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 2007

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COPYRIGHT
Record labels
The Crimea decide to give away their new album!

Successful indie popsters The Crimea have decided that they will give away download copies of their second album, Secrets of the Witching Hour. The band, who were previously signed to Warners and sold a respectable 35,000 copies of their first album Tragedy Rocks and charted with a UK top 40 single, have decided that they will not bother to fight music piracy, peer to peer file swapping or worry about DRM protection, gambling on the fact that building a big fan base through giving away recorded music will mean the band will earn more long term from live work, merchandising, music publishing and possibly endorsements. The move will be keenly watched by the recording industry as it struggles to find ways of monetising copyrights in sound recordings. It is interesting to note that on the same day this story came out, the PPL (Phonographic Performance Limited) had sent British MP's a free CD to lobby for extended copyright term for sound recordings - a campaign which has so far fallen on deaf ears. But surely the ‘Extend The Term’ campaign is as tired as it sounds. Recently Andrew Gowers made it clear that he felt that a fifty year term for sound recordings was more than sufficient. Realistically as this website has urged, the record industry has to come to terms with the realities of life in the digital age and the Crimea seem to be bravely (or perhaps just sensibly) facing up to the reality of the internet, peer-2-peer file swapping, free download sites - and a generation of fans used to getting recorded music for free. If the band succeed then this may well form a interesting new business model for the music business, and it will be fascinating to see how the majors and leading indies react to this initiative. Source: The Guardian, 30 April 2007

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COPYRIGHT
Internet
Launchcast service is a radio service

Last month a US federal judge, William Connor, made an important preliminary ruling that performance royalties were not payable on music downloads (although it should be added that mechanical royalties would be). Now a federal court in New York has ruled that Yahoo!'s Launchcast service is not an interactive service and is simply a radio station. The dispute was a conclusion to a long running dispute between the web company and BMG. CMU Daily reports that Launchcast was one of the early online personalised radio services where users provide information about the kind of music they like, and rate tracks as they play, from which the service provides them with a back to back music service hopefully geared towards their music tastes. Crucially CMU Daily say, if the user does not like they can skip it - the number of skips allowed each month dependent on the kind of subscription they have. Despite the personalisation and song skipping, Launch's owners have always claimed the service was simply an online radio station, and run it in the US under a webcasting licence secured through SoundExchange, the collecting society that coordinates those blanket music licences for online services that the record labels have to agree to under copyright law (and at rates set by the US Copyright Royalty Board).
However, when the service first launched most of the major record companies argued it was not simply a radio station, and therefore could not be operated under a standard webcasting licence. Rather, Launch would need to secure interactive service licences from the record companies directly, at rates to be agreed on a licence by licence basis. All the other majors (including a pre-merger Sony) except BMG settled with Launcast but BMG (now Sony BMG) continued and this is why the case was considered by a New York federal jury. The jury found in Yahoo!'s favour, ruling that despite having certain interactive functions, the Launchcast service was not sufficiently different from traditional webcasting services to be deemed not covered by the compulsory blanket licences. However this case was very much decided on its facts and it is still not clear what the difference between a web radio service and a true interactive service really is.

http://www.unlimitedmedia.co.uk/cmumusicnetwork.html archive 30 th April 2007

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PRIVACY / CONFIDENCE
Artists
House of Lords finally decide Douglas & Others v. Hello! Ltd & Others [2007] UKHL 21

From David Pearce at the wonderful the IPKat blog

The House of Lords decision in the case of Douglas v Hello! has resulted in a split (some might say fractured) decision. The Douglases and OK! have won on the issue of breach of confidence, with Lord Hoffmann taking the majority 3:2 view on the issue, restoring the earlier High Court judgment, saying:

"In my opinion Lindsay J was right. The point of which one should never lose sight is that OK! had paid £1m for the benefit of the obligation of confidence imposed upon all those present at the wedding in respect of any photographs of the wedding. That was quite clear. Unless there is some conceptual or policy reason why they should not have the benefit of that obligation, I cannot see why they were not entitled to enforce it. And in my opinion there are no such reasons. Provided that one keeps one's eye firmly on the money and why it was paid, the case is, as Lindsay J held, quite straightforward

It is first necessary to avoid being distracted by the concepts of privacy and personal information. In recent years, English law has adapted the action for breach of confidence to provide a remedy for the unauthorized disclosure of personal information: see Campbell v MGN Ltd [2004] 2 AC 457. This development has been mediated by the analogy of the right to privacy conferred by article 8 of the European Convention on Human Rights and has required a balancing of that right against the right to freedom of expression conferred by article 10. But this appeal is not concerned with the protection of privacy. Whatever may have been the position of the Douglases, who, as I mentioned, recovered damages for an invasion of their privacy , OK!'s claim is to protect commercially confidential information and nothing more. So your Lordships need not be concerned with Convention rights. OK! has no claim to privacy under article 8 nor can it make a claim which is parasitic upon the Douglases' right to privacy. The fact that the information happens to have been about the personal life of the Douglases is irrelevant. It could have been information about anything that a newspaper was willing to pay for. What matters is that the Douglases, by the way they arranged their wedding, were in a position to impose an obligation of confidence. They were in control of the information".

http://alpha.bailii.org/uk/cases/UKHL/2007/21.html

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COPYRIGHT
Record labels
New laws prevent sale of second hand CDs in US

New pawn shop laws are springing up across the USA that will make selling used CDs at local record shops extremely complicated – the shop will need personal ID as well as having to fingerprint potential sellers – and then the shop cannot sell the CDs for thirty (30) days. The legislation in Florida, Utah and soon in Wisconsin and Rhode island is supposed to prevent the sale of counterfeit and stolen CDs but has provoked a wave of consumer outrage.

For more see http://arstechnica.com/news.ars/post/20070507-record-shops-used-cds-ihre-papieren-bitte.html

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COPYRIGHT
Internet, broadcasting
IFPI announce two new cross border licensing schemes

Various online music services and broadcasting organisations should find it easier from today to gain licenses to stream music across several territories, thanks to an arrangement put in place between IFPI - which represents the recording industry worldwide - and record company collecting societies. Two new licensing agreements will create the framework for collective licensing of producers’ rights for certain streaming and podcast services across several markets.

In practice, the participating collecting societies will be able to license rights in each others’ territories and repertoire for certain internet and mobile streaming services and for the making available of previously broadcast programmes such as streams or podcasts. Broadcasters and online music services will also continue to be able to approach the record companies directly for a license for these uses.

Until now, obtaining cross-border online rights licenses for these services has involved dealing with each territory separately or approaching the right holders directly. This new framework will offer users the alternative to obtain a license for broad repertoire and for all the participating territories from a single collecting society. Online music services and broadcasters established within the European Economic Area will be able to approach any European society for a license, which will enable them to approach and choose the society they consider provides the best service for their needs. It is expected that more than 40 collecting societies, covering most of the key music markets worldwide, will sign up to these two agreements.

This arrangement comes at a time when the different European bodies are struggling to get to grips with collective cross-border online music licensing in Europe. The European Commission competition authorities recently rejected and issued an official statement of objections against the authors’ societies’ reciprocal online rights licensing arrangement. Meanwhile, the European Commission’s Internal Market Directorate issued a recommendation urging the right holders to streamline the collective licensing of online music rights.

These two new agreements follow the two groundbreaking reciprocal licensing agreements – the so-called Simulcasting and Webcasting Agreements - the recording industry had set up in 2001 and 2004 for the licensing of music streaming services.

Source www.ifpi.org

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UK Police have raided and shut down an online voucher system allegedly used by the Russian music download website allofmp3.com to try and sidestep the removal of legitimate payment services in the UK and Europe - Visaand Mastercard withdrew payment facilities for the site some time ago. The action under the Fraud Act 2006 follows a pan-European investigation, conducted by global recording industry body IFPIand UK record companies' association the BPI, which led to the arrest of a 25 year-old male in Bow, London. The individual was allegedly the UK-based European agent for allofmp3.com, facilitating the sale of digital downloads by advertising and selling vouchers through auction sites such as eBay and the website allofmp3vouchers.co.uk. That website has now been taken down from the internet. The vouchers contained a code that allowed UK and European consumers to access and download music illegally from the allofmp3.com website. Charging £10 per voucher, the suspect was believed to be taking payment from European customers and transferring the cash into various offshore accounts operated by the site's Russian owners. Metropolitan Police officers seized computer equipment and paperwork for further investigation.

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COPYRIGHT
Record labels
New early day motion puts sound recording copyright term back in debate

Despite the Gowers review of IP which was firmly against any extension in the fifty year term for copyright in sound recordings (quite the reverse, it seems Gowers actually considered suggesting a reduction), the record industry continue to push for copyright extension for sound recordings and 70 UK Members of Parliament have put their names to a early day motion that reads "That this House notes that 50 years ago Lonnie Donegan's Cumberland Gap was No. 1 in the charts for five weeks; is concerned that due to the present law governing payments for use of audio recordings this track will go out of copyright at the end of 2007 and that the family of Lonnie Donegan, who would have been 76 on 29th April, and the other performers, Denny Wright, John Nicholls and Mickey Ashman, and their company Pye Records, which produced this unique recording, will no longer receive any royalties, nor have any say in how this recording is used; is further concerned that thousands of musicians and their record companies will lose out over the next few years because of the shorter copyright term for sound recordings relative to that granted to almost all other creators, including the songwriters and the sleeve artists who enjoy copyright for the whole of their life plus a further 70 years; notes with concern that, according to a Musicians Union survey, 90 per cent. of musicians earn less than £15,000 a year, and thus acknowledges that the extension of copyright will come as a much needed financial boost to many low paid musicians; and asks the Government to make representations to the European Commission to look at this inequity".

Music Law Updates editor Ben Challis has already written an article on this (se Articles, EXTENDING THE TERM : Should the UK recording industry have new obligations as well as new rights if the copyright term for sound recordings is extended?)

And see the very pithy comments on the Open Rights Group website at http://www.openrightsgroup.org/2007/05/14/copyright-extension-seems-our-mps-havent-been-doing-their-homework/

And you can listen to Andrew Gowers on this podcast at http://www.out-law.com/page-7276

For the pro-extension lobby, the IFPI said this: The IFPI, representing the recording industry worldwide, today warmly welcomed the recommendation by the UK’s Parliamentary Culture, Media and Sports Committee that copyright term for recording artists should be extended and that Internet Service Providers and search-based businesses should do more to discourage piracy. The report, published today under the Committee Chairmanship of John Whittingdale, MP, repudiates the outcome of the review of copyright term by Andrew Gowers at the end of 2006 for focusing only on economic analysis rather than the moral rights of creators. It concludes that the Government “should press the European Commission to bring forward proposals for an extension of copyright term for sound recordings to at least 70 years, to provide reasonable certainty that an artist will be able to derive benefit from a recording through his or her lifetime.” IFPI Chairman and CEO John Kennedy said: “The Select Committee has given a ringing endorsement for fair treatment of the UK music industry. It has backed two simple principles – that UK performers must get a term of copyright protection comparable to composers, and that Britain must not be left with weaker copyright protection than its international partners. The Gowers report was far too long on economic theory and far too short on fairness to British copyright holders. The UK Select Committee’s findings are totally right for Britain’s creative industries, and they send a clear strong message to the Government and to the European Union. We are also pleased that the Committee recognised that Internet Service Providers and search-based businesses should do more to discourage piracy, a position that we have been advocating for some time.”

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COPYRIGHT
Record labels
AIM and UK Podcast Association agree UK’s First Full Track Multi-Label Licence

The UK Podcasters Association announced that they have come to an agreement with AIM the UK-based Association of Independent Music which allows their members preferential access to AIM's podcast licence. For the first time, UK podcasters have unlimited access to full length music tracks from top artists such as The White Stripes, Paul Weller, Bloc Party, Echo and the Bunnymen, Dizzee Rascal, Mylo, Basement Jaxx, Editors, Stereophonics, Coldcut to use in their podcasts. This gives UK Podcasters a unique opportunity to re-write the rules for music podcasting, opening the door for podcasters to move legitimately into traditional broadcast territory, which will hasten the shift towards media on demand. The AIM podcast licence covers over 30,000 tracks licensed by the UK independent music industry and includes labels such as V2, XL Recordings, Studio !K7, Cooking Vinyl and Beggars Group. Unlike other podcast licences, the AIM podcast licence ensures that the labels and the artists will be paid as a result of podcasters using their music, and allows for the use of the full track. Radio stations typically remove music from their podcasts.

www.ukpa.info

www.musicindie.com

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TRADE MARK
All areas
ARTICLE LINK: Trade marks vs free speech

Our feline friend the IPKat brings news of a tricky little case involving the interface between trade mark dilution and free speech. In Miss World Ltd v Channel 4, a judgment delivered on 16 April, Pumfrey J ruled on the conditions under which interim relief should be refused in a trade mark case on free speech grounds under s.12 of the Human Rights Act.

http://ipkitten.blogspot.com/2007/05/free-speech-v-tms-high-court-approach.html

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COMPETITION
Music publishing, Record labels
Universal / BMG Music tie up approved by European Regulators as Warners look at EMI

Vivendi/Universal and BMG Music Publishing have finally had their merger given the green light by the European Commission. The E1.63B merger was approved on the grounds that Rondor UK, Zomba UK, BBC Music and 19 Music were excluded from the merger. Immediately after the announcement, independent labels association Impala was quick to point out that it reserves the right to seek a reversal of the decision, and said it will follow the merger with great interest – no doubt Warners, who are hovering over EMI, will do the same! The ECsaid in a statement "The proposed merger, as initially notified, raised serious doubts as regards adverse effects on competition in the market for music publishing rights for online applications. However, the Commission's investigation found that these concerns would be removed by the remedies package proposed by the parties concerning the divestiture of a number of publishing catalogues". In fact EMI Group has agreed to an offer by private equity firm Terra Firma for £2.4B, subject to approval by the firm's shareholders. The board of directors at EMI intend to recommend unanimously that EMI shareholders should accept the offer. EMI's shares jumped 10% on the news - the offer vaues the company at 265p per share. EMI also announced year end figures for 2006 showing revenues down and a profit of £118.1 million in 2005 turned into a loss of £263.6 for 2006. Revenues were £1.75B in 'challenging' global market place. Despite this EMI's shares jumped to above the Terra Firma bid price to 271p as speculators waited to see if a bidding war started.

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