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

September 2006

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COPYRIGHT
Internet, record labels
Kazaa settles with major labels, AllofMP3 faces action and Limewire next in line

Having been found liable for copyright theft in Australia and following the seminal US Supreme Court decision in MGM v Grokster, Kazza has now reached a global out-of-court settlement with the trade organizations representing the international and US recording industries (IFPI and RIAA) concluding the ongoing legal proceedings brought by the major record companies against the service’s operators in Australia and the United States. Under the terms of the settlement, Kazaa has agreed to pay US$100 million in compensation to the record companies that took the legal action to stop copyright infringement on the Kazaa network. Kazaa will also introduce filtering technologies ensuring that its users can no longer distribute copyright-infringing files. John Kennedy, chairman and CEO of IFPI said: “Kazaa was an international engine of copyright theft which damaged the whole music sector and hampered our industry’s efforts to grow a legitimate digital business. It has paid a heavy price for its past activities. At the same time Kazaa will now be making a transition to a legal model and converting a powerful distribution technology to legitimate use. The settlement follows a landmark ruling in the Federal Court of Australia last year which found the Kazaa operators guilty of authorising widespread copyright infringement and litigation in the US by record companies, music publishers and motion picture studios against Kazaa, Grokster and Streamcast for copyright infringement. The case against Grokster and Streamcast ultimately reached the U.S. Supreme Court, which in June 2005 unanimously ruled that individuals or companies that promote (“induce”) copyright theft by users of their service can be held responsible for that infringement. Grokster settled the case with the record labels and motion picture studios in November last year. Whilst the labels have now successfully closed down the original version of Napster, Grokster and now Kazaa, many illegal file sharing sites and software remain. The BPI are now focusing on legal action against Russian based AllofMP3.com which has 14% of the UK ‘legal’ download market – the BPI contends that the site has no right to sell recordings owned by its members. The site contests this. Finally, the RIAA have said that they have taken action against LimeWire, one of the inter net's most popular peer-to-peer applications, LimeWire. The action follows the RIAA’s September 2005 ‘cease and desist’ letters to seven P2P companies. Lime Wire LLC was believed to be among the recipients. The LimeWire software, estimated by Lime Wire LLC to reside on 1.5% of PCs worldwide, allows users to connect to the Gnutella file-sharing network. It claims to be "the fastest P2P file-sharing program on the planet." Users can search for files on the computers of other users connected to the network. The suit filed at a New York district court seeks compensatory and punitive damages, accusing LimeWire of being "devoted essentially to the Internet piracy of plaintiffs' sound recordings".

Source www.IFPI.org / The Times 28 August 2006

http://www.out-law.com/page-7172

MGM v Grokster (2005) 04-480 Supreme Court 26 th June 2006 (see Music Law Updates Archive August 2006)

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COPYRIGHT
Internet
US Appeal Court to Consider Internet Copyright Infringement Issues in deep-linking case
Article by Tom Feather, Deeth Williams Wall LLP

An appeal pending before the US Court of Appeals for the Ninth Circuit (Perfect 10 Inc v GoogleInc) will address important Internet copyright issues including deep-linking of web sites, framing of third party content, and use of copyrighted content for searching. The image search function of Google Inc (Google) provides direct links to images, the copyright to some of which is held by Perfect 10 Inc (Perfect 10). Such images are often made available on web sites by third parties without the consent of Perfect 10. Google also caches and displays reduced-resolution versions of those images (thumbnails) to make searching easier. On user request, a full-resolution image is retrieved directly by the user’s browser from the host web site and is displayed in a frame within the Google search page. Perfect 10, which provides these images by paid subscription via the Internet, sued Google for direct copyright infringement for use of thumbnails, links and framing of Perfect 10’s images. It also claimed secondary infringement for inducing users to infringe, as well as for providing an audience to infringing sites and benefiting via its “AdSense” program.

In a motion for a preliminary injunction in February, a US District Court in California found that the claims of infringement by linking and framing were likely to fail. The Court also rejected the argument that providing a generic search function could be considered as inducing sites to make infringing images available and rejected inducement via the AdSense program for lack of evidence. Further, it rejected an argument that Google was inducing infringement by users because of a lack of evidence that users actually infringed. The Court noted that local browser caching of images by users probably constituted fair use, as supported by a recent case, Field vGoogleInc (412 F Supp 2d 1106).

However, a preliminary injunction was granted on the basis that it was likely that Perfect 10 would be able to prove Google infringed its copyright on the basis of the use of reduced resolution thumbnail images. The Court found, despite “enormous public benefit that search engines such as Google provide” and its reluctance to impede the advance of Internet technology, that Google’s commercial use of the material was not fair use. The Electronic Frontier Foundation (EFF) has filed an amicus brief supporting Google, as has NetCoalition, a group including ISPs and the Consumer Electronic Association. Recording and motion picture industry groups have submitted briefs supporting Perfect 10. While Perfect 10 and its supporters are not pursuing the argument that browser caching constitutes infringement, they are focusing on the argument that an inference of infringement by users should have been drawn. The relevance of the case in Canada may be limited based on the current version of the Canadian Copyright Act; however, it could become more relevant if Canada moves towards a fair use exemption, as some have recommended, including the Coalition of Arts Professionals and Canadian Music Creators Coalition.

For the EFF and other briefs and the text of the District Court order, see:

http://www.eff.org/legal/cases/Perfect10_v_Google/

For the Field v Google decision, see:

http://www.linksandlaw.com/decisions-148-google-cache.htm

And see Music Law Updates Archive November 2005 (Perfect 10 v Google) and March 2006 (Field v Google) and see Kelly v Arriba , 280 F 3d 934 (9th Cir 2002).

Taken from E-TIPS Vol 5 No 3 Published by Deeth Williams Wall LLP and edited by Richard

Potter QC . To review past issues of the E-TIPS ® newsletter, visit:

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INSOLVENCY / COPYRIGHT
Artists, record labels, music publishers
ARTICLE LINK Intellectual Property licensing issues in bankruptcy or insolvency
From the Intellectual Property Institute of Canada

This is a link to the very comprehensive 2003 Report by the Intellectual Property Institute of Canada which investigates the thorny issue of ownership and exploitation of intellectual property rights when one party in a contractual relationship is declared bankrupt or insolvent. Whilst primarily looking at Canadian law, relevant laws from the United States, The United Kingdom and Australia are also commented on. The report covers patents, copyrights (including moral rights) and trade marks. Whilst over 170 pages long may be of particular interest to lawyers and managers who represent recording artists and songwriters who sometimes wonder what they can do about unpaid royalties which have disappeared into the ether after the bankruptcy of a recording label or music publisher or find that their A&R manager is now an accountant!

For a brief synopsis of UK and Australian law see pp86-87.

http://www.ipic.ca/french/member/issues/f_Final_Report_on_Bankruptcy_Sept_16_2003.pdf

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This is a useful review of the current state of statutory royalties and royalty free licences which apply to radio broadcasters in the US and the development of new schemes to cover the rapidly changing technological environment as digital satellite radio services such Sirius develop in the USA.

http://www.rwonline.com/reference-room/skippizzi-bigpict/2006.08.02-03_rwf_pizzi_aug_2.shtmln

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COPYRIGHT
Internet
ARTICLE LINK details of Professor Lawrence Lessig’s presentation on copyright and other intellectual property rights in the digital age

Stanford University Law School Professor Lawrence Lessig, a leading authority on intellectual property issues in the digital era presented the case for overhauling copyright law to attendees of the Stanford Breakfast Briefing on August 9th. This is a report on his presentation which was titled "Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity."

http://news-service.stanford.edu/news/2006/august23/lessig-082306.html

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COPYRIGHT
Internet
Billy’s protests lead to MySpace and Bebo rule changes

A very public protest by Billy Bragg has led to MySpace promptly changing its standard terms and conditions. Bragg had written a letter to UK music trade magazine Music Week after using his MySpace blog to point out that the site’s small print meant that “ once an artist posts up any content (including songs), it then belongs to MySpace (AKA Rupert Murdoch) and they can do what they want with it, throughout the world, without paying the artist". MySpace had claimed a 'non-exclusive, fully-paid and royalty-free, worldwide license' for all its content. This has now been amended to read: 'MySpace.com does not claim any ownership rights in the text, files, images, photos, video, sounds, musical works, works of authorship, or any other materials (collectively "Content'") that you post to the MySpace Services. After posting your Content to the MySpace Services, you continue to retain all ownership rights in such Content, and you continue to have the right to use your Content in any way you choose.' The new terms and conditions make it clear that the company renounces all ownership rights to musicians' material and that only a limited licence is granted to the site to use and modify the content – and that full ownership remains with the copyright owner. Billy then set his sights on Bebo’s standard terms ….

and Bebo have now agreed that musicians will retain ownership of tracks they post on the site. According to recent estimates Bebo has more than 3 million monthly unique users in the UK, accounting for around 13.54% of UK visits to social networking websites, slightly more than MySpace.

See Pinsent Mason’s excellent OutLaw site at http://www.out-law.com/page-7152 for this story and other stories on intellectual property and e-commerce issues.

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PATENTS
Technology
Apple settle with Creative over patent use in iPods

Apple have agreed to pay Creative Technology $100 million to settle a digital music patent dispute between the two companies with Apple now licensing the technology owned by Creative, allowing them to continue manufacturing iPods. Under the settlement Creative will also now be allowed to produce accessories for iPods, giving it access to a far larger number of consumers than it could have reach with its Zen and Nomad digital music players. Creative's share price surged 38% after the news, although the long-term competitiveness of their players vs Apple's is still somewhat uncertain.

Added comment from FiveEight magazine
http://news.bbc.co.uk/1/hi/business/5280736.stm

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