So How Much Of The $90 Million Pandora Is Paying RIAA Labels To Settle Lawsuit Will Go To Artists?

from the we're-waiting... dept

This isn't a huge surprise, but following Sirius XM settling the lawsuit filed against it by the RIAA labels over playing pre-1972 sound recordings, Pandora has now done the same, agreeing to pay $90 million to have the lawsuit go away. In both cases, the companies recognized that, while the law was unclear and some lawsuits had gone both ways, it was probably a lot easier in the long run to just pay up than face the uncertainty and the possibility of much larger fees. Of course, both companies do still face some individual lawsuits, such as the ones by Flo & Eddie (the company behind The Turtles) who kicked off this lawsuit craze.

But... there is still a big question. As with pretty much any of these lawsuits filed by the RIAA or MPAA and its members, when they come to a settlement, how much of that money actually gets passed along to the individual creators? In the past, the answer has been slim to none with vague answers about how the money would go into some general pool, and the answer may be similar here. Eriq Gardner at the Hollywood Reporter did the heavy lifting, and got the slightly vague answers from the labels:

For example, will the proceeds of the settlement be shared by the major labels with their recording artists? What share? Upon a request for comment, an RIAA spokesperson said it was a question best directed towards the labels themselves. We've reached out. According to a Sony insider, the label intends to share proceeds in the standard way, analogous to how money from SoundExchange is shared. The source acknowledges that the mechanism is still being worked out. Another source says that Universal intends to process money directly through SoundExchange, a digital royalty collection outfit. A Warner Music spokesperson says the "the artist share [is] being distributed through SoundExchange."

So, they're basically passing the buck to SoundExchange, which handles royalties for Pandora and other digital streaming services, and has an unfortunate history of not being able to find the artists it's supposed to be paying (though, it's been much better in the past few years). But, even so, it's not clear how SoundExchange will divvy up the money, and how much will just be going directly back to the labels themselves.

Filed Under: pre-1972, pre-1972 sound recordings, settlement
Companies: pandora, riaa, soundexchange

Katherine Heigl Drops Her Lawsuit Against Duane Reade

from the dropping-spree dept

Back in April, I wrote to inform you of the crazy-pants lawsuit filed by Katherine Heigl after Duane Reade, a drug store chain, tweeted out a photo of Heigl shopping at one of its stores. Under the auspices of publicity rights and the corollary idea that celebrities are simply better people with more legal privileges than the rest of us, Heigl wanted six-million dollars for the following tweet.

At the time, we noted that despite New York publicity rights laws being among the most tyrannical, it seemed strange for a lawsuit to be filed against a company simply for showing, you know, a thing that happened. While Heigl also claimed that this was a form of advertising, it's still just the accurate representation of something that occurred, which makes the whole advertising claim sort of silly.

Well, the lawsuit has now been voluntarily dropped with prejudice, along with news that Duane Reade has reached some sort of super-secret agreement with Heigl.

Papers to dismiss the lawsuit were submitted in New York federal court on Tuesday. The dismissal comes with prejudice, meaning that Heigl can't later sue again over Duane Reade's tweet and Facebook post. No terms were revealed in court papers, but Heigl's attorney provides at least some detail.

"Katherine Heigl and Duane Reade have worked out a mutually beneficial agreement," says Peter Haviland at Ballard Spahr. "Ms. Heigl has voluntarily dismissed her lawsuit, and Duane Reade has made a contribution to benefit the Jason Debus Heigl Foundation. The parties have agreed to keep the terms of the agreement confidential."

There's no way to be sure that Duane Reade didn't drop six million off at Heigl's charity, but I doubt it. Either way, it's sort of a shame to see the company run away from challenging the insanity of the claims in the original lawsuit. Publicity rights are beginning to result in ever-more ramped-up legal cases that anyone with a modicum of common sense will recognize as silly. It was a picture of Heigl shopping at a store. Somehow that resulted in the store having to settle and contribute to a celebrity's charity of choice? Come on now.

Filed Under: advertising, katherine heigl, publicity rights, settlement, tweets
Companies: duane reade

NYPD Settles Case In Which It Arrested Guy For Recording Stop And Frisk, Pays $125,000

from the finishing-all-the-city's-business dept

In yet another case in which police illegal arrested someone for filming the police, the police have been forced to pay up. Unlike the big Simon Glik case, it appears that the NYPD (under new management!) decided to do its best to settle the case and get it off the books. They're paying $125,000 to Dick George, who recorded police doing one of its infamous stop-and-frisks. According to George's lawsuit, not only did the police arrest George and delete the photos from his camera (after he told the kids who were stopped and frisked to get the cops' badge numbers next time), the police flat out knew what they were doing was illegal -- telling George to sue the police:

“Now we’re going to give you what you deserve for meddling in our business and when we finish with you, you can sue the city for $5 million and get rich, we don’t care,” Lt. Dennis Ferber said, according to the suit filed in Brooklyn Federal Court.

Not surprisingly, the new mayor and new police chief didn't want this case to go very far, and got George to agree to a $125,000 settlement. Will victories like this get police to stop these kinds of things? Doubtful, but it's still good to see.

Filed Under: dick george, nypd, police, recording, settlement, simon glik

Big Silicon Valley Firms Aren't Going To Get Off That Easily For Their Anti-Poaching Agreements

from the open-up-that-wallet dept

A few months ago, we reported on how Google, Apple, Adobe and Intel had agreed to settle a lawsuit concerning their collusive hiring practices, in which those companies (and a few others that had already settled) agreed not to "poach" employees from each other. As we had noted, these anti-poaching agreements (led by Steve Jobs who pushed them on many other companies) are a really hideous practice that is not only bad for the employees of those companies, but bad for innovation in general. As we've detailed, allowing the easy movement of employees between innovative tech companies is a huge part of why Silicon Valley became Silicon Valley. Employees shifting jobs between these companies often helps with greater idea sharing, different perspectives and speeds up innovation and (especially) big breakthroughs. It's almost an informal "open sourcing" of certain information, in which employees who are job hopping act as conduits of important information moving between companies in an informal manner.

That's why it's a very good thing that the practice is being called out and shamed -- and hopefully episodes like this can be put in the past. In our comments on the original settlement, however, many people pointed out that the $324 million actually seemed a little "light" given the number of employees involved. It would appear that Judge Lucy Koh agrees, and has rejected the settlement agreement as being too low, saying that the companies should try again with a higher number, starting at a minimum of $380 million.

The ruling also includes more details of how these agreements got started, showing Steve Jobs basically bullying lots of other CEOs -- and demonstrating just how scared everyone was of Jobs. They all seemed to fear going against him and having him declare "war" on them and going after their employees. Either way, it looks like the companies are going to have to cough up more money -- and hopefully this (again) means that this kind of anti-poaching practice is ended. Hopefully, these companies stop thinking just about how employees leaving hurt themselves, but about how they too can benefit from inbound employees.

In fact, there's a new book by Reid Hoffman, Ben Casnocha and Chris Yeh, called The Alliance, which, among other things, recommends that companies get much better about learning (1) how to let employees leave when it's in those employees' best interests and (2) how to keep a strong "alumni" network, recognizing that can benefit them in the long run. Hopefully the ideas like that, as well as all of the evidence on the importance of job shifting for enabling innovation, will mean these kinds of practices go away. I'm sure a bigger payout due to the lawsuit won't hurt either.

Filed Under: anti-poaching, collusion, innovation, job shifting, non-competes, poaching, settlement, steve jobs
Companies: adobe, apple, google, intel

Goldieblox Agreed To Pay Charity $1 Million For Using Beastie Boys' Girls

from the fair-use-gets-pricey dept

It appears that the "settlement" between the Beastie Boys and Goldieblox was somewhat more significant than people imagined. Goldieblox will be contributing 1% of its revenue to a charity chosen by the Beastie Boys until it's paid up $1 million. Fair use ain't cheap, apparently.

Back in March, we noted briefly that the Beastie Boys and Goldieblox had settled their big legal dispute, over Goldieblox doing a commercial that included a parody of the Beastie Boys' song "Girls." We still strongly believe that this was a clear cut case of fair use, but the whole case got more emotionally complicated by the Beastie Boys general prohibition on the use of its songs in advertising, including Adam Yauch putting in his will that his music can not be used in ads. Legally, that statement has no bearing on the fair use analysis, but to many people, to ignore those wishes still felt pretty damn icky. Goldieblox appeared to fairly quickly realize that they were losing the war of public perception and capitulated.

However, the terms of the "settlement" were kept secret -- until now. And that's only because in a different legal fight between the Beastie Boys and Monster Energy Drink involving a Monster Energy Drink event where DJs played tribute to the Beastie Boys the day after Yauch passed away. The specifics of that case really aren't that important, but a recent filing in that lawsuit, concerning a "reasonable" licensing amount, also happens to reveal the settlement terms of the Goldieblox settlement (via Eriq Gardner):

The GoldieBlox Settlement granted GoldieBlox a retroactive license to use the musical composition of “Girls” between November 18, 2013 and November 28, 2013.... In exchange, GoldieBlox agreed to make annual payments of 1% of its gross revenue, until the total payments reached $1 million, to a charitable organization chosen by the Beastie Boys and approved by GoldieBlox which supports “science, technology, engineering and/or mathematics education for girls.” ... The parties also agreed to make certain, specifically worded public statements... and to keep the settlement confidential, with certain exceptions, including its use in litigation.

While $1 million donated to a charity that focuses on "science, technology, engineering and/or mathematics education for girls" is certainly a good thing, and settling this fight amicably is a good resolution, it's still somewhat disappointing. Again, the original usage was almost certainly fair use, and I always worry when people diminish fair use, or assume that there can be no fair use in commercial cases. That's simply untrue, and agreeing to pay $1 million, even to charity, for a clear fair use, which was online for just 10 days, did nothing to harm the original song (and, in fact, brought a lot more attention to some important ideas), seems like an unfortunate result.

Filed Under: beastie boys, copyright, fair use, girls, settlement
Companies: goldieblox

Google And Viacom Finally Settle The Big YouTube Lawsuit

from the about-time dept

I'm somewhat surprised this took nearly this long, but it appears that Google and Viacom have finally settled their long-running legal fight over whether or not YouTube was liable for copyright infringement on the site. So far, Viacom had been losing pretty badly at nearly every step of the process -- and YouTube is considered so completely legit at this point that the more Viacom fought, not only did it look worse and worse, but at least some of the legal geniuses there must have realized that the court was going to wipe the floor so clean with them that rulings they really didn't like were going to be written and used as precedents for other innovative services.

The terms of the settlement are not public, but in this case, it likely doesn't much matter. I'd be surprised if much (or any) money changed hands (Update: Yup, it appears no money changed hands). Both companies spent many, many, many millions of dollars in the lawsuit to date, and it clearly made sense to stop it from going any further (especially from Viacom's standpoint, because it was pretty clear that it was going to lose really badly). While this means there won't be a useful Supreme Court ruling that reinforces the DMCA's safe harbors, the initial victories by Google in the lower courts should have enough precedential value to be useful in many other cases.

In the end, Viacom wasted more than seven years fighting YouTube in this particular case, and not a single court seemed to think particularly highly of its theories. Its closest "victory" in the process still involved the appeals court more or less rejecting every one of Viacom's theories. If I'm a Viacom shareholder (and, thankfully, I'm not), at this point I'm asking why the company spent so many years and so much money trying to sue one of the most popular and useful distribution platforms out there.

In the end, the case is perhaps one of the most perfect examples of how old media reacts badly to new innovations and immediately reaches for the only real tool in its toolbox against disruptive innovation: flailing about angrily in the court system, hoping to kill the innovation. Thankfully, seven years later, this process has finally been put to bed.

Filed Under: copyright, dmca, fair use, innovation, lawsuits, settlement, youtube
Companies: google, viacom, youtube

IsoHunt Agrees To Shut Down And 'Pay' $110 Million

from the which-will-never-get-paid dept

Just this morning I'd been putting together a long and involved post highlighting how some of the MPAA's actions in the IsoHunt case raised serious questions about their overall strategy, but I now need to go back and revise and update that post as the news has come down that IsoHunt and the MPAA have "settled" the case with IsoHunt agreeing to "pay" $110 million and shut down. Of course, IsoHunt won't pay $110 million. In court recently, even the MPAA's lawyers admitted that IsoHunt would be dead if the court awarded as little as $2 million. But, the MPAA wants that bogus $110 million number to throw around, just as they wanted to toss around the $105 million that Limewire settled for a couple years ago.

Of course, even if IsoHunt did pay that kind of money, how much would go to artists?

Unfortunately, there were many, many problems with the IsoHunt case in the first place. It was a clear case of bad facts making bad law -- or what Eric Goldman has referred to as the difference between real law and file sharing rule. It's clear, for example, that there was a tremendous amount of infringement done via IsoHunt. But there are serious questions about whether or not the liability for that should fall on IsoHunt as a torrent search engine. IsoHunt remains really the only significant case where the court has accepted Hollywood's bizarre interpretation of "red flag knowledge" in copyright infringement. And, really, that's why the MPAA wanted so damn badly to get this case finished without an appeal.

Now, unfortunately, the MPAA can continue to point to the rulings in IsoHunt, including many of the more problematic claims around inducement liability and red flag knowledge, knowing that they can't be directly challenged in that case any more. You can understand why IsoHunt settled. The company had already lost the key fights, and it was going to get hit with a giant sum to pay no matter what -- clearly more than it could ever pay. So why go through the process of continuing the court fight, when a settlement just gets it over and done with? At that point, the quibble is just about what bogus number the MPAA gets to lead the press release with, and $110 million was apparently the winning ticket. It wouldn't have made a difference if it was $1.1 million or $1.1 billion, the result is basically the same.

Amusingly, Chris Dodd is out there claiming that this is some sort of victory for innovation:

"Today’s settlement is a major step forward in realizing the enormous potential of the Internet as a platform for legitimate commerce and innovation,” said former Sen. Chris Dodd, chairman and chief executive of the MPAA. “It also sends a strong message that those who build businesses around encouraging, enabling, and helping others to commit copyright infringement are themselves infringers, and will be held accountable for their illegal actions.”

Of course, it does nothing of the sort. If the shutting down of Napster, Grokster, Aimster and Limewire failed to make that point, why will IsoHunt's shutdown and unpayable fine make that point any stronger? Either way, I'll have a bit more on this case soon, once I've had a chance to rewrite that other post in light of this latest turn of events.

Filed Under: copyright, gary fung, inducement, red flag knowledge, settlement
Companies: columbia studios, isohunt, mpaa

Judge: Apple / HTC Patent Agreement Must Be Revealed (Except For Dollar Amount)

from the so-we-shall-see dept

Last month, we wrote about Apple and HTC settling their ongoing patent dispute, and the subsequent request by Samsung to see the details, which were being kept confidential. It wasn't so much the amount paid that interested Samsung, but which patents were included in the settlement. That's because, in the Apple/Samsung case, Apple has argued that it would never license some of its patents, and thus there should be an injunction banning the sale of certain Samsung devices. However, if those same patents are found in the HTC agreement... then Samsung can point out that, not only is Apple lying to the court, but that an injunction should be off the table. That's because the law suggests injunctions only make sense when there is "irreparable harm." And if you can just pay up the missed license fees, then it's clearly not "irreparable."

The court quickly granted Samsung's request and has now gone a step further, saying that the agreement itself should be made public, except for pricing and royalty terms. Bizarrely, it was actually Samsung who sought to have the information about what patents were included under seal -- such that it could see it, but the public could not. Either way, the judge has made it clear that the patents need to be made public as there's no compelling interest in keeping them secret.

Filed Under: injunctions, patents, settlement
Companies: apple, htc, samsung

Universal Music Settles Key Fight Over Eminem Royalties... With Secret Agreement

from the of-course dept

For years, we've been covering a key legal fight in the music business, involving Eminem's producers, FBT, and Universal Music, over how much was owed on iTunes sales. The key issue: is an iTunes purchase a "sale" or a "license." Older music contracts that predated the internet era tended to focus on sales, in which artists tend to get about 15% royalties. "Licenses," on the other hand, tended to be for things like commercials or movies, but commanded around 50% royalties. But when you talk about iTunes songs, you can make somewhat compelling cases that it's either a sale or a license, depending on which details you focus on. Universal Music, of course, insisted that it was just like a CD sale. FBT argued it was just like a license. There are a ton of other similar lawsuits ongoing, but after losing at the district court level, FBT won on appeal. That resulted in a somewhat insane and contentious fight over how much Universal would have to pay up, with a judge slamming Universal for hiding revenue with tricky funny money accounting, and even trying to expense the cost of this very lawsuit back against what they owed.

However, the damages phase of the case was set to go to trial in the spring, and it would have (1) revealed an awful lot about the blackbox of Universal Music's accounting practices and (2) given a roadmap for the many other similar lawsuits against Universal Music (and the other major labels). Given that, it should come as no surprise that Universal Music scrambled to come up with a way to get FBT to settle... with the terms of the settlement being secret. This almost certainly means that UMG paid through the nose, with the hope that it makes it more difficult for other artists to get similar rewards, and while allowing Universal to keep its secrets secret... for now.

Filed Under: eminem, license, royalties, sale, settlement
Companies: fbt, universal music