Major Record Labels Agree To Pay $45 Million For Copyright Infringement In Canada

from the and-they-got-off-easy dept

Tue, Jan 11th 2011 9:43am — Mike Masnick

We've noted the irony of the fact that the largest copyright system supporters are frequently found to infringe whenever possible. One of the most amazing examples of this concerned the major record labels, who for years were directly infringing on the copyrights of various artists, by putting their songs on compilations and mixes without first getting permission as is required by the law. Instead, the labels would put those artists on a "pending list," but they rarely seemed to get around to taking them off that "pending list" and paying them. After years of trying to get the labels to pay up, a lawsuit was finally filed, where the artists pointed out that the labels could be on the hook for $6 billion. Kind of amusing to see the ridiculously large infringement penalties thrown back at the labels. After some negotiation, it appears that the labels have agreed to settle the case for $45 million and they're also promising to make sure that artists on the pending list will get paid in a reasonable amount of time. Now, can we finally stop pretending that the major record labels ever have the best interests of the artists in mind?

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Filed Under: canada, copyright

36 Comments

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Mike C. (profile), 11 Jan 2011 @ 9:44am

Let me see if I get this right...
1) The major labels end up paying $45 million for over 300,000 cases on infringement. That works out to $150 per incident and yet they want $150,000 per incident here in the USA.

2) The labels get to CONTINUE to perform the acts of infringement as long as they "promise" to pay the artists infringed against in a "timely" fashion.

Yeah... and they wonder why we call them two-faced...
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Mike C. (profile), 11 Jan 2011 @ 9:44am

Re: Let me see if I get this right...
ugh...

* cases of infringement
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Anonymous Coward, 11 Jan 2011 @ 9:48am

Really nobody should complain, they were only doing what every other "user submitted" site online does now: Use now, and pay later (if at all).

Stop yer whinin' and go make something original yourself.
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Anonymous Coward, 11 Jan 2011 @ 10:01am

Re:
I am not whining and I make original things.
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Marcus Carab (profile), 11 Jan 2011 @ 10:16am

Re:
Nobody's complaining. Just pointing out the hypocrisy. And we all make original things. Go make an original argument.
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Chronno S. Trigger (profile), 11 Jan 2011 @ 10:32am

Re:
"go make something original yourself."

I have, and so has Mike, and Dark Helmet, and probably a bunch of others on this site.
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Anonymous, 11 Jan 2011 @ 10:33am

Still doesn't justify piracy.

Especially the ripping off of music that is on indie labels.
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Anonymous Coward, 11 Jan 2011 @ 10:47am

"Still doesn't justify piracy."

i think everyone on techdirt agrees with this statement,
what we do here is instead of fighting people who arent giving you money, try and get some value (money from other ways to buy or different products that cant be copied, using them as a marketing tool etc) out of them.
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Ccomp5950 (profile), 11 Jan 2011 @ 10:47am

Re:
No one is saying it justifies piracy, how come you and every other Anonymous Coward on here seems to think this blog is dedicated to justifying piracy? It's been repeated tirelessly "Piracy is bad, mmkay".

I'm personally just wanting all the megalawsuits to end. $150,000 per infringement is insane. What is interesting about this is that it is practically stating what the actual "damages" are right here ($150 per infringement), yet if this number should ever be tossed around with the mafIAA on the other side of the court you would have it laughed at.
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Not That Chris (profile), 11 Jan 2011 @ 10:53am

Precedent?
I'd seen a comment elsewhere on this and wondered also if, since the labels settled for $150 per infringement, this case could be used as precedent for future cases to set penalties for infringement at the $150 mark, as opposed to the outrageously high one noted in previous, still in process cases? Or would it not matter since this is a settlement (as opposed to a judgement) and it's really seen more as the artists' attorneys accepting the $150 and not the RIAA?
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RadialSkid (profile), 11 Jan 2011 @ 11:05am

Re:
Say it with me now:

"BUT COPYRIGHT INFRINGEMENT!"
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herbert, 11 Jan 2011 @ 11:05am

so the record labels 'pirate' multiple tracks of other peoples music, multiple times, in multiple countries, for multiple years, so as to make money, then only have to pay about $150 per infringement. now someone justify the thousands of dollars they claim (and get awarded!) against someone for sharing for free, not selling, half a dozen songs! the court should have made examples of them in the same way they make examples of file sharers!
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Eo Nomine, 11 Jan 2011 @ 11:06am

Sorry, folks, but this wasn't infringement... under Canadian copyright law, the labels had a compulsory license to reproduce the works in question and did not need to obtain permission. The labels *did* owe back royalties for owners they couldn't locate to pay (and there were allegations that they didn't try very hard to find them), and settled for almost the entire amount that the collectives were asking for ($50M, not the ridiculously inflated $6B figure).

More detailed (and better informed) coverage is here:

http://www.entertainmentmedialawsignal.com/2011/01/articles/music/settlement-reached-in-can adian-music-industry-pending-lists-lawsuit/
http://www.thewirereport.ca/reports/content/11789-new_r ecord_label_agreement_lays_groundwork_for_mechanical_royalties_payments
http://www.thestar.com/ente rtainment/movies/article/919136--tentative-agreement-reached-between-labels-songwriters
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The Groove Tiger (profile), 11 Jan 2011 @ 11:10am

Re:
Aren't you an original snowflake.
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Anonymous Coward, 11 Jan 2011 @ 11:15am

Re: Precedent?
especially in light of the fact that the infringement in this case was FOR PROFIT, as opposed to cases like the Thomas-Rasset
case.
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Mike Masnick (profile), 11 Jan 2011 @ 11:16am

Re:
Sorry, folks, but this wasn't infringement... under Canadian copyright law, the labels had a compulsory license to reproduce the works in question and did not need to obtain permission.

Was Geist's report incorrect? He noted that a change in the law, back in the late 1980s required permission. As a "compromise" the labels set up this pending list which *acts* as a compulsory license, but wasn't quite the same thing. Separately, if there's a compulsory license and you don't pay it, then you've infringed on the copyright.

Either way, it looks like copyright infringement.
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Anonymousy, 11 Jan 2011 @ 11:18am

Re:
You mean Masnick misrepresented and spun the issue to try and further his agenda?

How utterly shocking...
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btrussell (profile), 11 Jan 2011 @ 11:19am

Re: Re:
Actual damage for COMMERCIAL infringement.
For someone like Jammie Thomas, it should be much less. $0.01
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Anonymous Coward, 11 Jan 2011 @ 11:34am

I never understood how the penalty for copying a song could ever cost more than the original cost of the song? if this is a civil court matter, it should be for the cost of the item, not a judgment for punishment. I've never seen a song for sale at $150 let alone $150,000. Seems rather idiotic to me.

Just my view, and I honestly don't care what you think about it.
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Hephaestus (profile), 11 Jan 2011 @ 11:48am

Re: Let me see if I get this right...
"1) The major labels end up paying $45 million for over 300,000 cases on infringement. That works out to $150 per incident and yet they want $150,000 per incident here in the USA."

If I understand this correctly. Thats not per infringment, its per item infringed. If the song is used on an album it might have 100,000 copies sold but only be on the list once. So how much the labels are paying per infringement is much less.
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Marcus Carab (profile), 11 Jan 2011 @ 12:08pm

Re: Re:
Heh. I like that this comment rolled in just below Mike's comment where he expresses genuine curiosity about these new facts and is more than willing to consider the possibility that the report he read was wrong.

An AC misrepresenting Mike and spinning the issue to try to further his agenda of demonizing Techdirt?

How utterly shocking...
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Anonymous Coward, 11 Jan 2011 @ 12:16pm

So by the Capitol v. Thomas awards of $80,000 per song, shouldn't this mean the 300,000 unpaid tracks merit a $24,000,000,000 payment? Seems only fair.
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Phillip (profile), 11 Jan 2011 @ 12:21pm

Re:
If you have a license you never paid for that sounds like copyright infringement to me.
That's like downloading a few movies and putting them on a list to actually pay for at some point in the future and just never getting around to it and hoping everyone forgets. In the meantime I'm not just watching the movies I'm putting them out there and selling them.
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Karl (profile), 11 Jan 2011 @ 12:35pm

Re:
I never understood how the penalty for copying a song could ever cost more than the original cost of the song?

In theory, these people are distributing, not just downloading.

So, let's take the Thomas case. I did a bit of Googling, and it looks like Kazaa had an average limit of about 10 simultaneous connections back then. Even assuming you left your connection going for a long time, it seems unlikely that she would have shared a song with more than 100 people.

So, at maximum, the actual damages would be 100x the cost of the song. Assuming then-standard prices of $1.29 per song on iTunes, that would be $129 per infringement.

That's much less than the minimum statutory damages, so it's no surprise that the RIAA went with statutory damages instead. Even so - as far as I know, the latest damage amount was $1.5 million for 24 songs, or $62,500 per song. This is almost 500% of the actual damages - far in excess of what is normally considered unconstitutionally excessive.
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Ron Rezendes (profile), 11 Jan 2011 @ 12:36pm

Re: Precedent?
This was exactly my first thought! If I were one of the previous/current defendants ordered to pay some outrageous figure, like, oh say $150k per song, I'd be asking for an appeal on the award figure to this new perfectly reasonable (according to the labels themselves since they ARE willing to pay this amount) total of $150 per song. And if I weren't found guilty of doing my infringement for profit, as the labels did, I'd also argue that this $150 figure be cut in half to $75 per song.
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Colin, 11 Jan 2011 @ 1:05pm

Re:
Dang it, my browser isn't working again. It's not showing the part where it says that piracy is OK. Would you mind copying and pasting the original post so I can see it? Thanks!
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Eugene (profile), 11 Jan 2011 @ 1:53pm

Re:
Aside from the tired ad hominem, I'd like to point out that on average, pirates are hobbyists who don't profit off sharing music, whereas what the record labels were doing here is ACTUALLY MAKING MONEY. They engaged in infringement, and then endeavored to make a profit off of that infringement, something orders of magnitude worse than what the typical pirate does. Yet they managed to get off only paying out $150 per artist.
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Mike (profile), 11 Jan 2011 @ 3:03pm

Re: Re:
...$62,500 per song. This is almost 500% of the actual damages...

Minor quibble, I think you meant 500 times, not 500 percent.
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The eejit (profile), 11 Jan 2011 @ 3:04pm

Re: Re:
Yuo are what the fuck is wrong with discourse in America. Instead of actually discussing things and opening your tiny little mind to the possibility that you may just be wrong, you ad hominem and throw critical thinking out the window.

You are no better than Glenn Beck, Sarah Palin, Keith Olbermann or Rush Limbaugh. Honest to god, you make me so sick I may just end up vomiting the bile these half-brained fuckwits spew each and every day.
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Justin Olbrantz (Quantam) (profile), 11 Jan 2011 @ 3:13pm

Re:
And Eo Nomine gets to the real moral (pun not intended) of the story: anything that is legal is right, and anything that is illegal is wrong.
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Karl (profile), 11 Jan 2011 @ 3:39pm

Re: Re: Re:
I think you meant 500 times, not 500 percent.

Oops, you're right, sorry.
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Marcus Carab (profile), 11 Jan 2011 @ 3:46pm

Re: Re: Re:
Unfortunately everything you just said is exactly what he thinks about you or me. And that's where we stand.
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Anonymous Coward, 11 Jan 2011 @ 3:51pm

this has nothing to do with compilations --- perhaps reading the actual press release would be a good idea...
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Josef Anvil (profile), 12 Jan 2011 @ 12:23am

Re: Ummm read carefully
Thanks for the more detailed coverage. It was worth reading and it doesn't appear that there were 300,000+ cases of infringement, but to claim there was no infringement means that you didn't read the article.

Let me assist you, as it seems the infringement was settled right out of the case.

"The proposed agreement settles all alleged copyright infringement liability related to that small minority of unlicenced works that have accumulated over the years."

Assuming that the small amount was willfully infringed, in the US that would mean that the labels owe $30,000 - $150,000 per case of infringement. I would just like to know why all the ACs are not rallying for the cause of the artists. They seem to be keen on people paying up when they know they are breaking the law. It's about making sure the artists get paid, no?
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Not an electronic Rodent, 12 Jan 2011 @ 1:19am

Since I'm coming in a bit late...
.....I'll just say "shame about the paltry amount compared to what they claim from real people but Ha Ha! Ha ha ha ha! Haha! HA hahaha!"

Irony is not just something you flatten your clothes with it seems.
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Anonymous Coward, 12 Jan 2011 @ 5:59am

Re:
I'll bet you're torn. It's impossible for you to defend both copyright and the labels on this one.

So which way are you going (paid) to go? Defend copyright, and you go against your beloved labels. Defend labels, and you go against your beloved copyright?

No wonder you're angry, heh, hypocrisy slapped your face and spanked your ass hard.
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