Does Top Of The Pops need a licence?
Health & Safety , Live Events / November 2006

HEALTH & SAFETY Live event industry The iconic BBC chart show, Top of the Pops, may be breaking the provisions of the Licensing Act 2003 law by hosting live music without a licence. Officials at Hammersmith & Fulham Council said it depended on whether the recordings at BBC Television Centre were interpreted as public or private events. The BBC maintained that the recording of live performances before a limited, invited studio audience has always been treated by the BBC and the council as constituting a live event not requiring a live performance licence. However the BBC accepted that if a different approach was now needed the BBC will apply for the appropriate licence.” It is understood that the council’s attention was reportedly drawn to the programme after it staged an open-air concert at TV Centre in London on Saturday featuring US rock band the Red Hot Chili Peppers. http://news.bbc.co.uk/1/hi/entertainment/4927542.stm

Limewire files countersuit against major labels alleging anti-trust violations

COPYRIGHT / COMPETITION Record labels, internet Peer-2-peer software developer LimeWire has filed a counterclaim to the action brought by Warner Bros. Records, Virgin Records America, Sony BMG Music Entertainment and other music labels. The counterclaim filed in U.S. District Court in New York alleges that the record companies have engaged in unfair business practices to scare away its users. The record companies allege that Limewire’s technology provides a means for copyright infringement by illegal peer-2-peer fileswapping and downloading. In its countersuit Lime Wire alleges that the major record labels launched their own digital-distribution to “destroy any online music distribution service they did not own or control, or force such services to do business with them on exclusive and/or other anticompetitive terms”. This is not the first time this allegation has been made and the major labels are facing a class action in the USA alleging that the labels first forays into digital retailing were nothing more than blocking devices to shut other companies out of the digital market. Lime Wire’s suit also argues that the record companies combined and conspired to restrain trading in the market for online distribution of recorded music and, as a result, violated sections of the…

House Panel Tackles Piracy
Copyright , Internet / November 2006

COPYRIGHT Internet ARTICLE LINK:  This article by by Elia Powers details how The Motion Picture Association of America estimated the US film industry lost $6.1 billion to piracy in 2005 and puts the blame for a large chunk of that at the feet of students – who use college provided high speed broadband connections to illegally download films. For an interesting read on the measures some Universities and higher education institutions in the United States are taking to deal with peer-2-peer file swapping and downloading (particularly music and films) see http://www.insidehighered.com/news/2006/09/27/piracy

Streamcast found liable for copyright infringement in the USA
Copyright , Internet / November 2006

COPYRIGHT Internet ARTICLE LINK: After the Supreme Courts decision in MGM v Grokster, the liability of the various software companies was sent back to the lower courts to decide – using the tests set up by the Supreme Court who held that “ one who distributes a device with the object of promoting its use to infringe copyright … is liable for the resulting acts of infringement by third parties ”. Streamcast Inc, the creators of the Morpheus P2P file-sharing software, have now been found guilty by a federal judge of encouraging millions of users to exchange songs illegally. The company faces potential damages of $150,000 per track shared: http://www.latimes.com/business/la-fi-morpheus28sep28,1,1852347.story?coll=la-headlines-business / http://www.billboard.biz/bb/biz/index.jsp

British Library voices concerns over copyright law
Copyright , Record Labels / November 2006

COPYRIGHT Record labels The British Library has voiced concerns that UK copyright law prevents the Library retaining archive copies of recorded music and other sound recordings. In a statement the Library said ‘currently the law does not permit copying of sound and film items for preservation … without the right to make copies, the UK is losing a large part of its recorded culture.’ ‘Many original audio and film formats we hold are becoming increasingly more fragile and the statement added that such formats could ‘face irretrievable decay.’ Sections 37 – 45 of the CopyrightDesigns & Patents Act 1988 currently provides that “ the librarian of a prescribed library may, if the prescribed conditions are complied with, make and supply from a published edition a copy of part of a literary, dramatic or musical work [i.e. not sound recordings] … without infringing any copyright in the work, in any illustrations accompanying the work or in the typographical arrangement”. S61 provides that folk songs may be recorded for archive purposes without infringing the copyright in the music or lyrics. Words in italics added. The British Library are asking for are a number of revisions to UK copyrights law: Existing limitations and exceptions to copyright law should…

ASMEC Forum highlights problems in online licensing
Copyright , Internet / November 2006

COPYRIGHT Internet A forum put together by ASMEC, the Association of Streaming Media Companies, has highlighted how the Collection Societies are struggling to keep up with the demands of the new media companies as they present new and varied business models which use music in a variety of ways. Presentations form both Phonographic Performance Limited (PPL) and the MCPS-PRS Alliance set out current business models and licences available to online companies. The PPL’s licences are based on a approximate payment of 0.05p per track streamed for the sound recording right (but does not include the download right which is retained by labels). The MCPS-PRS Joint Online Scheme (JOL) allows the user to use music in return for a payment of 8% plus VAT of gross revenues (subject to a minimum payment of £500 plus VAT per annum. The MCPS-PRS Alliance also had a (LOEL) Limited Online Exploitation Licence for services generating less than £4,250 in revenue per annum based on a flat fee between £50 and £400. Both of these licences cover full track downloads, clips, on demand streaming and webcasting. The presentations met with some criticisms from the Forum audience – particularly questioning why PPL online licence rates were…

New royalty models for online services

COPYRIGHT Internet, music publishers, record labels INTERVIEW LINK – Lawyer Gregor Pryor discusses why it is not always easy for collection societies and rights owners to keep up with the wide range of new business models being presented to them by companies who want to legally exploit their copyrights. This interview was published by CMU Music Network as part of Music Tank’s ‘Think Tank’ series prior to the ASMEC Forum referred to above. http://www.cmumusicnetwork.co.uk/interviews/copyright01.html see also A new licensed P2P service by Prof Michael Geist at http://www.p2pnet.net/story/10126

Plagiarism case against Beyonce fails
Copyright , Music Publishing / November 2006

COPYRIGHT Music Publishing A US judge has dismissed a copyright infringement lawsuit against Beyonce Knowles filed last year by singer songwriter Jennifer Armour. Armour claimed that Beyonce’s 2003 hit ‘Baby Boy’ included lyrics from her song ‘Got A Little Bit Of Love For You’. Armour said that the Destiny’s Child singer had had access to her song because her former manager had provided a copy of it to executives at Beyonce’s record label, Columbia. Key people at Atlantic Records, who represented Sean Paul, Knowles’ collaborator on the track, had also been sent a copy. This type of claim is why more and more record labels, music publishers and management companies are refusing to accept unsolicited demos and tracks – returning them unopened to songwriters and artists. However, whether or not Knowles had ever heard Armour’s track was not, in the end, relevant because the court undertook a ‘side-by-side’ comparison of the two songs – the basic test in any copyright infringement case of this kind – and from that they ruled that the songs were “substantially dissimilar”, leading to Armour’s case being dismissed. Source CMU Daily / http://news.bbc.co.uk/1/hi/entertainment/5401632.stm

IFPI continue actions against file swappers
Copyright , Internet , Record Labels / November 2006

COPYRIGHT Record labels, internet Legal actions against thousands of music file-sharers across the world have been announced as the recording industry stepped up its campaign to deter copyright theft and promote legitimate use of music on the internet. Over 8,000 new cases in 17 countries are being announced today, including the first ever cases against illegal file-sharing in the two biggest markets of South America and in Eastern Europe.   A total of more than 13,000 legal actions have now been taken outside the United States. Legal actions are being extended to Brazil, where more than one billion music tracks were illegally downloaded last year and a country where record company revenues have nearly halved since 2000. Mexico and Poland are also seeing actions for the first time – while a further 14 countries are launching fresh actions against illegal file-sharing.  Over 2,300 of people have already paid the price for illegally file-sharing copyrighted material, with average legal settlements of €2,420.   Many of those on the receiving end of legal action are parents whose children have been illegally file-sharing.  They are finding that in many countries they are liable for any activities third parties undertake using their internet connection.  In…

Google snaps up Youtube for $1.65 billion
Copyright , Internet / November 2006

COPYRIGHT Internet As Video-sharing Web site YouTube Inc announced that it had struck content deals with Universal Music Group, Sony BMG Music Entertainment and CBS, Google announced, after several days of rumours, that it would buy YouTube for $1.65 billion. Google say the two companies will, for the time being at least, continue to operate independently – but Google also added that it had also directly dealt with Sony BMG and Warner Music for Google music video content. Vivendi’s Universal Music Group said on Monday it had agreed to give YouTube viewers access to thousands of music videos. The company said it and its artists will be compensated not just for the official videos, but also for user-generated content that incorporates Universal’s music. Universal Music Group said it will also use technology to filter out copyrighted content not authorized to appear on the YouTube site. Sony BMG has it will make video content available on YouTube – and will also let YouTube users include some catalogue songs in their own amateur video uploads. Warner Music had already said it had an agreement with the site. Sony BMG said it will share advertising revenue with YouTube for all music videos that…

United States v Google? As it buys YouTube, does Google now have market dominance?
Competition , Internet / November 2006

COMPETITION Internet ARTICLE LINK  An interesting blog by David Berlind looking at anti-trust issues in the US and pointing out that the question of Google’s ‘market dominance’ is by no means as simple as it might look – and challenges the idea of a ‘Googleopoly’ whilst making some challenging comments on Apple’s iTunes business model. http://blogs.zdnet.com/BTL/?p=3771

Sony and BMG to appeal the annulment of their merger by the European Court
Competition , Record Labels / November 2006

COMPETITION Record labels Sony and Bertelsmann have appealed against an annulment of their joint venture that created the world’s number two music company. In July, the Court of First Instance annulled the European Commission’s decision to approve the venture (see our August Music Law Updates. German media group Bertelsmann said in a statement it and Sony had filed the appeal because “the EU Commission’s 2004 decision to clear the Sony BMG recorded music joint venture was correctly decided on both the law and the facts”. The appeal process is likely to take about a year. Meanwhile the European Commission will concurrently undertake a renewed review of Sony and Bertelsmann’s original merger proposals (annulment issued by the Court Of First Instance simply overturned the original approval on procedural grounds, it did not actually state whether the merger itself was, in fact, anti-competitive – that is for the Commission to decide anew). Bertelsmann said “parties will be providing current market data and other information requested by the Commission in the next few weeks”. As European officials closely monitor the music industry, it appears that Vivendi is going to restructure the way it buys BMG Music Publishing from Bertlesmann after EC officials expressed…

CBS makes peace with Spitzer
Competition / November 2006

COMPETITION Broadcasting US radio major CBS has become the first broadcasting corporation to settle with New York Attorney General Eliot Spitzer in his long running payola investigations where record labels have paid to have their records played on the radio – ‘pay for play’. All f the majors have agreed to pay fines and revamp internal rules as a result of their own settlements with Spitzer has since turned his attention to the radio groups.CBS have pledged to introduce more stringent rules regarding the relationships their station managers have with record labels and their promoters, as well as paying $2 million in fines. CBS runs approximately 180 radio stations across the US

US Copyright Office agitates publishers over statutory licences for ringtones

COPYRIGHT / COMPETITION Record labels, music publishers The US Copyright Office has ruled that ringtones qualify as digital phonorecord deliveries and as a result they fall under compulsory license provisions. Under section 115 of the USCopyright Act, the Copyright Royalty Board can now determine royalty rates for these tones. This means that labels can offer ringtone operators the mater rights and the publishing rights as a single package and labels will be able to avoid lengthy licensing negotiations with publishers. Whilst the Recording Industry Association of America welcomed the news, the National Music Publishers’ Association was quick to attack the Copyright Office’s decision. It argues that this “represents an unprecedented broadening of the compulsory licence for musical works” and could damage songwriters and copyright owners who were previously able to negotiate licences in the free market but are now subject to government regulation. http://www.billboard.biz/bb/biz/newsroom/legal_management/article_display.jsp?vnu_content_id=1003255346

Court Rules Google’s use of trademarks as keywords is non-infringing
Internet , Trade Mark / November 2006

TRADEMARK Internet A federal judge in New York has just ruled that Google’s practice of selling trademarks as keywords that trigger links to particular Web sites other than those of the trademark holders does not constitute infringement because Google does not actually “use” the trademarks within the meaning of the law. This ruling was entered on September 28 by Norman Mordue, the Chief Judge of the United States District Court for the Northern District of New York in the case Rescuecom Corporation v. Google, Inc. Judge Mordue granted a motion by Google and dismissed Rescuecom’s complaint which alleged trademark infringement with respect to Google’s selling of the trademark “Rescuecom” to Rescuecom’s competitors as a keyword that triggers the appearance to the competitors Web sites among the search results of Internet users when they enter “Rescuecom” in the Google Internet search engine. Written by Eric Sinrod of Duane Morris LLP. For more information please see Findlaw.com

Public house fined for unlicensed door staff
Health & Safety , Live Events / November 2006

HEALTH & SAFETY Live event industry A Pontypridd licensee has been fined £250 and ordered to pay £761 in costs at the Pontypridd Magistrates Court for using unlicensed doorstaff supplied by a security company. Terri Jenkins, who runs the Angharads public house, was taken to court by Rhondda Cynon Taff County Borough Council after licensing officers found the unlicensed staff working at the pub in July 2005. The staff had been supplied by a security company but under the Licensing Act 2003, licensees commit an offence if fail to prevent unlicensed doorstaff being deployed by a third party to their premises. Rhondda Cynon Taff County Borough Council told the court that Jenkins had not shown due diligence and had failed to ensure that the door supervisors supplied were SIA (Security Industry Authority) licensed. http://www.morningadvertiser.co.uk/news_detail.aspx?articleid=22602

FKP Scorpio Konzertproduction Gmbh v Finanzamt Hamburg-Eimsbüttel ECJ C290-04
Artists , Live Events , Taxation / November 2006

TAXATION Artists, Live Music Industry In May 2006 Advocate General Leger expressed his opinion in the case of FKP Scorpio Konzertproduktion. Scorpio, a German concert promoter, contracted with a Dutch tour promoter in 1993 for performances by American and European artists in Germany. Scorpio did not pay any German withholding tax and the tax authorities raised a massive tax assessments because of breach of of the German Einkommensteuergesetz (Income Tax Law). The Bundesfinanzhofraised four questions to the ECJ: (1) is it correct that non-residents fall under a withholding tax, and residents not; (2) does the withholding tax at source need to be reduced because of the expenses of the non-residents, because residents only pay tax on their net income after the deduction of expenses;(3) can an exemption provided for in a tax treaty be used without the explicit approval of the domestic tax authority; (4) do the answers to these questions also apply to artists and sportsmen living outside the EU? The Scorpio case attacks the artist tax system more explicitly than theGerritse case and the German tax authorities have already allowed organisers of performances to postpone the payment of the withholding tax for non-resident artists AG Leger opined that neither the procedure of deducting tax…

Centro di Musicologia Walter Stauffer v Finanzamt München für Körperschaften ECJ C386-04
Live Events , Taxation / November 2006

TAXATION Live Event Industry This case concerns an Italian non-commercial foundation which provides education for classical music students. The institution is exempt from the Italian l’imposta sul reddito delle persone giuridiche (Corporation Tax) and comparable German institutions would be exempt from the German Körperschaftssteuergesetz (Corporation Tax Law). The Centro di Musicologia Walter Stauffer had rental income in Germany which was taxed under a of the German KStG but could not make use of the exemption for cultural institutions, because it was not based in Germany. The German Bundesfinanzhofhas raised the question to the ECJ, whether this exclusion for non-resident institutions is correct under the EC Treaty as an Italian institution would suffer tax on income whereas as comparable German institution would not. The European Court of Justice (Third Chamber A. Rosas, President of the Chamber, J. Malenovský, S. von Bahr, A. Borg Barthet and U. Lõhmus (Rapporteur), Judges) decided that the fact that the tax exemption for rental income applies only to charitable foundations that are resident in Germany places charitable foundations resident in other Member States at a disadvantage and may constitute an obstacle to the free movement on capital. Thus in principle the legislation constitutes a prohibited restriction on the free movement of capital. Accordingly, the ECJ decided…

Centro Equestro de Leziria Grande Lda ECJ C345-04
Live Events , Taxation / November 2006

TAXATION Live Event Industry The case of Centro Equestro de Leziria Grande Lda concerns German Einkommensteuergesetz (Income Tax Law) and the very strict application of tax refunds for non-resident artists. The German tax authorities have created theVereinfachtes Erstattungsverfahren (Simplified Tax Refund Procedure), but only expenses that are directly connected with the performances are taken into account and these expenses need to be more than 50% of the earnings. Applications are only considered when the original invoices are attached. The procedures are somewhat complex and not widely used. The Portugese company Centro Equestro de Leziria Grande wanted to make use of the procedure because it had paid 29% withholding tax on the fees for its 11 horse shows in 1996 in Germany and had calculated post-tour that the total expenses (both direct and indirect) had been higher than the gross earnings. One of the horses had died during the German tour, giving an additional depreciation for the book value of the animal. The German Bundesamt für Finanzen (Tax Office) rejected the application for a full tax refund because the indirect expenses were not accepted. The Bundesfinanzhof raised the question to the ECJ, whether this strict procedure is correct under the EC Treaty, because German resident artists and sportsmen are taxed…

US tightens up on non-resident taxation
Artists , Live Events , Taxation / November 2006

TAXATION Arists, Live Music Industry Audience (issue 80, October 2006) reports that the US Internal Revenue Service may ask bands to withhold thirty percent of tax on tour personnel as well as on their own artist earnings. This comes at a time when venues and promoters are being told they may be held liable for taxation if a non-resident artist has not filed a Central Withholding Agreement (CWA). The IRS has published a new guidance, Non-resident alien US income and payroll tax responsibilitieswhich now provides for a direct responsibility to withhold 30% of tax on tour personnel. Whether or not this offends international bi-lateral tax treaties may have to be tested in the US courts but the IRS maintain that without a CWA tour personnel may have a US tax liability and the withholding tax is in place to collect this. Tour personnel could then apply for a tax refund under the US system utilizing relevant double taxation treaties. Audience (issue 80, October 2006)

UK opera house wins major tax victory
Live Events , Taxation / November 2006

TAXATION Live Music Industry Despite having a Government that professes to support the creative industries in the UK, the Treasury doesn’t seem to have read the script – and have been up to their necks in somewhat over zealous taxation activities. The Court of Appeal has now found that UK Customs & Revenue were completely wrong to strip the Gloucestershire based Longborough Festival Opera of its cultural purposes exemption – from VAT on ticket sales. Why were the Revenue so adamant that the Opera Company should be stripped of its exemption? Well – because it was because founding trustee, Martin Graham , unilaterally agreed to underwrite any losses from staging Wagner’s Ring Cycle in 2002 and 2003. This, according to the Revenue, meant that the Company was no longer run ‘voluntarily’ . To benefit from the exemption the orchestra needed to be managed and administered on a voluntary basis by persons who had no direct or indirect financial interest in its activities. The Revenue said that Mr Graham did have a financial interest – even though he was only prepared to cover losses – and didn’t want a share of any profits. The Court, thankfully, said that the Revenue were wrong. The Times 7th October 2006. 

Bournemouth Symphony Orchestra v Revenue and Customs Commissioners (2006) EWCA Civ 1281
Live Events , Taxation / November 2006

TAXATION Live event industry However, it wasn’t all doom and gloom for the Revenue – in another case they managed to get the Court of Appeal to agree that the Bournemouth Symphony Orchestra should be stripped of its cultural exemption for VAT on ticket sales – because a salaried MD sat on the board of trustees – an a wholly negative and unsatisfactory decision for the cultural and creative industries and indeed the live music industry in the UK. The Court held that as the affairs of orchestra were managed by a managing director who was paid a salary to administer the affairs of the Orchestra and was a member of the Board of Directors: this meant that the orchestra’s business was not managed and administered on a voluntary basis for the purposes of Note 2 to items 1 and 2 inGroup 13 of Schedule 9 to the Value Added Tax Act 1994. Lloyd LJ said that managing director’s remuneration and participation in decision making process of the orchestra made it impossible to say that the management and administration of the orchestra was conducted on an essentially voluntary basis. The Independent 19 October 2006.  

Dutch taxation of nonresident artists & athletes to end
Artists , Live Events , Taxation / November 2006

TAXATION Artists, live industry ARTICLE: by Dick Molenaar, All Arts Tax Advisors The Dutch government has decided to abolish the taxation of non-resident artistes and sportsmen per 1 January 2007. This radical change attracts special attention, because the Netherlands has the right to levy a source tax from non-resident artistes and sportsmen under 74 of its 78 bilateral tax treaties, in which it follows Art. 17 of the OECD Model closely. But the government believes that the tax revenue from this special group of taxpayers is too low and the administrative burden is too high to justify a source taxation. The Netherlands prefers that only the residence country levies tax from their international performing artistes and sportsmen. This is an important deviation from the recommendation by the OECD in Art. 17 of the Model Treaty, in which the primary taxing right has been allocated to the country of performance. Earlier change in 2001 In 2001 the Netherlands already changed its taxation from non-resident artistes and sportsmen by allowing the deduction of expenses prior to performances and accepting normal income tax returns after the year. The Netherlands did not want to follow the recommendation of § 10 of the Commentary on…

Macca applies for trade mark
Artists , Trade Mark / November 2006

TRADE MARK Artists Former Beatle Paul McCartney – known to Sun readers as Macca – has applied to register the surname McCartney for use on goods as wide-ranging as pantihose, waistcoats and vegetarian food. The application was made by his company, MPL Communications, and specifies such disparate items as bath robes, articles of fancy dress, overalls, sports clothing and swimwear. The application also covers meat and poultry, products of which the vegetarian celebrity strongly disapproves. A spokesman for McCartney said the inclusion of meat products was purely defensive. “It would give him protection against his name being used on products he does not approve of” he said. Thanks to our friends at the IPKatfor this (see link details in the next update).

Rooney gets back domain name
Artists , Trade Mark / November 2006

TRADE MARK Artists England and Manchester United football star Wayne Rooney’s has been successful in his bid to have the waynerooney.com domain name transferred to him. The registrant claimed that he obtained the domain name in 2002, after seeing the then sixteen-year old Rooney playing for Everton, being convinced of his potential, and then being motivated to obtain the domain name to set up a fan site which never eventuated. The Administrative Panel of the WIPO Mediation and Arbitration Centre ordered that the mark be transferred. The domain name was found to be identical or confusingly similar to a trade mark, even though Wayne Rooney only registered his trade mark after the domain name was registered, since trade marks registered after domain names can result in a finding of identical or confusing similarity under the UDRP (though it’s harder to find bad faith where the domain name predates the trade mark). The registrant’s supposed desire to set up a fan site did not give him a legitimate interest because this intention was not particularly believable. The panellist in particular highlights that the registrant had no programming experience at the time of registration and did nothing subsequently in order to acquire such skills….

Jameel – a victory for responsible journalism
Defamation , Internet / November 2006

DEFAMATION Television, radio, magazines, internet ARTICLE :  by Catherine Fehler, solicitor, Michael Simkins LLP On 11 October 2006 the House of Lords, in a landmark ruling, unanimously overturned the decision of the High Court and Court of Appeal and allowed the defence of the Wall Street Journal Europe; effectively upholding the public interest defence in libel actions.  The decision represents an affirmation of the House of Lords’ decision in Reynolds v. Times NewspapersLimited in 2001 which was hailed as a victory for freedom of speech and investigative journalism, however until now had not provided a clear public interest protection from claims in libel. The offending article was published in the Wall Street Journal Europe and claimed that the Saudi Arabian authorities were monitoring bank accounts of prominent Saudis for evidence of supporting terrorism, knowingly or not, at the behest of the US Government. The article included the Abdul Latif Jameel Group as being on the list of monitored accounts.  The main company in that group,  and it’s president Mohammed Jameel,  sued for libel. The lower courts had allowed Jameel’s claim to succeed, taking a narrow interpretation of the Reynolds privilege defence.  But the Lords held that the Nicholls list in the Reynolds case,…