EMI Sneakily Trying To Pretend Many Of Its Artists Can't Reclaim Their Copyrights

from the but-of-course dept

We've talked plenty about the coming legal battles over "termination rights" in various works. If you're not familiar with it, under the 1976 Copyright Act, content creators have a guaranteed right to terminate any copyright assignments after 35 years. That is, if a musician assigned the copyright to a label, as is standard, they can take that copyright back after 35 years. This is not a right that an artist can give up. Even if they sign a contract saying they give up their termination rights, it doesn't matter. Those rights cannot be taken away from the artist under the law. The exception to termination rights, however, is if a work is classified as a "work made for hire." However, the definition of what qualifies as a work made for hire is very, very narrow:

A “work made for hire” is--

(1) a work prepared by an employee within the scope of his or her employment; or

(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.

There are a lot of specific conditions there. If you're wondering how such an odd list was put together, some have suggested it was basically just who was in the room. Somewhat surprisingly, one of the main parties who apparently wasn't in the room were the major record labels. Notice that sound recordings aren't there, and you'd have to stretch the definition mightily to cover sound recordings. Of course, the labels have been freaking out about this for decades. Famously, back in 1999, Mitch Glazier, a Congressional staffer, snuck some language into a totally unrelated law about satellites to make sound recordings count as work for hire too. He allegedly did this in the middle of the night such that no one -- even the "authors" of the bill -- knew it was there until after the bill passed. This one time, the outcry (especially from musicians) was so loud, that Congress had to go back and repeal that section. Of course, by then, Glazier had jumped ship to a job at the RIAA making about half a million dollars. He's still at the RIAA where he's now the second in command. Remember that the next time anyone pretends the RIAA is about helping artists. Their number two guy tried to screw artists out of their copyrights.

Of course, that hasn't stopped the efforts by the record labels to still pretend that the copyrights they hold are "works made for hire." They've been testing out a few legal theories, none of which seem very strong, but many of which will soon be tested in court. Why now? While there have been a few lawsuits over this (especially in the comic book space), the key aspect of termination rights came into effect in 1978, with that 35 year window. 35 years after 1978 is... 2013. So, a battle is shaping up.

Michael Robertson, who has been involved in a long term legal fight with EMI, is calling attention to the fact that EMI seems to be trying to just declare that music made by bands signed to its labels are works made for hire. How are they doing this? Well, just by declaring that the songs are "made for hire" on the copyright registration. You can see one example of that on a Billy Idol copyright registration embedded below. But, simply declaring it as a work made for hire on the copyright registration is totally meaningless. It doesn't mean the work hits any of the qualifications under the law.

The RIAA has been trying to claim that any albums are really a "compilation" so they qualify as a "collective work" under the law, which does create a work-for-hire situation. But there are other conditions that need to be met, and it's unclear if those have been. Plus, the claim that an album is a "collective work" is a pretty weak one all around.

Either way, many artists probably don't even recognize that their works have been designated this way (or even what it means), so Robertson has been putting together a big list, and seeking artists on that list to proactively challenge the claims, rather than waiting until the 35-year window hits. There are some pretty big names on the list he's dug up already -- including the Beatles, the Beastie Boys, the Beach Boys, The Rolling Stones, Billy Idol, Coldplay, David Bowie, Duran Duran, Frank Sinatra, Iggy Pop, Janet Jackson, John Lennon, Katy Perry, Pink Floyd, Radiohead, Smashing Pumpkins and many, many more. Robertson is hoping at least someone on the list will go legal and claim their own works:

What I'm looking for is an artist who has the courage to stand up on this issue and claim their works, laying the groundwork for them and ALL artists who share their plight to take ownership in the near future and escape this slavery. (Rather like Curt Flood did battling to get free agency for baseball players: See The Curious Case of Curt Flood which should have been called the Courage Case of Curt Flood.)

Of course, some of this may get sorted out by the long list of coming lawsuits for those artists who have actually begun the process of trying to terminate the copyright assignment, starting with The Village People (though that's a weaker case, since the band itself was put together by the label). Either way, it's pretty ridiculous to see how far the labels are going to try to deny artists the ability to take back their copyrights, despite the law being pretty clear that they have that right.

Filed Under: artists, copyright, michael robertson, music, sound recordings, termination, termination rights
Companies: emi

Kenny Rogers' Lawsuit Shows The Many Ways That A Major Label Screws Artists (Even The Big Ones)

from the here-we-go-again dept

We've seen this many times before, where famous musicians are totally screwed over by the major labels. A bunch of folks have sent over a summary of Kenny Rogers' lawsuit against Capitol Records (EMI), which highlights the levels to which Capitol Records went to not pay Rogers. The central facet of the lawsuit is similar to that of lawsuits that a number of artists have been filing, concerning whether or not iTunes transactions are sales or licenses -- for which massively different royalty rates apply.

However, there's plenty of other crazy things in the lawsuit, most of which involve an "audit" that Rogers requested from Capitol in April 2007... and which took until March 2009 to complete. Yes, it took two years. For a basic audit just to make sure he was getting the money he was owed. Oh, and the audit showed that he was not getting the money owed. From there, things got worse... with all sorts of stalling and foot dragging, finally resulting in the lawsuit. That stalling included repeated promises to resolve the problems and pay up. Rogers was told at times that the company was "still ironing out a few things," and then later found out that the people he'd been negotiating with were no longer at the company -- replaced by a lawyer who just told Rogers that he would be happy to work with Rogers to "promptly try to resolve the Rogers audit" -- nearly two years after the audit was completed and four years after it was requested.

Among the problems in the audit are a bunch of unprocessed royalties that were put into a "suspense" file for no reason. These kept $76,956 from Rogers. There were also actions in foreign territories where Capitol appears to have ignored the royalties it's supposed to pay Rogers. There were also things as simple as just not reporting royalties on money from record club sales. The company is also accused of playing some tax games to double count taxes to avoid paying royalties. There's also the fact that Capitol charged Rogers the full amount for a video production to his own expenses (i.e., money they'd "recoup" out of his portion of royalties), but they ignored their own contractual agreement that only 50% could be expensed that way.

Then there's the fact that Rogers wants his cut from the money Capitol has received in various lawsuits -- those against Napster, Kazaa, AudioGalaxy, Grokster, BearShare and others. As we've noted in the past, the labels have bent over backwards to avoid paying out such money to the actual artists -- but Rogers wants his piece:

Such lawsuits have resulted in Capitol Records receiving monies from entities such as Napster, Kazaa, Audiogalaxy, Grokster, BearShare, and others. Capitol Records has refused to provide Kenny Rogers with an accounting regarding the amounts actually received. A portion of the monies received by Capitol Records is attributable to the Masters and Kenny Rogers is entitled to that portion of Capitol Records‟ receipts. Capitol Records‟ refusal to account to and pay that money to Kenny Rogers has resulted in Kenny Rogers suffering direct financial harm in an amount that cannot be determined until Capitol Records provides a full, fair, and accurate accounting.

There are a few other charges as well, but those are the big ones. None of this, of course, is to say that it's "ok" to infringe because the major labels are somehow "bad." But it does show just how ridiculous it is if anyone assumes the majors represent the best interests of artists in any way.

Filed Under: copyright, kenny rogers, lawsuits, record labels
Companies: capitol records, emi

Katy Perry Shows How The Problem With The Major Labels Is Economics, Not Piracy

from the there's-a-lot-of-inefficiency dept

A few weeks back, the folks at Planet Money tried to break down the economics of Katy Perry's massively successful album with its five hit singles. Specifically, they wanted to figure out how much money her label made from such a big success. What comes out is a step-by-step description of the massive inefficiencies of the major label recording system. There are things like paying producers $100,000 per song they produce on the album. Then there's all the payola... er "special promotions" to get the songs played on radio so much. In the end, Planet Money calculates that Perry's label, EMI, probably made somewhere around $8 million in profit from Perry's music sales in the US. That's not topline revenue, but bottomline profit. That's not bad per se, but for an album with five hit singles and which was clearly one of the most successful albums in 2011, you begin to see why the labels are struggling.

But, of course, Perry, herself isn't struggling. As the full podcast by Planet Money notes, Perry has been able to avoid getting sucked into a "360" deal where the label gets to take some of all the revenue she earns. They just get the record sales. Perry, in the meantime, is estimated to have made $44 million in 2011 -- a large chunk of that coming from her tour, which alone grossed over $50 million.

What you begin to realize as you see more and more stories like this is, once again, the "problem" has nothing to do with the "music industry" failing... or even that musicians aren't able to make money any more. It's all about the bad economics of the record labels. They set themselves up to fail this way, focusing solely on that one slice of the pie, and not moving very quickly to adapt when the market shifts. Instead, they seem to have kept up the inefficiencies associated with making such a "hit" album, without figuring out a way to profit from the results. Of course, for artists like Perry, things are great. She's able to make a ton of money, most of which doesn't first have to filter through the label...

Filed Under: deals, katy perry, record labels, revenue, touring
Companies: emi

Major Label-Owned Vevo Caught Publicly Streaming NFL Game Off Of 'Rogue Site'

from the where's-ice-when-you-need-them? dept

Where's ICE when you need them? For a while now, ICE has been making the case that sites that merely link to streaming content -- especially sports content -- are the most evil kinds of criminals around. It's why they're trying to extradite Richard O'Dwyer from the UK to have him face criminal charges. It's why they recently arrested Yonjo Quiroa, who will soon be tried on criminal charges as well. Both ran sites that linked to streams of TV content, including sports content. So clearly, this is serious, criminal business. In fact, if you believe the propaganda from the RIAA, these sites contribute to gangland violence and terrorism.

But, of course, when those major label guys want to set up an illegal public performance of an NFL game, where do they turn? You guessed it! One of those rogue sites.

Jason Kincaid over at TechCrunch has the rather insane story of how Vevo, the music video streaming company created by Universal Music and owned by Universal Music and Sony Music, had a booth set up at Sundance a few weeks back, where they, quite clearly, live-streamed an NFL playoff game. Yeah. In their "lounge," they had computers showing the game, apparently sourced from ESPN America -- which isn't available in the US. And the stream came from TuTele.tv, which appears to be quite similar to many of the sites that have been seized and shut down. In fact, it sounds pretty similar to Rojadirecta, which is currently fighting the US Justice Department in court.

And the folks from these major record labels used this source to live stream the football game throughout their lounge area at Sundance. It gets even more ridiculous when you remember that Congress has been trying to pass bills that would make such streaming a felony in and of itself. Senator Amy Klobuchar's streaming felony bill, S.978 -- the one that would potentially put Justin Bieber at risk -- as well as SOPA, both had provisions that made public performance of infringing content a potential felony. Those were mainly supposed to be directed at sites that allow streaming, but I think people would find it hard to argue that what happened in that bar was not a "public performance."

Of course, what this shows is that these issues are never as black and white as the RIAA would have you believe. And, just like many others, when the industry doesn't give them a convenient way to do what they want, even the RIAA's strongest supporters stoop to making use of rogue sites to potentially do "criminal acts."

I eagerly await ICE moving in to arrest Vevo execs for this blatant criminal activity.

Filed Under: copyright, hypocrisy, rogue sites, seized sites, sopa, streaming
Companies: emi, riaa, sony music, universal music, vevo

Judge Denies Injunction Against MP3 Reseller Due To Lack Of Irreparable Harm... But Says EMI's Arguments Compelling

from the first-sale-is-dead dept

I've said before that I'm skeptical of the idea behind ReDigi -- a seller of "used" mp3s. The company claims it has a system to make sure that if you sell a music file you own, that they then make sure it's deleted from your computer. This just seems dumb for a variety of reasons -- some economic, some technological and some legal. But, most of all, I just don't see people caring enough to make this a valid business. Either way, whether it's dumb or not, the RIAA couldn't let the company actually try something new... so, of course it sued, with EMI subsidiary Capitol Records taking the lead on the case.

Somewhat surprisingly, the judge refused to issue the injunction, calling the case "fascinating" and noting that there were some serious issues to be dealt with concerning first sale rights around copyright (whether or not you can sell a product you bought that is covered by copyright). However, the judge also made it clear that he thinks that the record labels are likely to win in the end, saying that their arguments "look to be compelling." He just didn't issue the injunction because there was no evidence of irreparable harm if the site stayed up, as detailed in the transcript embedded below.

Filed Under: copyright, first sale, markets, mp3s, resale
Companies: capitol records, emi, redigi, riaa

EMI VP Comes Out Against SOPA/PIPA; Says The Answer To Piracy Is Providing A Better Service

from the promote-this-guy dept

Over the years, I've definitely found that there are plenty of folks working inside the major record labels (and big studios) who really do get what's going on. The problem is often that their voices are drowned out by others (usually the older guard) who are pretty stubborn in their anti-innovation, anti-consumer ways. It's always nice, however, when someone from the inside pops up and says something sensible in public, and those folks deserve kudos. The latest is Craig Davis, EMI's VP of Urban Promotions. He recently did a Reddit AMA (for you non-Redditors -- a Q&A session), in which someone asked him his opinion of SOPA/PIPA/ACTA, and he gave a really reasonable answer:

Personally, I feel that the method they're using is incorrect. All it will do will cause headaches and issues for everyone.

However, I do believe that a person should be compensated for their work. I feel that piracy is a big issue, and things like Spotify will assist in combating this problem.

Gabe Newell is correct, it's a service issue not an issue of money. Sales have gone up from sales concerts and merchandise, it's obvious that our fans still love music. We're just not giving them their music in an easier way.

The reference to Gabe Newell, of course, concerns Newell's regular speeches about how you compete with piracy by providing a better service -- something Newell's Valve has done quite well over the years.

Davis has it exactly right here. The only thing that's been shown to work over the years as a method of dealing with widespread infringement is to offer a better service. Things like SOPA/PIPA/ACTA will cause lots of problems... and won't do a damn thing to slow down infringement. EMI is in the process of being swallowed up by Universal Music, so who knows what happens here, but if I was in charge at Universal, I'd give Davis a nice promotion. Tragically, however, in my experience, the folks who do get these things from within the major labels frequently end up outside the major labels before too long....

Filed Under: competing, craig davis, infringement, pipa, piracy, protect ip, sopa
Companies: emi

Insane Entitlement: EMI Sues Irish Gov't For Not Passing SOPA-Like Censorship Law

from the wowzers dept

The sense of entitlement exhibited by the legacy players in the entertainment industry is now reaching positively insane levels -- highlighted by the news that major record label EMI (in the process of being acquired by Universal Music to make it the largest record label by far) is suing the Irish government because it feels the Irish government is taking too long to pass a SOPA-like law that would require ISPs to censor the internet and block access to sites it doesn't like. I'm not kidding. Apparently, because the legislative process is too slow, it feels the need to sue.

In another article on the lawsuit, EMI Ireland's CEO complains that the length of time it's taking the government to craft such a censorship bill is "leading me to believe it’s unlikely to satisfy the music industry’s requirement for injunctive relief."

Think about that for a second. The major record labels have such an insane sense of entitlement, they think that any bill they declare that they "require" must become law, or they can sue the government. More specifically, EMI is effectively confessing here that it's upset that the government isn't sharing the bill ahead of time with EMI or others in the industry. Again, the massive sense of entitlement of these guys is such that they expect that they get to write the laws, and when they're left out of the process, they get to sue over it. And yet, on every one of these laws, the people actually impacted by them -- the public -- get no real say or can't see them. Remember ACTA? The public was left totally in the dark, while RIAA/MPAA officials and others had pretty detailed access and the ability to help craft the bills. And yet, when EMI doesn't get to see a draft of a bill, and it makes them think that it won't go the way they want, they sue? Damn.

Filed Under: blocking, copyright, entitlement, injunctions, ireland, pipa, protect ip, record labels, sopa
Companies: emi, riaa

And Then There Were Three: Bye, Bye EMI

from the another-one-bites-the-dust dept

The major labels have been dropping one by one. Of course, they never "die out" completely... they just get weak enough until someone buys someone else. The Big Six became the Big Five when Universal took over Polygram. The Big Five became the Big Four when Sony (formerly CBS Records) and BMG effectively merged. And, now we're down to the Big Three as Universal and Sony pick off the remains of EMI. This was pretty much a foregone conclusion that there would be some sort of merger, when Citibank took over EMI after EMI defaulted on its debt obligations. Universal is picking up the music division for $1.9 billion while Sony gets the publishing side for $2.2 billion. Universal was already the world's largest record label, so adding the likes of the Beatles, Coldplay and Katy Perry to its roster must be appealing. Of course, there's some concern among regulators that this raises antitrust questions, but I really don't see the issue here. Universal Music has been self-imploding by failing to adapt. I don't see how merging it with EMI will do much other than to allow it to continue to be a nuisance and continue to not understand how to embrace the internet. Besides, spending $1.9 billion for more back catalog, rather than investing that kind of money into actually adapting? If anything, this simply accelerates the decline of these labels.

Filed Under: major labels, mergers, record labels
Companies: citigroup, emi, sony, universal music group

EMI Loses Yet Again In Its Quixotic War With Michael Robertson And MP3Tunes

from the the-definition-of-insanity dept

After losing pretty badly on most of the key legal points in its silly lawsuit against Michael Robertson and MP3Tunes, EMI doubled down and told the judge he made two mistakes in his initial ruling, and asked him to reconsider both. However, in an amended ruling (embedded below) Judge William Pauley has not only rejected EMI's claims, but clarified his arguments even further, potentially making any appeal from EMI that much harder.

The two key points, as we discussed two months ago, were whether or not pre-1972 sound recordings were subject to the DMCA... and whether or not MP3Tunes really had a policy of dealing with repeat infringers. The pre-1972 issue is really, really important to the record labels. As we've discussed, pre-1972 sound recordings are not subject to federal copyright law, but rather more restrictive state copyright laws. Whether or not such songs are covered by the DMCA is a key element for the labels in planning their legal strategy. In Universal's lawsuit against Grooveshark, for example, it's just focused on pre-1972 songs, to try to cut off Grooveshark's DMCA safe harbors argument. But the court goes into great detail why that's a bogus argument, and that the DMCA's safe harbors were clearly intended to cover all copyrighted works, even those not covered by federal copyright law:

EMI's interpretation of 301(c) would eviscerate the purpose of the DMCA. "Where an examination of the statute as a whole demonstrates that a party's interpretation would lead to 'absurd or futile results ... plainly at variance with the policy of the legislation as a whole,' that interpretation should be rejected." Yerdon v. Henry,.... As discussed, the DMCA was enacted to clarify copyright law for internet service providers in order to foster fast and robust development of the internet. Limiting the DMCA to recordings after 1972, while excluding recordings before 1972, would spawn legal uncertainty and subject otherwise innocent internet service providers to liability for the acts of third parties. After all, it is not always evident (let alone discernible) whether a song was recorded before or after 1972. The plain meaning ofthe DMCA's safe harbors, read in light of their purpose, covers both state and federal copyright claims. Thus, the DMCA applies to sound recordings fixed prior to February 15, 1972.

On the second key issue, EMI's filing for reconsideration sounded stronger, when only seeing EMI's side of the story. It claimed that the judge misconstrued certain claims by Robertson and MP3Tunes employees, suggesting that the company didn't really stop repeat infringers. However, it appears that EMI's quotes were taken incredibly out of context, and the judge had no problem putting them back into context and seeing that MP3Tunes did, in fact, deal properly with repeat infringers. In fact, the judge points out directly that EMI "mischaracterizes" Robertson's deposition testimony. Having a judge catching you trying to mislead him... is probably not good for your case.

But, perhaps even more importantly, the judge makes it clear that with a music locker like MP3Tunes, there's no legal reason why the company should automatically cut off someone who is a repeat infringer, since all uploads are for personal use, and not to the wider internet.

Blatant infringers typically are those who upload or post unauthorized content, allowing others to experience or copy the work. See Viacom v. YouTube.... (finding reasonable a policy that terminated users who uploaded content after warning); see also 10 Grp., Inc. v. Veoh Networks ... (same). The record reveals that MP3tunes' users do not upload content to the internet, but copy songs from third-party sites for their personal entertainment. There is a difference between (1) users who know they lack authorization and nevertheless upload content to the internet for the world to experience or copy, and (2) users who download content for their personal use and are otherwise oblivious to the copyrights of others. The former are blatant infringers that internet service providers are obligated to ban from their websites. The latter, like MP3tunes users who sideload content to their lockers for personal use, do not know for certain whether the material they download violates the copyrights of others.

The court also reminds that even if MP3Tunes execs discussed some sites where people accessed files and moved them into MP3Tunes own storage, and questioned whether or not they were infringing, they had no way of knowing, officially, if those files were actually infringing:

For example, MP3tunes employee e-mails reveal discussions about the legitimacy of some third-party sites and, on at least one occasion, a recommendation that a site be removed from Sideload.com. But ultimately there is no evidence that MP3tunes executives or employees had firsthand knowledge that websites linked on Sideload.com were unauthorized. (See Bart Decl. Exs. 64-66.) While knowledge is not an element of copyright infringement, it is relevant to a services provider's decision whether appropriate circumstances exist to terminate a user's account.

This is important for a number of reasons too, including the standard claim from copyright system defenders, insisting that it's "obvious" when something is infringing and sites should have to remove the content. As this court properly recognized, it's not at all obvious. Content may appear to be infringing, but may have been uploaded by an authorized person. Or there may be fair use. Courts determine what is and what is not infringing -- and random websites are in no position to do so, no matter how much the legacy entertainment industry likes to pretend otherwise.

Amusingly, in Robertson's own blog post about this ruling (linked above), he suggests a reason for EMI's decision to continue with this really pointless lawsuit: EMI exec turnover and upheaval is the perfect situation for lawyers to rack up billable hours, because no one's paying attention:

From the outset, many have been puzzled by EMI's decision to target MP3tunes as well as me personally with this lawsuit but it becomes clearer when one understands the chaos of EMI's management and their relationship to an outside legal firm. An outside corporation performs all the litigation work for EMI. This firm doesn't care if they win or lose the case because they get paid to fight. The more they fight, the more they get paid. This explains why in this latest move they went back to the same Judge with the same evidence telling him he got it wrong and asking him to reverse his findings. Unsurprisingly this rarely works, but it's a chance for more billable hours and to increase their bills to more than $6 million. The fact that it actually makes an appeal more difficult for EMI is a plus because that means more time will have to be spent on those creating even greater riches for the attorneys.

Extensive turnover in EMI's management means nobody is there to oversee the litigation costs or strategy. Currently EMI is owned by the megabank Citigroup who is likely unaware of the runaway legal expenses or fruitless strategy since they are concerned only with finding a buyer for EMI to get their multi-billion dollar investment back. The litigation firm senses this leadership vacuum and operates unimpeded taking every opportunity to drag out what is now a 4 year legal process with countless motions. An unlimited legal budget benefits only the lawyers not EMI. Maybe it will take a new owner to rein in the attorneys, but any objective analysis shows they are hurting EMI more than helping.

Filed Under: copyright, dmca, michael robertson, safe harbors, sound recordings
Companies: emi, mp3tunes

Insanity: Men At Work Lose Final Appeal For Using Brief Riff Of Classic Folks Song, Which Went Unnoticed For Decades

from the pay-up dept

More copyright insanity coming from down under. As you may recall, a couple years ago, the music publisher Larrikin sued for copyright infringement over the 80s pop hit Down Under by the band "Men at Work," claiming that it infringed on a classic Australia folk song, called Kookaburra. It seemed odd that it would take decades for anyone to make this claim, and even the boss at Larrikin only noticed it when an Australian quiz show mentioned it in a question. Then, suddenly, Larrikin wanted to get paid. The district court sided with Larrikin as did the appeals court. Now, as a bunch of you have been sending in, Australia's high court is refusing to hear the appeal, meaning the appeals court ruling stands... and apparently a big chunk of royalties from the pop song will be going to Larrikin -- who had nothing to do with the song and didn't even notice the weak connection until someone pointed it out.

At best, the Men at Work song is an homage to the folksong. All this ruling has done is demonstrate how copyright can be used to put a toll on culture.

Filed Under: australia, copyright, down under, kookaburra, men at work
Companies: emi, larrikin music