CONTRACT
Recorded music sector

 

 

A Finnish digital rights case could set interesting precedent over pre-iTunes catalogue is being brought by the family of a late artist who are in dispute with the local Universal Music subsidiary. The case centres on the so called ‘making available’ right.  Whilst record labels are usually the copyright owners when it comes to sound recordings – either through default ownership rules (eg in the UK S9 of the CDPA provides that the author of a sound recording is the producer) or by assignment in standard record contracts – in Europe there are also ‘performer rights’, which say that performers as well as copyright owners have certain controls over how their recordings are used. However when many contracts with heritage artistes were entered into ‘digital’ did not exist, as neither streaming or download platforms existing and there was no accompanying right meaning it can be argued that labels need to get new permission to licence services that are ‘making available’ recordings (which likely includes most digital platforms).

 

Many heritage acts appalled at the share of digital royalties they are receiving from the labels from digital income, not least as the major labels have attempted to pay on a ‘per unit sale’ basis- and pay a similar royalty splits on downloads and streams than they do on CDs, even though clearly the costs and risks of selling digital are less than with physical music products.

 

In Finland the sons of Finnish guitarist Albert Järvinen, best known for being in rock group Hurriganes, had argued in the Helsinki Market Court that Universal didn’t have the right to sell two Hurriganes albums featuring their late father digitally. And in a legal battle supported by the Finnish Musicians’ Union, the court has ruled in the Järvinens’ favour.

 

The case tested whether the assignment of future new performer rights could be part of an artist’s label deal. Most labels will argue that they can and it usually are. But in this case the Helsinki court said not so: The court stated, that Universal was not entitled to make the recordings available to the public through the internet, as the rights were only granted with regard to physical phonograms. There was a complication in this specific case, in that the original record contract wasn’t available, meaning the nature of the deal between artist and label was based on witness testimonies. But, according to the Finnish MU, “Universal could not convince the court of either a general business practice or a silent acceptance enabling them to use the recordings in internet services. The ruling obliges Universal to take out the first two Hurriganes albums from internet services, pending a fine of 50,000 euros”.

 

Welcoming the ruling, Ahti Vänttinen, President of the Finnish MU, told reporters: “We believe that a large part if not most of the older recorded repertoire from any country now utilised in internet music services worldwide is not sufficiently licensed by the artists. Labels cannot just assume they have the rights, but they have to agree on them with the artists. It is not credible to presume that record deals in the 1960s, 1970s or even 1980s would have included provisions on internet use. Only in the late 1990’s we started to see provisions dealing with electronic distribution, and even today some contracts are still silent on these types of utilisation”.
Meanwhile Benoît Machuel, General Secretary of the International Federation Of Musicians, added: “We welcome this ruling, which makes clear that the majors cannot unilaterally reinterpret their unfair contracts to make them even more unfair to performers. The time has come to re-shape business models and legislations, in order to provide performers with a fair share of the revenue generated by their music online”.
It will be interesting to see what the wider implications of this ruling will be and whether this sets any kind of precedent, in Finland, and possibly beyond, as in the EU performer rights stem from European law. In he U.S, the major labels have all made moves to settle similar claims,  although Eminen’s producers FBT successfuly won a case on appeal resulting in their being awarded a far larger share of the ‘digital pie’ than UMG had been prepaed to pay. UMG claims the decision by the US Court of Appeals for the 9th Circuit is not a precedent.
http://www.businesswire.com/news/home/20150326005359/en/Finnish-Musicians%E2%80%99-Union-Universal-Loses-Market-Court#.VRqYPvnF8uc
F.B.T. Productions, LLC, et al. v. Aftermath Records, et al. 621 F.3d 958