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

 

June 2006

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COPYRIGHT
Record labels
Canadian artists and independent labels lament actions of major labels

As digital music behemoth Ted Cohen delivered the gospel at a Nokia convention in Hong Kong in May saying that "The consumer is now the center of the industry and it is the music companies that have to adapt to consumer needs”, m ajor international music artists based in Canada have banded together to form a group aimed, among other things, at protesting the recording industry's practice of targeting fans with lawsuits. With Sum 41, Barenaked Ladies, Avril Lavigne and Sarah McLachlan as members, the new Canadian Music Creators Coalition says that ‘ suing our fans is destructive and hypocritical’ and that the majorlabels have been “suing our fans against our will’ and that “laws enabling these suits cannot be justified in our names”. The Coalition goes further by saying that they “oppose any copyright reforms that would make it easier for record companies to do this” adding that the government should repeal provisions of the Copyright Act that allow labels to unfairly punish fans who share music for non-commercial purposes with statutory damages of US$500 to $20,000 per song’. The Group are also concerned about DRM saying that d igital locks ‘are risky and counterproductive’ which post the SonyBMG Rootkit fiasco is a very sensible conclusion to come to. The CMCC say that they do not support using digital locks as this increase the labels' control over the distribution, use and enjoyment of music nor do they support laws that prohibit circumvention of such technological measures. The CMCC add that ‘government should not blindly implement decade-old treaties designed to give control to major labels and take choices away from artists and consumers. Laws should protect artists and consumers, not restrictive technologies. Consumers should be able to transfer the music they buy to other formats under a right of fair use, without having to pay twice’. The group also want the Canadian Government use policy tools to support actual Canadian artists and the thriving Canadian musical and cultural scene. The new group says until now, multinational record labels have done most of the talking about what Canadian artists need from copyright - "But let's be clear," the CMCC said. "Major labels are looking out for their directors and corporate shareholders even though recording industry lobbyists claim they represent artist interests. Most of the campaigning on behalf of major record labels isn't about protecting artists or promoting Canadian culture, says the Canadian Music Creators Coalition: it's about propping up business models in the recording industry that are quickly becoming obsolete and unsustainable and "preserving power structures and further entrenching the labels' role as industry gatekeepers". Last month six major Canadian independent labels including Nettwerk left the Canadian Record Industry Association (CRIA) saying that they could no longer support the Association. The decision stems from a disagreement about radio content rules and programmes for emerging artists. In Canada there is a required (‘Cancon’) quota for Canadian music on radio of 35%. "It has become increasingly clear over the past few months that CRIA's position on several important music industry issues are not aligned with our best interests as independent recording companies," the group wrote in a letter to the association's president Graham Henderson. The six companies, Nettwerk Records, Aquarius Records, the Children's Group, Linus Entertainment, Anthem Records and True North Records, said they wanted to send a clear message about where they stand." Ric Arboit, president of Nettwerk said that the CRIA were “looking out for their best interest, and their best interest is multinationals that are not Canadian". The CRIA wants the Cancon percentage to remain at 35 per cent, but has proposed a new calculating method where emerging artists would count more in the quota system than classic songs by superstar artists like Bryan Adams. But the six labels wrote that "If implemented (the proposals) would have a material negative effect on the future growth of Canadian independent music".

See John Newton in Techworld at http://www.technewsworld.com/story/50187.html
And see: http://www.canada.com/topics/entertainment/story.html?id=49fef870-51e3-4f3e-b3c5-4867b05b7721&k=11829
And see: http://www.canada.com/topics/technology/story.html?id=8b0ebcda-bd05-49f4-8778-38555c470f32&k=86026

ARTICLE LINK: you might also want to read this Canadian article – casting the major labels as the bad cowboys in wild west of the digital marketplace - http://www.digital-copyright.ca/node/2423 The Wild West lawlessness of the digital marketplace: who wears the white and black hats? By Greg Sandoval at CNet.

ARTICLE LINK : Power to the People: Nettwerk's Terry McBride tells Adam Sweeting how he is on a mission to change the music industry's narrow-minded attitudes towards its artists and the fans. The Independent online http://news.independent.co.uk/media/article362644.ece

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COPYRIGHT
Radio, television, internet
EFF warn about new restrictions in ‘PERFORM’ Act

The Electronic Frontiers Foundation (EFF) reports that Senators Feinstein (D) and Graham (R) have introduced S. 2644, dubbed the PEFFORM Act, that is aimed at punishing satellite radio for offering its subscribers devices capable of recording off the air. However the EFF point out that ]buried in the bill is a provision that would effectively require music webcasters to use DRM-laden streaming formats, rather than the MP3 streaming Today, webcasters that want to transmit major label music are entitled to do so under a statutory license (administered by SoundExchange) set out in section 114(d) of the Copyright Act. So long as they follow the rules and pay a royalty, webcasters can play whatever music they like, using whatever streaming format they like. Under the current law, webcasters are forbidden from helping their listeners record the webcasts, and are required to use DRM only if the format includes DRM. The new law would make the use of DRM technology obligatory for all webcasters.

http://www.eff.org/deeplinks/archives/004587.php

See also the Billboard article by Susan Butler, Licensing Battle over Convergence, at:
http://billboardradiomonitor.com/radiomonitor/news/business/leg_reg/article_display.jsp?vnu_content_id=1002463027
And see the story about the RIAA’s action against radio station Xm:
http://www.latimes.com/technology/la-ed-xm20may20,1,2909987.story?coll=la-headlines-technology&ctrack=1&cset=true

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CONTRACT
Record labels, artists, internet
SonyBMG challenged over digital artist royalty rates

Members of the Allman Brothers Band and Cheap Trick have filed a class action lawsuit alleging that Sony BMG has underpaid artists for digital music transactions. At issue in the action, filed April 27 in U.S. District Court in New York by Labaton Sucharow & Rudoff and Probstein & Weiner, is whether the label’s deal with online services for downloads is a license or a sale. Sony BMG labels consider that their deals with the services are for sales of records rather than licenses for the recordings. But the suit alleges that Sony BMG is violating contractual obligations to share 50% of the net licensing revenue from digital music transactions with artists. The two bands claim that from 99-cent downloads, they receive only about 4.5 cents, rather than the 30 cents per track they believe they are owed. For years, artists have complained that royalties are further cut; many contracts permit a 50% reduction in royalties for music sold through a new technology, as well as a packaging deduction. Many artists say these clauses only made sense in the physical world, when music migrated to CDs from cassettes. The suit concerns royalties received for master ringtones and digital downloads through at least nine services, including Apple’s iTunes. The parties are seeking in excess of $25 million in damages. The artists allege that there are about 2,500 other acts in similar situations from the Sony BMG-affiliated labels. The suit, which still has to be certified in federal court as a class action case, follows a similar suit filed by Tom Waits’ Third Story Music against Warner Music Group. Nielsen SoundScan reports more than 350 million digital tracks and 16 million digital albums were sold in 2005. If downloading is found to be a licensing activity, such a shift in the business model could see labels renegotiating artists’ deals or refusing to provide certain recordings for digital delivery.

http://www.billboard.biz/bb/biz/newsroom/legal_management/article_display.jsp?vnu_content_id=1002424883

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COPYRIGHT
Internet, music publishing, record labels
ARTICLE New Podcast licence unveiled by MCPS-PRS Alliance
By Tom Frederikse, Solicitor, Clintons

A new licence for “podcasting” has been launched by the MCPS-PRS Alliance. The scheme is intended to help legitimise the use of musical compositions in podcasts, which, until last week, had to be cleared in each instance by the relevant publisher. The licence has only just been made available (though it may be backdated to 1 January 2006) and this version can run only until 31 March 2007. The licence covers use of Alliance-controlled works in a “podcast” (defined as a digital programme offered “on-demand” in which individual musical tracks cannot be extracted from the podcast as a whole) and fills one of the existing holes in the Joint Online Licence.  

The licence itself extends to 48 pages and is notable for the many provisions explaining exactly what it is not. Among the exclusions, it does not cover music used in connection with advertising, public performance, karaoke, or any graphic or physical copies such as CDs. It does not even cover podcasts unless each track within the podcast has the first and last 10 seconds obscured (with speech or a station ID), the music amounts to less than 80% of the total time, the podcast is longer than 15 minutes and uses no more than 3 tracks from one album and no more than 4 by one artist, no track markers are inserted and the podcast is made available only in its entirety.

The royalty rate is the greater of 12% of gross revenue or a minimum fee of 1.5 pence per full-track and 0.75 pence per half-track (less than 50% by duration), and a quarterly advance is required. An annual minimum threshold of £400 also applies so services that generate less than £400 each year should use the “Limited Online Exploitation Licence” which is significantly cheaper. It should be noted that, whilst this scheme covers use of musical compositions controlled by the MCPS-PRS Alliance, podcasters may also need licences from the relevant record companies (and/or from AIM, which also recently launched its own podcast licence) for the use of the sound recordings in their podcasts. PPL currently offers no podcast licence.

Further information on the Alliance podcast licence can also be found at: http://www.mcps-prs-alliance.co.uk/aboutUs/. Further information on the AIM podcast licence can be found at: http://www.musicindie.org/news_show.asp?id=46.

The MCPS-PRS Alliance has also signed a global (excluding North America) licensing deal with Skype for ringtone and messaging services. Composer and publisher rights can now be cleared (on a song-by-song basis) through a one-stop shop. This is the first MCPS-PRS licence in line with the European Commission's recommendations on collective licensing. See www.mcps-prs-alliance.co.uk

And a number of labels, technology companies and publishers have joined forces to form the Digital Data Exchange (DDEX or "dee-dex") to standardise digital music data. The initiative is designed to tackle the increasingly complex and costly back-office systems of all parties involved in the digital retail supply chain. The aim is to improve efficiency and consistency in areas such as sales data, royalties and copyright information. Companies involved include all the major labels, Apple, RealNetworks, Microsoft, MCPS-PRS, ASCAP and the Harry Fox Agency.

www.digitaldataexchange.com and http://www.mcps-prs-alliance.co.uk/link/main.asp?pid=4812&sid=112

Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are. The Clintons website can be found at www.clintons.co.uk. The article by Tom Frederikse is for general guidance only and is © 2006 Clintons.

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HEALTH & SAFETY / LICENSING
Live Event Industry
ARTICLE LINK: Underage drinkers to target Fife pubs

Scotland is in the enviable position of rolling out their new licensing laws (and implementing their SIA door supervisor programme) with the benefit of hindsight – by learning from the mistakes made in England and Wales’s from the rushed and ill thought out Government and regulatory approaches.

See details of the Licensing ( Scotland) Act 2005 by Angela Frewin in the Caterer

http://www.caterersearch.com/Articles/2006/05/02/306513/Underage+drinkers+to+target+Fife+pubs+in+sting+operations.htm

For more details on Scotland’s new licensing laws see:
http://www.thepublican.com/cgi-bin/item.cgi?id=20646&d=32&h=24&f=23&dateformat=%25o%20%25B%20%25Y

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HEALTH AND SAFETY / LICENSING
Live event industry
Publicans fear that the Scottish Executive wants unhealthy bar food banned

Whilst Scotland can learns from the Licensing Act mistakes in England, the downside is that Scottish legislators have even more time to dream up new restrictions and rules – the dreaded initiatives that are seizing up so much of life – in education - in health – in the legal system – and now in entertainment. If it was April 1 st I am sure I would have thought the following was a joke – but its not. The Scotsman reports that ‘Advisers’ to the Scottish Executive have come up with a new way of promoting healthy eating using the new licensing powers – by banning ‘unhealthy’ food such as pies and chips food in licensed premises – meaning customers only have a ‘healthy’ option. So is it goodbye to personal choice, fun and rock n roll and hello to smoke free, noise limited, salad bar nanny state gigs, festivals and venues in the future? Who will rid us of these turbulent advisors!!!

See http://www.theherald.co.uk/politics/61444.htmlhttp://news.scotsman.com/health.cfm?id=674232006

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HEALTH & SAFETY / LICENSING
Live Event Industry
New licence granted in saturation zone

The Publican reports that a bar chain is celebrating a landmark victory over a council after it was granted a licence for a new venue in a town's saturation zone. Cannock-based operator Bar Sport has been give the green light by Loughborough magistrates to open a new bar in the town after winning an appeal overturning the local authority decision who felt that the new pub in an already ‘saturated zone’ would promote crime and disorder. Bar Sport argued that they would provide food and a dedicated customer taxi service. But please note the May 2006 Law Updates Archive for the recent High Court decision in R (J D Wetherspoon) v Guildford Borough Council upholding the prima facie legality of saturation zones (although blanket policies banning, for example, late night opening, are not legal).

http://www.thepublican.com/cgi-bin/item.cgi?id=20665&d=32&h=24&f=23&dateformat=%25o%20%25B%20%25Y

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HEALTH & SAFETY / LICENSING
Live Event Industry
Mean Fiddler not liable for cost of police presence at Leeds Festival: Reading Festival Limited v West Yorkshire Police Authority [2006] EWCA Civ 524

The Mean Fiddler Group (owner of Reading Festival Limited) has won a Court of Appeal battle over who pays to police major events. They had been ordered to pay West Yorkshire Police nearly £300,000 for its services at the Leeds Festival in 2003. But The Court of Appeal said that "special police services" had not been requested in 2003 and could not be recovered from the promoter. Lord Justice Scott Baker said the ruling had implications for major events and any large gatherings of the public. He said the court was being asked to decide on the dividing line between services the police must provide as part of its public duty and special services provided at the request of promoters, for which promoters must pay. Lord Justice Scott Baker said: "There is a strong argument that where promoters put on a function such as a music festival or sporting event which is attended by large numbers of the public, the police should be able to recover the additional cost they are put to for policing the event and the local community affected by it” and that "this seems only just where the event is run for profit. That, however, is not the law." Allowing the appeal, he said it had not been established that a request had been made for "special police services" at the three-day event at Bramham Park near Leeds. The court heard that Mean Fiddler had organised the Leeds Festival since 1999 and asked for and paid for "special police services" until 2003. But in 2003 there was a change of police strategy for the 2003 festival with a much lower profile on site. There was a relatively small number of plain clothes officers on site. The trial Judge (HH Judge Grenfall) identified various matters of factual common ground. These included that a temporary control centre was set up in Wetherby for the additional police officers who were on duty because of the festival. Very large numbers of police officers were required to be on duty for the duration of the festival, many of whom would otherwise have been on holiday or off duty. It was not in issue that deployment of those large numbers was caused by the staging of the three day festival. Nor was it disputed that Mean Fiddler requested special traffic policing and paid for it promptly. However, Mean Fiddler proceeded on the understanding that if there was no police presence on the site of the festival itself then it was not liable to pay for other services. This, it was submitted, was the crucial distinction. Officers deployed off site were providing ordinary police services and not 'special police services'. The Court were told that a similar situation was in place for 2004 and 2005 when the festival again took place.

Section 25(1) of the Police Act 1996 states that “The chief officer of a police force may provide, at the request of any person, special police services at any premises or in any locality in the police area for which the force is maintained, subject to the payment to the police of charges on such scales as may be determined by that authority.”

The Court of Appeal held that it requires a contract between the police and the promoter as the basis for the charge to be levied by the police. The effect of this is that the promoter can stipulate a budget and say what he wants, what he does not want and what he is prepared to pay for. Equally, the police can say that it is not prepared to provide the services asked for. Each side has a right of veto. Thus, the Court of Appeal held that the Judge’s finding that there was no “meeting of minds” as to the services to be provided was fatal to WYP’s claim.

Scott Baker LJ said it was for the promoter to decide, after negotiation, what special police services it wanted, otherwise it would have no choice but to pay the police for whatever scale of operation they chose to mount. Barker LJ added whilst I entirely accept that it is a matter for the police how the policing is conducted and the promoter cannot dictate to the police how they are to perform their public duty, that does not in my view put the promoter in an all or nothing situation as far as 'special police services' are concerned. He can, for example, say that there is a ceiling to his budget to which the police would be entitled to respond that they were not prepared to provide any 'special police services'. He can say what he wants and is prepared to pay for, and what he does not want. Each side has a right of veto. In my judgment, although it does not expressly say so, it is very difficult to see how section 25(1) can operate absent a contract “ and found that the court would allow the appeal and enter judgment for Mean Fiddler because it is not established they made a request for 'special police services' within the meaning of section 25(1) of the Police Act 1996

The Court of Appeal carefully considered two precedents on police costs. In Glasbrook Brothers Limited v Glamorgan County Council [1925] AC 270 a colliery manager applied for police protection of his colliery during a strike. The police superintendent was prepared to provide what, in his opinion, was adequate protection by means of a mobile force. The manager insisted the colliery could only be efficiently protected by billeting men on the premises . The House of Lords (on a 3-2 decision) held that it was legal for a police authority to charge for the garrison of officers and their services and that there was nothing illegal about the agreement.

The case of Harris v Sheffield United Football Club Ltd [1988] 1QB 77 established the legality of a contractual agreement to provide special police services under the Police Act 1964, here at Sheffield United Football Club's football ground. Here the provision of officers inside the ground was held to go beyond the chief constable's obligation to arrange for the attendance of officers to fulfill the police's duties to maintain law and order and protect life and property; thus they could be charged for although it should be noted that in this case the police were not seeking to recover any costs of policing outside the ground. Lord Justice Scott Baker made it clear that the decision in the Leeds Festival case did not overrule the previous case law saying; Ultimately each case will depend on its own particular circumstances. Different considerations will be material in different cases. The facts in Glasbrook were very different from the facts in Harris just as those in Harris are very different from the facts of the present case. Scott Baker LJ confessed to having some difficulty in defining what special police services might be saying. Essentially, however, 'special police services' will be something that someone wants, hence the importance of the link in the section with a request.

The words ‘special police services’ are not defined in the 1996 Act but Scott LJ Baker summarized Neill LJ In Harris to give some guidelines as to what courts would look at when determining whether or not special police services were involved (although every case will turn on its own facts):

Scott Baker LJ said that one of two key features would usually be present in special police services:

There mere fact of an event drawing on police resources is not enough. There must be a request for services and if there is a request then the court would see if the services required amount to special police services. Thus a clear request for police presence inside a festival arena or a request for other additional services above and beyond what the police might be reasonably expected to do to maintain law and order and protect life and property at a festival would surely then be the provision of special police services and thus be charged as a cost to a promoter or festival organiser. Conversely where there is no request there can be no provision of special police services and if services provided are only that which the police would usually provide then again it is suggested these would not amount to special police services.

The full judgment can be seen at http://www.bailii.org/ew/cases/EWCA/Civ/2006/524.html

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HEALTH & SAFETY / LICENSING
Live event industry
New booklet explaining the Licensing Act 2003 published

Licensing experts Poppleston Allen has launched the latest edition of The Licensed Trade Guide. The booklet provides a run down on the details of the new Licensing Act. It covers areas such as the role of the licensing authority, licensing objectives and licensing policy, whilst also explaining the decision process behind the granting of a licence. See http://www.pactltd.co.uk/ .

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COPYRIGHT
Record labels, artists
Sampling ‘settlement’ does not preclude ongoing claim

A US federal judge has issued a ruling in favor of 1970's British soul group Cymande, in a sampling lawsuit against the Fugees and Sony Music. The lawsuit, which was filed by group members Steve Scipio and Patrick Patterson in March, claims the Fugees illegally sampled the song "Dove" on their 1996 album T he Score. The basis of the claim is not vabout the fact of infringement – this seems to be accepted and in 1998, the two parties attempted to negotiate a settlement agreement. Cymande accepted a payment of $400,000. However, according to the lawsuit, members of Cymande denied that the $400,000 payment was for (full and final?) settlement whereas Sony claim that Cynmande "entered into a settlement" and that members of Cymande "ratified the 1998 settlement by accepting the several hundred thousand dollars of Defendants' payments”. The 6th U.S. Circuit Court of Appeals ruled that the payments did not amount to "ratification of an unsigned agreement to settle an infringement dispute." The Court held that "the Proposed Agreement was never ratified and that Plaintiffs should not be equitably stopped from pursuing their infringement claims". However the $400,000 payment must be repaid or subtracted from Cymande's damages if they prevail on the copyright infringement.

Thank you toThe IPKat http://ipkitten.blogspot.com/ for the reference here.
For more on this story see http://www.allhiphop.com/hiphopnews/?ID=5639

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COPYRIGHT
Record labels
CD Manufacturer liable for piracy from master disc

A firm that manufactured a master disc used to produce more than 100,000 pirate copies has been ordered to pay US$250,000 in damages to the recording industry. Planet Optical Disc Ltd, a mastering firm based in the United Arab Emirates (UAE) was ordered to pay the damages after a court decided it was liable for the production of all the compact discs originating from the master copy.  The Dubai Court of First Instance heard the master disc was used to produce 111,000 counterfeit compact discs featuring compilation of songs from a range of artists. The case had been brought by record companies including Universal International Music, Interscope Records, Zomba Records, BMG Middle East, Sony Music Entertainment, WEA International and EMI Records. They will share the damages granted by the Dubai court. www.ifpi.org

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COPYRIGHT
Internet, record labels
Australian Government to allow legal copying of consumer’s own collections of music whilst in the UK NCC lobbies for same right.

Music fans will be able to legally record their CD collections onto iPods and MP3 players under a raft of proposed changes to Australian Federal Laws. Taping TV and radio programs and using copyright material for parody or satire will also be legalised as part of the reforms. The Australian Government plans to introduce new enforcement measures to combat piracy. The changes are part of a major overhaul of copyright laws announced by Attorney-General Philip Ruddock in response to millions of Australians who effectively break the law every time they reproduce copyright material for personal use. The key changes relate to the recording of copyright material from CDs, audio tapes or vinyl records onto an MP3 player or home computer. Under existing laws, people copying material risked being sued by the copyright owner. The changes include: The legalisation of ‘time-shifting’ of TV and radio broadcasts; The legalisation of ‘format shifting’ e.g. music on CDs to MP3 players. This exemption isn’t limited to musical works, and would cover books and magazines too; New defences allowing schools, universities, libraries and other cultural institutions to use copyright material for non-commercial purposes; Provisions to allow the disabled access to copyright materials; A new parody/satire defence; New enforcement measures to combat piracy. In the UK research has shown that More than half of British consumers are infringing copyright law by copying CDs onto other players they own. The research, i n an online poll of 2,135 UK adults conducted by YouGov, showed that 55% of the group said they copied their own CDs onto computers, iPods, MP3 players and other equipment. Three in five of those questioned - 59% - thought it was legal to do so. The National Consumer Council (NCC) said their findings showed the law is out of step with modern life and discriminated against consumers. "We need to shake up the copyright law to incorporate the right to copy for private use," said the NCC's Jill Johnstone. Currently, it is technically illegal for anyone to copy a CD onto their computer or other format or to burn a legally downloaded track from iTunes for an iPod onto a CD or copy a CD onto a cassette tape for use in a car stereo. Earlier in the month the Telegraph newspaper had reported that the BPI, body that represents British record companies, has said that it believes copyright on CDs and records should be changed to allow consumers to copy music they have legally acquired if this is for personal use. The Telegraph said that the suggestion was reportedly in the BPI's submission to Andrew Gowers who is chairing a review of UK intellectual property law but the BPI subsequently qualified this saying that they were only exploring the issue. The NCC is also opposing the BPI’s campaign to extend the term in copyright protection for sound recordings beyond the current length of 50 years. "The current campaign to extend copyright terms for sound recordings beyond 50 years has no justification” said Ms Johnson and she added that “Evidence shows music companies generally make returns on material in a matter of years, not decades. "Current terms already provide excessive protection of intellectual property rights at a cost to consumers."

http://dailytelegraph.news.com.au/story/0,20281,19130639-5001028,00.html

http://news.bbc.co.uk/1/hi/entertainment/4766349.stm

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COPYRIGHT / CONTRACT
Record labels, artists
Marley bass player loses claim : Aston Barrett v Universal-Island records and Others [2006] EWHC 1009 (Ch)

Aston Barrett, the bass player for Bob Marley and the Wailers, has lost a £60 million ($113.6 million) lawsuit over royalties and songwriting credits against Island Records and the Marley family. Barrett testified that he and his brother Carlton Barrett, a drummer for the reggae band who was murdered in 1985, did not receive the money they were due following Marley's death from cancer in 1981. But Mr. Justice Lewison dismissed the suit on May 15 in a ruling at London's High Court. Barrett will be liable for court costs. The Barrett brothers played on numerous Marley albums, including "Natty Dread," "Rastaman Vibration" and " Babylon by Bus". They joined the band after Peter Tosh and Bunny Livingstone left - the Barrets had already achieved major success with their own band The Upsetters. The law suit claimed royalties owed under a 1974 contract with Island Records together with Aston Barret's claims for songwriting royalties on songs he co-wrote with Marley. Whilst the band originally shared equally it was alleged that a new agreement was made in 1976 whereby Marley would take 50% of record royalties and the Wailers (the two Barret brothers) would share the rest. But during the trial Marley's widow Rita and Island Records founder Chris Blackwell played down the contributions of the brothers and said Aston Barrett surrendered his right to further royalties in a 1994 agreement that paid him a share of a settlement figure of five hundred thousand dollars. This was critical to the outcome of the case when Mr Justice Lewison held that "There is, in my judgment, no reason to decline to enforce the settlement agreement against Mr. Aston Barrett. The judge also dismissed the Barrett's claim to have written several of the band's songs, including "War" and "Them Belly Full". The judge, who concluded that Barrett had reconstructed events in his mind according to how he would like them to have been, also ordered Barrett not to commence any further legal action without the permission of the court (Barrett had previously sued the Marley estate in New York in 1986 and in both New York and Jamaica in 1989). He also sued in 1994 resulting in the settlement in which Island agreed to pay $500,000 (£264,000) and legal costs (Lewison J. held that this also settled the two 1989 actions). According to the judge, Barrett had the "greatest difficulty" in answering questions about business dealings and his testimony was not reliable.

The judgment also contains a very interesting analysis of performers rights and appears to distinguish Bassey v Icon Entertainment plc [1995] EMLR 596 and qualify the recent Experience Hendrix LLC v Purple Haze Records Ltd decision. Section 182A of the Copyright Designs & Patents Act 1988 (implemented introduced by regulation 20 of the Copyright and Related Rights Regulations 1996, with effect from 1 December 1996 which itself implemented Council Directive 92/100/EEC of 19 November 1992) provides that:

A performer's rights are infringed by a person who, without his consent, makes, otherwise than for his private and domestic use, a copy of a recording of the whole or any substantial part of a qualifying performance

It had been understood from Experience Hendrix LLC v Purple Haze Records Ltd (2005) EWHC 249 (Ch) that this right was retrospective and covered performances pre-1989. But Lewison J held that regulation 27 of the Directive was the relevant provision (in as much as this is a ‘new’ right) providing that there should be no retrospective application of the Act holding that this would mean that regulation 27 may, in principle, afford a defence to the claim

Lewison J also held that that the consent to one of (restricted) act such as recording a performance would not mean that consent was given for another of the restricted acts (such as issuing copies to the public). But the judge distinguished Bassey v Icon Entertainment plc [1995] EMLR 59 holding that this was a decision to be made on the facts and pointing out that in Bassey the performer (Shirley Bassey) had expressly consented to recording but had expressly reserved a right of veto over any subsequent release. The Judge held that it was for Barrett to show that he had not consented and on the facts given found that Barrett either had consented (in as much as recordings were made pursuant to agreements) or had not shown that he had not consented, being clearly aware of a number of the recordings. Lewison J added “Had the question arisen for decision, I would have held that Mr Barrett had failed to establish the absence of consent in relation to the performances now complained of”.

See Music Law Updates: March 2006 News Updates

See http://news.bbc.co.uk/1/hi/entertainment/4772137.stm

For a html version of the judgment see http://www.bailii.org/ew/cases/EWHC/Ch/2006/1009.html

See the article ‘Performers Rights by Jamie Barnard on this site (Articles).

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TRADE MARK / CONTRACT
The internet, technology, all areas
Apple Computers survive assault from The Beatle’s Apple Corps: Apple Corps Limited v Apple Computer, Inc. (2006) EWHC 996 (Ch)

Apple Corps has lost its High Court action in the United Kingdom to prevent Apple Computers using the mark (name) Apple in connection with it's iTunes online music store. Mr Justice Mann held that the ongoing use by the computer company has not broken a 1991 deal aimed at ensuring there would not be two ‘Apples’ in the music industry. The first agreement between the parties was in 1981 concerned the use and registration of the word "Apple" and various apple logos. Mann J said “I do not need to set out the detailed terms of that [1981] agreement. In general terms, Computer was allowed to use its marks in relation to computer goods and services, but not use them in relation to computer equipment specifically adapted for use in the recording or reproduction of music, or in relation to operational services relating to music. It was also prevented from using its marks in relation to apparatus specifically designed and intended for synthesising music unless certain restrictions were met. Corps could use its marks in relation to sound and video recording, and reproducing apparatus and instruments, and sound and video records, but not computers and computing systems. That was how the parties divided up the product territories at the time. ” In 1991 a new Trade Mark Agreement (TMA) was entered into and Apple Computers paid Apple Corps US $26 million. Mann J said that “As will be apparent from the short description of the 1981 agreement, the TMA shifted the boundaries between the respective parties' exclusive fields of use so that Computer was entitled to a wider-ranging field of use in relation to, inter alia, equipment and delivery services. There remained, however, an important boundary line between Computer's permitted field of use and musical content – the latter was the exclusive preserve of Corps. Whether or not Computer has crossed that boundary is what lies at the heart of this action”. After 1991 both parties had the right to use their respective logos (Apple Corp being a half cut apple / green apple and Apple Computers the stylized Apple logo with rainbow colouring. BOTH Apple Corps and Apple Computers could use the mark ‘Apple’ in their respective areas. Apple Corp argued that the 1991 agreement gave them the exclusive rights to use the Apple trademark for the record business. The 1991 TMA provided that “whereas, the context in which this Agreement arises is the parties' desire to reserve for Apple Corp's field of use for its trademarks, the record business, the Beatles, Apple Corp's catalog and artists and related material all as set forth in section 1.3 herein and to reserve for Apple Computer's field of use for its trademarks, the computer, data processing and telecommunications business as set forth in section 1.2 herein and to co-ordinate the use of their respective trademarks in such fields of use as set forth in section 4 herein”. The agreement then goes on to provide more detailed definitions of each parties field of use:

1.2 'Apple Computer Field of Use' means (i) electronic goods, including but not limited to computers, microprocessors and microprocessor controlled devices, telecommunications equipment, data processing equipment, ancillary and peripheral equipment, and computer software of any kind on any medium; (ii) data processing services, data transmission services, broadcasting services, telecommunications services; (iii) ancillary services relating to any of the foregoing, including without limitation, training, education, maintenance, repair, financing and distribution; (iv) printed matter relating to any of the foregoing goods or services; and (v) promotional merchandising relating to the foregoing.

1.3 'Apple Corps Field of Use' means (i) the Apple Musical Artists; the Apple Catalog; personalities or characters which appear in or are derived from the Apple catalog; the names, likenesses, voices or musical sounds of the Apple Musical Artists; any musical works or performances of the Apple Musical Artists; (ii) any current or future creative work whose principal content is music and/or musical performances; regardless of the means by which those works are recorded, or communicated, whether tangible or intangible; (iii) promotional merchandise relating to any of the foregoing; …

1.4 'Apple Computer Marks' means (i) any design, reproduction or other depiction of an apple, in whole or in part, except for a whole green apple or a half apple (of any color(s)); and (ii) the word 'Apple'.

1.5 'Apple Corps Marks' means (i) any design, reproduction or other depiction of an apple, in whole or in part, except a 'rainbow' or multicolour striped apple (in whole or in part) or any apple (of any color(s)) with a 'bite' removed; and (ii) the words 'Apple', and 'Zapple'."

These provisions have come back to haunt Apple Corps especially as technology has blurred the meaning of the TMA. Mr Justice Mann ruled that the computer company used the Apple logo in association with its store, not the music, and so was not in breach of the 1991 TMA saying “once one is in the store the apple would be taken as denoting the store (in the sense of the service) and perhaps the software (but that does not matter), but I do not see that it goes further than that and adds some additional form of trade connection with the content of the recordings”. The judge further held that advertisements for iPods and iTunes had not breached the 1991TMA – and so iPods and iTunes will still be able to carry the Apple name and logo. Apple Corps manager Neil Aspinall said "With great respect to the trial judge, we consider he has reached the wrong conclusion" and made it clear that Apple Corps still maintained that Apple Computers had extensively "broken the agreement" and that Apple Corps would be "filing an appeal and putting the case again to the Court of Appeal."

http://www.bailii.org/ew/cases/EWHC/Ch/2006/996.html

http://www.vnunet.com/vnunet/news/2155560/beatles-lose-apple-trademark

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COPYRIGHT
Music publishing, internet
Music Publishers file class action against online services

16 online music services including Apple, iTunes AOL Music, Sony Connect, RealNetworks and Napster are facing new legal actions. A number of music publishers including Euro Tec Publishing, Bruce Caplin, Prestoons Music have filed the action in the District Court of Los Angeles. Customarily licences are available so that publishers cannot refuse to license previously recorded and released songs, but it is argued that the online music services did not comply with the requisite formalities.

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COPYRIGHT
Record labels, technology
ARTICLE LINK - the Sony Rootkit story : Wade Roush asks how the world's second-largest record label, Sony BMG, became one of the world's largest distributors of malware in TR (Technology Review).

http://www.technologyreview.com/read_article.aspx?id=16812&ch=biztech

A Federal judge has now approved the settlement in the case. District court judge Naomi Reice Buchwald granted final approval for a settlement ordering that consumers will receive new malware and vulnerability-free CDs, a patch to remove the offending XCP or MediaMax code, and Sony will be dishing out free downloads.

http://www.theregister.co.uk/2006/05/23/sony_rootkit_settlement/

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TAXATION
Artists
ARTICLE Agassi: Game, set and match to the Revenue by Euan Lawson, solicitor

 André Agassi lost his long-running legal battle with the Revenue yesterday.  By a 4 to 1 majority, the House of Lords overturned the earlier Court of Appeal decision and ruled against Agassi in his contention that he had no personal liability to UK income tax in respect of certain endorsement income relating to appearances at tennis tournaments (including Wimbledon) in the UK. Agassi, who is neither resident nor domiciled in the UK, traded through a personal services company, Agassi Enterprises Inc., a company controlled by himself and incorporated in the USA.  It received endorsement payments from Nike Inc. and Head Sports AG (neither of which had a tax presence in the UK). Agassi had argued that, even though a portion of the endorsement payments could be directly connected with his performance at tennis tournaments in the UK, he had no tax liability because the relevant legislation provided that his liability to tax was contingent on the payers being subject to a UK withholding obligation.  Since the payers had no tax presence in the UK, they could have no withholding obligation because of the so-called "territoriality principle" which states that, unless the contrary is either expressly stated or plainly implied, UK legislation is applicable only to British subjects or to those coming to the UK and making themselves subject to British jurisdiction. The Court of Appeal had found in favour of Agassi.  However, the Lords held that, although the territoriality principle was relevant, it was necessary to ask whether the implied territorial limitation could also sensibly be read as carrying through into the primary tax charge.  The answer to that question was 'no'.  Put simply, the relevant consideration was the nature and status of the payment rather than the identity of the payer.  The legislation had been introduced not only to provide an improved collection machinery but also to expand the ambit of the basic tax charge on trading income.  Further, it could not have been Parliament's intention to provide that a tax liability could be avoided simply by ensuring that all payments were made by foreign entities. The decision safeguards potentially millions of pounds of future revenue for the Treasury by making a clear distinction between the charge to tax on the taxpayer and the liability of the third party payer to make and account for deductions at the basic rate.

This update is © Michael Simkins LLP. 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.co.uk/default.aspx

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COPYRIGHT
Record labels, internet
3500 file swappers targeted in Germany

The biggest single action against illegal file-sharing internationally has taken place in Germany today as 3,500 illegal music file-sharers faced criminal prosecution for uploading large amounts of copyrighted material on peer-to-peer networks. Investigators identified individual illegal music file-sharers who were using the eDonkey network to offer up to 8,000 copyright infringing music files on the internet.  Each of the individuals now faces both criminal prosecution and claims for compensation for their actions under civil law.  They are likely to face damage claims of up to several thousand euros for distributing music on file-sharing networks according to the IFPI. Police searched 130 premises to gather evidence in the investigations, which have been running for several months. The actions were coordinated by the Public Prosecution Service of Cologne and the Police Authority of Bergheim. In Germany, legal physical sales of music have fallen by a third in five years, while more than 400 million music files were downloaded illegally in 2005 alone and the German recording industry has taken high-profile actions against file-sharers since early 2004.  They are part of an international campaign that has seen more than 7,000 legal proceedings brought against uploaders in the last three years.

Source www.ifpi.org

 

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© 2006, Ben Challis