In what can only be the universe trying to get me to write more about statutory damages, today I read Judge Wood’s most recent decision in the Limewire case and discovered an interesting article by Wyatt Glynn entitled “Musical Albums as “Compositions”: A Limitation on Damages or a Trojan Horse Set to Ambush Termination Rights?” The former decision deals with the record labels’ motion seeking entitlement to statutory damages for each individual sound recording infringed by users of Limewire’s file sharing protocol, even if those sound recordings appeared as part of a compilation. The latter article considers the recent case of Bryant v. Media Rights Prods., Inc., 603 F.3d 135, 141 (2d Cir. 2010) and the potential impact of that decision, which found that the plaintiffs were only entitled to one award of statutory damages because the sound recordings had been issued as albums and were, therefore, “compilations” under the Copyright Act, on terminations of transfer.
In finding that the record labels were entitled to individual awards of statutory damages for each sound recording infringed, Judge Wood distinguished her Limewire case from Bryant by noting that the plaintiffs in Bryant had only issued their recordings as a compilation; i.e., the individual sound recordings had never been issued by the plaintiffs as “singles” but only as a CD. Only later, when those digital albums were made available on iTunes, were the individual sound recordings available as “singles.”
The calculation of damages in the Limewire case is going to require a MIT math wiz to calculate. Here is how Judge Wood described the statutory damages available to the record label plaintiffs:
For albums that contain sound recordings that are available only as part of the album, and
sound recordings that are also available as individual tracks, the Court provides the following example for purposes of illustration. Let us assume that Plaintiffs issued (1) an album containing songs A, B, C, and D, and that Plaintiffs also made available (2) songs A and B as individual tracks, but (3) made available songs C and D only as part of the album as a whole. Let us also assume that songs A, B, C, and D were infringed on the LimeWire system during that time period. Plaintiffs would be able to recover three statutory damage awards: one award for song A, one award for song B, and one award for the compilation (of which C and D are a part).
The concern of the author of the article is whether the Second Circuit’s holding in Bryant that albums are “compilations” under § 101 of the the Copyright Act might impact recording artists ability to terminate their copyright transfers under § 203 of the Copyright Act. For the uninitiated, § 203 provides that an author who has transferred the rights to her copyrighted work may, after 35 years, terminate the assignment of the copyright notwithstanding any agreement to the contrary. This being the Copyright Act, there is, of course, an exception; there is no right to terminate a transfer for a “work made for hire.” As the author discusses, whether the “album” as currently constituted today fits the statutory definition of a “compilation” is hotly contested; e.g., if a song is issued first as a single and then as a part of a digital album, is that a “compilation”? If they are compilations, then record companies can rest easy in the knowledge that they will own the copyrights in those sound recordings until they expire. If they are not compilations, then record companies face a mass exodus of famous (and very profitable) back catalog in the coming years.
An interesting application of this issue can be found in Arista Records LLC v. Launch Media, Inc. where the Second Circuit held in a case of first impression that the Launchcast personalized Internet radio service was not an “interactive” service under the Copyright Act. Because the Second Circuit determined that Launch as non-interactive–and, therefore, not infringing–the Court never considered whether the record label plaintiffs were entitled to damages based on individual sound recordings or only on a per-compilation basis. The Launch brief to the Second Circuit, however, contains a nice encapsulation of how this issue plays itself out in interesting ways. According to their brief (around page 51):
During the trial, plaintiffs stipulated as follows: (1) every copyright at issue
was a single registration for “an album consisting of multiple tracks”; (2) for all
but 11 of the 835 copyrights at issue, the copyright registration was denominated
as a “work made for hire”; (3) for every copyright at issue “the recording artist
whose recordings are the subject of the Certificates were not employees of the
copyright claimants.” … These facts, taken together, lead to the
inescapable conclusion that the registrations at issue were, in fact, for
Judge Wood’s Limewire decision is here:
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Wyatt Glynn’s article is available by clicking here.
Launch Media’s Second Circuit brief is here:
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