The End User: When it comes to digital hardware, copyright levies are a taxing debate
Copyright , Record Labels / December 2006
EU

COPYRIGHT  Record labels, film, television, technology  ARTICLE LINK  By Victoria Shannon, International Herald Tribune A useful summary of the pros and cons of levies on hardware such as photocopiers, technology such as CD Burners and CDR discs etc: These are widely used in Europe (but not the UK) to compensate copyright owners – extra charges on hardware to make up for the ease of copying. http://www.iht.com/articles/2006/11/22/business/ptend23.php

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

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…

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

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
EU
Germany
Italy

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…

MPA goes after fan guitar sites
Copyright , Internet , Music Publishing / October 2006
EU
UK
USA

COPYRIGHT Music Publishing, internet In January 2006 we asked whether the Music Publishers Association (MPA) was wise to target unauthorized online lyric and music score sites after the Association, which represents US sheet music companies, launched its campaign with MPA president Lauren Keiser saying he wanted site owners to be fined and jailed. Mr Keiser cited the Xerox machine as the first enemy of sheet music and now identifies the internet as a new major enemy. Now the MPA is after guitar fan websites which they say infringe songwriters’ copyrights. These give so called ‘tab’ instructions which stands for guitarist tablature which show guitarists where to put their fingers to play a chord and primarily are used by people playing at home. Traditionally tab notations and sequences of chords have been found in books and – understandably – book publishers and authors have been upset when their publications have been copied wholesale onto the internet. But Pinsent Mason’s excellent Out-Law site reports that the MPA and the National Music Publishers’ Association (NMPA) have shut down several websites or forced them to remove all tabs using threats of copyright law suits. The sites are typically fan-run and not significant profit-making enterprises and many…

What will Universal do about YouTube now Warners have joined up?
Copyright , Internet , Record Labels / October 2006
EU
UK
USA

COPYRIGHT Internet, broadcasting, record labels The strange honeymoon between record labels and websites such as YouTube seems to be in the balance. Universal Music Group Chief Executive Doug Morris hit out at YouTube and other social networking sites claiming they owed record labels “millions”. Speaking at the annual Merrill Lynch Media & Entertainment Conference, Morris said: “We believe these new businesses are copyright infringers and owe us tens of millions of dollars. How we deal with these companies will be revealed shortly.” The comments were surely aimed primarily at YouTube where large volumes of artist videos and concert footage have been illegally uploaded. Five Eight magazine says that According to ‘insiders’ on both sides, the major labels are in talks with YouTube about how to remove unlicensed content and also implement a workable business model for licensed content and in stark contrast to what seems to be Universal’s position (though it may be a negotiation tactic of course) Warner Music has become the first major label to formally license its content to YouTube. Last month, YouTube announced an advertising deal with Warner Music as the start-up’s first partner for its new Brand Channel advertising to promote the new Paris Hilton…

European Commission to review copyright levies
EU

COPYRIGHT Record labels, music publishers, film The European Commission has unveiled plans to set up streamlined systems for copyright levies across Europe. The levies exist to compensate artists and other creators for unauthorized copyright by consumers use – essentially giving consumers permission to make private copies, but in return charges a levy on media and devices used to make them – including photocopiers, cassettes, discs, CDRs and MP3 players. These levies are then passed on to the copyright owning community as compensation for the copying that is assumed to take place. The EC’s aim is to make levies more consistent, both across different member states and between different technologies.

MCPS-PRS challenge basis of eMusic’s pan-European licence
Copyright , Internet , Music Publishing / October 2006
EU

COPYRIGHT Music publishing, internet Legal download specialist eMusic has now launched across Europe but a dispute about the validity of their music publishing arrangements has surfaced meaning that Buma/Stemra and the MCPS-PRS are in talks to resolve a contested pan-European licence. eMusic has a licence with Buma/Stemra which it says covers it for Europe but the MCPS-PRS is disputing that Buma/Stemra has the right to offer such a pan-Europe licence: http://www.billboard.biz/bb/biz/newsroom/global/article_display.jsp?vnu_content_id=1003123582

The European Court annuls the European Commission’s approval of the Sony BMG merger
EU

COMPETION Record labels, music publishers ARTICLE The European Court annuls the European Commission’s approval of the Sony BMG merger Case T464/04 Independent Music Publishers and Labels Association v Commission of the European Community By Ben Challis Barrister The European Court of First Instance has annulled the European Commission’s approval of the 2004 merger between Sony Music and BMG, which allowed the music industry to shrink from five major companies to four. The case, brought to court by IMPALAon behalf of European independent record labels, has been closely watched by Warner Music and EMI who must now wait and see how Europe’s top antitrust authority will react to the court’s decision. The court considered two pleas brought by IMPALA: The first plea was in regard to the strengthening of a pre-existing collective dominant position in the market for recorded music and the second plea: creation of a collective dominant position on the markets for recorded music. The Court noted the case-law of the Court of Justice regarding an alleged collective dominant position which has held that the Commission must assess, using a prospective analysis of the reference market, whether the concentration which has been referred to it leads to a situation in which effective competition…

The end of peer to peer file swapping
Copyright , Internet , Record Labels / July 2006
EU
UK
USA

COPYRIGHT Record labels, internet ARTICLE LINK:  A useful article by Paul Devinsky and Robert H. Rotstein who review the recent MGM v Grokster litigation and analyse the how this decision and the 1984 Sony Betamax case can sit together. http://www.mondaq.com/article.asp?articleid=40126&email_access=on

Europe and US to fight global battle against counterfeit goods
Copyright , Patents , Trade Mark / July 2006
EU
USA

COPYRIGHT / PATENTS / TRADE MARK All areas European and US creative industries have welcomed a new joint EU and US strategy launched by US Commerce Secretary Carlos Gutierrez, EU Trade Commissioner Peter Mandelson and EU Industry Commissioner Gunter Verheugen in Vienna aimed at fighting the soaring global trade in counterfeit and pirate goods. The US President George W. Bush and Commission President José Manuel Barroso will endorse the strategy at the EU-US Summit in Vienna. The industries from many sectors stressed the enormity of the counterfeiting and piracy problem, estimated to be worth 360 billion euros a year: In 2005 film piracy in China was calculated at $2.7 billion and in the US at $3 billion. Music piracy in the UK alone was valued at £414 million last year and in China $400 million – china has a 90% piracy rate.  Overall it is estimated that 5 – 7 % of the global economy is based on counterfeit and pirated goods which can endanger consumer safety, erodes the competitiveness of legitimate businesses, fund crime and undermine the livelihood of workers in innovative and creative industries. The IFPI add that the “June 20th announcement of a joint EU-US strategy and…

The Rise of Clip Culture
Copyright , Internet / May 2006
Canada
EU
Japan
UK
USA

COPYRIGHT Television, internet ARTICLE LINK – By Professor Michael Geist. Michael holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa. He can be reached at mgeist@uottawa.ca The popularity of the websites that allow people to share short video snippets is leading to the rise of a clip culture, writes internet law professor Michael Geist. But services such as YouTube, which streams 15 million videos each day, face the anger of copyright owners when clips from existing TV programmes – which of course include music promo videos and clips from concerts – are put up in the site. http://news.bbc.co.uk/1/hi/technology/4825140.stm

EU to propose new piracy laws
Copyright , Record Labels / May 2006
EU

COPYRIGHT Film, television, record labels The European Commission is to recommend common European sanctions against counterfeiting and piracy of goods, including custody provisions of at least four years in prison and fines between E100,000 and (£70,000) and E300,000 (£210,000). Other possible measures are the confiscation or destruction of the objects, and a permanent or temporary ban on offenders from engaging in commercial activities. The seizure of counterfeited goods at the borders of the European Union increased by 1,000 percent between 1998 and 2004, with 103 million counterfeited and pirated items seized in 2004, Commission figures show. The EU says that different penalties in the 25 EU countries make it difficult to combat counterfeiting and piracy effectively. The draft legislation deals only with sanctions for infringements as physical product and does not cover the downloading of music via the Internet for private use.http://today.reuters.co.uk/news/newsArticle.aspx?type=internetNews&storyID=2006-04-25T164059Z_01_L25506524_RTRIDST_0_OUKIN-UK-EU-PIRACY.XML

Spyware and cookies can trespass: Thomas Kerrins v. Intermix Media, Inc.
Copyright , Internet / March 2006
Canada
EU
UK

COPYRIGHT Internet Legislation is always struggling to keep up with technology and in this age of digitization and the internet this has never been truer. But sometimes existing laws can be adapted to solve a new problem area. Recently a federal court in Los Angeles just held that trespass was a viable legal theory to address the alleged distribution of spyware and adware programs. More recently the UK Culture Secretary pointed out that the UK Government did not want more EC legislation applied to the internet to protect children as existing criminal law was more than sufficient to deal with new forms of criminal behaviour facilitated by the internet. A recent Canadian (Ontario) decision has held that invasion of privacy is a common law tort and other Canadian provinces such as Quebec already have a statutory tort for invasion of privacy – again laws which could be applied to privacy invasion in and by digital media. See: http://www.sinrodlaw.com See Law Updates Archive February 2006 See: http://news.com.com/Beware+of+Internet+trespass/2010-1071_3-6033581.html See: http://practice.findlaw.com/tooltalk-013106.html Invasion of privacy is a tort see http://www.canlii.org/on/cas/onsc/2006/2006onsc10045.html Somwar v McDonald’s Restaurants of Canada Ltd , 2006 CanLII 202 Ontario Supreme Court.

High Court ruling to protect Canadian folk singer follows Von Hannover v Germany
Artists , Privacy / March 2006
Canada
EU
UK

PRIVACY Artists, publishers In the clearest statement yet that the UK courts will follow the precedents of the European Court of Human Rights when looking at the right to individual privacy under Article 8 of the HumanRights Act 1998 (and the European Convention for Human Rights) Mr Justice Eady issued an injunction against publication of a book about Canadian folk singer Loreena McKennitt and awarded damages of £5,000 against Neima Ash, the author of Loreena McKennit, My Life as a Friend. Ash had been a close friend and confidante of McKnnitt for over 20 years but following the precedents set in the ‘Princess Caroline’ case Mr Justice Eady made it clear that even celebrities has ‘the legitimate expectation to have their private lives protected’ and just because events could have been witnessed in a public place does not make them any less private. There would need to be a high level of misbehaviour before the courts would apply the ‘public interest’ defence for publishers showing how far the law has moved to protect privacy at the expense of press freedom to publish in the last few years. The Guardian 13 February 2006 (from an article by Rupert Elliott) Von Hannover v Germany see Music…

New book looks at the taxation of international performing artists
Live Events , Taxation / March 2006
EU

TAXATION Live Music Industry A new book, Taxation of International Performing Artists by Dick Molenaar, investigates the taxation of international performing artists in Europe. Published by the International Bureau for Fiscal Documentation, the book makes it clear that the tax rules for international performing artistes are very different from normal tax rules. For instance, taxation occurs in the country of performance, regardless of whether an artiste is self-employed or an employee. The book considers the problems regarding, for example, the determination of taxable income and the non-deductibility of expenses and tax credits in the country of residence, and gives current examples of excessive taxation. Recent cases before the European Court of Justice have led to awareness of some fairly dubious practices promulgated by fiscal authorities and the author is active in campaigning against restrictive (and often illegal) taxes on the music industry in European Union member states such as Germany.  www.ibfd.org/portal/Product_tipa.html Published by IBFD Publications BV. See Music Law Updates News Archive December 2004 for details of three recent cases at the European Court of Justice: FKP Scorpio Konzertproduktion (C-290/04), Centro Equestro de Leziria Grande Lda. (C-345/04) and Centro di Musicologia Walter Stauffer (C-386/04)http://www.musiclawupdates.com/news/04Decembernewsupdates.htm . Also see IQ magazine

European competition regulators to look at music collection societies again
Competition , Internet / March 2006
EU

COMPETITION Internet In October 2005 The European Commission adopted a recommendation on the management of online rights in musical works. The recommendation puts forward measures for improving the EU-wide licensing of copyright for online services. Improvements were deemed necessary because new Internet-based services such as webcasting or on on-demand music downloads needed a license that covers their activities throughout the EU. The absence of EU wide copyright licenses were held to have been one factor that has made it difficult for new Internet-based music services to develop their full potential. Internal Market and Services Commissioner Charlie McCreevy said at the time : “Today we have made workable proposals on how licensing of musical work for the Internet can be improved. I want to foster a climate where EU-wide licenses are more readily available for legitimate online music service providers. These licenses will make it easier for new European-based online services to take off. I believe that this recommendation strikes the right balance between ease of licensing and maintaining the value of copyright protected works so that content is not available on the cheap. In the interests of better regulation, for the time being and as a first step, I am…

MCPS-PRS Alliance to spearhead pan-European licensing
Copyright , Internet , Music Publishing / February 2006
EU
UK

COPYRIGHT Music publishing, internet As Music Law Updates have previously reported, the European collecting societies are gearing up for some big changes to the way they license their members’ music. To encourage the growth of pan-European online music providers, Europe’s collecting societies are changing their licensing from a country-by-country model to a Europe-wide model. The MCPS-PRS Alliance have announced that they will be at the forefront of these changes. Ultimately this will hopefully mean increased effectiveness in the administration of members’ online royalties and ease of use by broadcasters, online retailers, record labels and other users. In the first two moves towards a new licensing model for Europe, the Alliance has announced partnerships with a key publisher and two of Europe’s other major collecting societies. In the first initiative. the Alliance has signed a deal with EMI Music Publishing (EMI). The Alliance will work with German rights society GEMA to build a one-stop shop for the licensing of EMI’s Anglo-American song rights for online and mobile usage across Europe. In the second initiative , the Alliance is partnering with Spanish society, SGAE, to create a new licensing platform for the powerful Anglo-Latin repertoires across Europe.  These initial Alliance projects are…

IFPI Digital Music Report points to growth in legal downloading
Copyright , Internet , Record Labels / February 2006
EU
Japan
USA

COPYRIGHT Record labels, internet Sales of music via the internet and mobile phones proliferated and spread across the world in 2005, generating sales of US$1.1 billion for record companies – up from US$380 million the previous year – and promising further significant growth in the coming year. The findings are released today in IFPI’s Digital Music Report 2006, a comprehensive review of the development of the digital music market internationally.  Music fans downloaded 420 million single tracks from the internet last year – twenty times more than two years earlier – while the volume of music licensed by record companies doubled to over 2 million songs.  Digital music now accounts for about 6% of record companies’ revenues, up from practically zero two years ago. the legitimate digital music business is steadily pushing back on digital piracy.  In Europe’s two biggest digital markets, UK and Germany new research by Jupiter indicates more music fans (6% of the total user group in the UK) are legally downloading music than illegally file-swapping (5%). The mobile phone became a portable music device in 2005, the first year in which song downloads to mobile phones spread internationally. Mobile music now accounts for approximately 40% of record company digital…

UK Secretary of State opposes plan for EU internet regulation
Competition , Internet / February 2006
EU
UK

COMPETITION Internet Tessa Jowell, the UK’s Culture Secretary, has said that European Union plans to regulate the internet would be unwelcome, arguing that the new media were best left to regulate themselves and that ordinary criminal laws were sufficient to regulate the internet. The EU insists that its new plans would be ‘light touch’. The EU is trying to overhaul its1989 ‘Television Without Frontiers’ Directive in particular to introduce new rules on the protection of children and the incitement of hatred. The remarks were made at the Oxford Media Convention. See the Times, 20th January 2006.

IFPI announce new wave of law suits against individual peer-2-peer file swappers
Artists , Copyright / December 2005
EU

COPYRIGHT Artists The IFPI has unveiled the biggest escalation yet in its campaign against illegal internet file-sharing, announcing over 2,100 new legal cases against individuals and extending the actions to five new countries in Europe, Asia and – for the first time – South America. File-sharers in Sweden, Switzerland, Argentina, Hong Kong and Singapore are for the first time at risk of criminal penalties and payment of damages in an international campaign that has already seen thousands of people – the majority of them young men between the ages of 20 and 30 – pay sums of US$3,000 or more for uploading copyrighted music on peer-to-peer networks (p2p). This latest wave of cases, covering actions launched today or brought in recent months, takes the total number of legal actions against uploaders to over 3,800 in 16 countries outside the US.  This is the fourth wave since the international campaign began in March 2004, and it targets users of all the major unauthorised p2p networks, including FastTrack (Kazaa), Gnutella (BearShare), eDonkey, DirectConnect, BitTorrent, WinMX, and SoulSeek. The move comes just one week after the landmark settlement between the p2p service Grokster and the US music industry. It also follows a series…

Intellectual property theft mooted as pan-European crime
EU

COPYRIGHT Record labels, music publishers, internet, film, broadcasting Intellectual property theft has been advanced as one of the new offences under a proposed pan-European body of criminal offences. The European Commission has insisted that seven core crimes (including counterfeiting the Euro, money laundering, people-trafficking, marine pollution, private sector corruption, credit card and cheque fraud and computer hacking and virus attacks) must become law. IP theft is a ‘proposed’ offence which could become part of the pan-European system some time in the future. The new proposals are not without criticism as many member states (including the UK, Holland and Italy) oppose any involvement of the EU in criminal matters which are seen as domestic issues and pan European legislation is see as a challenge to parliamentary sovereignty an power grabbing by Brussels.The Times 24 November 2005 http://www.timesonline.co.uk/article/0,,2-1779849,00.html

National Consumer Council asks for fair play in EC copyright legislation
Copyright , Internet , Record Labels / November 2005
EU

COPYRIGHT Record Labels, Internet The National Consumer Council (NCC) has warned that ‘heavy-handed’ European Commission plans to enforce intellectual property rights on music and other creative content overstep the mark. Consumers, says the NCC, are being treated like organised criminal gangs (who, they accept, should be pursued). Consumers already face the prospect of legal action for sharing music files. The NCC report that in the UK sixty internet users have settled legal claims against them by the British Phonographic Industry, each paying up to £6,500 in compensation. The NCC has lobbied that any new laws must strike a balance between right holders’ interests in getting a fair return and the public and consumer interests of fair access and use, and the encouragement of innovation. NCC is concerned that new European IP laws are being planned before there has been a chance to assess the impact of the existing law. The existing (2004) Directive on the Enforcement of Intellectual Property Rights is barely a year old and is not yet implemented in the UK. See: http://www.broadcastbuyer.tv/publish/article_5962.shtml and http://www.ncc.org.uk and see the BPI’s (somewhat predictable) response at : http://www.mi2n.com/press.php3?press_nb=83860 Also see also the blog by David Berlind looking at the problems and unfairness of DRM software…

IFPI say that booming global online demand offsets a small decline in CD sales
Copyright , Internet , Record Labels / November 2005
EU
UK
USA

COPYRIGHT Record Labels, Internet, Telecomms The IFPI have released figures showing that booming demand for music on the internet and mobile phones nearly offset the decline in physical formats as recorded music sales fell 1.9% to a retail value of $US 13.2 billion in the first half of 2005, compared to $US 13.4 billion in the same period of 2004. The IFPI has estimated the retail value of the digital music market in order to be consistent with its reporting of physical sales, and to allow year-on-year comparisons. On that basis, digital music sales in the period amounted to approximately $US 790 million, up from $US 220 million in the first half of 2004. This is the equivalent of 6% of total record industry sales, almost triple what it was. On a trade basis, excluding the retail margin, digital sales in the first half of 2005 totalled $US 440 million. This includes sales from a-la-carte download stores, music subscription stores and from mobile music services such as downloads and ‘ringtunes’. The figure does not include revenues from monophonic and polyphonic ringtones. The surge in digital music sales is being driven by the growing uptake of broadband, increasing penetration of 3G…

ICANN approves more top level domain names
Artists , Record Labels , Trade Mark / November 2005
EU
USA

TRADE MARK Telecomms, Artists, Record Labels, Film, Television ICANN (Internet Corporation of Assigned Names and Numbers) has approved the designation of three new generic Top Level Domain Names (TLDs)- mobi, .travel, and .jobs.- and is reviewing six more TLDs. Applications for domain names in the .jobs and .travel TLDs are now being accepted. ICANN has approved the .mobi TLD, and details regarding the beginning of registration will soon be available. In addition, ICANN has also preliminarily approved the launch of four more TLDs -.post, .cat, .tel, and .xxx and has entered into commercial and technical negotiations with the sponsors of these TLDs. Finally, ICANN is reviewing the applications for .asia and .mail TLDs. See : http://www.mondaq.com/article.asp?articleid=35082&email_access=on

One stop licensing scheme for online rights in Europe
Copyright , Internet , Music Publishing / November 2005
EU

COPYRIGHT Internet, Music Publishing The European Communities Internal Market and Services Commissioner: Charlie McCreevy has said that online music service in Europe such as Apple’s i-Tunes will be able to acquire a single licence to use songs from one of the European Collection Societies. Currently use requires the consent of dozens of license holders from each country where the service wants to operate ‹ from record labels or their collections societies for the use of the sound recording and from music publishing royalty collection societies (such as the MCPS and PRS) or music publishers for the use of the song. In some instances consent will be needed from the artists themselves. The resulting lengthy negotiations have pushed back the launch of services such as i-Tunes and Napster and some popular U.S. music services such as Yahoo have yet to appear in Europe in part due to the complexity of the rights situation. The new move is hoped to make the launch of new online services in Europe easier and hopefully will facilitate better artist and songwriter payments. MCPS-PRS eM Magazine October 2005 See Law Updates August 2005 European Commission proposes Europe wide music licensing for online use

IFPI Publish 12th Recording Industry in Numbers
Copyright , Record Labels / September 2005
Brazil
EU
Hong Kong
Japan
Mexico
Norway
UK
USA

COPYRIGHT Record Labels The International Federation of Phonographic Industries has published its 12th annual Recording Industry in Numbers which includes record company market share figures for 2004, and, for the first time shows global revenues from the collection of performance rights, along with data, statistics and trends in 65 countries’ music markets. Market share: Universal maintains its position as the world’s biggest recording company, with a 25.5% share of the world market. Sony BMG is next with a 21.5% share followed by EMI at 13.4% and Warner at 11.3%. The independent sector holds steady with a 28.4% global share. National and regional market share information is also available. Performance rights revenues: For the first time, IFPI is publishing revenues to the industry from the public performance of music and music videos. This is an increasing revenue source for record companies as the channels for getting music to the consumer expand. Performance rights collections totalled $US493 million in 2004 – up 4.5% on 2003 and up 19% over the past five years. IFPI estimates that potential revenues from the sector could more than double its current value over the next five years. The figures include licensing income from webcasting and simulcasting…

EC propose new offence similar to the MGM v Grokster ‘induce’ to infringe
EU

COPYRIGHT Record Labels, Music Publishers, Internet The European Commission has published a draft directive which includes provisions to criminalise “attempting, aiding or abetting and inciting” acts of copyright infringement. The EU parliament will debate the proposal later this year. If the directive is adopted, software used primarily for illegal file sharing, for example, could potentially make its developers criminally liable in one or more EU member countries. See: http://www.wired.com/news/politics/0,1283,68418,00.html

EU proposes harmonisation of criminal sanctions for infringements
EU

COPYRIGHT, TRADE MARKS, PATENTS, DESIGN RIGHTS Record Labels, Music Publishers, Film and Television, Internet The European Commission has adopted proposals to form a new directive which will align criminal law in the European Community in relation to the use of criminal sanctions for copyright infringement. The proposals will extend to at least commercial piracy. The directive is aimed at allowing Community wide co-operation in the investigation and prosecution of piracy and counterfeiting. The Commission argues that counterfeiting and piracy are so lucrative, and carry such light penalties relative to other forms of trafficking, that they are attracting investment from criminal organisations. The Commission says the directive is being aimed particularly at organised counterfeiters and faked goods that are dangerous to public health and safety, with minimum prison terms of four years being mandated for these offenses. Individual countries will have the option to impose harsher terms when the directive is translated into national law. See: http://www.theregister.co.uk/2005/07/13/eu_moots_criminal_ip/

European Commission proposes Europe wide music licensing for online use
EU

COPYRIGHT Record Labels, Music Publishers, Internet The European Commission has proposed that rules for registering and administering copyrights in Europe need to be changed to simplify procedures and to make it easier for artists to secure copyright registration across the European Community and provide a ‘one stop shop’ for copyright users such as legal download sites. The Commission suggests that it is the complexity and cost of the current system involving numerous collection societies each operating on a country by country basis that is holding back online growth in Europe (and not piracy and illegal file swapping). A EC study found that the cost of licenses to sell tracks in all 25 member states currently tops EUR 19,000. With profit per download standing at approximately EUR 0.10 it would require the sale of over 4.75m tracks to break even. “The gap is very wide; we need to do something about this” said a spokesman for Tilman Lueder, the EU’s commissioner for internal market and services. At the present musicians, record labels and publishers need to register copyrights with collective rights managers (collection societies such as the PRS, GEMA and SACEM). The collective rights managers then license songs to end users…

Westlife lose battle over name in European Court of Justice
Artists , Trade Mark / June 2005
EU

TRADEMARK Artists, Merchandising Judges in Luxembourg ruled that “Westlife” cannot be registered as an EU trademark – because it is too similar to the word “West”. A German tobacco firm has already trademarked that name and judges said the fact that Germans say “vest” and not “west” did not lessen the confusion with the merchandise of the pop group. Westlife can still go on using their name as well as on merchandise, but it means they cannot protect it as an exclusive trademark. The band applied for an EU trademark in 1999, but the Germany company claimed there was potential confusion because the two sell similar types of merchandise (not least because of West’s involvement in motor racing as a team sponsor selling branded clothing etc). During a five-year legal tussle, lawyers for Westlife argued that there was a clear distinction between the group’s name and the single word West. See: http://www.itv.com/news/entertainment_1535352.html

Does European decision herald true pan-European tax accounting?
Artists , Live Events , Taxation / May 2005
EU

TAXATION Artists, Live Concert Industry Marks & Spencer Plc v Halsey (Inspector of Taxes) European Court of Justice C446-03- The Advocate General of the European Court of Justice had held that UK tax law, which allows group tax relief for losses in the UK only and does not allow a firm to deduct the losses of foreign subsidiaries, is in breach of EU law. Miguel Poiares Maduro, recommended that Marks and Spencer be allowed to offset losses made at its foreign subsidiaries against its tax burden in Britain. He said British tax law was in breach of EU law by refusing to allow companies to offset tax losses from overseas subsidiaries against British profits. “The principle of territoriality cannot justify the current restriction” he said adding that a blanket restriction on this practice far exceeds what is necessary to protect the cohesion of the British tax system. The advocate general said the only condition should be that losses from foreign units would not also receive fiscal benefits in the states abroad. Germany, France, the Netherland, Greece, Finland and Sweden all backed the UK Government’s position fearing they will have to repay billions of Euros if the court finds in favour of Marks &…

EU Council of Ministers recognises withholding tax problems
Artists , Live Events , Taxation / April 2005
EU

TAXATION Artists, Live Industry The EU Council of Culture Ministers has decided to “solve the obstacles caused by the taxation of mobile artists”. They have included this item as Paragraph 5 of their Work Plan for 2005-2006. Dick Molennar, a Dutch tax advisor with All Arts Tax Advisors commented that “this is an important step forward, because the EU now recognizes officially the issue of taxation of international artists as a problem to be solved. The Dutch Ministry of Culture has been very active during the Dutch presidency of the European Union (July – December 2004) to push this decision through. We hope that the English presidency of the EU (July – December 2005) can develop this subject further.” German Tax expert Dr Harald Grams and Mr Molennar chaired a EU conference in Rotterdam in October 2004, that made the recommendation for the EU Council of Culture Ministers to progress in this manner and both are members of the International Live Music Conference (ILMC) Tax Working Group.

EU to investigate download pricing in Europe
EU

COMPETITION Record Labels, Internet The European commission is to begin an investigation into the pricing of Apple Computer’s digital music service after consumers complained that downloading tracks was more expensive in the UK than other parts of Europe. Officials are investigating whether price differentials on iTunes between the UK and other countries such as France and Germany of up to 20% amount to a breach of EU pricing regulations. The inquiry comes after Which? (formerly the Consumers’ Association) wrote to the Office of Fair Trading last September, asking it to look into iTunes’ pricing across Europe. In the UK, iTunes charges users around 1.20 (83p) a track against 99 cents in France and Germany. The OFT later referred the case to the commission, which yesterday said it would begin an investigation. Source: http://www.guardian.co.uk/uk_news/story/0,,1424769,00.html

Microsoft faces the wrath of the European Commission
Competition / April 2005
EU

COMPETITION Computer Software The European Commission is threatening to fine Microsoft 5% of its global revenue for failing to comply with sanctions imposed last year. Microsoft was fined E497 million ( million) and was ordered to implement EU remedies forthwith – these included allowing competitors access to software protocols so they could compete in the provision of interoperable servers and providing Windows software without the obligation of taking Microsofts MediaPlayer software. Microsoft has already posted details of secret protocols to enable other software manufacturers to produce servers compatible with Microsoft’s Windows operating system but is now disputing the royalty (or licence) fees competitors should pay. The software giant also has chosen the name ‘Windows Reduced Media Edition’ for the new version of soft ”unbundled’ from Microsoft’s MediaPlayer software. This and other names (for what Microsoft call their ‘degraded’ software) have bee rejected by the EU as a serious deterrent to consumers. Microsoft’s total revenues in 2004 were approximately $40 billion. Source: The Guardian 26/02/05 Also see: Microsoft Ordered to Open Up Windows – Law Updates March 2005

European Commission seeks to restrict public services broadcasters’ online and digital services
Competition , Internet / April 2005
EU

COMPETITION Television, Internet, Radio The European Commission is to look at the role played by public service broadcasters in the provision of digital and online services. In particular the EC Competition Directorate, headed by Commissioner Neelie Kroes, will look at whether state funding of online and digital services is unlawful state aid. The commercial sector has complained that the online services provided by German public service broadcasters ARD and ZDF and by the BBC in the United Kingdom results in unfair competition to the commercial sector as it is funded by public money or governments. In an effort to head of confrontation ARD and ZDF are to limit their online services to programme related services. The licence fee funded BBC provide its 24 hour news channel News 24 (against commercial providers such as CNN and Sky) childrens’ channels CBBC and CBeeebies (against commercial providers such as Nickleodeon) and a wide range of highly successful web pages at http://www.bbc.co.uk. The BBC also provides a free to air ‘youth’ and comedy channel, BBC3, and the arts and culture channel BBC4. Whilst the principle of licence fee funded broadcasting is not under threat, recent state funding of web and digital services could be. Action…

The European Live Music Forum Launches at ILMC
Legislation , Live Events / April 2005
EU

LEGISLATION Live Music Industry The European Live Music Forum (ELMF), first announced at the Noorderslag Seminar in Holland had its foundation meeting in London at the seventeenth International Live Music Conference in London on the 10th March 2005. The ELMF, currently was proposed by eight associations including Europe wide festival association Yourope, The Concert Promoters Association (CPA), the Agents Association, Network Europe and the International Music Managers Forum (IMMF) will try and identify issues, themes and objectives and formulate a constitution over the next few months but will hope to make a preliminary announcement at the ILMC. An invitation has been extended to all national and Europe wide live music, festival and cultural events to be involved with the ELMF. More groups and associations have been invited to join to give the Forum broad based European wide industry support. See: http://www.ilmc.com

IFPI gain extra time to lobby
Copyright , Record Labels / April 2005
EU

COPYRIGHT Record Labels The International Federation of Phonographic Industries (IFPI) and other interested parties in the music industry have been granted extra time to present their case for the extension to the 50 year term for the life of copyright for sound recordings in Europe after the European Commission altered its timetable for reviewing legislation. Recordings by classic rock and roll artists such as Elvis Presley are beginning to fall into the public domain. Already nearly 140 European artists, managers and trade organisations (including the IFPI and BPI) have provided comment to the EC. Source: http://www.ifpi.org

ILMC calls for European legislation to govern ticket re-sales
Health & Safety , Live Events / April 2005
EU

HEALTH & SAFETY Live Event Industry European promoters and venues aired their worries about the secondary market in concert tickets at the seventeenth annual International Live Music Conference. Conference speakers highlighted events such as 3A’s Kylie Minogue and Cream concerts and Glastonbury where prices quoted by ticket touts and on auction website Ebay have risen to many multiples of original face values. Most European speakers at the ILMC said that there was nothing to prevent concert ticket re-selling in their territories. In the UK it is only a criminal offence to resell football tickets and the rise of Ebay had led to a rise in re-selling – not just by touts but by members of the public. Most delegates felt that legislative action was the only way forward. The position is different In the USA on a state by state basis where ticket reselling or ‘scalping’ can be prohibited. Ticket broker Chris Lipton has agreed to pay $30,000 to settle a lawsuit brought by the state who alleged that that he scalped tickets to a benefit concert featuring Bruce Springsteen. Under a deal announced Monday by the state Division of Consumer Affairs, $7,500 of the settlement money would go to…

Two new decisions on trademarks in colours and shapes: Heidelberger Bauchemie Gmbh (ECJ C-49/02 )
Trade Mark / March 2005
EU

TRADEMARK Merchandising For many years, traders have used colours or combinations of colours to distinguish their goods and services from those of other traders but European Union trade mark registries and courts have struggled to define the circumstances in which colours will be allowed registration as trade marks. The ECJ’s 2003 decision in Libertel answered many of the issues in relation to single colour marks per se, confirming that such marks are registerable in limited circumstances. However the ECJ’s recent decision in Heidelberger Bauchemie GmbH has significantly raised the hurdle for registration of colours per se meaning that many existing registrations may not be valid. In this case German company Heidelberger applied to the German Patent Office for trade mark registration of the colours blue and yellow: the applicant’s corporate colours were used “in every conceivable form, in particular on packaging and labels”. The German Patent Office rejected the application on the grounds of lack of distinctive character. Heidelberger appealed to the Bundespatentgericht, which referred two questions to the ECJ, asking, in short, whether combinations of colours per se are registerable as trade marks, and, if so, in what circumstances. The ECJ started with a three-step test for registerability for combinations of colours: 1….

Microsoft ordered to open up windows
Competition / February 2005
EU

COMPETITION Technology Computer giant Microsoft has been ordered to pay a million fine (497 million euros) to the European Commission for anti-competitive activities and abuse of market dominance. This is the biggest fine ever in Europe for a competition case. The company had appealed to the European Court of First Instance in Brussels but the ECJ upheld the European Commission’s ruling in March 2004 that the firm had abused a virtual monopoly. In addition, Microsoft must now make Windows available to consumers without its Media Player software bundled in as part of the package. The European Commission’s aim is to give Media Player’s competitors such as Apple’s Quicktime and RealNetwork a level playing field. The company must also hand over confidential coding information from the Window’s operating system to rivals. Microsoft may still appeal to the full European Court of Justice. The Court of First Instance rejected a suspension of payment of the fine until such appeal. See: www.eubusiness.com/afp/041222193914.qgqu0dis

Three new tax cases are to be heard by the European Court of Justice
Artists , Taxation / February 2005
EU

TAXATION Artists After a success for the live music industry in the case of the 2003 Arnoud Gerriste in Germany there are now three new tax cases pending before the European Court of Justice (ECJ) regarding the taxation of non-resident artists. The industry has long argued that German withholding tax laws are unfair to non-resident touring and performing artists, particularly where these artists are EC citizens. In all three cases, the German Bundesfinanzhof (Federal Fiscal Court) has raised preliminary questions to the ECJ as to whether German taxation of non-resident artists is in accordance with the EC Treaty. The Geriste case held that Article 49 and 50 of the EC Treaty (previously articles 59 and 60) precluded a national provision which, as a general rule, taxed non-residents on gross income without allowing for the deduction of business expenses whilst allowing residents to deduct such expenses before a tax on net income. The case also held that a fixed rate of 25% was allowable on non-residents provided this would not be a different taxation rate to residents taxed on a progressive scale but on net income. However the decision has only been partially applied by Germany in its legislation while other countries, such as France, Spain, Italy,…

IFPI Digital Music Report 2005
EU
USA

COPYRIGHT Record Labels, Artists, Music Publishers Music on the internet and mobile phones is moving into the mainstream of consumer life, with legal download sites spreading internationally, more users buying songs in digital format and record companies achieving their first significant revenues from online sales. These are the conclusions of the IFPI Digital Music Report 2005, a comprehensive review of the music industry’s digital strategies and of the fast-emerging market for online and mobile music distribution. The report is published by the IFPI. Music fans downloaded well over 200 million tracks in 2004 in the US and Europe – up from about 20 million in 2003. This helped bring record companies their first year of significant revenues from digital sales, running into several hundred million dollars. Analyst Jupiter estimates that the digital music market was worth US$330 million in 2004, and is expecting it to double in value in 2005. The supply of music available digitally is proliferating. The number of online sites where consumers can buy music legally has now hit more than 230, up from 50 a year ago, with record companies licensing the bulk of their active catalogue for download, totalling over one million songs – more than…

I-tunes faces European inquiry over pricing
Copyright , Record Labels / January 2005
EU

COPYRIGHT Record Labels Apple will face a European Commission inquiry over the price United Kingdom downloaders have to pay for using the service. Typically a UK download costs 79p but a mainland European download E99, or 68p at present exchange rates. Consumers can only download in a country where they hold a relevant bank account registered. Apple holds around 70% of the global download market although now faces growing competition from services such as Sonyconnect, Mycokemusic, HMV and now in the UK superstore Tesco. See: www.guardian.co.uk/arts/netmusic

Indies challenge SONY-BMG Merger
Competition , Record Labels / January 2005
EU

COMPETITION Record Labels IMPALA, which represents Europe’s independent labels, has mounted a legal challenge to the BMG-Sony merger by launching a claim in the European Court of Justice (court of First Instance) in Luxembourg saying that the merger could have legal, cultural and political and economic implications and that the European Commission, which passed the merger, made mistakes when considering the merger and the implications it will have on the market in sound recordings.

New .EU domain names to be available in 2005
Trade Mark / December 2004
EU

TRADEMARK All Areas The new .eu top level domain names are to be phased into use in 2005 following an agreement reached between the European Commission and EURid, the registry responsible for the new .eu domain name. The first period of registration, the ‘sunrise period’, will allow those with registered trademarks , names of public bodies and territories governed by such bodies the right to apply for the .eu suffix. The application for the domain name must exactly match the name registered or for that which priority registration is claimed and evidence supporting the registration must be provided within 14 days of application. This phase will last for two months probably starting in April or May 2005. After the sunrise period the .eu domain will ‘go live’ and be freely available on a first come first serve basis. Certain names will not be registerable by EURid (eg geographical names and those which are clearly defamatory). Evidence may be adduced to support a registration (such as the name of a company registered with Companies House) but where an application is based on an unregistered right or mark then the onus will be on the applicant to produce evidence supporting the application…

Database Protection narrowed: British Horseracing Board v William Hill ECJ, 9 November 2004
Copyright , Internet / December 2004
EU

COPYRIGHT Retail, Internet This case arose out of a referral by the Court of Appeal who asked the European Court of Justice to clarify the extent of the Database Right. The Database Right, which was thought to provide wide-ranging protection for databases far beyond that afforded by standard copyright, has been narrowed in reality once a fixture database was published it became unprotected. The right was thought to be useful where a database may not qualify as an original literary work under the provisions of the Copyright Designs & Patents Act 1988. The European Court of Justice finally ruled in the case by giving answers to some key questions regarding interpretation of the Database Right, which was created by an EU directive and implemented in the UK by the Database Regulations 1997. The ECJ ruled in William Hill’s favour by finding no infringement of BHB’s Database Right. The case involved the accessing of data from BHB’s database of pre-race information by William Hill bookmakers (via an intermediary subscription service), which was then displayed on the William Hill website. Given the immense amount of information in the original database, it was accepted by both sides that William Hill had only displayed…

IFPI Say That Markets Are Showing Signs of Recovery
Copyright , Record Labels / November 2004
EU
USA

COPYRIGHT Record Labels The International Federation of Phonographic Industries (IFPI) say that global sales of recorded music – audio and music video – grew by 1.7% in units and fell 1.3% in value in the first half of 2004, compared to the same period in 2003. Audio sales fell by 2.7% in value, while the music video sector grew by 20.2% driven by DVD music video, which increased by 26.6%. Interim sales of all audio and music video formats totalled $US13.9 billion, compared to $US14.1 billion in 2003. The figures reflect a slowing of the rate of decline in music sales of the past four years. This is the best first-half year result achieved since 2000. Sales in regional and individual territories varied widely, with the effects of unauthorised file-sharing on the internet and commercial piracy, among other factors, still affecting many of the world’s markets. The US music market is leading the recovery, while markets such as Canada, Germany and Japan are showing a substantial reduction in their rate of decline. But other markets including Spain, Italy and the Netherlands are still weak, and more recent reversals have hit sales in France and Australia. Two bright spots are DVD…

IFPI RELEASE “RECORDING INDUSTRY IN NUMBERS 2004”
Copyright , Record Labels / September 2004
EU
Japan
USA

COPYRIGHT Record Labels The IFPI (International Federation of the Phonographic Industry) have published the 2004 edition of the “Recording Industry In Numbers” which contains a mass of detail on the current state of the global music market including a list of the top 50 best-selling albums, globally, in 2003. The top 10 has Norah Jones’s ‘Come ‘Away With Me’ as the year’s best-selling album, followed by (in order of sales): 50 Cent ‘Get Rich or Die Tryin”, Linkin Park ‘Meteora’, Dido ‘Life for Rent’, Beyonce Knowles ‘Dangerously in Love’, Coldplay ‘A Rush of Blood to the Head’, Evanescence ‘Fallen’, Britney Spears ‘In the Zone’, Avril Lavigne ‘Let Go’ and Celine Dion ‘One Heart’. The major companies’ top ten albums and top ten videos are also listed as are market shares of the major and independent companies by country. For the first time IFPI has produced market shares based on wholly or majority owned content on a country by country basis. The global market shares for 2003 were BMG at 11.9%, EMI at 13.4%, Sony at 13.2% (now combined with BMG), Universal at 23.5% and Warner at 12.7%. Independents had a 25.3% market share. Analysis of trends in retailing show a…