Bar Fight! Sony Sues Karaoke Distributor For Infringement; Gets Sued Right Back For 'Copyright Misuse'

from the winner-determined-via-sing-off-at-the-holiday-inn-express-lounge-starting-at-10 dept

Fri, Jan 27th 2012 12:54pm — Tim Cushing

A great many drinkers have watched helplessly as their BAC became inversely proportionate to their common sense, throwing around cash as thought it were Monopoly money before grabbing the mic to belt out Adele's latest track. Karaoke has been the go-to bar sport for thousands of people who feel the only thing keeping them back from superstardom is sobriety. It's a proven money-maker, but does it make ridiculously large damages-type money? Sony/ATV sure thinks so:

[O]ne manufacturer and distributor of karaoke discs [KTS] has just taken Sony/ATV Music Publishing to California federal court to get a declaration that it doesn't owe $1.28 billion for 6,715 acts of alleged infringement. The plaintiff not only wants to limit its liability, but also is seeking to punish the music publisher for unfair trade practices.

Sure, karaoke is lucrative, but $1.28 billion? From one manufacturer? And how about those damages -- $190,618 per violation? How does Sony get to this number? By going back to the well over and over and over and over. And they're not the only ones in line.

The use of the original music as the background score requires a license over the master recording. The use of the song composition requires a mechanical license too. When songs are performed in public, that requires payment to a PRO like ASCAP or BMI. When the music is matched to video images, it requires a synchronisation license. And if the lyrics are being republished, that might require an additional fee too.

Standard operating procedure for karaoke manufacturers is to hire their own lineup to play the hits, thus dodging higher royalty fees by paying a mechanical license for the cover versions. Obviously, this makes financial sense considering the sheer number of tunes required to run a karaoke business, not to mention the fact that it's frequently multiple mechanical licenses. You'd think Sony would be wary of shutting down a steady income stream. But a good thing can always become a better thing with the addition of lawyers and improbable maths, amiright? Not so fast, say KTS (also via lawyers):

In KTS' lawsuit two weeks ago, the company alleges that Sony is committing copyright misuse by attempting to collect multiple damage awards on a single work from the upstream producers, the downstream users (bars and restaurants), and KTS, the packager/distributor. KTS believes this alleged bullying "scheme" is unlawful.

In its lawsuit, KTS says that Sony/ATV has long since known about its operation, and rather than take reasonable steps to stop such products at the source, the defendant has: "instead committed copyright misuse by seeking to secure multiple license fees for the same allegedly infringed work by suing each link on the distribution chain, by demanding license fees for licensed goods and by attempting to obtain more than one statutory damage award for the continuing infringement (i.e., down stream distributions of the infringing work) of a SINGLE WORK."

This declaration only succeeded in irritating the music giant, which like many major labels finds itself easily angered in this "post-Napster" environment. Sony wants both damages and an injunction against KTS. KTS wants Sony to be realistic and to honor licenses paid by distributors instead of shoving all of its hands into KTS' wallet over and over again.

KTS wants a declaration that Sony is only eligible for one statutory award per work, which would trim the nearly $1.3 billion that Sony allegedly says it is due, but perhaps just as importantly, the karaoke manufacturer is bringing a bold copyright misuse claim that seeks to punish the publisher for trying to "recover multiple times for the same allegedly infringing conduct at rates greater than if the claims had been asserted against the manufacturers."

We'll see how this shakes out, but I have a feeling that Sony may be willing to slaughter one of its few remaining cash cows (you know, where people are still paying for music -- music not even performed by the original artists) on the altar of infringement, rather than settle for lower mechanical license fees. When all you have is sales declines, everything looks like a lawsuit.

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Filed Under: copyright, karaoke
Companies: kts, sony, sony/atv

35 Comments

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Anonymous Coward, 27 Jan 2012 @ 1:14pm

We have Patent Termination
Time for some copyright termination legislation as well?
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Anonymous Coward, 27 Jan 2012 @ 1:18pm

better to have $1x1000 or $10x10? nothing like getting one big hit then nothing at all after that. if Sony win, does it think that other karaoke gigs will risk continuing? they're gonna shoot themselves in the foot, methinks! having a 'little and often' cash stream is usually the best way
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Rose, 27 Jan 2012 @ 1:29pm

No Hope for Victory
After everything I've read lately about judges (the Jan 17th vote allowing public domain works to be re-coyprighted, judge ruling that idea of photograph is copyright infringement) I don't see much hope that KTS will win, even though I desperately DESPERATELY want someone to have a victory against Big Content for once.
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- Anonymous Coward, 28 Jan 2012 @ 12:29am
  
  Re: No Hope for Victory
  That ruling was great it means if we put our people there and end copyright they also can't complain.
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Pickle Monger (profile), 27 Jan 2012 @ 1:34pm

No way! Oh, wait...
Would that be the same Sony that blocked a Japanese-themed bar in Montreal from being called "Godzilla's"? Huh! Who'dda thunk...
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- That Anonymous Coward (profile), 28 Jan 2012 @ 2:43am
  
  Re: No way! Oh, wait...
  I thought Toho owned the rights to Godzilla
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  - Anonymous Coward, 28 Jan 2012 @ 8:31am
    
    Re: Re: No way! Oh, wait...
    It does. Interestingly enough they licensed right to Legendary Pictures back in March of 2010.
    
    That leads to the question of when Sony nixed the name of Godzilla's (now Imadake's), if it even happened at all (I've found a few quotes in stories along the lines of "A waiter told us" and "we heard", but I haven't turned up any actual articles about it), and how much of a legal basis it really had to do so if it did.
    
    Personally, it sounds totally like something I'd expect from Sony, so I doubt anyone would question it
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    - That Anonymous Coward (profile), 28 Jan 2012 @ 9:50pm
      
      Re: Re: Re: No way! Oh, wait...
      No if Sony had done it, someone would have walked in the unlocked door and stolen the sign.
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- Anonymous Coward, 28 Jan 2012 @ 11:19am
  
  Re: No way! Oh, wait...
  That would be Sony being huoS with their heads not visible.
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Rekrul, 27 Jan 2012 @ 1:35pm

Does anyone need any more proof that today's copyright laws are insane?
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- The eejit (profile), 27 Jan 2012 @ 1:45pm
  
  Re:
  We had proof before copyright even existed.
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Mike, 27 Jan 2012 @ 1:50pm

I will say this...
... even as an IP lawyer, copyright is mess from this perspective. The industry, and in part copyright law, has created a nearly impenetrable tangle of inter-related rights.

I think that a rewrite of performance (and related) rights in copyright law is long overdue. It's time to do away with Grand Rights, Mechanical Rights, and Synchronization rights.
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- Capitalist Lion Tamer (profile), 28 Jan 2012 @ 2:12am
  
  Re: I will say this...
  You'd think that with all this going to the well over and over for the same songs, some singer/songwriter would have stepped forward to announce that they were making a killing from all the licensing.
  
  Since that hasn't happened, I'm inclined to believe that bandying about multiple licenses for the same track ONLY benefits the licensing agencies. Whatever the artists are seeing from this license pileup is next to nothing.
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Anonymous Coward, 27 Jan 2012 @ 1:51pm

i am reminded of the ferengi 9th rule of aquisition...
Opportunity plus instinct equals profit. sadly sonys instinct is to sue instead of deal. this will win them the quick money but not the smart money (which is almost always more profitable).

although kts would do well to remember the 47th rule when dealing with businessmen: Never trust anyone whose suit is nicer than your own.
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Anonymous Coward, 27 Jan 2012 @ 2:02pm

Totally insane. For (bad) karoke?
I'd like to see more of these ridiculous examples; charging Girl Scouts for campfire songs, hitting up dentist's and auto shops when the public can overhear the radio playing in the background...

"The use of the original music as the background score requires a license over the master recording. The use of the song composition requires a mechanical license too. When songs are performed in public, that requires payment to a PRO like ASCAP or BMI. When the music is matched to video images, it requires a synchronisation license. And if the lyrics are being republished, that might require an additional fee too."
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- MAJikMARCer (profile), 27 Jan 2012 @ 2:12pm
  
  Re:
  Uhoh, I better make sure I don't have the windows open in my house when listening to music loud. Wonder if they'll go after the people with really loud car stereos too? (please!)
  
  Maybe they really don't want anyone to actually listen to the music, just buy it.
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  - Anonymous Coward, 28 Jan 2012 @ 8:39am
    
    Re: Re:
    I can just see the record labels making deals with police departments even now to hand out tickets to people who blast their bass for copyright infringement.
    
    Fine - $100,000
    
    They might even agree to let the police departments keep a few hundred bucks.
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- That Anonymous Coward (profile), 28 Jan 2012 @ 2:45am
  
  Re:
  From the people who wanted a court to rule that ringtones were a performance so they could get paid again this behavior surprises you?
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JarHead, 27 Jan 2012 @ 2:22pm

When all you have is sales declines, everything looks like a lawsuit

Really like that sentence, I think I'll quote it sometimes (with proper attribution of course).

Sadly, what it says is literal truth for many dying dinosaur businesses these days...
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- The Devil's Coachman (profile), 27 Jan 2012 @ 4:02pm
  
  Re:
  They will not be missed.
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IH8S0nEE, 27 Jan 2012 @ 3:28pm

Goen in a decade
I cant wait for a time where there will be no Sony, we will remeber the good days of walkmans trinitrons and the playstation. We will remeber like we do LPs and Cassettes

ah the good old days,

Sony is a dying brand. END Of story I would do everything I can for dear life, they just dont have a clue its quite sad.
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- Anonymous Coward, 28 Jan 2012 @ 8:42am
  
  Re: Goen in a decade
  Now if someone would just whip their butts when the next gen consoles come out. I would dance in the streets if the Playstation4 gets slammed in the marketplace.
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- hmm (profile), 28 Jan 2012 @ 9:13am
  
  Re: Goen in a decade
  Dying is closer than you might realize given some of the behind-the-scenes shennigans going on at Sony HQ at the moment....
  
  Not long before the dam breaks and the truth comes pouring out like a broken toilet.
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Rapnel (profile), 27 Jan 2012 @ 4:48pm

lolwhut?
"The use of the original music as the background score requires a license over the master recording. The use of the song composition requires a mechanical license too. When songs are performed in public, that requires payment to a PRO like ASCAP or BMI. When the music is matched to video images, it requires a synchronisation license. And if the lyrics are being republished, that might require an additional fee too."

Blah, blah, blah, blah. Shut the fuck up puta. Old trick bitches. Your cousin looks good though, and she don't charge shit but what it's worth, and she's goood for what it's worth.
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Josef Anvil (profile), 28 Jan 2012 @ 2:28am

SOPA Math
If they don't keep going to the well over and over and over, then how else can they claim the billions in losses that piracy is causing.

Piracy may not be a lost sale, but its probably 1000 lost licenses.

Wow, that almost made sense.
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- Ed C., 28 Jan 2012 @ 3:03am
  
  Re: SOPA Math
  Considering that media is being "licensed" these days rather than "sold", sadly, you might actually have a point.
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- Loki, 28 Jan 2012 @ 8:44am
  
  Re: SOPA Math
  A license is just a sale you don't actually own.
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Josef Anvil (profile), 28 Jan 2012 @ 2:28am

SOPA Math
If they don't keep going to the well over and over and over, then how else can they claim the billions in losses that piracy is causing.

Piracy may not be a lost sale, but its probably 1000 lost licenses.

Wow, that almost made sense.
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jeff, 28 Jan 2012 @ 5:01am

I think the music lobby is too powerful such that this will be thrown out on appeal. What judge is courageous enough to stand up to that much political pressure? Sorry, it ain't gonna happen. Nice story though.
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jeffj (profile), 28 Jan 2012 @ 5:01am

I think the music lobby is too powerful such that this will be thrown out on appeal. What judge is courageous enough to stand up to that much political pressure? Sorry, it ain't gonna happen. Nice story though.
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Luke Clifford, 28 Jan 2012 @ 5:37am

Piracy, is a problem. But isn't all of this getting out of hand now? Is this what we have to expect from this point on? The innocent and the masses being attacked and controlled by the giants?

It all seems a bit twisted to me.
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hmm (profile), 28 Jan 2012 @ 9:09am

Ah Sony
Does anyone think Sony has anything better to do these days?

Almost bankrupt, selling off its primary brands (Bravia etc) for knock-down prices, quietly trying to sell off (oops sorry 'license') the Playstation brand to rival companies because as they said they "can't make another console for at least 5 years".

As they dump their manufacturing and factories to anyone that will take them, Sony is changing into nothing but another hollow-shell copyright troll company.

Oh yeah don't mention how their executives are selling off their shares, because they get quite angsty if you bring THAT up in polite company....
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Anonymous Coward, 28 Jan 2012 @ 11:05am

BOYCOTT SONY
This is time for some public input against this type of absolute ludicrousy. Push this cORPORATION sONY back and declare this not appropriate for a court's time. This is pure bullshit.
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Michael, 29 Jan 2012 @ 6:28am

The question
'Copyright abuse' or 'abuse of copyright'? You decide...

I pick the latter.
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Anonymous Coward, 30 Jan 2012 @ 7:38am

SONY = Stupid Ornery Numbnut Yahoos
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