Music Publishers Lawsuit Against Yahoo, Microsoft, Real Tossed For Failing To Prove They Hold Copyrights

from the oooops dept

Back in June, we wrote about an odd lawsuit from a bunch of independent music publishers headed by MCS Music America against Microsoft, Yahoo and RealNetworks claiming that all three failed to secure licenses on the compositions. This seems strange, of course. You would assume that big companies like Microsoft, Yahoo and Real would make sure to secure all the necessary licenses for their music download and streaming operations. However, MCS and the others suggested that the three companies only secured the licenses on the recordings, but not the compositions. What appeared to have happened, was that Microsoft, Yahoo and Real licensed the songs from the major record labels, who also own many publishing operations, and in were told that they had received licenses for both the recording and composition. The problem is that not all of those major labels hold the composition rights. In some cases, those rights are still held by independent music publishers -- and there was a fair amount of confusion over who owned what. It was a perfect example of how ridiculous copyright law is today that even in setting up a big music operation from a major company with the major record labels, no one was exactly sure if all the proper rights were secured.

Either way, Microsoft, Yahoo and Real were quick to ask for the lawsuit to be dismissed and Eric Goldman sent over the rather short ruling from last month that does, in fact, dismiss the case stating (surprisingly) that the music publishers failed to show they hold the copyrights they were arguing over. That's rather incredible, seeing as the original lawsuit went on for pages and pages, claiming to hold various licensing rights. But the court wasn't buying it:

Defendants' Motion to Dismiss All Causes of Action of Plaintiff MCS Music America, Inc. ("MCS") is granted on the ground Plaintiff MCS has failed to state a legal claim for copyright infringement. To establish a claim of copyright infringement, two elements must be satisfied: (1) ownership of a valid copyright, and (2) unauthorized copying of the original work. Feist Publications, Inc. v. Rural Telephone Services Co., Inc,. 499 U.S. 340, 111 S.Ct 1282 (1991); Jones v. Blige, 558 F.3d 485 (6th Cir.2009).

MCS has failed to demonstrate ownership of any of the copyrights at issue. Plaintiffs allege MCS is a licensing administrator and an exclusive licensing agent of the copyrights at issue, but do not allege MCS to be an owner of such works. Without demonstrating legal ownership, MCS is not able to plead all of the necessary elements of copyright infringement.

Plaintiffs ask the court to consider the affidavit of Janice Bane with regard to MCS's rights. The court will not consider Ms. Bane's affidavit in deciding this issue. In ruling on a motion to dismiss, a court properly may consider only evidence contained in or asserted in the pleadings. As a general rule, matters outside the pleadings may not be considered in ruling on a motion to dismiss unless the motion is converted to one for summary judgment under Rule 56. Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir.1999). Weiner v. Klais & Co., 108 F.3d 86, 88-89 (6th Cir.1997). Furthermore, even if the court were to consider Ms. Bane's affidavit, it does not indicate any ownership on the part of MCS, thus rendering its consideration moot.

Defendants' Motion to Dismiss All Causes of Action of Plaintiff MCS is GRANTED.

On top of that, MCS requested the right to amend the lawsuit, and the court shot them down there as well:

Plaintiffs have moved to amend their complaint a second time. The Federal Rules of Civil Procedure state "... a party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). However. Plaintiffs have not demonstrated their amended complaint would show MCS has ownership of any of the copyrights at issue and would therefore be futile. For that reason, Plaintiff's Motion to Amend Complaint is DENIED.

So much for that, then. Somewhere along the line, it looks like these publishers got some really poor legal advice, as this case didn't last long at all, and to be tossed out so early is pretty bad.

Filed Under: copyright, music, publishers, songwriters
Companies: mcs music america, microsoft, real networks, yahoo

Microsoft, Yahoo And Real Sued For Failing To Get All Necessary Licenses For Music Stores

from the oops dept

Want to know just how incredibly confusing and impossible copyright law has become? Just take a look at this lawsuit, filed yesterday by some music publishing companies against Microsoft, Yahoo and Real Networks, claiming that the online music stores each of them runs (the Zune store, Yahoo Music and Rhapsody) infringe their copyrights (thanks Eric Goldman for sending this over). How can that be, you ask? Surely these companies properly licensed the music they offer in their streaming/download offerings, right? Well, the lawsuit doesn't provide that much in the way of detail (and I've spoken to a few copyright lawyers -- none of whom seem to agree with each other!), it sure looks like the claim is that Microsoft, Yahoo and Real may have licensed the copyrights on the recordings, but did not license the copyright on the compositions. It sounds like (though, again, the details are fuzzy) that the record labels did licensing deals with these music services, but publishers and labels are separate entities (even if the labels own many publishers), and the rights are separate.

It's pure speculation until more details come out, but one imagines that the licensing deals with the record labels included some sort of assurances that the publishing rights were covered as well -- and for songs whose publishing rights were covered by the major record labels, that's probably the case. But for songs where the publishing rights were owned by independent companies -- such as MCS Music America, the claim appears to be that the publishing rights were never cleared -- and thus, Microsoft, Yahoo and Real were streaming/downloading music to which they only held some of the rights. Yikes.

Most of the complaint details which songs were offered without (allegedly) having secured all the rights. And, of course, the publishers are claiming that every time a song was streamed or downloaded, it counts as a separate act of infringement. If the court agrees, this could represent a massive liability for Microsoft, Yahoo and Real, given the fines we all know can be issued over a single instance of infringement.

That said, this is yet another example of the convoluted house of cards that copyright has become. The idea that you can license a recording, but then need to get a separate license from a totally different party for the rights to the "underlying composition" (and don't get us started on the need to make sure you're covered for reproduction, distribution and performance rights -- three separate issues under copyright law), and you begin to get a sense of the problem. Basically, every time some new technology or innovation comes along, the copyright holders run to Congress to slap on another right, rather than actually innovating on the business model side. And on top of it, when new technologies like the internet come along, it's not at all clear which rights really apply and who controls/owns what rights. Suddenly, you have a massive mess for a company trying to do something as simple as let people listen to music. Just for that, you get a massive lawsuit like the following: It's the sort of system only a greedy copyright lawyer could love: it's designed not to incentivize creation (copyright's stated purpose) or to facilitate the distribution of content -- but instead designed for the exact opposite: to confuse and hinder (but to keep copyright lawyers quite busy and gainfully employed).

Filed Under: composers, copyright, music, publishing rights
Companies: mcs music america, microsoft, real networks, yahoo