Music 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

March 2006

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COPYRIGHT
Internet, technology, record labels, music publishing
Is selling your pre-loaded iPod on E-bay illegal?

There is a major market in second hand vinyl and I would be personally very upset if I was to be stopped from selling either my vinyl or CD collection (not that I want to). But the Recording Industry Association of America seems to be adamant that selling pre-loaded iPods is illegal. A number of members of the public in America have sought to sell their iPods on Ebay loaded with content - no doubt for numerous valid reasons - they don’t want the device anymore or they got a better iPod for Christmas or Valentines day. But the new practice has stirred up a fierce debate about the legality of reselling the music content. Ebay lawyer Andrew Bridges has said that "It really depends on the individual circumstances … I'm not sure the law is settled. If I'm a college student and I want to supplement my income by buying 100 iPods and taking my CD collection and putting it on those iPods and selling them at a significant premium, that's probably not going to fly. But if I've had my iPod Shuffle for two years and I'm tired of it and I go out and buy a 60 gig video iPod and want to sell my old Shuffle, but don't want to purge the music first, that's probably legal." Not exactly, says RIAA President Cary Sherman. "Both cases Andrew cites are different types of infringement, it's just that the damages are higher for someone engaged in it for commercial benefit versus someone who isn't," he said. "Unlawful reproduction or distribution is infringement. There is no fair use when someone is getting a complete copy of a work, especially a creative work and especially when it could have an adverse impact on the marketplace for selling or licensing that work …. when you buy a CD, you have it for personal use on your computer or iPod, but you can't give it away and keep it for yourself. That's having your cake and eating it too. If everyone did that, [record labels] would only sell one CD," Sherman said. Well Music Law Updates does think that Mr Bridges is being a bit over optimistic in his approach and when looking at the position in the UK, certainly pre-loading numerous iPods from a single source and the re-selling them at a premium would be an infringement under UK law. The Copyright Designs and Patents Act1988 provides that making a copy and more importantly issuing copies to the public without permission or licence is an infringement of copyright (S16). But what about selling an iPod you have legally loaded up yourself from iTunes? You have paid for the songs – and you now want to sell these within the device they are loaded into. Is this an infringement? The first copy was made legally (as permission was given to make the copy) and provided no other [illegal] copies have been made from the legal download source [eg you sell this one copy – you don’t keep the copy and sell a copy of the copy] then from a common sense point of view surely the answer must be ‘of course not’. And moreover you are not ‘issuing copies to the public’. Surely this scenario it is just like selling your vinyl or CD collection to another fan. It is not issuing copies to the public any more than a second hand record shop is ‘issuing copies to the public’. The act of sale also cannot be secondary infringement by way of possession or dealing in infringing copies as there is no ‘infringing copy’ in the first place. In fact the Copyright Designs & Patents Act 1988 S18.3(a) provides that any re-distribution of a copy previously (legally) issued to the public is not, in UK law, an infringement of copyright. In effect the original rights have been 'exhausted' – and the original owner has already been paid. That said it would be interesting to see a judgment on where the parameters of the law are drawn on this issue both in the UK and particularly in the USA where the industry friendly provisions of the DCMA (Digital MillenniumCopyright Act) may produce a different reading of the re-seller’s position with regard to digital audio files. But what perhaps might be just as useful would be a clear statement from the RIAA, the BPI and/or the IFPI on the matter. A statement pointing out that re-selling a MP3 player loaded with legally acquired downloads is NOT an offence on its own would at least limit the damage from yet another round of bad press about the consumer unfriendly actions by the majors and their trade bodies.

Although to my knowledge, there are no court decisions that have addressed this issue, I think the result under U.S. copyright law would likely be the same as under UK law. If you sell an iPod you have legally loaded with copyrighted music from iTunes or elsewhere, I believe this would be legal. Similar to the UK Copyright Designs & Patents Act S18.3(a), the first sale doctrine under U.S. copyright law provides that “the owner of a particular copy or phonorecord lawfully made . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” 17 U.S.C. §109(a). If you legally download music, you have acquired a lawfully made phonorecord and the fact that the phonorecord is made in a digital format should not make any difference. You have the right to distribute that phonorecord (e.g., MP3 file) under the first sale doctrine just as you have the right to sell a lawfully acquired CD to a used record store. However, pre-loading iPods from a single source and then re-selling them with the loaded copyrighted content would likely be infringement. This would involve making multiple unauthorized reproductions (copies) as well as distributions of the copyrighted songs and sound recordings. The first sale doctrine only applies to the distribution right, not to the reproduction right so making copies of music files to distribute to others would violate the copyright owners’ reproduction rights under section 106 of the U.S. Copyright Act.

And Five Eight magazine adds comment with a further twist:The RIAA (Record Industry Association of America) is looking to 'create' a new and more populous prey. The association has filed for an amendment to the DCMA which would stop consumers legally copying their CDs onto their digital music players. Whilst most iPods can hold thousands of tracks, it is estimated that, on average, owners have bought just 10-25 tracks form the iTunes Music Store. If a change in the law is pushed through, millions of Americans would be criminalised overnight. The Electronic Frontier Foundation (EFF) has criticised the trade group for attempting to push back the parameters of fair use. Meanwhile, in a statement to Digital Music News, the RIAA has downplayed the move saying it supports flexible personal use copying by fans:
http://www.digitalmusicnews.com/#021606fair see also ‘is ripping from CDs fair use’ – from the IP Kitten in February (see link above)

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New UK copyright law has come into force extending “Moral Rights” to performers. Since 1 February 2006, performers have the legal right (with exceptions) to be identified as the performer and to object to derogatory treatment of their recorded or broadcast performances. The new laws have been inserted into the existing Copyright, Designs and Patents Act 1988, by way of the ThePerformances (Moral Rights, etc) Regulations 2006. In the UK, copyright law is divided generally into three types: the best-known “copyright” laws which protect the works of authors, the lesser-known “rights in performances” laws which protect the live performances of musicians and other performers, and the little-known “Moral Rights” which protect the reputations of authors (and, now, also performers). This new extension of “Moral Rights” to performers includes the right to be identified as the performer when his performance is broadcast or when a recording of his performance is communicated to the public. He (or his stage name or the name of his group) must be identified in a manner likely to be noticed by the audience. Exceptions include where identification is “not reasonably practical” and where the performance is given for reasons relating to advertising or news reporting. No guidance is given as to when identification may not be reasonably practicable and this may or may not cover a radio presenter that fails to name all musicians performing on a recording. The full text of the new regulations can be accessed at http://www.opsi.gov.uk/si/si2006/20060018.htm. From an article by Tom Frederikse which can be found at www.clintons.co.uk

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COPYRIGHT
Record labels, internet
AIM invited to air views on DRM to UK government as indie labels distance themselves form RIAA actions

AIM, the UK association representing independent labels, has been asked to give evidence at the House of Commons to the All Party Internet Group on DRM. AIM will be represented by Alison Wenham, Chairman and CEO of AIM and newly-elected President of WIN (Worldwide Independent Network), Simon Wheeler, Director of Digital at Beggars Group/Chairman of AIM's New Media Committee and Paul Sanders, founder of state51. AIM will be addressing MPs and Peers who form the membership of the Parliamentary/New Media Industries Forum, a body established to consider Internet issues as they affect society and inform Parliamentary debate. The APIG inquiry is looking at DRM issues to establish how consumers, artists and the distribution companies should be protected in a continually evolving market place. AIM was chosen from among 50 bodies who sent in evidence, to speak on behalf of its constituency, 95% of the British independent record industry. Other attendees of the hearing will include British Music Rights, EMusic.com, Snocap, the British Library, BBC and AOL, National Consumer Council, Open Rights Group, PACT and The Film Council. AIM's written submission outlined the differences between independent labels' varying attitudes to DRM and those of the music majors and other IP-based sectors. AIM stated that DRM systems “cannot and will not offer a complete answer to doing IP business via the internet”: though DRM is a useful and competent tool for tracking music use and sales via downloads, it is not and cannot be a “policing” system. The submission continues “Independent music companies are primarily artist-orientated and want to give their artists every possible opportunity to reach national and international markets: using rather than refusing new technologies; encouraging broad and niche consumer access to new music; avoiding a punitive approach to copyright enforcement and realising that loss of some measure of copyright control is a factor in reaching new and enthusiastic music markets around the world - and believing that there can be a fresh approach to all these factors”. The Inquiry report will be published in March or April. In North America, Canadian indie label and management company Nettwerk has distanced itself from the actions of the Recording Industry Association of America in taking direct legal action against music fans after fears that the RIAA’s actions would ultimately be counterproductive. Terry McBride of the Nettwerk Music Group who represent Avril Lavigne, Dido and MC Lars amongst others said that “suing music fans is not the solution, it’s the problem”. That said, The RIAA has launched a further 750 lawsuits against alleged file-sharers in the US. A total of 16,837 have been targeted so far in the RIAA's actions and the RIAA is now looking at taking legal action over the resale of pre-loaded iPods (See above).

And for a fairly caustic response to the IFPI’s Digital Music Report see P2Pnet: “….. Sony BMG, Vivendi Universal, Warner Music and EMI – are sticking to their physical 1970s business model in the digital 21st century. The cartel is trying desperately to compete with independent music sites and the p2p networks by selling low quality compressed digital music tracks at sky-high $1 and up prices. But music lovers continue to get their fixes for free on the networks, or for pennies and cents on one or other of the indie download sites ……..” LINK TO http://www.p2pnet.net/story/7661

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COPYRIGHT
Record labels
SonyBMG Rootkit case still rumbles on as SunnComm agrees to the terms of the Electronic Frontiers Foundation Open Letter

In response to an open letter written by the Electronic Frontier Foundation (EFF), SunnComm Technologies, Inc., has outlined what it has done and will do to address potential security problems caused by its MediaMax CD copy-protection software and to help protect against future vulnerabilities. Use of the software on CDs released by Sony BMG has received significant media attention, but many consumers are unaware that the software was also used by several independent music labels. SunnComm says it will ensure that future versions of MediaMax will not install when the user declines the end user license agreement (EULA) that appears when a CD is first inserted in a computer CD or DVD drive. SunnComm has also agreed to include uninstallers in all versions of MediaMax software, to submit all future versions to an independent security-testing firm for review, and to release to the public the results of the independent security testing. SunnComm and EFF are discussing how to ensure that legitimate security researchers who have been, are, or will be working to identify security problems with MediaMax will not be accused of copyright violations under the Digital Millennium Copyright Act (DMCA). In January, SunnComm published a complete list of all music CDs that employ the MediaMax technology and sent a letter to the independent labels using MediaMax with information about a security vulnerability in MediaMax version 5. Music label Sony BMG has separately committed to addressing security concerns arising from CDs using MediaMax. The EFF continues to “disagree with SunnComm on the wisdom of CD copy protection in general". EFF wrote the open letter to SunnComm because of its concerns about the MediaMax software, which is included with a wide variety of music from independent labels, such as Cuban Link's "Chain Reaction" by Men of Business Records, Peter Cetera's "You Just Gotta Love Christmas" by Viastar Records, and several releases on KOCH Records.The problems with MediaMax came to light in November and December 2005, after independent security analysts discovered problems on Sony BMG CDs that included MediaMax. EFF and others subsequently brought legal actions against Sony BMG based on its distribution of the MediaMax titles, and a settlement in that case provided a remedy for music fans who bought Sony BMG MediaMax CDs. SunnComm's response to EFF's open letter commits the company to addressing the potential vulnerability for fans who bought such CDs on independent labels and to a continuing process that should help protect fans against future vulnerabilities.

The Director of Law Enforcement at the US Department of Homeland Security, Jonathan Frenkel. has made it clear that the organization will now monitor the situation and make industry and consumers aware of the dangers of rootkit technology and push for regulation if necessary (although the DHS does not have the power to regulate itself).

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COPYRIGHT
Games industry
ARTICLE: Copyright in a video game: Nova Productions v Mazooma (and Bell Fruit )
By Tom Frederikse, solicitor, Clintons

A video games design and manufacture company has lost its copyright claims against two rivals in a case which sheds considerable light on the extent of legal protection of a video game. Tom Frederikse explains:

In Nova Productions Limited v Mazooma Games Limited (and the parallel Nova v Bell Fruit Games Limited), Nova claimed that both companies had copied its skill-based coin-operated arcade video game “Pocket Money” in which players could win cash prizes. The court found that, although there had been copying, the copying was not “substantial” enough to constitute infringement. Nova had claimed that its game had copyright protection in four ways by virtue of being four different types of work at the same time: an “Artistic work” (the graphics and displays), a "Literary work” (the software program itself and the original design notes), a “Dramatic work” (the game itself as “an ordered sequence of events within an overall framework”) and a “Film” (the series of images). The court agreed that the graphics in the game made it a protectable Artistic work (“similar to that of a painting or drawing”) and that both the programming code and the design notes made the game a protectable Literary work. The game, however, was found not to be a Dramatic work (because it is not capable of being performed and, even if it were, nothing can be both a Literary and a Dramatic work) and probably not a Film (though even if it were, there had been no “photographic copying” by either defendant).

The judge conducted a detailed examination of the games (which included playing the games in court and an astonishing eight-page explanation of each in the judgment) and concluded that there had been copying but that it was not legally “substantial”. For the purposes of the Artistic work, the court found that the features were copied “at a very high level of generality or abstraction” and the copy had “no meaningful connection with the artistic nature” of the original. For the purposes of the Literary work, despite the similarities in the games no substantial verbatim code or architecture had been copied and only “generalised ideas” had been taken. Many of the similar features were found to be “obvious”, “commonplace” or “functional” (and thus, do not help the "substantial" argument). Furthermore, there had been no “slavish copying”, as the defendant’s games (“Jackpot Pool” and “Trick Shot”) had “obviously been the subject of considerable independent creative effort”. This case, for the second time in 12 months, shows that software which takes only the generalised ideas of an earlier program will not be an infringement: “Ideas and principles which underlie any element of a computer program are not protected by copyright”. Similarities which may exist in the “outputs” do not necessarily suggest similarities in the software (or, the mere fact that two puddings look and taste alike does not mean that the latter recipe is a copy of the first). This judgment also confirms the UK as a leading forum for technology-based litigation. The judge is shown to be impressively knowledgeable and, at least in this case, game.

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TRADE MARK, COPYRIGHT
Television, radio, film
ARTICLE: French court protects a TV programme format using passing off laws: Saranga Production v Canal Plus
Jonathan Coad, solicitor and Eleanor Adams, solicitor, of Swan Turton

After Simons Cowell and Fuller backed away from a full out battle over the format rights to Pop Idol and X-Factor, Jonathan Coad and Eleanor Adams look at a French decision which shows how a programme format can be protected even where no copyright is found to subsist in a format, here by using the laws of passing off.

The Paris High Court has given protection for a television programme format under the law of passing off. The claimants, Saranga Production, produced a format for a political docu-drama show entitled Crise en direct. The broadcaster, Canal Plus, one of the defendants, sought proposals from production companies for a new politically themed programme. The claimants met with the defendants and presented their ideas. Canal Plus then commissioned a different production company to produce programmes using themes and characteristics in the claimants’ format. The defendants, Canal Plus, a production company and two journalists involved in production, were then responsible for producing and broadcasting a programme entitled C’est déjà demain.

The claimants brought an action for passing off in respect of the programme C’est déjà demain. In order to establish passing off under French law, the claimants had to show that the defendants had intentionally taken characteristic features of their format, that such formats were of economic value and that this had caused them loss. The defendants argued that they had independently developed their programme before they met with the claimants. They also argued that the claimants’ format had no independent economic value because it lacked originality and merely used themes and characteristics which were commonplace within the public domain. The court found that there was no evidence that the defendants had already developed their programme before meeting the claimants. The issue of originality of the format was not relevant to establishing passing off, unlike in the law of copyright. The court also held that formats are “commercial products” with inherent economic value.

The court held that the broadcast of the defendants’ programme had caused the claimants loss in that it had deprived them of the opportunity of marketing their format to another broadcaster. The defendants were ordered to pay damages of 150,000 Euros and other relief was granted. lthough this decision does not provide any indication of whether the French court might afford copyright protection to television formats, it demonstrates that the court is willing to grant them protection via other forms of legal action. This is consistent with a general trend worldwide to give protection to this valuable species of intellectual property.

The Swan Turton website is at www.swanturton.com This article 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 .

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COPYRIGHT
Internet, film, television, record labels, music publishers
French parliament continues moves to legalise file sharing

After opposition members and some members of the ruling party hijacked a bill meant to strengthen anti-piracy laws, the French parliament is resisting heavy pressure from the major record labels and pressing on with plans to legalise the sharing of music and movie files. Parliamentary deputies will question the country's culture minister Renaud Donnedieu de Vabres about the draft legislation that proposes to allow unlimited file sharing in return for the payment of a monthly fee of 'several euros' – a ‘P2P tax in effect. Consumer groups back the move, but the record industry is staunchly opposed. 'If France continues down this road, it could jeopardise the promising growth we're now seeing in the legitimate online market,' said EMI chairman Eric Nicoli. 'Many French artists, authors, indies, majors, film producers and entertainment retailers have expressed their strong opposition to the proposed "global licence" and to other detrimental proposal.'

And a French court has ruled that using P2Ps is legal providing it is for personal use rather than for commercial reasons. The French record producer association, SCPP (Société Civile des Producteurs Phonographiques) sued a French national for downloading and uploading 1,212 music tracks. The District Court of Paris decided that these acts of downloading and uploading qualified as "private copying".

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Legislation is always struggling to keep up with technology and in this age of digitization and the internet this has never been truer. But sometimes existing laws can be adapted to solve a new problem area. Recently a federal court in Los Angeles just held that trespass was a viable legal theory to address the alleged distribution of spyware and adware programs. More recently the UK Culture Secretary pointed out that the UK Government did not want more EC legislation applied to the internet to protect children as existing criminal law was more than sufficient to deal with new forms of criminal behaviour facilitated by the internet. A recent Canadian (Ontario) decision has held that invasion of privacy is a common law tort and other Canadian provinces such as Quebec already have a statutory tort for invasion of privacy – again laws which could be applied to privacy invasion in and by digital media.

Somwar v McDonald's Restaurants of Canada Ltd , 2006 CanLII 202 Ontario Supreme Court.

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A federal district court in Nevada has ruled that Google does not violate copyright law when it copies websites, stores the copies, and transmits them to Internet users as part of its Google Cache feature. The ruling clarifies the legal status of several common search engine practices and could influence future court cases, including the lawsuits brought by book publishers against the Google Library Project. The ruling clarifies the position that fair use (fair dealing in the UK) covers new digital uses of copyrighted materials. Blake Field, an author and attorney, brought the copyright infringement lawsuit against Google after the search engine automatically copied and cached a story he posted on his website. Google responded that its Google Cache feature, which allows Google users to link to an archival copy of websites indexed by Google, does not violate copyright law. The court agreed, holding that the Cache qualifies as a fair use of copyrighted material. "This ruling makes it clear that the Google Cache is legal and clears away copyright questions that have troubled the entire search engine industry," said Fred von Lohmann, Electronic Frontiers Foundation senior staff attorney. "The ruling should also help Google in defending against the lawsuit brought by book publishers over its Google Library Project, as well as assisting organizations like the Internet Archive that rely on caching."

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In spite of its win in Field v Google the search engine Google has lost a Californian copyright case at the preliminary injunction stage. At issue were the thumbnail images that Google provides as part of its “image search” service. The thumbnails in question were images from Perfect 10, a pornographic magazine. US District Court Judge Howard Matz held that displaying these images could be classed as infringement. However, the Judge held that Perfect 10’s claim that Google was also liable for secondary infringement if users clicked on the thumbnail images, which took users to the full-sized image as hosted on the copyright owner’s website did not have a sufficient likelihood of success at trial to serve as the basis of a preliminary injunction. Judge Matz said that based on evidence submitted at a preliminary injunction hearing, Google could not be held responsible when viewers click on the images and are directed to third-party sites that contain full-size images stolen from Perfect 10's Web site. Matz ordered both sides to craft a narrow preliminary injunction that would respect Perfect 10's copyrights but not curtail Google's broader right to catalogue and display online images. The case will go to trial at an unspecified time in the future.

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COPYRIGHT, TRADE MARKS
Internet
ARTICLE: Search Engine Marketing & The Law – an Update
By Nicola McCormick, solicitor, Michael Simkins LLP

Search advertising is presently estimated to account for around 40% of US/UK online marketing spend and the total spend will almost certainly continue to increase. The purchase of key words to trigger banner ads or sponsored listings is hugely important- although crawler listings cannot be bought and rankings cannot be guaranteed. The public understand this and largely trust organic search results to point them to the most relevant content-rich sites. For this reason a good search result ranking is a hugely significant means of driving traffic to a website. No matter what ingenious new marketing techniques are developed, online ranking manipulation will remain popular, so in what way does UK law apply to search engine optimisation (“SEO”)? Solicitor Nicola McCormick explains

More than just Meta-tagging
A couple of years ago much was written about the legality of using a competitor’s trade marks in meta-tagging as a form of SEO. The reported UK and US cases did not give a definitive statement as to when such use was permissible; cases rarely do. However, the broad principle was that such use was permitted when it was justified. US cases in particular were more inclined to make a finding of justification if the competitor’s trade mark also appeared legitimately and visibly in the body copy of the alleged infringer’s website. However, by the time this principle was emerging Google was on its rise to dominance. Google’s PageRank search algorithm decreased the reliance on meta-tagging as a means of assessing search relevance and introduced a large number of other factors. Evidentially it became increasingly difficult to argue that a competitor’s trade mark in meta-tagging was likely to be a significant factor in even returning the alleged infringers page in response to a search let alone in causing confusion for the purpose of trade mark infringement or passing off. Naturally, as soon as a given factor, be it tagging or linking, is known to be factored into search engines’ algorithms the optimisation experts start looking for ways to manipulate their websites to emphasise that factor and boost their rankings.

Black Hat and White Hat SEO
It should be emphasised that optimisation is not a bad thing per se. If you have a number of companies it is to be expected that you will provide genuine links between their respective websites which is likely to enhance each website’s rankings. If you participate in a wiki or blog community in your specialist field it is natural to want to include a link on such sites to your own company’s website (if permitted). Depending upon the provenance of the site hosting a link such links are by varying degrees likely to enhance your site’s rankings. Maximising the ranking-effect of genuinely relevant online activity is the domain of the SEO “White-Hatters” and where it serves to ensure that content rich sites are returned high in a search ranking no complaint may be made. However, on myriad sites across the web companies are complaining about sites that have used various means designed to fool a search crawler into believing that an irrelevant or content-poor site is of greater relevance to a given search term than is genuinely the case and have thereby bumped genuinely relevant sites down in the rankings. Some of the better known forms of ‘Black Hat’ search engine optimisation (or spamming) include: the use of link farms; mouse-activated re-directs; hidden table cells stuffed with key words; links from contrived websites or wikis; invisible text and duplicate websites. None of these techniques need involve the use of intellectual property belonging to another.

The bulk of online disputes, and in particular those relating to optimisation techniques, have involved arguments as to intellectual property, passing off or defamation. If no intellectual property rights have been infringed is the law able to help those aggrieved by another’s use of misleading SEO?

Claims other than Intellectual Property Infringement
During the 19th century English law might have stepped in readily to prevent someone committing a wrong that ‘hindered another in his business’. In the UK free market economics put an end to such a broad principle. Simply making it difficult for a competitor to promote his business by adopting a sharp, but legitimate, practice will not give rise to a legal claim. The courts will not prevent intentional damage to another person’s business unless the acts committed in pursuit of that damage are in themselves unlawful. Assuming no IP rights infringement or defamation a legitimate, commercial website owner may fill his site with whatever content he pleases either in its coding, visible or invisible text, no element of unlawfulness arises. It should be noted that if any element of unlawfulness in the means of advancing a website up the search engine rankings could be established then, not only would it be difficult (in the face of constantly changing search engines algorithms) to demonstrate that the specific, unlawful optimisation technique led to the advancement in the rankings but it would be extremely difficult to show that an advancement in the crawler rankings alone by a competitor led to a loss to the complainant of business.

Dispute Resolution Techniques
Any business which suspects that another site has advanced itself in the crawler rankings by virtue of search engine spamming might seek resolution by approaching Google directly (whilst there are a number of other well-known search engines Google accounts for about half of all UK searches and most of the large search engines share content with Google). Google has a record of taking steps to ban sites using certain optimisation techniques from its index, an action which would lead to the delisting of those websites from the majority of searches. More openly it invites complainants to submit details of sharp optimisation practices taking place and seeks to update its search algorithm to factor out the effect of such techniques. Google sets out procedures for notification of such matters on its website but whatever action it is persuaded to take there is usually a significant delay for the complainant between starting the Google notification process and seeing a change in search results. Whilst the existing law may not directly help in fighting some online battles, legal dispute resolution techniques may nevertheless be employed to good effect. Most companies, indeed most lawyers, simply do not understand the rules and penalties applicable to online marketing strategies and this can be exploited by those that do understand them. One option for a complainant which may, in the right circumstances, have force, is to write to the owner of the artificially boosted website in terms similar to a legal ‘Letter Before Action’ but which might be termed a ‘Letter Before Notification’. The letter should detail the spamming practices that have been identified by the complainant and threaten a notification to Google and all other major search engines unless such practices are stopped. There is a risk for any site whose activities are reported to Google that they will be blacklisted entirely following a notification that they have undertaken search engine spamming. Even when they subsequently dismantle any architecture complained of it may take some time (even weeks) for them to be re-included by Google. Many website owners, even those employing spamming techniques, may not be aware of the consequences of doing so (often they have engaged a rogue SEO company who may not have explained what they have done let alone how it may be viewed by Google and other search engines). The threat of a period of search invisibility means lost sales for a transactional site and possible disputes with advertisers for many others and may well have sufficient power to persuade the competitor voluntarily to change their ‘optimisation’ strategies. It is not suggested that you set your IT team analysing all those who outrank you in your key searches but if a competitor appears to be stealing a march on you or you have been bumped to page 2 by an irrelevant-looking site it might well be worth checking for obvious signs of Black Hat activity and putting pen to paper.

This Article is for general guidance only. Legal advice should be sought before taking action in relation to specific matters. The Michael Simkins LLP website is at http://www.simkins.co.uk/default.aspx

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PATENT LAW
Technology
Crackberry addicts face their darkest hour as patent war moves towards a conclusion

Blackberry addicts are facing their darkest fears as Blackberry manufacturers, Research in Motion (RIM) try to overturn a court decision they lost five years ago to NTP who hold a patent which NTP say (and a court upheld) had been infringed in the Blackberry hand held mobile/computer device. RIM received good news last week when the US Patent Office ruled that the patent owned by NTP was not relevant to RIM’s invention and should be cancelled. But simultaneously on the 24 th February the US District Court in Richmond, Virginia, will decide whether NTP’s 2003 injunction against RIM should stand. RIM are contesting the injunction not least because they believe that in the event of a decision against RIM, NTOP could be fully compensated by financial recompense. A tentative £235 million settlement between the parties failed and the US Supreme Court has refused to intervene, leaving the decision to the District Court (Judge James Spencer).

ADDENDUM: Judge Spencer has now issued his judgement (24th February 2006) and has not ordered the immediate shut down of RIM's service although he did not accept that the Blackbery service was a 'vital telecommunications service'. The judge expressed disapointment that BTP and RIM could not come to a commercial agreement in the four year patent dispute but said that in default of that the court would decide how much RIM would have to pay to NTP. However, as the matter stands this is a reprieve for RIM and not a final judgement. RIM's shares jumped on the news and on Nasdaq closed $4.53 higher at $74.05.

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The Electronic Frontier Foundation (EFF) filed a friend-of-the-court brief with the United States Supreme Court asking justices to overturn a court ruling in a patent case with ‘dangerous implications for free speech and consumers' rights’. The Public Patent Foundation, the American Library Association, the American Association of Law Libraries, and the Special Library Association joined EFF on the brief. At issue is a case involving online auctioneer eBay and a company called MercExchange. Last year, the Federal Circuit Court of Appeals ruled that eBay violated MercExchange's online auction patents and that eBay could be permanently enjoined, or prohibited, from using the patented technology. But as part of the ruling, the court came to a perilous conclusion, holding that patentees who prove their case have a right to permanent injunctions under all but "exceptional circumstances," like a major public health crisis. This radical rule created an "automatic injunction" standard that ignored the traditional balancing and discretion used by judges to consider how such a decision might affect other public interests--including free speech online. The EFF suggest the lower court’s ruling stems in part from a misperception that patents are just like other forms of property, with the same rights and remedies. However, the EFF suggest that relevant Supreme Court rulings have repeatedly emphasized that patents are a unique form of property, designed to achieve a specific public purpose.

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DEFAMATION
Artists
Kate Moss fails in bid to have recent allegations excluded from trial

Kate Moss has failed in a High Court attempt to block recent allegations of drug abuse being used in her forthcoming libel trial. Moss alleges that Channel 5 defamed her by saying that she had taken a ‘vast’ quantity of cocaine in Barcelona in 2001 and had to be revived from a coma. The more recent allegations stem from the period of Moss’s relationship with Babyshambles frontman Pete Doherty when she was photographed allegedly using cocaine at one of the band’s recording sessions. On September 22 nd Moss issued a public apology and said that she was taking steps to address her ‘personal issues’. She has since attended a rehabilitation clinic in the US. Moss has subsequently returned to the UK and has, on January 31 st, been interviewed by police under caution but she was not arrested and no charges have been brought against her. In a pre-trial ruling Mr Justice Eady gave defence lawyers permission to use the more recent allegations of cocaine use in their defence against the action for defamation for the alleged Barcelona incident in 2001 (these allegations being pre the winter 2005 new allegations and apology). Channel 5’s case at trial will be that Moss was a ‘serious cocaine abuser’ and will use the more recent allegations and the apology as part of their defence to the action.

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PRIVACY
Artists, publishers
High Court ruling to protect Canadian folk singer follows Von Hannover v Germany

In the clearest statement yet that the UK courts will follow the precedents of the European Court of Human Rights when looking at the right to individual privacy under Article 8 of the HumanRights Act 1998 (and the European Convention for Human Rights) Mr Justice Eady issued an injunction against publication of a book about Canadian folk singer Loreena McKennitt and awarded damages of £5,000 against Neima Ash, the author of Loreena McKennit, My Life as a Friend. Ash had been a close friend and confidante of McKnnitt for over 20 years but following the precedents set in the ‘Princess Caroline’ case Mr Justice Eady made it clear that even celebrities has ‘the legitimate expectation to have their private lives protected’ and just because events could have been witnessed in a public place does not make them any less private. There would need to be a high level of misbehaviour before the courts would apply the ‘public interest’ defence for publishers showing how far the law has moved to protect privacy at the expense of press freedom to publish in the last few years.

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PRIVACY
Artists, broadcasters, press
Diana paparazzi convicted of invasion of privacy but must only pay nomimal damages

Three paparazzi photographers who took pictures of Princess Diana and Dodi Fayed leaving the Ritz Hotel and at the scene of the fatal car crash in Paris where the couple died must pay nominal damages of E1 each as well as the cost of advertisements announcing the verdict in newspapers. The French Appeals Court found that the couple’s privacy had been invaded on both occasions – at the hotel and at the scene of the crash. The convictions of Jacques Langevin, Christian Martinez and Fabrice Chassey, based on unpublished photographs, are thought to be very unusual in France.

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TAXATION
Live Music Industry
New book looks at the taxation of international performing artists

A new book, Taxation of International Performing Artists by Dick Molenaar, investigates the taxation of international performing artists in Europe. Published by the International Bureau for Fiscal Documentation, the book makes it clear that the tax rules for international performing artistes are very different from normal tax rules. For instance, taxation occurs in the country of performance, regardless of whether an artiste is self-employed or an employee. The book considers the problems regarding, for example, the determination of taxable income and the non-deductibility of expenses and tax credits in the country of residence, and gives current examples of excessive taxation. Recent cases before the European Court of Justice have led to awareness of some fairly dubious practices promulgated by fiscal authorities and the author is active in campaigning against restrictive (and often illegal) taxes on the music industry in European Union member states such as Germany. www.ibfd.org/portal/Product_tipa.html

See Music Law Updates News Archive December 2004 for details of three recent cases at the European Court of Justice: FKP Scorpio Konzertproduktion (C-290/04), Centro Equestro de Leziria Grande Lda. (C-345/04) and Centro di Musicologia Walter Stauffer (C-386/04) http://www.musiclawupdates.com/news/04Decembernewsupdates.htm . Also see IQ magazine

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New York Attorney General Eliot Spitzer has subpoenaed some of the USA's largest radio conglomerates in his "payola" investigation of major artists and songs that he claims got air time because of payoffs by recording companies. Payola, or ‘pay for play’ breaches a 1960 federal law prohibiting record companies paying ton get airtime for records on the radio. "A lot of the major songs have been implicated in this and it showed how pervasive the payola infrastructure had become," Spitzer told Associated Press. "Probably many of the songs that were beneficiaries of the payola scheme would have succeeded without it, but certainly payola became part of the promotional structure and was integral to the game to get songs to the top. Major artists, major songs were sent up the charts through improper payments to buy spins on the air that translated into sales." Warner Music Group Corp. agreed last year to pay $5 million to settle its part of the investigation, and Sony BMG Music Entertainment agreed to pay $10 million . http://abcnews.go.com/Business/wireStory?id=1594741

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COMPETITION
Internet
European competition regulators to look at music collection societies again

In October 2005 The European Commission adopted a recommendation on the management of online rights in musical works. The recommendation puts forward measures for improving the EU-wide licensing of copyright for online services. Improvements were deemed necessary because new Internet-based services such as webcasting or on on-demand music downloads needed a license that covers their activities throughout the EU. The absence of EU wide copyright licenses were held to have been one factor that has made it difficult for new Internet-based music services to develop their full potential. Internal Market and Services Commissioner Charlie McCreevy said at the time : “Today we have made workable proposals on how licensing of musical work for the Internet can be improved. I want to foster a climate where EU-wide licenses are more readily available for legitimate online music service providers. These licenses will make it easier for new European-based online services to take off. I believe that this recommendation strikes the right balance between ease of licensing and maintaining the value of copyright protected works so that content is not available on the cheap. In the interests of better regulation, for the time being and as a first step, I am making a recommendation as to how the market should develop. I will be monitoring the situation closely and, if I am not satisfied that sufficient progress is being made, I will take tougher action”. And last month (see Law Updates Archive February 2006) we reported on the MCPS-PRS Alliance’s moves to spearhead their position as pan-European licensors, following the third suggestion from the EU’s pathways which were (1) Do nothing; (2) improve cooperation among collecting societies allowing each society in the EU to grant a EU-wide license covering the other societies’ repertoires; or (3) give right-holders the choice to appoint a collective rights manager for the online use of their musical works across the entire EU (“EU-wide direct licensing”). But it is clear that collection societies will have to work very hard indeed as the same European Union regulators have accused the same music royalty collection societies of breaking competition rules by restricting broadcasters from obtaining pan-European copyright licences.

The European Commission has also said national monopolies that manage copyright licenses are hurting competition through exclusive national contracts. The commission’s move follows a complaint by RTL Group SA, Europe’s biggest broadcaster and a unit of Germany’s Bertelsmann AG. The collection societies have now received a Statement of Objections from the EC and now have two months to respond. They can call for a hearing on the matters raised.

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HEALTH & SAFETY
Live concert Industry
Avon and Somerset Police go on a ‘pub crawl’

Police officers have been visiting pubs and clubs in the Bath area in the early part of February as part of a drive to ensure that venues were complying with the new regulations for licensing and accredited door staff. Officers spoke to door staff to check they were Security Industry Authority- approved and what policy the venue had on drugs and underage alcohol sales. A force spokesman said it was pleased with the results but some needed to review their drugs search policy. Staff were also reminded of their obligations under the Licensing Act. Bar staff could face a maximum fine of £20,000 if they breach licence conditions or be imprisoned for up six months under new regulations introduced as part of the Licensing Act 2003.

And see this link for details of a recent study by Kate O’Brien, a Durham University sociology lecturer, who found that that the percentage of female door staff is rising sharply to deal with violence caused by female binge drinking at nightclubs. O’Brien says that fighting between drunk women can be particularly vicious because they attempt to inflict disfiguring injuries. The British Journal of Sociology is to publish the results of O’Brien’s undercover research when she worked as a security guard in clubs in six cities. Nationally, the proportion of women bouncers has risen from 2% to 11%, according to the Security Industry Authority

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HEALTH & SAFETY
Live Event Industry
Violent alcohol related crime rate allegedly drops by 20% as Licensing Act provisions come into force

Serious violent crime has dropped by more than a fifth since the new Licensing Act was introduced, according to official figures. The Home Office statistics challenge the popular press concerns that the new laws would mean drink-fuelled chaos on Britain’s streets. The figures show that serious violent crime was 21 per cent lower in the last three months of 2005, while total violent crime was down 11 per cent. The number of woundings fell by 14 per cent. This included a six-week period when the police were given £2.5m to target alcohol-related crime. However these are Home Office figures and it might be prudent to take these with a ‘pinch of salt’ as UK Government statistics are currently difficult to rely on, particularly when used to justify Government policy.

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The Delhi High Court has restrained the Phonographic Performance Limited (PPL) from collecting more than 15 per cent of the special licence fee it planned to levy for playing recorded music. The bench comprising Justice Mukul Mudgal and Justice H.R. Malhotra issued the interim order based on writ petitions filed by various hotel owners through the National Restaurants Association of India (NRAI), which challenged the enhanced special fees and annual fees imposed by PPL and the Indian Performing Rights’ Society (IPRS). Counsel for NRAI Anip Sach, they challenged the imposition of the special licence fee and annual licence fee by the two organisations as ‘‘illegal and arbitrary’’.

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TRADE MARK
Artists, record labels
ARTICLE: Supreme Court of Canada to look at confusion with trade marks
Article by Abraham Drassinower and Signe Silver

The power of famous trade marks to attract consumers is enormous. But the extent to which trade mark law protects the value that such power generates is by no means clear...

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A recent appeal from the UK Trade Marks Registry to the High Court has emphasised the need for trade mark owners to file evidence correctly, particularly when seeking to establish a reputation in a mark. E! Entertainment Television Inc applied to register the mark E! ONLINE in relation to a broad range of goods and services in the field of telecommunications....

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British artists will receive well-deserved reward for their creativity through the introduction of regulations giving them the right to a royalty on the re-sale of their works, Minister for Science and Innovation Lord Sainsbury has said. From the 14 th February, when an artist's work is re-sold on the UK art market for the equivalent of €1,000 or more, he or she will receive a royalty of up to four per cent of the sale price. Lord Sainsbury said: "The artists'’ re-sale right regulations ensure a just reward for living British artists’ creativity while protecting the valuable UK art market." The regulations have been introduced to comply with the EU Artist’s Re-sale Right Directive (2001/84/EC). The directive required the Government to set the threshold at which the royalty is paid at between €0 and €3,000. Eighty-eight per cent of works by living artists sold in the UK in the €1,000 to €3,000 price range in 2003-2004 were by British artists. The UK Government successfully negotiated a delay in the application of the royalty to works by deceased artists until 2010, with a possible extension to 2012, and will seek to extend it indefinitely. The Statutory Instrument laid before Parliament in December 2005 contained provisions which included (a) that the royalty will be calculated as a percentage of the sale price, with a tapering scale starting at 4% for works valued to €50,000 and decreasing to 0.25% for the proportion of sale above €500,000 and (b) that the maximum payment on any sale is fixed at €12,500 and (c) that all royalties will also be collected on behalf of artists by a collecting society to reduce the burden on business. In the twelve months to March 2004, 1259 works by living artists sold at auction would have been covered by this new law (and approximately the same again in private galleries and dealers.

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The Danish Supreme Court confirming that Internet Service Providers (ISPs) can be obliged to terminate the internet connections of customers engaged in internet piracy. The case, involving two individuals operating illegal FTP servers, will set an important precedent for the responsibilities of ISPs in cases involving illegal filesharing. ISPs may now face action by copyright owners, requiring them to stop providing internet services to customers that use those services to distribute copyright material over peer-to-peer networks. The ruling ends a long-running legal battle between telecommunications company TDC and Denmark’s AntiPiracyGroup , representing copyright owners from the Danish music and film industries. The ruling will oblige TDC, and other ISPs, to act immediately when they are notified that one of their customers is using their internet account to infringe copyright. In the event of non-compliance, copyright owners will be able to ask the court for an injunction against the service provider . The AntiPiracyGroup consists of the members of IFPI Denmark, Danish Video Distributors Association, Danish Film Distributors Association, KODA (Composers, Publishers and Songwriters in Denmark), Nordic Copyright Bureau, the Danish Musicians’ Union and the Danish Artists Association.

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The family of South African composer Solomon Linda has reached a settlement with Abilene Music in the lawsuit over his world-famous song The Lion Sleeps Tonight. The financial terms of the deal were not disclosed. Linda composed the song, originally called Mbube (or Lion, in Zulu) in 1939 in Johannesburg. It became a hit throughout South Africa. But Linda and his wife had sold the rights to his song to a local company that year and never properly benefited from the song's popularity. Linda died in poverty in 1962 and his wife could not even afford a headstone for his grave. In a recent action lawyers for the Linda family had argued that according to copyright law in the British Commonwealth at the time (Imperial Copyright Act 1911) the rights to the song were to revert back to the composer's heirs 25 years after his death – in 1987. In the 1950s Mbube was adapted and covered by American folk singer Pete Seeger and his group the Weavers. Seeger heard Mbube and transcribed its Zulu lyrics completely (but inaccurately) and the song became Wimoweh, a 1952 hit which subsequently sold four million copies in various recordings. It has been covered at least 150 times. The Tokens covered the song in the 1960s and writer George Davis Weiss added new lyrics and re-titled the track The Lion Sleeps Tonight. It was here that the copyright of Wimoweh was in effect separated from The Lion Sleeps Tonight (even though it was acknowledged it was based on the same melody) and copyright in the Lion SleepsTonight passed through several hands, landing up in the ownership of Abilene Music of New Jersey, who licensed The Lion Sleeps Tonight to Disney for its film The Lion King - it is the only non-Elton John song in the movie. Meanwhile Linda’s widow Regina received just 3/24ths of the income from Wimoweh (she now receives 100% of the composer share). The Disney film was released in 1994 and was adapted into a massively successful Broadway musical in 1997. At one point lawyers acting for Linda’s estate secured an attachment to all Disney trademarks in South Africa. The settlement is believed to include back payment of royalties and future payment of royalties – an ‘equitable share’ of the earnings from The Lion Sleep Tonight.

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Swiss and Belgian authorities have closed down Razorback 2 which is seen as the biggest index server on the eDonkey P2P network. The server's operator was arrested in his home in Switzerland while the server itself was seized at an Internet hosting centre close to Brussels. There are said to be somewhere between 100 and 200 other index servers on the network, but the closing down of Razorback 2 has been taken as a significant coup. Razorback 2 had an estimated 1.3M simultaneous users with around 170M files being traded via it. Across the whole of eDonkey there were an estimated 3M users. John Kennedy of IFPI said of the raids: "This is a very significant breakthrough in the fight against internet piracy internationally, removing one of the biggest and most well-known sources of illegal music files on the internet. This is an excellent example of good cooperation between law enforcement agencies across borders and among the copyright industries in addressing the problem worldwide”.

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A police unit dedicated to combating movie piracy and those responsible for the manufacture and distribution of pirated films has launched in London. In partnership with the Federation Against Copyright Theft (Fact), the new unit will pursue individuals and groups profiting from the sale of fake DVDs. In Scotland, a counterfeiter who sold thousands of fake DVDs and CDs in the run up to Christmas has been jailed. Airdrie Sheriff Court heard George Malone, 48, had built up his black market operation over two years at his home in Cumbernauld. Malone admitted producing the illegal copies and selling them at industrial estates across west central Scotland. He was sentenced to nine months in prison, despite claims he had only made £900 from the venture. Goods seized in a raid on Malone's house had a black market street value of £18,385 and caused a loss to trade of an estimated £50,000.

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Intellectual Property Law Updates

March 2006