ARSENAL VICTORY IN COURT OF APPEAL
Trade Mark / May 2003
UK

TRADE MARK Merchandising The Court of Appeal has published its decision in the case of Arsenal Football Club Plc -v- Reed substantially overturning the decision of Mr Justice Laddie in the High Court. The Court of Appeal applied the European Court of Justice’s decision that where a third party used in the course of a trade a sign that was identical to a validly registered trademark on goods which were identical to those for which the trademark was registered then the registered owner could prevent this third party use. Mr Justice Laddie had held that the mark ‘Arsenal’ was a badge of allegience rather than indicating the origin of the goods and as Mr Reed had made it clear his goods were not official Arsenal FC goods then he was not infringing the club’s trademark. But the Court of Appeal held that whilst the mark may well be a badge of allegience – that though would not prevent its use by a third party and thus jeopardise the function of a trademark, namely the ability to guarantee origin. The Court therefore held that the High Court should have followed the ECJ’s decision and given judgement for Arsenal. Whilst not strictly…

TRADER FREE TO SELL CELTIC AND RANGER’S FAKES
Trade Mark / May 2003
UK

TRADE MARK Merchandising A Scottish Court has confirmed the approach of Mr Justice Laddie in Reed -v- Arsenal Football Club when it allowed a street trader to continue selling branded ‘Celtic’ and ‘Rangers’ associated football club goods. The defendant, Joseph Gallacher, could have faced up to 10 years in jail when he was charged with breaching the Trademarks Act 1994 by selling unlicensed merchandise. Sheriff Laura Duncan halted his trial and acquitted Gallacher, ruling he was not “infringing” by using the clubs’ logos on his gear. The Sheriff (Judge) followed the Arsenal case – where it was successfully argued that unlicensed use of the club’s crest was allowable because it was “a badge of allegiance” and not a deliberate trademark breach. Following the decision, a delighted Gallacher claimed it was “another victory for the man on the street”. He said: “I did not believe I was doing anything wrong and that has judged to have been the case. The crests are a badge of allegiance and the clubs are finding it hard to explain otherwise”. Gallacher had told the court that he sold the goods from the back of his van on match days at the Ibrox and Celtic Park…

COURT PROVIDES NEW WEAPON IN THE AUDIT ARSENAL
UK

COPYRIGHT Record Labels, Music Publishers, Merchandising CARLTON FILM DISTRIBUTORS -v- VCI & VDC As a result of a High Court decision last month companies pursuing royalty audit claims have acquired a new procedural weapon. It has now been established that in appropriate cases the court will order pressing plants to disclose their manufacturing records to an audit claimant prior to the commencement of any court proceedings. One of the most contentious areas in royalty audits is access to manufacturing records so audit claimants can compare numbers of units accounted with numbers of units actually manufactured. Companies being audited often will not, and sometimes cannot, provide manufacturing records. This leaves audit claimants in a difficult position. Should they pursue claims where they have reasonable suspicions but no hard evidence that all units manufactured have not been properly accounted? It is possible to obtain disclosure of documents from the potential defendant prior to commencing court action. But what if that company says it has no manufacturing records? This was the dilemma facing the claimant in Carlton Film Distributors -v- VCI and VDC. Carlton had entered into a licence agreement with VCI for the manufacture by VCI of videos. The licence agreement contained…

RIAA LAUNCHES PRE-EMPTIVE STRIKE AGAINST STUDENT DOWNLOADING
USA

COPYRIGHT Internet, Record Labels The RIAA (Recording Industry Association of America) has issued lawsuits against four students in the United States to prevent the illegal downloading of music files. Two of the students are from Rensselaer Polytechnic Institute, one from Princeton and one from Michigan Technological University. The Record Industry’s previous tactic (e.g. in the UK) had been to send university and employers formal notices detailing their approach to the illegal downloading of music in educational institutions and the workplace (see Law Updates April 2003 BPI Targets Universities Over Illegal Downloads). These actions are against students who set up sites where sound recordings could be searched and then facilitated downloading and the lawsuits claim that one of the sites could distribute over 1 million MP3 files. See: http://www.wired.com/news/digiwood/0,1412,58351,00.html

SUPREME COURT OF CANADA TO REVIEW THE POSITION OF INTERNET SERVICE PROVIDERS (ISPs)
Copyright , Internet / May 2003
Canada

COPYRIGHT Internet The Supreme Court of Canada is to review the position of Internet Services Providers who facilitate the transmission of music on the internet. The case in question, known as the ‘Tariff 22 case’ began in 1995 when the Society of Composers, Authors and Publishers of Music in Canada (SOCAN) filed an application with the Copyright Board of Canada for the creation of a new royalty to cover music on the Internet. SOCAN argued that all parties involved in an Internet transmission – from the poster to the Internet service provider to the recipient – are liable for the communication and thus all bear some responsibility to pay an appropriate licence or royalty fee. Canadian Internet service providers (ISPs) led the opposition to the SOCAN proposal arguing that as mere intermediaries (much like phone companies) who should not be held liable for the content transmitted over their equipment. In 1999 the Copyright Board ruled that music transmitted over the Internet qualified as a public performance under the Copyright Act and therefore could be subject to a royalty. It also determined that ISPs could rely on a provision that exempts intermediaries from liability where they function strictly in an intermediary…

CATHERINE ZETA JONES AND MICHAEL DOUGLAS HAVE LIMITED SUCCESS AGAINST HELLO! UNDER THE LAW OF CONFIDENCE
Artists , Privacy / May 2003
UK

PRIVACY Artists In a 104 page High Court judgement, Mr Justice Lindsay ruled that Hello! magazine had breached commercial confidentiality by publishing photographs secretly taken of the Douglas/Zeta-Jones wedding, and that Hello! had breached the Press Complaint’s Commissions’ code of conduct – but that there had been no invasion of the couple’s privacy in law. The Judge held that the evidence that Hello! and OK had competed to win the right to cover the wedding was enough to demonstrate that commercial confidentiality should apply and that the couple were entitled to damages as a result of this. The judge commented that “I hold the Defendants to be liable…. under the law as to confidence. It will have been noted that an important step in my coming to that conclusion has been that, on balancing rights to confidence against freedom of express for the purpose of granting or withholding relief, I have been required by statute to pay, and have paid, regard to the Code of the Press Complaints Commission. The Hello! Defendants broke their own industry’s Code.” But Mr Justice Lindsay did not uphold the couple’s claim in privacy and indeed went some way to suggest the court would not…

ASTORIA FIGHTS FOR LICENCE
Licensing , Live Events / May 2003
UK

LICENCING Live Concert Industry The London Evening Standard reported (08/04/03) that the Astoria in Charing Cross Road faces a fight for its public entertainment licence after Westminster Council renewed efforts to remove the venue’s public entertainment licence. The venue has had a number of high profile problems and in the eight months between September 2001 and May 2002 the emergency services were called to the venue 152 times. In October 2001 there was a double shooting linked to rap band So Solid Crew at the Astoria. The Council initially refused the venue’s licence but the Astoria’s owners, the Mean Fiddler Group Plc, successfully appealed the decision in the Magistrate’s Court. Westminster Council have now lodged an appeal against the Magistrate’s decision asking the superior court to uphold the original decision to refuse the licence. The case will be heard before the Superior Court who will review the magistrate’s decision. COMMENT : Licensing law in the United Kingdom is currently under review by Parliament (see Law Updates March 2003 Musicians Union Spearheads Challenge to Proposed Licensing Legislation) and new provisions regulating the private security industry will soon be incorporated into UK law. The House of Lords have rejected parts of the proposed licensing…

DAMAGES AWARDED IN EASYINTERNETCAFE LITIGATION
UK

COPYRIGHT Internet, Record Labels Easyinternetcafes have agreed to pay costs and damages totalling £210,000 to the British record industry as a result of the High Court judgement awarded against the internet café chain in January 2003 as a result of the chain’s activities in illegally downloading music and burning CDs for customers (see Law Updates February 2003). See http://media.guardian.co.uk/newmedia/story/0,7496,933184,00.html

DTI CONSULTATION ON EC PRIVACY DIRECTIVE
Internet , Privacy / May 2003
UK

PRIVACY Internet, Telecommunications The draft DTI (UK government’s Department of Trade & Industry) Regulations to implement the European Commission’s Privacy and Electronic Communications Directive were published on the 27th March 2003. The Privacy Directive aim is to ensure that the rules which currently apply to phone and fax services will be extended to email and SMS and that privacy will be respected when individuals use electronic networks and services. Key new features include the right of individuals to give consent (in the form of an opt in) prior to the sending of unsolicited commercial email and SMS messages. Cookies and similar software tracking devices will be subject to a requirement for greater transparency and anyone using them on a web site should provide information about them to subscribers or users and offer users the opportunity to refuse them. There are also stronger rights for individual subscribers who will be able to decide whether or not they want to be listed in subscriber directories. The full consultation document is available on the DTI web site at: www.dti.gov.uk/cii/regulatory/telecomms/telecommsregulations/comms_dpd.shtml For comment by Melissa Bailey, see www.simkins.com/archive/sim_archive.asp

SOLOISTS CAN PROVIDE VAT FREE SERVICES IN GERMANY
Artists , Live Events , Taxation / May 2003
Germany

TAXATION Live Concert Industry, Artists The ECJ (European Court of Justice) held on appeal that the meaning of ‘cultural bodies’ in the context of the supply of cultural services in the concert industry could extend to individual performers who would not need to charge VAT for their services. This case arose out of an appeal from the Federal Court of Justice in Germany (Bundesgerichtshof) by a German promoter against a criminal conviction for failing to account for VAT in respect of soloists engaged by him for a concert tour. The commercial nature of the activities did not preclude the services and their providers from being exempt from VAT in Germany. Reference: Criminal proceedings against Hoffman ECJ Case C-144/00

US MERCHANDISER TO BRING COUNTERCLAIM ACTION AGAINST BRITNEY
Copyright / April 2003
USA

COPYRIGHT Merchandising SKECHERS USA Inc. the US footwear manufacturer has announced that the Company will file a counterclaim lawsuit against singer Britney Spears and her companies, Britney Brands Inc. and Britney Touring Inc. for fraud and breach of contract. The suit, in the Federal court in Los Angeles, also includes allegations of unjust enrichment and negligent misrepresentation, and seeks rescission of all agreements between Skechers and Ms. Spears, return of all advances paid, costs, and compensatory and punitive damages in excess of ten million dollars. Skechers signed an exclusive three year worldwide licensing deal with Britney for a line of Britney branded roller skates known as Britney 4 Wheelers and accompanying apparel and skating accessories The suit alleges that the singer breached her obligations to Skechers under a merchandise license agreement by unreasonably delaying and failing to approve manufacturers, product designs and product advertising for Britney 4 Wheelers roller skates and apparel. See www.mtv.com/news/articles/1459660/2100301/story.jhtml

FORMER MANAGER SUES DRU HILL
Artists , Contract / April 2003
USA

CONTRACTS Management, Artists The R&B group Dru Hill have been served with a $30 million lawsuit from former manager, Kevin A. Peck, who claims the group owes him millions of dollars in management fees. The lawsuit, filed in Baltimore Circuit Court on March 20 2003, alleges unjust enrichment and is served against all of the original band members. Peck believes that his management contract entitled him to a percentage of the group’s income from all three of its albums, as well as the members’ solo releases. Dru Hill attempted to settle with Peck, but were unable to reach an agreement with him. Dru Hill achieved multiple platinum albums, several music awards and generated millions of dollars in publishing royalties and record sales, including ‘The Thong Song’ released by band member Sisqo in late 1999. See www.news8.com Meanwhile, former Guns N’ Roses songwriter and guitarist, Izzy Stradlin, has also filed a lawsuit in the Los Angeles Superior Court. He alleges that he mistakenly paid his management firm Big FD $231,575 in post-term commissions after the ‘old’ Guns N’ Roses broke up and that Big FD had no right to receive this, since according to the agreement he entered, the remainder of his…

STIFF PENALTIES HANDED DOWN TO UK MUSIC PIRATES
Artists , Copyright , Record Labels / April 2003
UK

COPYRIGHT Record Labels, Artists His Honour Judge Lowen, sitting in the Isleworth Crown Court on 12th March 2003, sentenced Yogesh Raizada to 3 years imprisonment and record fines of ,000 under a Confiscation Order. Raizada was charged and found guilty on eleven counts under the Trade Marks Act 1994 and a further two counts under the Video Recordings Act. The Court heard that Raizada had been subject to a number of raids carried out by the Police and Trading Standards Officer which resulted in the seizure of thousands of pirated music CDs, DVDs and video cassettes between 2000 and 2001. In a separate case, David Stanley was sentenced to 4 years and 5 months imprisonment at Maidstone Crown Court having been charged with conspiracy to defraud and attempting to pervert the course of justice. The Court heard that Stanley was ringleader of a gang which copied and sold illegal music product and computer software, primarily at computer fairs across the UK. At one fair in May 2001, CDs with a street value of ,000 were seized. Sentencing Stanley, His Honour Judge Croft said that “the loss to the industry was massive and incalcuable” and that Stanley had been in effect…

UK COMMUNICATIONS BILL FACES DETAILED SCRUTINY
Legislation / April 2003
UK

BROADCASTING Television, Radio The UK’s draft Communications Bill has now reached the House of Lords where peers are expected to table amendments to many of the provisions. The Bill is a massive piece of legislation reforming the regulation of telecommunications, broadcast television, radio and the newspapers. The Bill will also reform rules of ownership of the media as well as providing for a new regulatory infrastructure under the auspices of the ‘super-regulator’ – OFCOM. The Bill includes several controversial proposals including plans to open up ITV1 to foreign owners, allowing Independent Television News (ITN) to be owned by a single entity and provisions to regulate the BBC. The Bill also needs to include revisions to embrace four new EC directives for the telecommunications industry. See www.mediaguardian.co.uk

GLOBAL CLAMPDOWN ON PIRACY
China
EU
Italy
Russia
Thailand

COPYRIGHT Record Labels, Music Publishers The PRS/MCPS Alliance have announced a number of global successes in combating the sale of illegal music product. In ITALY collection society SIAE joined with the police in a series of high profile raids across the country targeting 454 premises and resulting in charges brought against 137 people with 78,000 CDs, 5,000 DVDs and 6,000 VHS cassettes confiscated along with 17 sets of mastering equipment. In RUSSIA a number of government agencies have joined forces with the trade mark protection agency and various intellectual property organisations to tackle counterfeiters. Russia has one of Europe’s highest piracy levels with well over half of all music product sold being illegal copies. In THAILAND the British Government has formally asked the Thai Government to clampdown on illegal copies of music product flooding onto the world market. Thailand is the third largest exporter of illegal music product after China and Taiwan. See Mbusiness7 (PRS/MCPS magazine Spring 2003)

US INTERNET ASSOCIATION SUPPORTS VERIZON
Copyright , Internet / April 2003
USA

COPYRIGHT Internet The US Internet Industry Association (USIIA) has announced that it will support the efforts of Verizon to overturn a recent ruling by the Washington DC District Court in the case of RIAA v Verizon. The ruling was based on a narrow and erroneous reading of a single provision of the Digital Millennium Copyright Act,” says David P. McClure, president of the USIIA. “In reality, this ruling will cause great harm to the Internet community, and will place ISPs in jeopardy of violating contracts, subscriber agreements and local and federal privacy laws if they are forced to comply. It was never the intent of the Congress that copyright holders should have the right to invade the personal privacy and security of American consumers on the basis of allegations, and without due process under the law,” says McClure. “Internet service providers and their subscribers have the right to be secure in their persons, houses, papers and effects, including on the Internet. USIIA endorses and will support efforts by Verizon and other parties to stay and overturn this ruling.” Source: US Internet Industry Association

BPI TARGET UNIVERSITIES OVER ILLEGAL DOWNLOADS
Copyright , Internet , Record Labels / April 2003
UK

COPYRIGHT Internet, Record Labels The BPI (British Phonographic Industry) has today (March 27th) sent out a letter to every University in the United Kingdom warning them that they face criminal sanctions if they collude in the illegal downloading of music files. This action follows similar actions by record company associations in Australia and the USA, the latter resulting in in the US Navy Acadamy warning nearly 100 students about downloading music files illegally. See www.timesonline.co.uk/student University News and Views. COMMENT : The BPI’s action follows on from similar actions by the RIAA and other industry associations, targeting internet service providers (ISPs), telecommunication companies and cable companies. The leading case at the moment is the ‘Verizon’ case currently in the appeal courts in the USA (see Law Updates March 2003). The UK courts held in the BPI’s case against easyinternetcafes Ltd that providing and facilitating the downloading of illegally copied files was actionable and the first instance decision in the Verizon case and the decisions in the RIAA’s cases against Napster and Aimster clearly supports this position. However, the Verizon appeal will certainly be of interest and the Dutch decision in Buma/Stemra -v- KaZaA (see Law Updates December 2002) means that this issue…

WHEN ‘MOVING’ IS ‘DANCING’
Licensing , Live Events / April 2003
UK

LICENSING Live Concert Industry Undercover licensing officers for Westminster Council in London have investigated and now succesfully prosecuted the Pathfinder Pubs, owner of the Pitcher & Piano chain of bars, for allowing customers to dance at bars which did not hold a public entertainment licence. The bars argued that customers were simply ‘moving rhythmically’ to the music. Horseferry Road Magistrates Court fined the chain 00 and required the chain to apply for two public entertainment licences.These will cost the chain 00 and the two bars in question will need 000 of works between them to qualify for the licences. See London Evening Standard 27 March 2003.

Article: THE DOCTRINE OF RESTRAINT OF TRADE
Articles / March 2003

Click here to download this article as a PDF file (.pdf) The Doctrine of Restraint of Trade in Relation to Music Industry Agreements Andrew Evans MA, Solicitor March 2003 In this article Andrew looks at the decisions of the UK courts which have, over the last thirty years, developed a body of law under the doctrine of restraint of trade which will, in certain circumstances, allow artists to ask courts to hold their excusive recording contracts and exclusive music publishing contracts unenforceablewhere the provisions of such contracts are unreasonable. All covenants in restraint of trade are prima facie unenforceable at common law and are enforceable only if they are reasonable with reference to the interests of the parties concerned and of the public. Unless the unreasonable part can be severed by the removal of either part or the whole of the covenant in question, its inclusion renders the covenant or the entire contract unenforceable. With the case of Nordenfelt v Nordenfelt, it was decided as a matter of policy that although general restraints were prima facie void, such restraints may be considered valid provided that the party alleging its validity could prove it reasonable as between the parties and in the…

WILL THE VICTORY FOR THE RIAA IN ITS CASE AGAINST VERIZON OPEN THE FLOODGATES FOR LEGAL ACTIONS AGAINST CABLE COMPANIES AND ISPs?
USA

COPYRIGHT Record Labels, Music Publishers, Internet The legal battle between the Recording Industry Association of America (RIAA) and Verizon Communications over the pursuit of alleged internet music pirates could have a major impact on cable operators, telecom companies and internet service providers. If the RIAA wins the case, record labels and music publishers wielding broad federal subpoena power could force operators to divulge the names of high-speed data subscribers each time one is suspected of breaking a copyright. RIAA also want operators with high-speed data operations to pay copyright use fees into a new industry-wide ISP pool. The RIAA has proposed that the fund should compensate music companies for the copyright violations which they can’t track down. The case places the right to fair remuneration for use of copyright in direct conflict with individuals right to privacy, and further, would put an obligation on ISPs to take responsibility for subscribers unauthorised copyright infringements. The cable industry is carefully watching the case. The case also highlights the conflicts within major media conglomerates – AOL Time Warner owns two major ISPs, cable channels and of course a major record label and major music publishing house. The legal action arose when Verizon refused…

ROD STEWART FACES “MAGGIE MAY” ACTION FROM MANDOLIN PLAYER
UK

COPYRIGHT Record Labels, Music Publishers A folk musician says he is to take legal action against Rod Stewart over his contribution to the 1970s hit song “Maggie May”. Ray Jackson, a member of folk/rock band Lindisfarne, says he was paid just in 1971 for his contribution of a distinctive mandolin section in the recording. Mr Jackson believes he may have lost at least because he was not credited for the track’s distinctive “hook”. Mr Jackson is basing his claim on the Court of Appeal ruling that held that session musician Bobby Valentino should be recognised for his part in writing the distinctive violin riff on the Bluebells’ 1983 hit and subsequent 1993 number one hit “Young At Heart”. Stewart’s defence is that Jackson was engaged on a ‘work for hire’ basis and that all and any copyright which might have subsisted in the mandolin recording was assigned to Stewart absolutely and the was ‘full and final settlement’ for his services and any contribution. It is accepted that Mr Jackson had played on the song but not that he had any part in writing it. Stewart’s argument is that the recording and song were from the inception of their creation “the…

BERT WEEDON WINS LIBEL BATTLE WITH BBC
Artists , Defamation / March 2003
UK

DEFAMATION Artists Guitar legend Bert Weedon has won damages from the BBC over a false claim that he “learned to play the guitar whilst a convict.” His appearance in the libel case was a first time in court for the 82-year-old despite allegations to the contrary in the Daily Mail where a radio preview wrongly included Bert with musicians who had spent spells in prison. The Radio Choice review for Jailhouse Rock incorrectly stated that “even gentle guitar guru Bert Weedon” is among the many popular music figures who has spent time in prison. Mr Weedon said: “A friend phoned me up and said ‘have you read the radio review in the Daily Mail?’. “I have never been in prison. I am known in show business as “Mr Clean”. I have never taken drugs, I have never drunk heavily and I have never been involved in any scandal.” The Daily Mail said the report was based on a BBC press release and the broadcasting company apologised for the “distress and embarrassment” caused. Mr Weedon’s solicitor, Simon Smith said: “It may not always be fashionable in the rock music world but my client is rightly proud of his unblemished past and does not…

CD PIRACY IN SOUTH AMERICA ESCALATES
USA

COPYRIGHT Record Labels, Music Publishers CD pirates and street vendors in Ecuador are decimating the legitimate music industry as copied CDs featuring tropical salsa, hard rock and even Christmas carols are retailing for just $1 each – a price even the citizens of this poverty-stricken nation can afford (the minimum wage is just $138 a month). More worryingly for record labels and music publishers is the statistic that pirates sold an estimated 13 million compact discs in 2002 – compared to just 650,000 sold legitimately. The pirates are now exporting copied CDs, and pirate CDs made in Ecuador have been found in Peru and Columbia. Ecuador is a prime spot for all types of pirated goods. Weak police intervention compounds the problem. As the pirating industry grows, local shops suffer. Just 80 record stores are still in business in Ecuador, compared with 300 shops four years ago. Even with the US dollar adopted as currency, two of the ‘big five’ majors (BMG and EMI) have left Ecuador after they were unable to compete with counterfeiters. Sony Music Entertainment and Universal still operate in Ecuador. See www.mercurynews.com

MISLEADING WEBSITE DIVERTED BUSINESS FROM ENDSLEIGH INSURANCE
Internet , Trade Mark / March 2003
UK

TRADEMARK Internet, Merchandising A website name used by Campus Insurance Services diverted customers intending to buy policies from Endsleigh Insurance to Campus’s own sales pages. Campus registered the names www.ensleigh.com and www.ensleigh.co.uk hoping web users would misspell the word ‘Endsleigh’. It is believed that a large number of students did this and Campus have been ordered to produce details of the number of students diverted from their ‘Ensleigh’ pages to their main site who then bought home contents insurance. The Court held that Campus had infringed Endsleigh’s trademark in a deliberate attempt to fool customers into buying more expensive cover from Campus. Damages will be assessed at a later stage. See www.thetimesonline.co.uk/yourmoney

NAPSTER: BMG FACES LAWSUIT
Germany

COPYRIGHT Record Labels, Music Publishers The parent company of ‘major’ record label BMG are the latest recipient of a lawsuit in the Napster saga. The German media giant Bertelsmann has received a $17 billion lawsuit from a group of songwriters, composers and music publishers alleging that by funding the file swapping service BMG had been involved in the widespread infringement of copyrighted music works and had deprived the claimants of millions of dollars of revenues. Bertlesmann invested in Napster in the hope of turning Napster into a subscription service. Bertlesmann argue that their investment is only a loan and deny any legal liability. Ironically Bertlesmann owns a major publishing catalogue through BMG which would benefit from any successful action. See www.newsvote.bbc.co.uk

AOL LAUNCHES SUBSCRIPTION INTERNET SERVICE
Copyright , Record Labels / March 2003
USA

COPYRIGHT Record Labels AOL’s 27 million subscribers will be offered legitimate access to record company catalogues from $3.95 (0) per month. Subscribers will be given access to the 250,000 strong recording catalogue of download service MusicNet, one of the music industry’s answers to the hugely popular but unauthorised sites like Aimster, KazaA and Morpheus. The New York Times has welcomed the move as the strongest attempt yet to beat unauthorised downloading of music. The music industry has blamed internet piracy for contributing to a slump in CD sales, with sales dropping 9% in the US in 2002. But legal sites from the industry have so far struggled to persuade fans to use legitimate (paid for) services – MusicNet has 500,000 subscribers, compared with 100 million users of the free song-swapping services. The basic AOL $3.95 deal will give users 20 streamed songs and 20 downloads per month. Fans can sign up for more access for up to $17.95 (40) per month, which buys unlimited streams and downloads, and the ability to burn – or copy – 10 songs to blank CDs per month. AOL Director of Music Evan Harrison said “A music subscription service is not going to make sense…

GRAND JURY BEGINS ITS INVESTIGATION INTO THE STATION NIGHTCLUB TRAGEDY
Health & Safety , Live Events / March 2003
USA

HEALTH & SAFETY Live Concert Industry The Grand Jury began its investigation on February 26th behind closed doors at a National Guard training center in East Greenwich to decide whether anyone should be held responsible for the fire and the deaths of 97 people in West Warwick, Rhode Island. Most of the first Grand Jury session was devoted to preliminary talks between prosecutors and lawyers for the rock band Great White whose guitarist, Ty Longley, died in the blaze. The investigation will centre on the causes of the fire, Great White’s pyrotechnic display, the layout and construction of the nightclub and the use of inflammable soundproofing materials. There is also a dispute over whether Great White had permission to use pyrotechnics. The band has said it received approval to use special effects, but the two brothers who own the club have denied that they gave permission. Club owners Jeffrey and Michael Derderian, along with band members, could be indicted on state charges of involuntary manslaughter or second-degree murder. It appears that the brothers who own the club were about to sell the business and the Derderians were scheduled to begin transferring the liquor license the day after the disaster. See…

“INTELLECTUAL PROPERTY IS THEFT. IDEAS ARE FOR SHARING”
Copyright , Internet / March 2003
Japan
Netherlands
UK
USA

COPYRIGHT Internet Columnist John Naughton used this headline in his February 09 column in the UK’s Sunday Observer newspaper advancing the argument that in the USA industry associations such as the RIAA (Recording Industries Association of America) and the MPAA (Motion Picture Association of America) have used politics and clever rhetoric to develop the concept of ‘intellectual property’ and to portray internet file swopping as ‘theft’ of this property. Naughton says that, in his view, the industry associations’ aim is to ‘signify the moral equivalent between sharing a track from a CD with a friend and stealing your neighbour’s goods and handing them round’. Naughton goes on to point out that the new draft EU copyright directive (see Law Updates, February 2003) will impose criminal sanctions on large scale (e.g., for profit) piracy but not on individual file sharing and copying. See www.briefhistory.com/footnotes. The industry campaigning continues and the RIAA and MPAA have just published a brochure warning companies of the risk of internet piracy and work place related copyright infringement. See www.zdnet.com.au. COMMENT:Most legal systems recognise that granting ownership of copyright and other intellectual property rights provides economic stimuli for those who create, invent and design for a living and provides protection against…

OWNER OF SAMPLED SONG WINS COURT INJUNCTION
USA

COPYRIGHT Record Labels, Music Publishing, Artists Indian composer Bappi Lahiri has won a court injunction halting the sale of Dr. Dre protéguth Hurts’ debut album and single based on claims that the hit song, “Addictive,” sampled more than four minutes of one of his compositions, without credit. A federal judge in Los Angeles ruled that “Addictive” must be removed from shelves unless the composer Bappi Lahiri’s name is added to the credits. Lahiri filed suit against Dre, his Aftermath Records label, and parent company Interscope/Universal Music Group, citing uncredited use of the Hindi song “Thoda Resham Lagta Hai,” composed by Lahiri for the 1987 Indian film “Jhoothi.” Lahiri is seeking compensatory damages in excess of $1 million as a result of the failure to give credit and the loss of his ability to properly promote his music in the United States. The figure represents a combination of the profits Lahiri’s attorneys said the sales of Truth Hurts’ music has reaped for Universal along with the losses suffered by their client. The album has sold in excess of 300,000 units. Universal had the choice of pulling all product from the shelves or affixing a sticker with Lahiri’s credit on copies of…

UK PUB PAYS HEFTY PRICE FOR BREACHING PUBLIC ENTERTAINMENT LICENCE
Licensing , Live Events / March 2003
UK

LICENSING Live Concert Industry Pub licensee Peter Elton was fined 00 with 00 costs by Bromley Magistrates Court for two admitted breaches of the Pub’s Public Entertainment Licence. Mr Elton admitted to allowing entertainment to continue for 45 minutes past the licenced curfew at the Alexander Pub in Penge on the Kent Borders in England. The licence conditions had been imposed to prevent disturbance to residential neighbours of the Alexander. See www.newshopper.co.uk

DOORS DRUMMER TAKES ACTION AGAINST NEW ‘DOORS’
Artists , Copyright , Trade Mark / March 2003
UK

TRADE MARK, COPYRIGHT Artists, Merchandising A reunion concert featuring two original members of the Doors has prompted a law suit from original drummer John Densmore in the Los Angeles Superior Court for breach of contract and unfair competition. Original keyboardist Ray Manzarek and guitarist Robby Krieger have teamed up with vocalist Ian Astbury (formerly of the Cult) and Stuart Copeland, drummer with the Police, to play a concert in Los Angeles. Densmore claims that the band’s name is owned as a partnership by the three living members and the late Jim Morrison’s wife, Pamela Courson and that each partner has a right of veto over use of the name. He claims that the ‘new’ Doors are misusing the band’s name and logo and will confuse the general public. Recent cases in the UK involving the use of original band names have included Sweet and Bucks Fizz. Seewww.news24.com/News24/Backpage COMMENT : This area of law has recently been explored in the UK by the High Court in the case of Byford -v- Oliver and Dawson (2003). This case involved the use of the name ‘Saxon’ by Biff Byford, the original singer with the British heavy metal band. Byford had been a band member since its formation in the late 1970s….

INTERNET PATENT VIOLATIONS ALLEGED
Internet , Patents / March 2003
Mexico
USA

PATENTS Internet Acacia Media Technologies have asserted ownership of a number of patents which govern the process of transmitting compressed audio or video online, one of the most basic multimedia technologies on the Net. Acacia have just signed up its latest licensee, Mexican satellite telecommunication company Grupo Pegaso. Radio Free Virgin, the online music division of Richard Branson’s Virgin Corporation, said it agreed to license the technology late last year after a careful legal review. A number of basic Web technologies and practices have been subject to patent claims over the past year. Telecommunications giant SBC Communications is claiming rights to Web site “frames” and another company says it has rights to the e-commerce site staple known as the shopping cart. Acacia Media Technologies is part of a larger corporation called Acacia Research which holds intellectual property in several areas. One of its subsidiaries owns technology used in the television content-blocking V-Chip and last year alone earned close to $25 million in royalties from that side of the business. According to the Company, their patents could affect virtually anyone involved in the business of providing on-demand digital audio or video, from software companies to network service providers to the actual…

CATHERINE ZETA-JONES AND MICHAEL DOUGLAS BEGIN ACTION AGAINST HELLO!
Artists , Privacy / March 2003
UK

PRIVACY LAWS Artists The action brought by Michael Douglas and Catherine Zeta Jones reached the High Court in London. The couple and Northern & Shell, publishers of OK, have brought an action against Hello! claiming that their privacy was invaded when a photographer secretly took pictures of their New York wedding and provided these to Hello! who then published the shots. The couple had an exclusive agreement with OK to publish official photos. The UK has no real body of privacy law and recent cases by celebrities such as Naomi Campbell (against Mirror Group Newspapers) and footballer Gary Flitcroft (A -v- B & C [2002]) have done little to develop the right to privacy set out in the Human Rights Act 1998 with the Court of Appeal giving a very wide definition to what the ‘public interest’ might be. Mr Justice Lindsay must have further alarmed the couple by stating in court that in the UK weddings must, by their very nature, be ‘public’ events as part of the ceremony involves asking members of the public if they know of any just reason why a marriage ceremony should not take place.

UK MUSICIANS’ UNION SPEARHEADS CHALLENGE TO PROPOSED LICENSING LEGISLATION
Licensing , Live Events / March 2003
UK

LICENSING Live Concert Industry Organisers of live music in small venues, currently exempt from needing a Public Entertainment Licence (PEL) and ‘pub’ venues where two or less performers are featured (known as the ‘two in a bar’ rule) are becoming increasingly alarmed at the hidden costs and bureaucracy emerging from the UK Government’s proposed Licensing Bill. Audience magazine noted that ‘far from deregulation or a boost to the industry, the legislation is likely to devastate the sector of live music where many aspiring performers take their first steps and others enjoy a modest living’ (www.audience.com). The initial plan of scrapping PELs and including a entertainment licence free with a venue’s liquor licence initially seemed positive – not now, as both the live music industry and the licensed pub trade are becoming increasingly concerned. The plan to move liquor licensing from Magistrates Courts to local authorities is now opposed by the licensed trade and the live music industry is also alarmed that the new levels of local authority bureaucracy and increased costs will spell the end of small pub and club venues.

JAPANESE COURT ORDER ENSURES THAT CLIENTS OF ONLINE KARAOKE SUPPLIES MUST PAY ROYALTIES
Japan

COPYRIGHT Music Publishing, Internet The Daily Yomiuri Online reports that the Osaka District Court have ordered an online karaoke machine leasing firm in Osaka to take necessary measures to prevent its customers, who have not paid copyright fees for music to the Japanese Society for Rights of Authors, Composers and Publishers (JASRAC), from using music delivered online. The Court’s ruling held that Hit One had been assisting its customers to infringe copyrights. The verdict is a precedent for a number of forthcoming lawsuits of a similar nature in Japan and means that music distributors who do not take an active role in violating the law can, and will, be asked to take remedial measures to prevent infringements by users. According to the Daily Yomiuri Online, Hit One leased karaoke machines and distributed music online to bars and restaurants in the Osaka and Hyogo prefectures. About 97 percent of the songs distributed by the firm were reportedly controlled by JASRAC. However, Hit One knowingly delivered music to a number of its customers who had not paid copyright royalties to JASRAC. Presiding judge Kazuo Komatsu said in his ruling, “The firm was responsible for confirming that its customers already closed a deal…

2003 GLASTONBURY FESTIVAL PUBLIC ENTERTAINMENT LICENCE GRANTED
Licensing , Live Events / March 2003
UK

LICENSING Live Concert Industry After a meeting lasting until 00.30 the Regulatory Board of Mendip District Council finally granted the licence for the 2003 Glastonbury Festival. This was the festival’s second application having initially been refused a licence because of the Council’s worries about safety and security of local residents and the policing of local villages outside of the Festival site itself. After the seven hour meeting on the 17th February, Festival co-organiser Emily Eavis said ‘I am so excited but it was like going through a really painful paper shredder’. See www.glastonburyfestivals.co.uk

US DOUBLE TRAGEDY RE-FOCUSES LIVE INDUSTRY ATTENTION ON EVENT SAFETY
Health & Safety , Live Events / February 2003
USA

HEALTH & SAFETY Live Concert Industry Following on from the death of 21 clubbers in Chicago on the 17th February, America was reeling after the deaths of at least 95 people in West Warwick, Rhode Island when the band Great White’s pyrotechnic display set fire to the venue where they were playing. The 17th February tragedy was caused by security staff letting off pepper spray in a nightclub to break up a fight; this caused members of the audience to panic in trying to escape. The Rhode Island tragedy was described by state Governor Don Carcieri as ‘a real disaster. The building went up so fast no one had a chance’. It was estimated that over 300 people were inside the one-story wooden building. 187 people were taken to hospital and over 30 remain critical. The low ceiling ‘Station’ club had no water sprinkler system as it was too small to require one by law. It also had no pyrotechnics licence although the band claim that they had checked in advance with the venue and permission for their display was given. Reports say that that after the pyrotechnics ignited the roof of the venue soundproofing material also ignited and the…

COURT GRANTS MUSIC INDUSTRY SECOND MAJOR VICTORY IN AIMSTER CASE
USA

COPYRIGHT Record Labels, Music Publishing, Internet In a major victory in the fight against the unauthorised uploading and downloading of music and other copyrighted works, a U.S. District Court Judge granted an all-encompassing preliminary injunction against the file swapping site Aimster (Madster). The Court’s decision follows its ruling on September 4th granting the record companies’ request for a preliminary injunction. In that prior ruling, the Court described the Aimster system as “a service whose very raison d’etre appears to be the facilitation of and contribution to copyright infringement on a massive scale.” After issuing that opinion, the Court asked for proposals from the parties for the language of the Injunction. The record companies and music publishers submitted a proposal that the Defendants opposed; however, the Defendants did not submit their own proposal, arguing that it was impossible to filter out infringing recordings. The Court adopted the record companies’ and music publishers’ proposed Injunction in full, outlining the roadmap by which Aimster must act immediately to halt the massive copyright infringement it facilitates. U.S. District Court Judge Marvin Aspen of the Northern District of Illinois ordered that Aimster implement filtering technologies now available so that it does not directly, indirectly, contributorily,…

US SENATOR REINTRODUCES BILL ON COMPETITION IN RADIO
Competition , Live Events / February 2003
USA

COMPETITION Radio, Live Concert Industry Democrat Senator Russ Feingold has reintroduced his Competition in Radio and Concert Industries Act on January 28th 2003 which he says will help consumers, small and independent radio station owners, and independent concert promoters by prohibiting anti-competitive practices in the radio and concert industries. The Bill’s introduction comes as the Senate Commerce Committee holds a hearing on the problems of radio consolidation. Insiders say committee chairman, Republican Senator John McCain, is expected to sign on as a co-sponsor of the bill soon. The Committee expects to hear from representatives of leading radio station owner and concert promoter Clear Channel Communications, the National Association of Broadcasters, the Recording Artists Coalition and the Future of Music Coalition. Says Feingold: “Since originally introducing this legislation in June 2002, I have seen a groundswell of interest both in Congress and among artists, consumers, independent radio stations, and local promoters in restoring fairness to radio. My legislation will reduce concentration and crack down on anti-competitive practices, such as the new ‘pay to play’ system.” Feingold says the latter practice allows radio giants to “shake down the music industry.” See www.recordingartistscoalition.com See www.billboard.com

EU UNVEILS NEW ANTI-PIRACY LAWS
EU

COPYRIGHT Record Labels, Music Publishing The European Union Justice & Home Affairs Commissioner Antonio Vitorino unveiled a tough new draft anti-piracy code on Thursday January 30th designed to standardise the approach to piracy throughout the European Community. The new legislation would direct all member states to treat large scale piracy and counterfeiting as a criminal offence as well as a civil offence meaning that offenders would be liable for damages, fines and possible imprisonment. Rights owners could sue for damages and ancillary remedies such as accounts for profits and destruction orders whilst the authorities could shut down infringing companies and seize assets. The legislation would work alongside revised border controls allowing for the seizure of counterfeit and pirate goods. www.reuters.com

JAPANESE COURT RULING FOLLOWS USA APPROACH AS PEER TO PEER FILE SWOPPING SERVICE IS SHUT DOWN
Japan

COPYRIGHT Record Labels, Music Publishing, Internet The Tokyo District Court, in an interim ruling on Wednesday January 29th 2003, decided that the online music file-sharing service provided by MMO Japan Ltd has violated copyright law, thus supporting the Japanese music industry’s stance. The decision follows the Court’s April 2002 injunction, which prohibited Tokyo-based MMO’s Internet file-swapping service in an action brought by the Japanese Society for Rights of Authors, Composers and Publishers (JASRAC) and 19 record labels. Damages have yet to be assessed. This ruling, the first such suit filed in Japan, follows on from actions brought in the US against Napster, Aimster and KazaA. The service, which was provided by MMO Japan, automatically sent files over the Internet enabling online users to swap music and other files stored on their hard drives. The presiding Judge Toshiaki Iimura held that MMO had financially benefited and was responsible for the service. www.japantoday.com Also see “NEW ACTIONS IN CYBERSPACE” – DECEMBER 2002 LAW UPDATES

UK INTERNET CAFÉ DOWNLOADS INFRINGE MUSIC COPYRIGHT
UK

COPYRIGHT Record Labels, Music Publishing, Internet Sony Music Entertainment (UK) Ltd. & Others -v- Easyinternetcafe Ltd. (2003) Mr Justice Smith held that Easy-internetcafes were guilty of copyright infringement by allowing customers to download music and burn CDs at their chain of internet cafes. Investigators for the BPI (British Phonographic Industry) found that hundreds of tracks had been downloaded in the cafes. Users paid £2.50 (approx US $4) for the download and a further £2.50 to buy each CDR. Mr Stellios Haji-Ionannou, owner of the chain of internet cafes, said that he will appeal the High Court decision and that the music industry was itself guilty of ‘extortion’ for overcharging for CDs and that ‘copying music over the internet is no different to videotaping a programme to watch later’. In the UK ‘time shifting’ by copying TV programmes onto a VHS is legal (under the Copyright Designs & Patents Act 1988) for personal use but copying records and films otherwise unavailable is a copyright infringement. In the US case of RIAA -v- Napster (US, 2000) the so called ‘VCR defense’ failed to protect Napster against claims from the Recording Industry Association of America which shut the service down. Damages in the Easy-internet case have yet to be determined. [See…

USE OF SIMILAR MARKS
Trade Mark / February 2003
EU
Germany

TRADE MARKS Merchandising Davidoff et Cie SA -v- Gofkid Ltd (2003) European Court of Justice C292/00 (2003) This case concerned an action by Davidoff who distributed luxury cosmetics, clothing, tobacco, leather and other goods under the trade mark Davidoff which is registered in Germany and other countries. The defendants owned the markDurfee – registered in Germany later than the Davidoff mark. The marks had the same script and the same distinctive styling of the letter D and ff. At first instance the claim was refused as it was held that there was no risk of confusion between the marks. The ECJ held that despite there being no risk of confusion between the marks, Articles 4(4)(a) and 5(2) of the EEC trade mark Directive 89/104 provided specific protection for the first registered mark against a later mark which was identical with or similar to the first registered mark and which was intended to be used or was being used on goods or services similar or identical to the first registered mark. (The Times, 22 January 2003).

RAID ON SCOTTISH COUNTERFEITERS REVEALS A MAJOR OPERATION
UK

COPYRIGHT INFRINGEMENT Record Labels, Music Publishing A man and a woman are being questioned after a raid on their Airdrie home in North Lanarkshire uncovered what is believed to be the biggest CD counterfeiting operation ever found in Scotland. Thousands of illegally copied CDs, DVDs and videos were discovered in the raid along with nineteen CD writers, 11 DVD writers and 15 video recorders. This MCPS-led raid (along with Strathclyde Police and Trading Standards officers) was designed to get to the root of the counterfeit problem in Scotland. It follows recent raids by other anti-piracy units that have focused on removing product from the market stalls themselves. Nick Kounoupias of the MCPS Anti-Piracy Unit said: “Getting to the source of significant counterfeiting operations like this one is the real key to stopping the proliferation of counterfeit product. You can strip a market of illegal goods but within a few days, the illegal product is back.” The two who were questioned could then face charges under theCopyright, Designs & Patents Act (1988), the Trade Marks Act (1994) and the Trade Descriptions Act (1968). The maximum penalty for counterfeiting and trade marks offences in the UK is ten years imprisonment. Late in 2002 Norwich Crown…

GLASTONBURY FESTIVAL’S 2003 PUBLIC ENTERTAINMENT LICENCE IS REFUSED
Licensing , Live Events / February 2003
UK

LICENSING Live Concert Industry The UK’s biggest festival, Glastonbury, is having to re-apply for a Public Entertainment Licence after its initial application was rejected by Mendip District Council (MDC) despite no objections from MDC’s own officers or statutory consultees. The new application will be heard on the 17th February 2003. The Local Government (Miscellaneous Provisions) Act 1982 provides that responsibility for controlling places of public entertainment (music, dancing, etc) rests with the district council or in London with the relevant London Borough. It would normally be an offence to organise public entertainment without a licence or to be in breach of any terms or conditions of a licence granted. At present the licensing of public entertainment applies to all indoor and outdoor events (except bar events with two or less performers). The relevant local authority will have a very wide discretion with the terms and conditions of the licence but as a minimum the authority can impose terms and conditions to secure the safety of performers and others present, to ensure there is adequate access for emergency vehicles and provide toilets and sanitation and to present unreasonable noise and disturbance to the neighbourhood. The Public Entertainment Licence (Drugs Misuse) Act 1997 allows local…

INTERNET RADIO SERVICE RESTRICTED
Copyright , Internet / February 2003
USA

COPYRIGHT Radio, Internet Yahoo have agreed to a settlement with Sony Music Entertainment as part of a lawsuit filed by the US recording industry against the web portal’s online music subsidiary, Launch Media. The lawsuit, filed in May 2001 by the Recording Industry Association of America (RIAA), alleged that Launch violated copyright laws by giving its web radio listeners too much control over their song choices – allowing users to ‘programme’ their own station with tracks of their own selection which means that at the very least users can create ‘virtual albums’. Yahoo will make a onetime payment to Sony for its past use, and the portal will enter into a nonexclusive license to broadcast Sony’s songs on its LaunchCast radio service. The financial terms of the settlement were not disclosed (seewww.cnet.com). This case again shows the recording industry’s determination to force new media to either pay for the use of copyright material itself or make sure users and subscribers pay for copying or ‘downloading’ music.

US SUPREME COURT UPHOLDS COPYRIGHT EXTENSION
USA

COPYRIGHT  TV, Film, Artists and Composers, Record Labels, Music Publishing, Internet Eldred -v- Ashcroft (2003) In this case, the US Supreme Court finally confirmed the provisions of the US Copyright Extension Act 1998. This Act, known as the ‘Sonny Bono’ Act after the late recording artist and congressman, extends US copyright protection to life of author plus 70 years (up from 50 years) and 95 years (up from 75 years) for works owned by corporations. The Act, passed after lobbying from Walt Disney and other media corporations (worried about older works falling into the public domain) returns certain works to copyright and gives extended protection to other works. It could be argued it is the end of public domain as hundreds of thousands of works which would have become freely available are now protected by copyright laws. (John Naughton, The Networker, Observer Newspaper 19/01/03). See : www.observer.co.uk/business See : www.briefhistory.com/footnotes

CAN A TELEVISION FORMAT BE OWNED?
Copyright / January 2003
USA

COPYRIGHT TV, Film CBS -v- ABC (2003) US District Court NY, Judge Loretta Preska The protection of the format to television formats has become a complicated area for programme makers and lawyers. The leading UK case of Green -v Broadcasting Corporation of New Zealand (1984) held that there was no copyright in an idea and that on the facts of that case the format rights to the programme Opportunity Knocks were not protected under copyright law. This case reaffirms that principle. CBS claimed that the programme I’m A Celebrity Get Me Out of Herewas a copy of their programme Survivor and sought injunctive relief against ABC to prevent the programme going to air. ABC successfully argued that their show was an original format and that injunctive relief was not an appropriate remedy. Despite the judgement it is clear that the global television industry does licence format rights – indeed both the programmes in this dispute were themselves formats licensed from third parties. (Duncan Lamont, The Guardian Media, 20/01/03) See : www.aftrs.edu.au/studwork/essays/legalprot.html This opinion is from Johnathan Coad a solicitor at the Simkins Partnership. The last format rights dispute to go to trial was some 15 years ago, when Hughie Green sued the New Zealand Broadcasting Corporation over his huge hit programme, “Opportunity Knocks”. Despite the…

A SMELL CANNOT BE A TRADE MARK
Trade Mark / January 2003
EU

TRADE MARK Merchandising Slecmann -v- Deutches Patent und Markenamt  European Court of Justice C273/00 (2002)  EC law provides that a trade mark may consist of any sign capable of being graphically represented particularly words including personal names designs letters numerals shapes of goods or their packaging provided that such signs are capable of distinguishing the goods and services of one undertaking from those of other undertakings (EC 89/104) The Court’s decision was that a smell (defined as balsamically fruity with a slight hint of cinnamon) could not be registered as a trademark whether as a chemical formulae, a description in words or by depositing a sample. For background information on trade mark law see www.fjcleveland.com

NEW SOURCES OF INCOME FOR SONGWRITERS
Artists , Copyright , Music Publishing / January 2003
EU
USA

COPYRIGHT Music Publishing, Artists and Composers A recent study by the Informa Media Group shows that downloading mobile phone rings is a fast growing and lucrative business. Informa found that in 2002 songwriter’s collection societies collected in excess of £44 million for composers and publishers and that the global income from mobile tone rings was in excess of US$1 billion. See www.cnet.com for further information.