for clean CDs now, but the rest of the settlement benefits will not be available until an official notice to the class has been issued. The court ordered that the notice--via newspaper ads, Google ads, email and other means--must occur by February 15. Once that notice goes out, consumers can begin submitting claims for settlement benefits and should get those benefits within 6-8 weeks of submitting the proof of claim form. To help consumers figure out what the settlement means to them, The EFF has posted a list of frequently asked questions (FAQ) on its website (see below). The FAQ tells music fans how to return their flawed CDs, how to get their clean CDs and downloads in exchange, and how to opt-out of this settlement. The deadline to opt-out of the settlement is May 1, 2006. "The settlement helps consumers finally get music that will play on their computers without invading their privacy or eroding their security," said EFF Staff Attorney Corynne McSherry. "Now that the court has given preliminary approval, the next step is to make sure that the millions of music fans who bought these XCP and MediaMax CDs understand what is available and how to get it." The problems with the Sony BMG CDs surfaced when security researchers discovered that XCP and MediaMax installed undisclosed--and in some cases, hidden--files on users' Windows computers, potentially exposing music fans to malicious attacks by third parties. The infected CDs also communicated back to Sony BMG about customers' computer use without proper notification.

FAQ on Sony BMG settlement proposal:
http://www.eff.org/IP/DRM/Sony-BMG/settlement_faq.php

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The Electronic Frontier Foundation (EFF) today sent an open letter to EMI Music, calling on EMI to agree not to pursue any legal action against computer security researchers who examine the copy-protection technologies used on some EMI CDs. In late 2005, independent researchers uncovered security problems with Sony-BMG copy-protected CDs, forcing the label to issue patches and uninstallers to those customers who had played the CDs on Windows computers. Several record labels owned by EMI, including Virgin Records, Capitol Records, and Liberty Records, use similar copy-protection technologies supplied by Macrovision. On those CDs, an end user license agreement (EULA) forbids reverse engineering for any reason, including security testing. In addition, the Digital Millennium Copyright Act (DMCA) has chilled the efforts of computer security researchers interested in examining copy-protected CDs. In the open letter published Wednesday, EFF urges EMI Music to publicly declare that it will not take legal action against computer security researchers who study copy-protected CDs released by record labels owned by EMI.

"Music fans deserve to know whether EMI's copy-protected CDs are exposing their computers to security risks," said Fred von Lohmann, senior staff attorney with EFF. "When it comes to computer security, it pays to have as many independent experts kick the tires as possible, and that can only happen if EMI assures those experts that they won't be sued for their trouble."

Full text of the open letter to EMI Music: http://eff.org/IP/DRM/emi.pdf

For details on the SonyBMG Rootkit ‘fiasco’ see Music Law Updates Archive December 2005 and January 2006.

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Two UK residents have been forced to pay over ‘thousands of pounds’ by the High Court on copyright infringements actions brought by the British Phonographic Industry. In one case the defendant, who refused to settle with the BPI, claimed he was unaware that his actions were illegal and had not sought to benefit financially. He was fined and ordered to pay £1,500 against a final determination of damages and costs. In the second case the defendant was ordered to make an immediate payment of £5,000 against a far larger final figure of damages and costs. The BPI said that the rulings were ‘a massive step forward in the music industry’s bid to fight illegal file-sharing. The BPI has brought 139 cases against alleged file sharers and so far has settled approximately 90 with an average settlement figure of £2,500.00.

http://www.vnunet.com/vnunet/news/2149335/uk-courts-rule-bpi-favour-music

Evening Standard 27 January 2006.

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TRADE MARK
Internet
GEICO v Google settlement still provides food for thought
ARTICLE by Jason Patrick Kairalla of Jorden Burt LLP

With little fanfare, the presiding federal district judge in the GEICO v. Google case issued the much anticipated and long-awaited written order on Google’s motion for judgment on the pleadings in the action of using competitors trade marks in internet search engine based advertising. Whilst Google may have escaped a decision on their liability the fact remains that it appears that actual use of a competitors trade mark in advertising to drag internet customers to a competitors site may well result in liability for trade mark infringement in the US.

http://www.mondaq.com/article.asp?articleid=37262&lastestnews=1

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TRADE MARK
Mechandising, record labels
Hooligan Marks – badges of antagonism – No one loves them – We don’t care
ARTICLE by Paul Walsh, Bristows

The UK Trade Mark Registry refuses the registration of a mark that harks back to the infamous ‘InterCity’ football hooligan gang.

LINK TO http://www.mondaq.com/article.asp?articleid=37084&lastestnews=1

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TRADE MARK
Merchandising, artists, record labels
When marks are confusingly similar
ARTICLE by Lee Curtis, Pinsent Masons

Probably one of the most subjective areas of trade mark law is the question of when are two trade marks confusing similar. Whether one trade mark will be confused with another is dependent on a number of factors and this article examines the UK law in this area.

http://www.mondaq.com/article.asp?articleid=37184&lastestnews=1

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COMPETITION
Internet
UK Secretary of State opposes plan for EU internet regulation

Tessa Jowell, the UK’s Culture Secretary, has said that European Union plans to regulate the internet would be unwelcome, arguing that the new media were best left to regulate themselves and that ordinary criminal laws were sufficient to regulate the internet. The EU insists that its new plans would be ‘light touch’. The EU is trying to overhaul its 1989 ‘Television Without Frontiers’ Directive in particular to introduce new rules on the protection of children and the incitement of hatred. The remarks were made at the Oxford Media Convention. See the Times, 20th January 2006.

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