Wednesday, 11 December 2019


COPYRIGHT & TRANSIENT REPRODUCTION IN STREAMING – STATUTORY EXCEPTIONS TO INFRINGEMENT FOR RECIPIENTS

 

Internet streaming, due to the packet switching technology used in internet communication, inevitably means the streamed content is transiently reproduced by recipients at the end of the communication chain.  Also, the practicalities of internet delivery of content mean there is transient and temporary reproduction by intermediaries in the chain, but the focus of this blog is end user copyright issues. 

Unlike the situation where recipients download content, transient reproductions involved with streaming are beyond the control, or even knowledge, of the recipients.  They should not constitute infringements of creators’ or communicators’ reproduction rights.  As was recognised, but unfortunately not codified, in the international negotiations which led to the 1996 WIPO Internet treaties, there should be statutory exceptions to copyright infringement which expressly cover these types of transient reproduction.  A model provision in the treaties would have meant that not only would all jurisdictions ratifying the WIPO treaties now actually have an exception in their copyright legislation, but they  might also have less ambiguous provisions for their courts to apply.      

Streaming is different to browsing pages on a website where the reproduction on a screen might better be categorised as ‘temporary’ (a limited period of time) rather than ‘transient’ (a momentary, fleeting or short-lived period of time).  It may be easier to achieve clarity and certainty by having a separate statutory exception for ‘temporary reproductions’ such as browsing, if indeed it is considered to be an infringing reproduction in the first place.

Transient Reproduction prior to and outside the Digital World

Watching ‘analogue’ television programmes required transient reproduction of the individual picture frames making up such works on the user’s TV screen.  Despite a technical reproduction occurring this was treated like reading a book and was never considered infringement of copyright in the programme, let alone the TV broadcast.  Nor, going way back in time was watching a movie being transiently reproduced frame after frame on a screen using a home projector.  This was the case even in the rare situation where the programme or its transmission breached a third party’s copyright. 

Reproduction of Content on the Internet

The first hot internet issue for the music industry was peer-to-peer (P2P) file sharing where millions of consumers shared content files via a central database (eg Napster) and later decentralised databases such as Grokster and Kazaa. 

Here the users/consumers were active infringers and not simply recipients of content.  So-called file sharing involved copies being made and stored by uploading and downloading.  Somewhat different from streaming!  Although, as mentioned below, in the US receiving a stream has been equated with a download rather than with a broadcast.            

Transient Reproduction in Streaming Technology

Although the copyright issue being dealt with here is transient copying in consumers’ equipment any overview of the streaming process must start with the communicator of the content.  First, analogue content is digitised by periodically sampling it (at 40,000 times per second for music) and representing the magnitude of each sample using binary numbers.  The numbers, in the form of groups of bits (0s and 1s), are chained together to form a digital file.  Next the digitised content file is split into data packets (10,000 bits per packet) to be able to be transmitted over the internet which uses packet switched data technology.

For video content the consumer will usually have a ‘set top box’ connected between their internet router and TV set.  All this can be done on a suitably programmed computer, but lack of user friendliness and the small screen are negatives for family groups of drama and sports lovers.  Perhaps using a smart phone to receive and play audio content is more directly analogous to using a computer.  

The STB, among other components, contains a buffer memory for transiently storing received packets of content until enough packets are accumulated to constitute one picture frame to be displayed on the TV screen – 50 packets.  After each frame is displayed the frame packets stored in the buffer memory are deleted to make way for packets making up the next frame.  Maximum packet storage time in theory would be 0.04 seconds – very obviously ‘transient’.  In practice because optimum bandwidth might not be available continuously for many viewers the buffer memory will be set up to store more than one picture frame’s worth of data packets so storage time might be 0.2 seconds – still rather transient.  

So, this is how the domestic consumer is carrying out transient reproduction – simply an essential part of the technological process executed by his STB to enable private watching or listening to content.  Without a legislative exception many jurisdictions consider this to be infringement of the copyright in the content.

But is the Subject Matter that is being Transiently Reproduced actually a Copyright Work or a Substantial Part of a Work?

The answer may be different for audio streaming as opposed to video streaming, but why has little, if any, consideration given to the quantity or quality of the fragment of the work which is actually transiently reproduced by storage in memory?  If we look at the groups of binary digits which are transiently stored when receiving an audio stream they may only represent half a musical chord – a mere fragment of a musical work.

Infringement by reproduction in many jurisdictions requires the whole or a substantial part of the work to be reproduced.  Is half a chord a substantial part of the whole musical work?  Although the ‘substantial part’ approach to infringement is not part of US law, copyright there has traditionally not even subsisted in short insubstantial things like, say, a short phrase.  However, it does need to be mentioned that this has recently been thrown into turmoil by the Ninth Circuit in a case brought against Taylor Swift where a phrase in a song was considered possible copyright subject matter.

The EU is a bit more liberal – any expression which is an author’s intellectual creation will be protected (even 13 words according to the CJEU in the Infopaq case) – but in the EU half a chord should not constitute an intellectual creation by a composer.  Nor even would any whole chords since they will have been used by many composers over the centuries.   

For video the issue of substantiality of the part transiently reproduced (even a single picture frame) was essentially decided in the days of film long before the internet – reproduction of a single frame being considered to constitute infringement of film copyright.

Nevertheless, for audio streaming, transient reproduction in the streamer device’s buffer memory should never have constituted infringement of the copyright in the piece of music being streamed.  Debate over a statutory exception for these transient reproductions should have been superfluous.  

Home recipients versus transmission initiators and intermediaries.

Why should domestic consumption of content ever be a potential infringement?  Reading books is not.  As already mentioned above, watching movie films on a screen using a home projector system was not and watching television was not and even with those countries which have TV licences the licence is not a copyright licence.  Listening to a radio broadcast is not. These acts were only infringements where the playing or showing was in public.

There is a clear difference between passive watching and active recording of received content.  Why should the mode of communication, that is digital transmission, have a different legal outcome?  Why have some courts thought viewing or listening to streamed content could constitute infringement of copyright?  This appears to be contrary to copyright philosophy.

Taking a cynical viewpoint, maybe there was a ‘commercial’ motive for promoting the concept that transient reproduction of streams by recipients should be considered an infringement which could only be exempted by detailed statutory exceptions (or by case law developments of a fair use doctrine).  This would facilitate additional or alternative claims against communicators further up the distribution chain such as infringement by ‘authorising’ or ‘promoting’ the recipients’ infringement and/or by making them contributory infringers unless they obtained licences and paid royalties. 

Consider, for example, the countless legal actions against Spotify in the US based on Spotify not always having obtained and paid for ‘mechanical rights’ licences from music publishers.  Although, as Spotify has claimed in one case, streaming does not fall within the mechanical rights scenario of delivery of a reproduction for repeated playing by the recipient’s equipment.

A Statutory Exception to Infringement for Recipients of Streamed Content  

What are the necessary elements for an effective copyright exception for recipients of video and audio streams?  The position of private recipients is different from intermediaries and the statutory exceptions should also be different and not merged together in a generic provision as is common in many of those jurisdictions which have incorporated exceptions for transient and/or temporary reproduction.  The latter (‘temporary’) should be at the heart of a separate exception for browsing web pages and the like.  

Obviously, the duration of the reproduction must be limited to being transient and it must be an essential part of the technology for receiving and enabling the viewing and/or listening of the streamed content.  The reception must be for private viewing/listening only and not the public at large.

Exceptions for private end of chain recipients need not have these further qualifications: a ‘lawful use’ or lawful dealing (EU, NZ); no independent economic significance (UK, NZ); a use that is not an infringement of copyright (CA); or communications which are not infringements (AU).

On the other hand some jurisdictions have omitted elements that would seem to be required for clarity.  For example, UK section 28A when listing the sole purposes for which transient reproduction is permitted does not expressly mention ‘for the enabling of the receipt of a work’.

Law Reform

Although it has not introduced a statutory exception for the transient reproduction involved in streaming, the US has signed into law the Music Modernization Act 2018.  This requires audio streaming service companies, such as Spotify, to obtain and pay for mechanical rights licences from the composers/publishers.  Even though what they deliver vaporises on receipt – unlike a CD or LP.  The fundamental technological and legal distinction is between streams and downloads.  Streams of musical pieces, whether on demand or not, do not result in the recipient obtaining possession of a copy of the music any more than is the case with analogue radio broadcasts.

New Zealand is currently in the process of conducting a comprehensive review of its Copyright Act 1994, which was last substantively updated by amendments in 2008.  The Ministry responsible has identified many issues where it seeks submissions and one of them concerns the 2008 exceptions for all transient copying which takes place in technological communications. 

The Australian Law Reform Commission (ALRC) was tasked with a review of copyright in the light of the ‘digital economy’ back in 2013.  The ALRC, when considering the arguments for and against specific statutory exceptions for transient reproduction recommended that these should be put aside in favour of amending Australia’s Act to incorporate an American style fair use doctrine which would, among other things, apply to technologically inevitable transient reproduction.  This recommendation has yet to be implemented.

This blogger would not like to see New Zealand adopt such a fair use approach.  As we have seen in the US, the fair use doctrine must be fleshed out by the courts over some years.  The introduction of a fair use doctrine even for less complex non-digital scenarios will only lead to a magnification of legal uncertainties and as a result increased copyright litigation.  And it will be even worse for digital scenarios.  It would be better to stay with statutory exceptions, albeit somewhat better targeted and separately applying to each of the participants in an internet communication chain.
The increasing popularity of streaming services over recent years has had the incidental effect of reducing content piracy and in particular music piracy.  An international exception to infringement for recipients of streamed content which is crystal clear for courts and easy for users to understand is likely to further diminish content piracy.

Tuesday, 3 December 2019

Artwork cannot be cut up to realize watch faces, Danish court rules



Paris Chic, Tal R, 2017

Copenhagen's maritime and commercial court was recently asked to decide whether Dann Thorleifsson and Arne Leivsgard - a duo of Faroese art provocateurs and founders of Kankse and Letho watch brands - could cut up Tal R's artwork "Paris chic", which the duo had purchased last August for 70,000 £ at the Victoria Miro Gallery in London. The duo wanted the painting fragments to decorate the faces of their latest watches, each of which they planned to sell for at least DK 10,000. 

The Danish court issued a ruling yesterday in favor of the Danish artist. Consequently, the two watch designers cannot use Tal R's painting as a raw material and have to pay DK 31,550 in legal costs.

The Danish court awarded an injunction under the Danish Act on Copyright, protecting copyrights and moral rights. Indeed, the Court accepted Tal R's argument that the duo's project would have been an illicit alteration of the artist's work rather than a destruction of same, as contrarily argued by the duo's lawyers. Tal R's lawyer alleged that the watch brand planned to market the watches as fragments of a Tal R's work. The artist's lawyer also argued that whilst the purchasers of Tal R's art could sell it or even destroy it, they could not alter it, as to do so would infringe Danish copyright law. 

While the duo is still considering whether to appeal the ruling or to reach a settlement, this case questions again the boundaries of  copyright and ownership of artworks, and namely whether a work of art can be freely destroyed by its owner. In this last regard, the answer seems to differ from country to country: in Denmark, for instance, is considered permissible

Monday, 2 December 2019

CMOs public performance tariffs: Spanish court indirectly urges for the application of an “European average” criterion but then uses the UK one. Is there any room for discretion besides the CRM Directive?

In this guest post David Serras Pereira (SCM) discusses a recent decision which is interesting to anyone working in the collective rights management sector.


Here's what David writes:


CMOs public performance tariffs: Spanish court indirectly urges for the application of an “European average” criterion but then uses the UK one. Is there any room for discretion besides the CRM Directive?


Another interesting Spanish decision (here – search using reference 2000/2019 of Catalunya - Barcelona Court) concerning copyright collective management organizations (CMOs)’ tariffs was issued on November 7th last in the context of proceedings between a music promoter and Spanish CMO SGAE



The Audiencia Provincial de Barcelona considered that the criterion applied in relation to the public performance tariffs used by SGAE was too ‘heavy’ for a heavy metal show, and thus reversed the decision at first instance. 



Usually, CMOs have their own “Book of Tariffs”, which are applicable to different types of events and venues. At the time when the proceedings began, SGAE applied a 10% licence fee on the box office income (it is now 8,5%). The 10% fee was considered abusive by the court while, curiously, pointing to another CMO’s (UK PRS for Music) criteria as a fair and good percentage to apply, ie 3% on the box office income. 



The case began in 2013, when promoter of Def Leppard y Whitesnake, by the name of Rocknrock, refused to pay the 10% licence fee requested by SGAE, claiming that SGAE did not represent all rightsholders and that it had abused its dominant position. 



Regarding the latter aspect, the Spanish Competition Authority in separate proceedings sanctioned SGAE with a EUR 3 million fine following this and other matters (here). This eventually led SGAE to reduce the fee from 10% to 8,5%. 



In its ruling, the Barcelona court considered that SGAE had a monopoly and that 8,5% was still too high a percentage. The court pointed, among other things, to the fact that the percentage asked by SGAE was above the European average and, unexpectedly, indicated the UK case as the role model: 3% of box-office revenue, which is perhaps the lowest or one of the lowest in all EU. 



The decision can still be appealed to the Supreme Court and a final ruling will have to be made, but the decision raises a number of interesting points. 



The tariffs of a CMO (as a body representing several rightholders) normally reflect the criteria that the individual rightholders considered to be fair for licensing use of their works (either decided during a general assembly or by other means). 



It is possible for a court to make an intervention in the exclusive rights’ nature setting a maximum threshold not decided by the rightholders themselves? The basis for any such intervention should be framed in the context of the CRM Directive (here; Recitals 31 and 35 and Articles 16(2) and 35), which followed the Commission Recommendation 2005/737/EC (here). Even prior to the adoption of the directive, in OSA the Court of Justice of the European Union highlighted how tariff setting might also fall within the scrutiny of competition authorities. 


From the Directive it follows that, while tariff setting is in principle a matter of autonomy, there are some limits to it, ie:
  • Tariffs should be determined on the basis of objective and non-discriminatory criteria 
  • Tariffs should be reasonable in relation to, inter alia, the economic value of the use of the rights in a particular context and the nature and scope of the use of the work 
  • Tariffs should offer appropriate remuneration to rightsholders for the use of their rights 
  • Tariffs should be made public by the CMO 

This decision raises the following issues: 



a) Can rightholders right to set up how much they want to charge for the licensing of their creations be limited beyond the limitations set up by the CRM Directive and national legislation? 



b) If so, can such limitation be based on an European average of licencing practices of all the CMOs? 



c) Can it be considered abusive any tariff that is not close to the 3% one used by PRS? 



If SGAE decides to appeal, we will have to wait for the Supreme Court decision. 

THE COPYKAT


Kylie Minogue’s fashion range loses copyright It claim

Australian pop star Kylie Minogue is associated with a range of interior design and bed linen products, produced by Ashley Wilde. In a recent action, this design company went on to sue BCPL, a brand which sells bed linen products, primarily owned by another well-known model and TV star Caprice Bourret. The subject of the litigation was with respect to a duvet cover (the cotton shell which covers a comforter) and a matching runner. The allegations of similarity were concerned with the following factual determinations (as reported in the IPKat):

- The choice of a the pattern of scallop-style pleats in repeating horizontal rows; 
- The relative size of each pleat; 
- The relative spacing between each pleat; and
- The relative spacing between each horizontal row. 

Justice Melissa Clarke firstly went on to establish that a presumption of copying will exist if the works are primarily substantially similar and there is proof of access to the prior work. However, she then went on to reiterate the rule that the question of copying concerns with the quality of the work, and not merely the quantity taken, and whether the intellectual expression and creation of the author is appropriated or not. It is not just the similarities but also the differences which need to be looked at, and the copyright needs to be determined as a whole. The differences cannot be downplayed, as was done in the case at hand.

These jurisprudential notes in combination with the determination that scallop-style pleats were relatively commonplace in the fashion industry and could not be monopolized due to it being a concept (Idea-Expression dichotomy), led the court to reject a finding of presumption of copying. Apart from this, the court found that the expression of such scallop-style pleats in the conflicting designs, in fact, encompassed sufficient differences and were not in any case substantially or extensively similar to bring in a case for the presumption of copying. The differences in the method of pleating the scallops, the number of pleats in the pleated scallops, the size of the pleated scallops and the shape of the pleated scallops, the number of repeated scallop motifs were rendered to be sufficient to avoid a claim for infringement and to establish an original distinct expression of a design made out of the concept of a scallop-styled pleat. In lieu of the same, the court rejected a finding of copyright infringement and Ashley Wilde was unsuccessful in the action.

Interestingly, this case reinforces the importance of factual evaluation and the fine line between inspiration and infringement especially in the fashion industry, to recognize the multitude of possibilities of expression in a copyrightable design and its dominion, and balance the interests of the copyright holder and the general public (other designers in the fashion industry) accordingly. It reinforces the principle of creative freedom and the leeway of experimentation on similar ideas, provided in copyright, to account for designs, which may prima facie seem similar intuitively, but are much more detailed and different when such details are analyzed. The judgment can be found here.

Versace sues Fashion Nova for infringement of the gold “Barocco” print

In yet another infringement action concerning the Fashion industry, Italian brand Versace has sued Fashion Nova to seek a remedy and redress with respect to the copyright infringement of its apparel involving the black and gold “Barocco-57” print, pop-hearts design the “Jungle print dress” that was worn by Jennifer Lopez in the Grammy Award functions. This case has been lodged in the US District Court for the Central District of California, as reported by the World IP review. The claim of Versace revolves around the principle of Fashion Nova deliberately riding on the popularity and renown of Versace’s signature designs and its valuable goodwill and business reputation, to make profits. (Trademark logic?) The use has been alleged to be within the content, text, and meta-tags of the Fashion Nova website, as well as on social media websites, wherein “Fashion Nova” results pop-up upon a search of Versace products, due to this infringing action, resulting in alleged misdirection of consumers. A notice has already served and despite the same, Fashion Nova has not allegedly taken down these infringing designs which are substantially similar to Versace’s copyrights, from its web-portal. Interestingly Kim Kardashian took to twitter to address this claim by tweeting:  It’s devastating to see these fashion companies rip off designs that have taken the blood, sweat, and tears of true designers who have put their all into their own original ideas.”

David Gilmour involved in a legal battle for the 2015 solo-single “Rattle That Lock”.

In a suit for copyright infringement, Pink Floyd’s iconic guitarist David Gilmour has been sued by French jingle composer Michaël Boumendil, over a four-note jingle, which Gilmour was first exposed to at a French train station and was instantly charmed. According to reports, he had approached Boumendil to seek a license to use the music in a song, wherein the agreement stipulated co-authorship for the resultant song.  In a suit filed by Boumendil it is alleged alleged that instead of replaying the notes (as was stipulated in the licensing contract), Gilmour went on to interpolate the exact recorded notes. The claimant sought damages worth 450,000 Euros. When the court had to decide upon this, it was noted by the court that this infringement suit was a year after the stipulated release of the song, and hence was time-barred. But Boumendil has now more recently appealed this decision and is seeking damages for the alleged unlicensed use of this jingle, and a breach of the contract between the parties.

Jay-Z sues Australian retailer over lyrics

American rapper Jay-Z (Shawn Carter) has filed a copyright infringement lawsuit against Australian Jessica Chiha and her business “The Little Homie”, which sells hip-hop inspired clothing and apparel. The subject matter of infringement refers to the book “AB to Jay-Z” which has been created by this online retail business, to teach kids alphabets in terms of names and pictures of rappers. Since then, their imagery and names have been expended to use in a coloring book as well as clothing retail options. After being served with a legal notice, the company has maintained its defence of transformative use and fair use and has resisted the claim, which has consequently landed them in court. As far as the claim over lyrics is concerned, the lawsuit refers to the famous quote by Jay- Z: “If you’re having girl problems, I feel bad for you son, I got 99 problems but a bitch ain’t one”, which has allegedly been appropriated by the Children’s book, as it displays on its front page a quote on the same lines, which states: “If you’re having alphabet problems, I feel bad for son, I got 99 problems but my ABC’s ain’t one.”

These actions and use of the image, likeness, and quotes purported by Jay-Z have been alleged to be “a deliberate attempt to trade-off the reputation and goodwill of Jay-Z for own commercial gain”. As reported by Pitchfork, there have been multiple cease and desist notices sent to Chiha, however this retail business is adamant of this use being fair.

Can a claim of fair and transformative use subsist on the facts? It seems so - however, the main issue before the court would be the task to balance the transformative use factor with the commercial advantage factor of fair use and the acknowledgment of a violation of the publicity rights of Jay-Z. Use in clothing, unauthoriasedly, raises a direct claim under violation of Publicity rights, but as far as the use of likeness in the Children’s book is concerned, there is no direct commercial benefit accruing out of the use of the likeness of Jay-Z and it can be argued to be merely incidental and a transformative use of his identity. It will be interesting to see how this case shapes up in court.

Indian Production House Yash Raj Films booked for an alleged failure of royalty payments to the tune of 100 Crores to Authors

The Indian Performing Rights Society, which represents composers, lyricists and music producers has accused Bollywood production house YRF of unauthorisedly collecting and not distributing royalties worth 100 crores, legitimately belonging to authors  as reported by the IPRMENT law blogA First Information Report has been filed before the Mumbai Police Economic Offences Wing. Further, an allegation of pressurising artists to enter into signing illegal agreements has also been raised. The FIR claims that while YRF managed to extract royalties from TV broadcast platforms, it hasn’t been able to collect the same from telecoms, radio stations and music streaming platforms to pay up. The core issue involved here is the non-membership of YRF in the IPRS collecting society, which is one of the major copyright societies indulging in revenue distribution. The lacunae is primarily because of the Indian Copyright Act as although it intends that royalties must be paid to the authors via a copyright society, it does not explicitly state so. The Copyright Act does not take into account the following questions, as reported in the IPRMENT law blog:

Who is supposed to pay these non-assignable and non-waivable royalties?
Who is supposed to collect these royalties?
Are authors and the assignee of their works compulsorily required to become members of a registered copyright society to claim royalties or can they continue dealing in their own works without becoming members 

Hence, due to no statutory compulsion to act through a copyright society, such dubious practices are being entered into by the Production houses, which have allegedly denied authors their claim to royalty. Recently, music composer/singer duo Salim-Sulaiman came forward in a journalistic report to state that they haven’t indulged in a work-based relationship with YRF in the last 4 years due to continuous non-payment of royalties, in spite of having allegedly collected the same. Such practices deny the authors their inalienable right to reproduction and right to receive royalty, on such assignments and the prime reason for the same is the lacunae and vagueness in the drafting of the Copyright Act of India.

 $1 Billion Lawsuit on Spotify by PRO Music Rights and Sosa Entertainment


A law suit has been filed by PRO Music Rights, LLC and SOSA Entertainment, LLC alleging that Spotify failed to pay royalties on over 550,000,000 streams. Pro music rights intends to ask a Florida based jury at the trial to hold Spotify responsible for its conduct and alleged infringement, and unfair and deceptive trade practices. The case was filed on 25th November at the United States District Court for the Middle District of Florida. The suit involves an allegation of removal of content for anti-competitive reasons, engaging in unfair deceptive and business practices and inter alia refusing to pay royalties - and publicly performing songs without a licence. According to the petition, Spotify removed the Plaintiff's profile without an advance notice without ever informing the claimant why these songs were removed. The Plaintiff's songs had genuine 550,000,000 streams before being removed an  was one of the most popular playlists. The petition further states:

As it knows and claims to do, Spotify is required to remit royalty payments to Plaintiffs for the streams of their songs and to obtain public performance licenses for the public performance of songs on its platform. To date, however, Spotify has not paid full royalties for the 550,000,000+ streams of Plaintiffs’ songs on Spotify’s service”

It has also been alleged that the motive for removal of all these songs is linked with its equity deal with Music and Entertainments Rights Licensing Independent Network in order to pressurize MERLIN to terminate its contract with SOSA, as high stream counts from unknown independent acts do not generate close to the same revenue for Spotify from advertisements, as compared to mainstream acts, and do not offset the royalties owed. Further, it was alleged that 99% of the users responsible for the 550,000,000 streams of Sosa’s songs were ad-supported users rather that subscription users. Is this as a result of such discrimination on the part of Spotify against less established artists?  the Plaintiff thinks so and says it's musicians have suffered economic loss. This has been alleged to be an anti-competitive practice to oust independent musicians from the music market, merely due to less revenue for streaming services. In continuation, Sosa has also alleged that”

Spotify continues to unilaterally profit from Plaintiffs’ music; despite purporting to remove Plaintiffs’ content, some of the Plaintiffs’ music continues to stream without license via Spotify-generated playlist(s), and without any compensation made to copyright holders, in blatant disregard of the Copyright Act. Spotify is legally obligated to pay royalties for streaming music.”

This battle will be interesting for the survival and growth of the Independent music circuit. The math can be done here:

1)    Mainstream artists are targeted by companies with a higher marketing budget, due  to the expectation of more number of streams and popularity, resulting in more consequent advertisements (of the company). These companies offer large sums to Spotify, in lieu of the advertisements – which gives Spotify its revenue 

2)    Independent Artists and non-mainstream music artists have a low budget advertisement attached to them, which provides less money per stream for Spotify, due to budget advertisement companies being associated therein (less revenue per stream as compared to mainstream songs).

3)   Royalties to be paid in lieu of streaming is equal because of it being a statutory amount and does not in any way vary upon the artist being mainstream or not. 

4)  This leads Spotify to a situation that with  the enhanced popularity and number of streams of non-mainstream and indie music as well (550,000,000), they get less revenue for a large number of streams (as compared to what they would have gotten, had the streams been on mainstream songs), and they have to pay equivalent royalties to both mainstream as well as indie artists.

5)  The ultimate conclusion out of this analysis is the low earning on the part of Spotify through indie artists, and equal royalties to be paid, which has led them to oust them from the market, in order to attract more streams for mainstream artists only which would lead to a higher ad revenue per stream for Spotify (when balanced with the amount of royalty to be paid, which remains constant).

At the core of this is the allegation that Spotify is contributing to the already persisting anti-competitive and unequal structure of distribution of music, wherein mainstream artists who have more funds to produce and market the music and are signed to a bigger record label are able to flourish, whereas independent artists are left marginalised - and fail to get fair compensation - or reach.

From the point of view of a musician, this is a sad state of affairs, where mere economic benefit is being preferred on the cost of access of more genuine and original content to the public, which was, in fact, the goal of copyright in the first place. This arguably de-incentives the musicians (especially independent ones) from creating music (to some extent),  due to the lack of marketing capability (although money is not the sole incentive), and is not competitive or ethical practice. True or not - does that matter in a court of law?

It will be interesting to see how the court approaches this and if it enters into this socio-economic aspect of survival of musicians who do not have much access to funds to market their music and content.

Plaintiff’s petition can be read here.

This Copykat by Akshat Agrawal

Monday, 25 November 2019

THE COPYKAT

In a curious turn of events, police in Thailand have now said that they will seek a warrant to arrest copyright agents who allegedly attempted to extort 50,000 baht from a 15 year old for copyright infringement. About 50 vendors in Korat are also said to be preparing to file criminal complaints against the same copyright agents. They had ordered krathongs decorated with cartoon characters from the teenage girl and had been threatened with 'fines' or they would face criminal charges. Korat provincial police chief Maj. Gen. Sujin Nitpanit said the investigation was almost complete and court warrants would be issued for copyright agents, whose names have been withheld by police: Police said they were in contact with the actual owners of the copyrights in the cartoon characters who were not involved in the attempts to.extort money from the teenage girl. Press reports say that Korat City police chief Col. Kachen Setaputta had been moved from his post after allegations that police officers under his command were colluding with the so called copyright agents. 

Hypebot reports that despite an acknowledgement that the the 1923 song “Yes! We Have No Bananas” by composers Irving Cohn and Frank Silver had slipped into the public domain, Universal Music stepped up to claim ownership. Glenn Fleishman had posted a video of the song to YouTube in celebration of it entering the public domain earlier this year. He even titled it “Yes! We Have No Bananas, now in the public domain.” The video is of him and his friends and family singing it at a New Year’s Eve Party: However, Hypebot says that video has now been “claimed” by Universal Music with a claim to “monetize” the video on YouTube  - despite them "literally having no rights to speak of". Hypebot say "What’s possibly troubling is that YouTube doesn’t even seem to offer up an option for you to point out that the work is in the public domain, and even if these entities might have once had a claim on the song". 

In a related update, reclaimthenet.org says that another YouTuber is struggling with the platform's harmful and often confusing copyright protection system. This time it's the turn of Kerbal Space Program game aficionado Matt Lowne, who has come under fire from copyright holders for using what he was sure was a royalty-free track in his videos. The creator, with a quarter-million subscribers and more than 55 million views, tried to navigate the system by carefully choosing a legal and copyright-unencumbered audio track – only to fail all the same with YouTube  informing him that the music featured in these videos – namely, “Dreams” – “may” be licensed or owned by music industry heavyweights like SonyATV, PeerMusic, Warner Chappell, Audiam and LatinAutor. 

The US The Supreme Court has agreed to hear the appeal by Google in the case where Oracle accused the tech giant of violating copyright laws when developing its Android mobile platform. The court's decision to hear the case comes more than a year and a half after the U.S. Court of Appeals for the Federal Circuit ruled against Google, saying the company's unauthorized use of 11,500 lines of code in Oracle's open-source Java application programming interface was not fair use, and will provide the final say in the 2013 claim accused Google of infringing the copyright on its Java APIs in the development of Google’s Android OS. Google denied any wrongdoing and has argued, in part, that software APIs cannot be protected under U.S. copyright law. 

Nirvana‘s 2018 lawsuit against Marc Jacobs will proceed. According to The Hollywood Reporter, a Californian judge has denied the motion to dismiss the band’s copyright complaint over the designer’s smiley face T-shirt which seems to bear an uncanny resemblance to Nirvana's own artwork.  he copyright infringement concerns Jacobs’ “Redux Grunge” collection, which Nirvana's representatives claim used the band’s smiley face logo created by Kurt Cobain in 1991. The Jacob's T-shirt features a similar coloration and font to Nirvana's original T-shirt, replacing the word Nirvana with “Heaven” and the smiley face’s X eyes with “M” and “J.”  iN MaRCH 2019 Marc Jacobs filed a motion to dismiss the complaint, arguing, among other things, that the band doesn't explain how or when Cobain transferred the rights in his design and that the two designs aren't sufficiently similar. U.S. District Judge John A. Kronstadt has denied the motion, finding the complaint sufficiently alleges Nirvana owns the copyright registration and that the only "discernible difference" in the faces is the use of "M" and "J" as eyes instead of two X's. Kronstadt found that the asymmetrical circle of the face, the relatively wide placement of the eyes, the distinctive squiggle of the mouth and the stuck-out tongue are enough to distinguish the happy face from a generic smiley saying "It is also noteworthy that the Accused Products have combined this protectable artwork with other distinctive elements of the Nirvana T-shirt, including through the use of yellow lines on black background and a similar type and placement for the text above the image on the clothing". The case is Nirvana LLC v Marc Jacobs International LLC et al. LA CV-18-10743 JAK. 

AsianAge reports that Hyderabad-based short-filmmaker Nandi Chinni Kumar has sent legal notices to the makers of forthcoming Hindi film "Jhund" and megastar Amitabh Bachchan, the lead actor of the movie, over alleged copyright infringement. At the heart of this seems to be a dispute over who owns the rights to the story of the life of Akhilesh Paul, a slum soccer player who was the Indian captain at the Homeless World Cup. 


Monday, 11 November 2019

THE COPYKAT



USPTO brings in the all-important question of whether AI can create or infringe Copyrighted “Works”

Artificial Intelligence is a well discussed and debated topic in the realms of Copyright - since the advent of the concept of “Computer-generated works”, but with the recent advancement in the role of AI in curation of art-based copyrightable works, this debate has gained even more importance and is now the  subject of a number of major academic conferences and seminars, with the question surrounding the most appropriate path to be taken by lawmakers and courts.

The US Patent and Trademark Office has now launched a public consultation in this matter and The USPTO has issued a request for comments on IP protection of AI based innovation, on or before 16th December. The notice reads: “Artificial Intelligence (AI) technologies are increasingly becoming important across a diverse spectrum of technologies and businesses. AI poses unique challenges in the sphere of intellectual property law. At a January 31, 2019 conference on ‘‘Artificial Intelligence: Intellectual Property Policy Considerations,’’ USPTO explored a number of those challenges. On August 27, 2019, the USPTO published a request for comment regarding AI’s impacts on patent law and policy. As a continuation of this work, the USPTO is also considering the impact of AI on other intellectual property rights.” 

In lieu of the same, 13 specific question have been posed by the USPTO including concerns around a work produced by an AI, without the involvement of a natural person contribution expression, constituting a protectable work of authorship or not, kind of involvement of human which would be regarded as authorial, state of existing law in lieu of evolving AI technology, AI getting authorship as a separate legal entity or not etc. The whole list of questions posed can be found herein. Even in the UK, while evaluating a claim to inventorship, and identifying an inventor, the UK government has herein gone on to specify that “An AI inventor is not acceptable as this does not identify a “person” which is required by law.” Further, and importantly, as reported by the IPKAT, even in China, the Beijing internet Court in its decision in th case of Feilin v. Baidu has gone on to hold that for it to be a copyrightable “work”, it must be created by a natural person, which is a fundamental tenet of Copyright law. The court even held that neither the software developer nor the user and not even the software could be the Author of the work. The court further pointed towards the establishment of a sui generis right system (although indirectly) to protect the investment in the generation of the production. This is a core academic debate, and will be interesting to see how it takes shape in other jurisdictions.

Musicians urge for a similar regime to the EU Copyright Directive in the United States, to protect them against digital exploitation

CISAC recently saluted the EU Copyright system for its reform and fight against digital upload based services and has urged other jurisdictions including the United States to follow its example. With the digital market taking over the means of “communication” of content, the CISAC has urged for fairer norms, in light of a higher contribution of the digital market to these authorial royalties and revenues. The income from digital sources has substantially increased and is EUR 653 million more in 2018 than in 2014. Of course the International Confederation of Societies of Authors and Composers has at its core the aim to protect the rights and promote the interests of creators worldwide and is a known advocate for strong legal protection of copyright and authors' rights.  The EU Copyright Directive offers a stronger negotiating position for authors and composers against these distributing agencies and tech giants which display content and further holds them completely responsible for the content uploaded on their platform, in order to rapidly curb piracy. As reported by CISAC newsroom, Jean-Michel Jarre, CISAC President, said: “Digital is our future and revenues to creators are rising fast, but there is a dark side to digital, and it is caused by a fundamental flaw in the legal environment that continues to devalue creators and their works. That is why the European Copyright Directive is so momentous for creators everywhere. The Directive has sent an amazing, positive signal around the world, building a fairer balance between creators and the tech platforms.” A few highlights of this report as well as the full report released by CISAC can be accessed here. But a number of major tech companies, including Google, Facebook and Twitter are concerned about harmful copyright legislation being created around the world. 

Meanwhile TechDirt reports that tech industry groups are warning that these developments, including the EU Copyright Directive, will harm the interests of US companies, while conflicting with various free trade agreement. The Computer & Communications Industry Association (CCIA) and Internet Association have registered their unhappiness in submissions to the US Trade Representative in response to a call for opinions on foreign trade barriers. According to the CCIA, whose members include Amazon, Facebook, Google, Netflix, Pandora and Samsung, the EU’s directive “poses an immediate threat to Internet services and the obligations set out in the final text depart significantly from global norms”.

Important question of Jurisdiction in Copyright Infringement cases, resolved by the US Court of Appeals for the 6th Circuit

In a lawsuit involving a lack of proximity or territorial nexus of the infringing action to the venue wherein the suit was instituted, the court in the US dismissed a claim of Copyright infringement, This is the case of Parker v. Winwood (6th Circuit Sept. 17, 2019). The main question is this case was around the taking of a bass line from the plaintiff’s song “(Aint that) A lot of love” in their song “Gimme Some Lovin’” Due to Mervyn Winwood’s residence in the UK and his conduct of the subject matter of the suit (and the alleged infringement) taking place in the UK, the sixth circuit relying on the Supreme Court decision in Walden v Fiore where the forum of the act was given prominence, held that there is no personal jurisdiction to bring in the suit at Tennessee. Further, due to lack of evidence showing distribution of the infringing work in Tennessee, the steam of commerce argument was also rejected.  In the dissenting opinion however, justice Donald stated that “Plaintiffs could not properly assert personal jurisdiction over Mervyn because Plaintiffs did not set forth evidence or affidavits establishing jurisdiction . . . is incorrect, as Plaintiffs have submitted evidence supporting the district court’s ability to exercise personal jurisdiction over Mervyn.” Further, an evidence related to a nationwide distribution agreement was also accounted for, in support of personal jurisdiction, however the majority rejected the same. This judgment seems fallacious in relying on Walden v Fiore as this judgment doesn’t cover situations where the defendant has minimum contacts with the United States and any of the states within itself.  Read more here. The judgment can be accessed here.


Nigeria declares no tolerance policy on issues surrounding acts of Piracy

The West African Country has emphasized, via its Copyright Commission, a will to stamp out Piracy in totality. In a declaration by Vincent Oyefeso, the commision’s director of public affairs, as reported by Music in Africa. the Director said:

"The NCC is not just a compliance agency, it has the power to arrest and prosecute anybody caught pirating other people’s intellectual properties.” and “Copyright owners could institute civil suit against copyright offenders, apart from the criminal suit the commission normally institutes against such offenders.”

Further, there has also been a call to update Nigerian Copyright laws to come in line with the digital era. And to combat piracy, the commission has adopted surveillance, inspections, raids, investigations and diligent prosecutions of alleged and suspected offenders and infringers. This is all the more keeping in mind the agenda to bolster economic growth through the creative industries.

Even in South Africa, there have been concerns around the amendments surrounding authors and performers rights and the impact of the bill on rights of creators. There has been a formulation of a tribunal to address these issues concerning the same. The general consensus as reported by Music in Africa, is that the amendment bill supports users and multinational streaming company by providing them free content and going against the economic concerns of the rightful authors and composers including performers.  There is no punitive clause which provides for a remedy against infringing use. Read more here.

Claim against the Constitutionality of the Copyright Remedy Clarification Act, 1990 (United States), being heard in the Supreme Court

The case of Allen v. Cooper where the US Supreme Court is looking at a modern-day dispute involving the pirate Blackbeard's ship that went down off North Carolina's coast more than 300 years ago discusses the question of whether a limitation on state sovereign immunity in copyright claims via a statute (CRTA,1990) is constitutional. This case highlights the statute which abrogates sovereign immunity in claims of copyright infringement. The Supreme Court, in a similar claim to unconstitutionality concerning Sovereign Immunity being abrogated in Patent and Trademark cases, has already held it to be unconstitutional (Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank)which is generally used as a precedent by the lower courts even in Copyright Cases (concerning CRTA) to hold sovereign immunity applicable. 

The SC has peculiarly started hearing these claims with respect to this particular act since November 5, 2019, as reported by the Disruptive Competition Project. The core issue is whether there can be a distinction drawn from the treatment of this act with respect to the other ones which have already been held to be unconstitutional. In the Florida case, the core reasoning against such immunity being removed was that there needs to be a pattern of cases showing infringement by the State or constitutional violations, which weren’t established. The focus of the plaintiff in this case is on distinguishing the factual scenario and establishing that infringement by states is a growing problem which has also been identified in the study by the Copyright office and in the amicus brief filed by Ralph Oman, ex registrar of Copyrights, in favour of the plaintiff, .North Carolina-based Nautilus Productions who had for nearly two decades documented the ship's salvage. In the process, the company copyrighted photos and videos - which were then published by the state.  Nautilus sued in federal court, but the federal appeals court in Richmond, Virginia, ruled North Carolina could not be sued despite using the materials without permission. 

The plaintiff has also relied upon the dissenting opinions of Justice Ginsburg and Breyer and has firstly argued to overturn the Florida Prepaid case, but later in a second argument has also gone on to establish as to how the Florida prepaid case is not a valid precedent for the CRTA. States generally are protected from lawsuits in federal courts, and the justices in 1999 ruled out federal court cases against states over patent infringements. Patent and copyright protections come from the same constitutional provision that outlines Congress' powers.

As reported by Disruptive Competition ProjectJustices Alito and Kagan questioned the adequacy of the evidence of widespread copyright infringement when Congress adopted the CRCA. Florida Prepaid found the eight instances of patent infringement considered by Congress to be insufficient. Here, the Copyright Office study had identified sixteen instances of copyright infringement by state entities. So are sixteen infringements by 50 states enough to constitute a widespread pattern of constitutional harm, while eight are not?  Read more on this case here. 

"All that would be very persuasive if we didn't have the patent decision" Justice Ruth Bader Ginsburg said during the legal arguments.  Ginsburg dissented in the patent case.

This CopyKat from Akshat Agrawal