UMG’s Motion for Summary Judgment
Global Eagle’s Response
Judge Wu’s Tentative Order
Judge Wu’s Supplemental Order
UMG’s Motion for Summary Judgment
Global Eagle’s Response
Judge Wu’s Tentative Order
Judge Wu’s Supplemental Order
The Second Circuit delivered its highly anticipated decision in the Capitol Records v. Vimeo case. Various record labels sued UGC site Vimeo for copyright infringement of sound recording fixed prior to February 14, 1972, so-called Pre-72 recordings. The labels argued that the safe harbor provisions of Sec. 512 of the Copyright Act, which provides immunity to copyright infringement liability to UGC host sites subject to certain conditions, do not apply to Pre 72 recordings, which are not covered by the Copyright Act but rather are the subject to various state statutory and common law protections. Relying heavily on a 2011 report concerning the legal state of Pre 72 recordings from the Copyright Office, the federal district court for the Souther District of New York granted the labels’ motion for summary judgment.1 Vimeo appealed.
In discussing the origins of Sec. 512, the Second Circuit describes the “compromise” that Congress sought to establish between content creators and content users. That compromise provided creators with a ‘notice and takedown’ provision, which allowed creators to avoid filing individual copyright infringement actions against each and every unauthorized use online. That compromise provided users immunity from infringement claims and monitoring responsibilities, provided the user expeditiously remove content in response to a takedown request. This compromise, the Second Circuit concludes, would be illusory if Pre 72 recordings weren’t subject to the 512 safe harbor.
The Second Circuit begins by noting that “the district court accepted without discussion the position taken by the United States Copyright Office in a report prepared in 2011 that the safe harbor does not protect against liability for infringement of pre-1972 sound recordings.” The Second Circuit then dissects the report and its shortcomings.
The Second Circuit points out that
The Report begins its analysis by asserting that § 512(c)’s term “infringement of copyright” is defined in § 501(a) as the violation of “any of the exclusive rights of the copyright owner as provided by sections 106 through 122.” Section 501(a), however, does not contain such a definition. The Copyright Act’s definitions are set forth in § 101, and do not include a definition for “infringement of copyright.
The Second Circuit rejects the Office’s conclusion, reasoning
The statement that one who violates rights identified in specified sections is an “infringer of copyright” does not purport to set forth an exclusive definition of “infringer of copyright.” … To state that conduct x violates a law is not the same thing as saying that conduct x is the only conduct that violates the law. (emphasis in original)
The Second Circuit concludes, therefore, that the safe harbor must include Pre 72 recordings or the entire “compromise” envisaged by Congress would be illusory.
what Congress intended in passing § 512(c) was to strike a compromise under which, in return for the obligation to take down infringing works promptly on receipt of notice of infringement from the owner, Internet service providers would be relieved of liability for user-posted infringements of which they were unaware, as well as of the obligation to scour matter posted on their services to ensure against copyright infringement. The purpose of the compromise was to make economically feasible the provision of valuable Internet services while expanding protections of the interests of copyright owners through the new notice-and-takedown provision. To construe § 512(c) as leaving service providers subject to liability under state copyright laws for postings by users of infringements of which the service providers were unaware would defeat the very purpose Congress sought to achieve in passing the statute.
Second Circuit Decision
Copyright Office Pre-72 Report
In the latest lawsuit involving the public performance of so-called Pre 72 sound recordings 1, defendant CBS Radio is making a claim almost as controversial as the plaintiff’s allegations. Much digital ink has been spilled criticizing the decisions of federal district courts in California and New York finding that record companies enjoy a state law right of public performance in their Pre 72 recordings, despite not having ever asserted such rights before 2012. 2 CBS, in its recent motion for summary judgment, makes a similarly bold assertion: that it cannot be liable to plaintiff for infringing a performance right in plaintiff’s Pre 72 recordings because CBS only performs “remastered” versions of plaintiff’s sound recordings — and not the original Pre 72 sound recordings owned by the plaintiff.
The question of when a remastering or remixing of an existing recording is entitled to a new copyright has been debated before.3 The problem here is that record labels have been remastering previously released recordings for many years and *not* attempting to secure a new copyright in those remastered versions. The reason is fairly obvious — as plaintiff’s point out in their response to CBS’ motion — if a record company could secure a new copyright simply by remastering a perviously copyrighted sound recording, a shrewd record executive could extend the life of copyright in a sound recording forever. While CBS is correct that remastering engineers contribute significant creativity in the process of applying new technologies to remaster a sound recording to (hopefully) improve the listener’s experience of listening to a previously released recording, it strikes me as dubious to conclude therefore that the resulting remastered sound recording is entitled to an entirely new federal copyright. If CBS is correct, then we could find ourselves in a world in which the originally issued sound recording enters the public domain, but the digitally remastered version continues to enjoy copyright protection, even though to the layperson those are the same recording.
CBS’ motion for summary judgment
TufAmerica has discovered that it can be very expensive to bring a copyright infringement claim when you don’t own the copyright allegedly being infringed. In this case, TufAmerica sued the Beastie Boys (including their record label [UMG] and music publisher [UMPG]) over the alleged sampling of TufAmerica’s recording artist Trouble Funk’s 1982 release “Say What” on the Beastie Boy’s track “Shadrach” from their 1989 release Paul’s Boutique. Judge Nathan of the SDNY recently granted Defendant’s motions for attorneys’ fees and costs totaling nearly $850,000! Judge Nathan had earlier granted Defendant’s motion for summary judgment, finding that TufAmerica lacked standing to sue for infringement because it did not own an exclusive license to the Trouble Funk recording / musical composition at issue. Instead, Judge Nathan found that, at most, TufAmerica had acquired a “bare right to sue,” which is not an exclusive license and does not provide standing under the Copyright Act’s Sec. 501’s standing requirements.
Judge Nathan’s decision is below.
Also from TufAmerica’s lawsuit against the Beastie Boys over the alleged sampling of TufAmerica’s recording artist Trouble Funk’s 1982 release “Say What” on the Beastie Boy’s “Shadrach” from their 1989 release Paul’s Boutique, I give you Trouble Funk’s recording contract and co-publishing agreement.
ESPN recently initiated a rate proceeding with performing rights organization BMI. ESPN claimed that the rate BMI was seeking was above market and asked the federal district court for the Southern District of New York, which has continuing jurisdiction over the consent decree between BMI and the Department of Justice to determine “reasonable” rates. BMI has responded (attached below) and claims it is simply asking ESPN to continue paying the same percentage of revenue rate to which it agreed 10 years ago.
BMI claims that ESPN utilizes a BMI blanket license to cover so-called “incidental and ambient” music performances, such as in broadcasts of live sporting events; e.g., at Heinz Field the Pittsburgh Steelers sometimes play Styx’ “Renegade” during commercial breaks when the Steelers are on defense to “hype” the crowd. If the Steelers are on Monday Night Football and ESPN breaks back to the game before “Renegade” has stopped playing, for the purpose of music copyright licensing ESPN has “performed” that song, for which it must have a license. This is true even though Heinz Field already has its own license to perform that song to the fans sitting in the stadium to watch the game. In a bit of litigation hyperbole BMI argues that “ambient stadium music is a critical component of the broadcast that allows ESPN to attract viewers by making them feel like they are sitting in the stadium cheering on their favorite team.” How can something that is “ambient” (e.g., “as ignorable as it is interesting”) also be a “critical component” of a broadcast?
So how much does BMI want ESPN to pay for this ambient but “critical component”? $15 million per year. That figure is the product of ESPN’s annual revenue ($11b in 2014) multiplied by 0.1375%, the lowest rate among the rates charged for cable television broadcasts (“music intensive” programming networks pay 0.9% of gross revenue, “general entertainment” programming networks pay 0.375% of gross revenue, and “news and sports” programming networks pay 0.1375% of gross revenue.).
However, in 2005, the last year of ESPN’s prior license with BMI, ESPN’s annual revenue was “just” $5b. 1 This is one of the problems with a percentage of revenue royalty rate: while it may be that ESPN viewed its “incidental and ambient” music performances on live broadcasts of sports to be “worth” $6.875mm annually, it does not mean that those same performances are “worth” more than twice that amount. This is especially true at a time when ESPN’s revenues are declining rapidly and content acquisitions costs are increasing. 2
BMI’s answer is below:
Readers of this blog know how much I enjoy finding actual recording / publishing agreements appended to lawsuits involving artists and their labels / publishers. Here is Mobb Deep’s 1995 copublishing agreement with BMG, the rights to which were acquired by UMPG and the subject of a short-lived lawsuit by Prodigy (a.k.a. Albert Johnson) (Johnson v. Universal Music Publishing Group et al, 15-cv-8811-ER (S.D.N.Y)). Here you go:
Jay Z’s Tidal is the latest interactive service to be sued for copyright infringement for failure to secure reproduction rights to musical compositions embodied in sound recordings made available to listeners / subscribers of the service. The suit specifically alleges that Tidal failed to submit the required notices of intent that are prerequisites to taking advantage of the statutory license under Sec. 115 of the Copyright Act.
The complaint is here:
Randy California (born Randall Wolfe) was a singer songwriter and original member of the 60s psychedelic rock band Spirit, best known for “I Got a Line on You,” from the band’s second album.
A portion of the intro to the song “Taurus,” an obscure track on Spirit’s eponymous 1968 recording, bears a resemblance to introduction of “Stairway to Heaven,” the 1971 release by Led Zeppelin that is counted among Rolling Stone magazine’s 500 greatest songs of all time.
You can listen to “Taurus” and decide for yourself.
What is more interesting to me than whether Jimmy Page lifted the intro of one of the most famous songs in rock history from one of its most obscure is an argument in Led Zeppelin’s motion to dismiss, which alleges that Randy California isn’t the “author” of the song and, therefore, lacks standing to sue. The argument–which appears quite strong–is based on Randy’s first songwriting agreement, executed in 1968 when he was only 16. That agreement, which is provided below, defines the relationship between Hollenbeck Music (the publishing company affiliated with Ole Records, to which Spirit was signed for an exclusive recording contract) thusly: “Publisher … employs Writer to render his services as a songwriter and composer …” This language appears to be classic “work made for hire” under which the Copyright Act treats the employer as the author of the copyrighted work. (See Sec. 101, defining a “work made for hire” as “a work prepared by an employee within the scope of his or her employment.”). Said differently, in this context the “work made for hire” doctrine treats the copyright in the song “Taurus” as if Hollenbeck had actually written the notes in question. Under the Copyright Act’s Sec. 501(b), only the legal or beneficial owner of an exclusive right under copyright has standing to sue for its infringement. Importantly, however, “[a] creator of a work made for hire does not qualify as a beneficial owner even if he or she is entitled to royalties.” Ray Charles Found. v. Robinson, 795 F.3d 1109, 1116 n. 7 (9th Cir. 2015). This appears to be fatal to Randy’s heirs attempt to sue Led Zeppelin for infringement!
ASIDE: If Jimmy Page did copy the intro to Stairway to Heaven, then Hollenbeck may have a claim for infringement, so succeeding on this motion to dismiss is not necessarily a lasting victory for Led Zeppelin.
The exclusive songwriter agreement is here.
The motion to dismiss is here.
As I’ve often said, reviewing litigation dockets is a great place to learn new things. Instead of focusing on a judge’s final decision, one can often learn more by reading the party’s pleadings, which provide the strongest advocacy for a particular legal position. [caveat–it is critical to read BOTH side’s pleadings]. It is also often the case that a recording artist or songwriter’s contract will be appended to the complaint, providing useful insight not only into the issues in a particular litigation, but towards how the music industry evolves over time. I was reading Rita Ora’s recording contract with Roc Nation–a copy of which can be found here–and I remembered some research I’d done a while ago but never bothered to post here. Specifically, a review of 3 recording contracts executed between 1983 and 1992 demonstrate how public performance for sound recording royalties made their way into major label recording contracts. [caveat–this is not intended to be scientific; it is merely an interesting fact based on the 3 contracts in question]
So, check this out. In 1983, CBS did *not* have any language about public performance rights in sound recordings—check out the Toto contract below. By 1989, the language does exist—see 10.04 of the Allman Bros. agreement with CBS reproduced below. Identical language appears in the Interscope license with Dr. Dre is 1992—see 10.05 of the Dre agreement reproduced below—even though I’m not aware of any relationship between CBS (which was bought by Sony) and Interscope (which was bought by UMG)!
The Toto recording contract is below.
The Allman Bros. recording contract is below.
Dr. Dre’s recording agreement is below: