Copyright Talk

The digital questions just keep on coming. ASCAP and some others have maintained that the digital downloading of music implicates two strands of the copyright bundle, and that royalties for both are due. One royalty is due for reproduction of the recording (the digital equivalent of pressing a record or CD), and one royalty is due for the performance of the work, since the music can be heard during the download transmission.

In a royalty rate case before a federal district court in New York, ASCAP asked for clarification that both royalties must be paid when a piece of music is digitally downloaded.

Last week, the judge ruled that only one right, the reproduction right, is implicated, and therefore only the mechanical royalty for digital transmission must be paid. Streaming audio still requires payment of performance royalties. Thanks to William Patry at the Patry Copyright Blog for spotting that court result.

The question now is whether ASCAP continues the fight or turns its attention to the many other issues facing muscians as digital technology expands. My personal opinion is that the quest to collect royalties for the incidental listening to music while downloading is a pointless pursuit. If the individual consumer completed the download and THEN listened to it, clearly no performance royalty would be due. It’s an accident of timing and technology that you can create and listen to music at the same time, but if the purpose is to effect a download, then that is how it should be viewed.

Copyright.com is a clearinghouse for persons who want to use copyrighted material to connect with the copyright holders. According to their website,
“Copyright Clearance Center manages the rights to over 1.75 million works and represents more than 9,600 publishers and hundreds of thousands of authors and other creators. The company’s streamlined, convenient compliance solutions enable more than 10,000 corporations and subsidiaries, including most of the Fortune 100, and thousands of government agencies, law firms, document suppliers, libraries, academic institutions, copy shops and bookstores to respect the rights of copyright holders and lawfully reuse the copyright-protected information they need to drive their business.”

It’s a relatively simple process for publishers and authors. The publishers and authors register their works with the clearance center, and set their own royalty rates for various uses. The Center then collects and distributes the royalties from people who buy the permissions. The Center keeps a percentage to cover their operating costs.

For a user, however, the service is not as friendly. A company or person looking for permission to use a copyrighted work would search the Center’s database by publication title, publisher name, or ISBN number. If the work is in the database, the user can tell immediately if permission is available for the the use they want, and exactly how much it will cost. They can then pay right then, on a per use basis or they can purchase an annual license to cover multiple uses of multiple works.

The system works for users only if they know what work they want and if it is in the database. If the publisher or author has not registered the work to be licensed by the Copyright Clearance Center, then the user must find and contact the copyright holder directly. Although the Center has huge numbers of works in its database, it’s still just a drop in the bucket of the total number of copyrighted works in existence. Going through the Center merely adds a step to the process of seeking permissions that stands a good chance of falling flat.

If the Center wants to be the real “go-to” place for copyright permission sales, they need to have a search feature that catagorizes the material they manage.

I am constantly preaching the value of written contracts. For some reason, they tend to scare people who are not in the mainstream business world, but the whole point of a written contract is to make sure that each party understands, as best as is possible, exactly what is being agreed to. There are other good reasons to write things down, but ensuring that everyone is agreeing to the same thing is one of the primary purposes of committing your agreements to writing.

So with that in mind, I found an excellent checklist for putting together book publishing contracts. Any agreement that involves copyrighted materials becomes just that much more complicated, because the bundle of rights that make up copyright can be split and repackaged so many ways. Book publishing and article rights can easily be overlooked and left out of written agreements if the parties are not careful, so a good checklist like this one is well worth the time to go through.

A lot of intellectual energy has been used on trying to figure out how sampling fits into copyright law. Sampling is a technique used largely in hip-hop music, which relies on previously recorded music to create large portions of the sound in the hip-hop piece. But it never sounds exactly like the original recording, even though it is taken directly from the original recording, and this is where all of the complexity of the issue arises from. Even though hip-hop, and sampling, has been around now for quite a while, DJ’s, record companies, lawyers and courts are still struggling with the concept and how to handle it. This short documentary highlights some of the issues from the perspective of the artists who use the samples.

The poor recording industry. It’s just trying to protect the rights of the companies and of the artists who record for them. I really do believe that. But somewhere along the way, they’ve acquired an image worse than that of Big Oil. Record companies are masters of imaging for their artists, so you’d think they would be able to turn that talent on to themselves and overhaul their image - it’s gotten so bad that no matter what they do these days there’s an instant jump to dislike whatever they’re doing.

The latest is an effort to weigh in on proposed legislation in California that would limit the ability of private individuals to pretend to be other people, if the purpose is to obtain personal information from or about someone else. In other words, you’d no longer be able to play undercover cop unless you really were an undercover cop. Personally, I think that bites, but I’ll get over it. The recording industry, however, wanted an exception in the legislation that would ensure they could continue to conduct undercover copyright piracy investigations without running afoul of the law. I think it’s a reasonable request, but instead of starting a considered debate on the whole issue, the recording industry was vilified for even bringing it up. You can read the story in the LA Times, and I apologize in advance for linking to a site that requires registration - albeit free registration - but I couldn’t find the story anywhere else.

A post on William Patry’s copyright law blog discusses the troubles the old TV show “WKRP in Cincinnati” has had trying to go into syndication and now onto DVD release due to the limitations of the original licenses for music used in the show. I found the saga interesting not just for its relation to copyright law and author’s control, but even more so for it’s illustration of the importance our culture places on music. Don’t ever underestimate the value of nurturing great musicians and songwriters. While it’s true that no single song is irreplaceable, it is also true that without great music, our lives would be far less rich than they are. Music has the power to evoke emotion like nothing else.

I liked last week’s cartoons so much, I thought I’d post some more. Enjoy.
Copyright Cartoons

Hokie Spirit Memorial Fund

April 16, 2007, will be remembered as one of the darkest days in the history of the Virginia Tech community and the world beyond.

To remember and honor the victims of those tragic events, the university has established the Hokie Spirit Memorial Fund to aid in the healing process and generate financial support.

The fund will be used to cover expenses including but not limited to:

• Grief counseling
• Memorials
• Communication expenses
• Comfort expenses
• Incidental needs

If you plan to give, please click the link below:

Is internet radio really a threatening development that broadcast radio would like to drive out of business, or is the outcry over royalty rate increases merely a blow to small operations that are the equivalent of “pirate” radio stations? There are certainly internet based streaming music services that have a business model that allows them to take in enough revenue to cover costs, including royalty costs. Maybe the internet radio services that are in danger of shutting down are simply those that don’t know how, or don’t want, to get paid for their service.

SoundExchange, the company that collects and pays out royalties to performers for digital use of their recordings, has a FAQ that addresses some of these issues.

Personally, I think the real problem in all this mess is that broadcast radio and internet radio are treated differently. Either all pay, or none pay.

Internet radio stations are facing their final days due to a huge, and in my opinion, unjustifiable increase in the statutory royalty rate paid for playing copyrighted recordings. You can read an account, and some of the reaction, here. At the risk of being incredibly annoying, let me say that I think we can find the lemonade in these lemons.

There may be an incredible opportunity here for do-it-yourselfers and true independent labels. With the internet stations finding most music off-limits because of the huge royalties required, any music that comes to those stations with an individual license waiving the right to collect statutory royalties should have an excellent shot at getting played - and played a lot. Sure there’s some extra work and extra record-keeping involved for the music owners, but it’s well worth it to be able to get your small release played to real people.

Traditional airwave radio does not pay royalties for music that they play on their shows. There is a special exemption in the copyright law for radio play. When internet radio stations came into being, it was determined that they do not qualify for the exemption and they must pay royalties for the music they play. The latest battle over how much the royalty would be ended with a steep increase in the amount. The stations requested a rehearing, and there was some optimism that they would get one. However, today the Copyright Royalty Board denied the request, leaving the sharply steeper royalty rates in effect, and causing many internet stations, including traditional stations that simulcast over the internet, to predict their own demise.

The legal difference between air radio and internet radio is based on the science behind the broadcasts. This makes no sense to me whatsoever. People use air radio and internet radio in similar ways. Internet radio has simply opened up the competition for listeners, giving those listeners vastly more choices. Increasing the number of choices available is especially critical as regulation of air radio has resulted in the consolidation of thousands of stations into single “networks” that control the vast majority of what is broadcast in the US. Air radio was exempted from royalties ostensibly because radio play for music was a useful promotional tool for the owners of the music, essentially an advertisement for sales of their recordings. The same can be said of internet radio, so the only smart thing to do is to treat air and internet the same for royalty purposes. Either eliminate royalties for internet radio, or require air radio to pay the same royalties.

“Time-shifting” is not a word you expect to hear from federal court judges in the real world. You especially don’t expect a court to rule that US citizens have a right to time-shift. (I suspect that our right to timeshift does not include situations where the IRS is involved – “But Mr. TaxMan, I timeshifted back to last week so my return is not late at all!” ) TiVos are time-shifting technology. They may seem like magic to a lot of us, but they are actually a type of Digital Video Recorder, commonly referred to as DVRs. There are a number of DVR’s on the market, TiVo is simply the best known one. Back in the ‘80’s, Universal Studios sued Sony, alleging that it’s new Betamax video recorder was a device intended to promote copyright infringement, because it was being used to record television shows. The US Supreme Court ruled that it was legal for TV viewers to video record television shows on their home video recorders for viewing at a later time - effectively “time shifting” their television schedule. Such a use, ruled the Court, was not copyright infringement.

The battle is now being fought again, this time with the studios trying to distinguish between home DVRs like TiVo, and so-called remote storage DVRs (RS-DVR), a device that allows a cable company to do store programs on a server at their facility, and allow individual home users to pull their time-shifted programs off that remote server.

A district judge ruled in March that the RS-DVR was a copyright infringement, siding with the studios. The cable companies appealed that ruling to the second circuit last week, arguing that the RS-DVR is not any different than a home DVR.

The history of copyright infringement lawsuits involving new technologies (starting with a lawsuit involving player piano rolls at the turn of the last century) would have me placing my betting money on the cable company to win. Courts have been reluctant to find the potential for abuse a sufficient reason to prohibit an entire technology. Actual infringement is punished, but providing technology that could be used to facilitate infringement is rarely restricted.

Today, a little humor.
I really admire cartoonists, I love these things, it is a talent that is so foreign to me that I delight in clever cartoons the way babies delight in the moment in hide and seek when they discover you are still there behind the hands. So I hope you enjoy these as much as I did.

Copyright Infringement Cartoons

The digital media explosion has created new challenges for libraries as well as creators and consumers. Purchasing a book or subscribing to a periodical were pretty much WYSIWYG transactions, and did not require much time on the part of the library once the budget talks were over. However, with more and more demand for digital material, libraries now have to negotiate and interpret licensing agreements, which may vary with every purchase. I found a good article specifically for libraries on this topic - Getting What You Bargained For – Essential Terms Every Librarian Should Include In A Licensing Agreement. It covers the basic terminology and common clauses that should be considered for every licensing agreement.

AllFreelance.com keeps a page of links to helpful copyright articles, including some copyright information for countries other than the US. They also have a page with information about putting together a contract for the job they hope you’ll get from their site.

As an attorney, I really think the best advice will come from a conversation between you and an attorney about your individual situation, but the reality is that many freelance jobs are so small that it is not cost effective - one might even say crazy - for the author to talk to an attorney. So these resources will at lease put you in a position to be able to recognize the basic elements of a good contract and to recognize the red flags that could compromise your position as a writer.