Friday, 29 June 2018

What's all the fuss about? It's those EU copyright reforms

Following on from previous CopyKats, the noise around the proposed changes to EU copyright law has reached a crescendo - and it's not just the tech giants and content behemoths who are lobbying at all levels, the former against changes, the latter very much in favour of the main changes in the Directive for Copyright in the Digital Single Market (known as Copyright Directive) which was approved by the European Parliament's Committee on Legal Affairs on the 20th June 2018.

The most controversial provisions are in the current draft of Article 13, which requires internet platforms to perform automatic filtering of the content that their users have uploaded. As the CopyKat reported, a group of over 70 internet leaders including Vint Cerf and British physicist and computer scientist Tim Berners-Lee.addressed Members of the European Parliament (MEPs) by sharing their concerns regarding the proposed text of the Directive. In their June 12th letter they said “Article 13 takes an unprecedented step towards the transformation of the Internet from an open platform for sharing and innovation, into a tool for the automated surveillance and control of its users” making the argument that this requirement goes against the previously established balance in the E-Commerce Directive and the ‘Safe Harbour’ provision in Article 15 of the InfoSoc Directive, where users uploading content are solely responsible for its legality, whereas platforms may be required to take down illegal content once it is brought to its attention. 

Julia Reda, Member of the European Parliament, (for the Pirate Party) agreed with the internet gurus, criticising the high error rate expected from the algorithms and the resulting blocking of content. Reda describes on her website a phenomenon called "Startup killer". And Reda suggests that the filters will be so complex that they can only be developed by the big US tech giants. Small companies and start-ups will not be able to afford the programming and so every small platform that offers user-generated content will have to acquire their filter system from the big players. Reda then suggests that this creates a monopoly for the likes of Google. 

Article 11 is the other main focus of attention. This would require of a new level of engagement between platforms and news creators and providers. Reda writes, "The automatic link previews social networks generate when users share links (showing the article headline, a thumbnail picture and a short excerpt) would require a license, as well as anyone analysing news content on the web like news aggregators, media monitoring services and fact checking services." This is the so called 'Link Tax'. Reda also claims that that Article 11 could limit freedom of expression and access to information, boost fake news, discourage startups and small publishers saying "Making it legally risky or expensive to link (with snippets) to news risks disincentivising the sharing of reputable news content. Since “fake news” and propaganda outlets are unlikely to charge for snippets, their content could as a result become more visible on social networks."

But Google, one of the leading lights in the battle against the proposed changes, has faced criticism. The Financial Times reports that Google has been accused of encouraging news publishers participating in its Digital News Initiative to lobby against proposed changes to EU copyright law at a time when the beleaguered sector is increasingly turning to the search giant for help. Google itself opposes the copyright directive, which it says would impede the free flow of information, and in a recent email to publishers suggested they contact members of the European Parliament to express their views. The search engine has developed close ties with publishers via its DNI programme, which provides support for digital journalism as well as innovation grants from a €150m fund. Angela Mills Wade, executive director of the European Publishers’ Council, said Google was trying to preserve the status quo. “It seems to be arguing for the news eco-system of today to continue,” she told the FT. “We feel that Google has largely created a news eco-system where it is apparently perfectly acceptable for companies to go around helping themselves to news media content for their own purposes.

EU-based media organisations have hailed the Copyright Directive in a joint statement calling it “a crucial stand for the future of a free, independent press.” “The internet is only as useful as the content that populates it.” The statement also applauded Article 11, known as the “neighbouring right,” for “encouraging further investment in professional, diverse, fact-checked content for the enrichment and enjoyment of everyone, everywhere.”

So - who else is having a say? Well first off, a group of open science advocates have made the point that the new proposals will conflict with Europe’s principles of open science and freedom of expression. Vanessa Proudman, European Director of the Scholarly Publishing and Academic Resources Coalition (SPARC), a science-advocacy group in Apeldoorn, the Netherlands said “Copyright law must not hamper open science. The EU has made significant headway towards open access of research funded by European citizens. The proposed new rules would clearly impede further progress, threatening the visibility of Europe’s research".  Maria Rehbinder from the Association of European Research Libraries said “We really don’t want further paywalls on top of any research materials libraries have paid for already”. 

Prince
One of the high profile stories circulating the internet is that Article 13 would impact the creation and sharing of memes - not least as memes often use copyrighted images from popular films and TV shows. Global News reports "Pepe the Frog, the “Distracted Boyfriend” meme and Arthur’s balled-up fist are all under threat. So are reactions GIFs such as the one of a confused Zach Galifianakis, or the clip of Steve Carrell shouting ‘No!’ in The Office. EU lawmakers may inadvertently destroy the internet’s robust meme culture with a proposed law designed to fight online piracy. One article in the legislation would force online platforms such as Google, Facebook, YouTube and Twitter to automatically censor copyrighted content uploaded by anyone who isn’t licensed to share it." So called mash-ups and re-mixes have been given the same attention with their presumed demise highlighted. Matt made the point in the last CopyKat that a filtering and blocking system could lead to some major mistakes. Whilst the Dancing Baby vs Prince case is now settled, at the heart of that was ine question of whether the mother in question, Stephanie Lenz, could use fair dealing as a defence - or at least whether the rights owners (Universal Music took a lead) issuing the take down should have considered the doctrine before removing the video of the toddler dancing to Prince's music. As Matt argued "many mistakes will occur ....  a lot of content may be removed or blocked because of the system being unable to recognise what falls under exception or limitation, such as parody or quotation, and how they differ across the various Member States. Additionally, the proposed text by Commission and compromise texts of the Parliament and the Council does not contain any provision which will bring either clarity or consistency in defining “which Internet platforms would be required to comply with the provision, and which may be exempt”. 

AbovetheLaw give the example of  a simple mistakes - In 2013, Fox sent a take down notice against a book by Cory Doctorow because the book and one of Fox’s hit television shows shared the same name: Homeland. They add:  "Remember the Super Bowl ad Chrysler released this year, using the words of Martin Luther King, Jr. to sell a Dodge Ram truck? One viewer cleverly replaced the original audio of the ad, which highlighted the importance of service, with audio from another portion of the same MLK speech that instead criticized consumer culture, including a line calling out Chrysler by name. This version of the ad was flagged by YouTube’s content ID and taken down, but was later restored because it is obviously a fair use. The very fact that it was removed at all, though, demonstrates the inability of automated systems to determine whether a use is criticism, parody or some other non-infringing use."

Professorf Lessig
Back in August 2013 Lawrence Lessig filed a federal complaint after YouTube forced the Harvard University law professor and Creative Commons co-founder to take down a video of a lecture that featured people dancing to a copyrighted sound recording. Supported by the Electronic Frontier Foundation (EFF), Lessig said: “The rise of extremist enforcement tactics makes it increasingly difficult for creators to use the freedoms copyright law gives them. I have the opportunity, with the help of EFF, to challenge this particular attack. I am hopeful the precedent this case will set will help others avoid such a need to fight. The company who issued the take down issued an apology. 

“It’s a blunt instrument and it’s going to lead to lots of over-censorship,” Jim Killock, head of the U.K.-based Open Rights Group, told Global News. And he is not alone - numerous civil rights groups have pointed out that the proposed changes could be used to restrict freedom on the internet and could be used to censor content and sharing.   Communia, which advocates policies that expand the public domain and increase access to and reuse of culture and knowledge, and seeks to limit the scope of "exclusive copyright to sensible proportions that do not place unnecessary restrictions on access and use", issued a key recommendation to delete Article 13 from the proposal "as it addresses a problem that lacks empirical evidence confirming its existence. Article 13, as drafted by the Commission, would limit the freedom of expression of online users and create legal uncertainty that has the potential to undermine the entire EU online economy. As such it is unworthy of being included in a Directive proposal that is intended to modernize the ageing EU copyright framework".

InfoJustice was scathing on the automatic filtering proposals saying: "The upload filtering proposal stems from a misunderstanding about the purpose of copyright. Copyright isn’t designed to compensate creators for each and every use of their works. It is meant to incentivize creators as part of an effort to promote the public interest in innovation and expression. But that public interest isn’t served unless there are limitations on copyright that allow new generations to build and comment on the previous contributions. Those limitations are both legal, like fair dealing, and practical, like the zone of tolerance for harmless uses. Automated upload filtering will undermine both. What began as a bad idea offered up to copyright lobbyists as a solution to an imaginary “value gap” has now become an outright crisis for future of the Internet as we know it. Indeed, if those who created and sustain the operation of the Internet recognise the scale of this threat, we should all be sitting up and taking notice." 

Of course neither side wants to give ground: The recorded music sector's main lobby group, the IFPI, said Article 13 restores fairness to the digital market. It’s about looking out for workers in the creative industries, helping to secure them a future that is financially viable where we continue to benefit from their services" and a cross section of rights owners from the music, film, sports and television sectors (amongst others in the cultural and creative industries) have now sent a letter to MEPs pointing to "a cynical campaign from tech companies flooding the inboxes of MEPs with scaremongering that the copyright directive would be the end of the internet"  adding  "Please note that this is the 20th anniversary of their first claim that copyright provisions would break the internet. And it has never happened."

And the actual creators of music from across Europe are calling on MEPs to protect Europe’s status as a global hub for culture saying that the tech giants must pay fairly for content hosted on their platforms. Robert Ashcroft, Chief Executive of PRS for Music, said: “After three years of debate, one of the most controversial pieces of legislation ever to come before the European Parliament is about to go to the vote. This is about copyright and specifically about the rights of creators versus those of the Internet giants; it is about the way the Internet functions as a fair and efficient marketplace. It is a debate we must win if we want to secure our creative community into the next decade.” Jimbo Barry, producer and songwriter, known for co-writing hits for The Script, said: “I do worry about the sustainability of the professional music industry, as a songwriter. If copyright becomes free for the music that I write, and I don’t get paid in any sense for the music being used either on the radio or the platforms online, then logically, I won’t be able to sustain myself as professional. I hope that the fight for copyright for songwriters improves and that songwriters are just able to sustain the work that they love.


It will be left to MEPs to address the balance that is surely needed: “Creators and news publishers must adapt to the world of the internet as it works today,” rapporteur Axel Vossn MEP), said in a European Parliament Committee on Legal Affairs news release. “The Committee position aims to ensure that widely recognised and observed copyright principles apply to the online world, too.”

The legislation will now be debated in ‘trilogue negotiations’ where EU legislators and member states debate proposed legislation. The next plenary vote on the copyright review is due to take place on July 5th, and the final vote of the full plenary of the European Parliament is expected to take place in December. However, the decision of the JURI Committee which approved the proposed text, certainly increases the likelihood of Articles 11 and 13 becoming law - but it's going to be a battle!

http://the1709blog.blogspot.com/2015/09/prince-and-universal-wrong-to-take-down.html

Disclosure: The author represents a number of rights owners. Any opinions expressed by the author in this article are personal.

Wednesday, 27 June 2018

The COPYKAT: from Fallout Shelters to your local library


These days, a cursory search for “copyright” online will likely result in one thing more than any other: headlines about the [insert scary adjective here] draft for the Directive on Copyright in the Digital Single Market. It’s certainly something to keep an eye on, and the CopyKat has covered the DSM Directive here and here. But in other copyright news…


Is Warner Bro's Westworld game a blatant rip-off?

Bethesda Softworks is suing Warner Bros. and Fallout Shelter co-developer Behaviour Interactive over the recently released Westworld. Bethesda Softworks alleges that not only is the mobile game based on HBO’s TV series a “blatant rip-off” of Fallout Shelter, but that it also uses the same code as Fallout Shelter. The lawsuit, filed on 21 June in Maryland District Court, is a civil action for breach of contract, copyright infringement, unfair competition, and misappropriation of trade secrets.


a scene from HBO's hit show, Westworld
The original Fallout Shelter was released in 2015 for mobile devices, and is now available for play on Nintendo Switch, Windows PCs, PlayStation 4, and Xbox One. Fallout Shelter is a free-to-play simulation game, which has in-app purchases, where players build and manage a post-apocalyptic bunker full of workers (Variety). The Westworld game, which is currently available only on Android and iOS mobile phones, allows players to manage a virtual replica of the  theme park from HBO's hit Westworld TV show. The mobile game also features an “underground facility” that is similar to the vault in Fallout Shelter.

Bethesda accuses Warner Bros. of copying “the subtle sway, bounces, and minute movements in idle characters that give them and the scene a constant sense of motion and a distinctive feel as a result of unlawfully copying Bethesda’s code.” With these common elements discussed above in mind, Bathesda asserts that “there is more than a substantial similarity between Fallout Shelter and the Westworld mobile game.” 



Of course, questions of inspiration can be argued either way. Importantly for Bethesda’s case, both Fallout Shelter and the Westworld game share the same developer: Behaviour Interactive. The company, which is Canada's largest independent video game development studio, is also a named defendant in the claim, which states: 

“Warner Bros., sharing a similar consumer demographic, and recognizing Bethesda’s significant success in bringing its Fallout Shelter game to a broad audience on mobile devices, engaged and collaborated with Behaviour to develop a mobile app for its own science-fiction property, Westworld. To bring the Westworld mobile game to market, Behaviour and Warner Bros. utilized Bethesda’s intellectual property without authorization to develop a mobile game with the same or substantially similar gameplay experience as that provided by the copyrighted Fallout Shelter mobile game.”


The evidence continues to stack in Bethesda’s favour, with the publisher pointing out that the Westworld game even included the very same bugs or defects that were present in the early development stages of Fallout ShelterBethesda, which also publishes the popular FalloutThe Elder Scrolls, and DOOM games, is seeking an unspecified amount in damages from Warner Bros., and to have the Westworld game removed from app stores.


Social network, media company, host provider, neutral intermediary... what's in a name for YouTube?

Austrian commercial TV broadcaster ProSiebenSat1Puls4 has achieved a key victory in its four-year legal battle with YouTube. According to the Handelsgericht Wien (the Vienna Commercial Court) in its judgement of 6 June 2018, YouTube is not a neutral intermediary, but is rather jointly responsible for copyright breaches that take place on its video platform.

Puls4, a private broadcaster affiliated with the major broadcasting group ProSiebenSat.1, accused YouTube of complicity in copyright infringement. In 2014, Puls4 sued YouTube, arguing that the media giant had allowed Puls4’s stolen content to appear on the YouTube platform. YouTube responded by asserting the Host Provider Privilege set out in Article 14 of the E-CommerceDirective, which in certain situations exempts host providers like YouTube from liability for infringing activities by their users.



Austria's former Chancellor Christian Kern appears on Puls4 TV.
It is important to remember that the Host Provider Privilege only applies if the entity in question indeed qualifies as a “host provider” within the meaning of the E-Commerce Directive. This means that YouTube would have to prove it (a) does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or (b) upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.

Speaking to German newspaper Der Standard, Puls4’s CEO Markus Breitenecker explained that if YouTube “leaves its neutral intermediary position and assumes an active role, which could provide it with a knowledge of or control over certain data, it cannot rely on the liability privilege in this respect. And that is exactly what has happened in this case.”

Although (as of 25 June) the official judgement has not been published, the court cited the YouTube’s “links, mechanisms for sorting and filtering, in particular the generation of lists of particular categories, its analysis of users’ browsing habits and its tailor-made suggestions of content.” This led the court to determine that YouTube was prohibited from “playing the role of a neutral intermediary.”


In a statement to The Local Austria, YouTube said it was studying the ruling and “holding all our options open, including appealing” the decision. Both sides have four weeks to petition the court before it issues its binding ruling. In the meanwhile however, YouTube noted that it takes protecting copyrighted work very seriously.


If the preliminary decision is upheld, YouTube must perform a content check upon upload, instead of simply removing copyright infringing content upon notification. In respect of this, the Viennese court stated that “YouTube must in future — through advance controls — ensure that no content that infringes copyright is uploaded.” YouTube began beta testing a feature called Copyright Match last month, which shows rights holders who have had their work stolen and lets them ask YouTube to delete the guilty party’s video.
Although Austrian case law is not binding for other EU member states, the Commercial Court’s judgment sets a precedent for denying Host Provider Privilege to YouTube under EU law. This may encourage similar decisions in the future which are based on the same line of argument.

As Breitenecker put it, “the media companies who call themselves social networks will have to recognize that they, too, have to take on responsibility for the content with which they earn their millions.” 


For creatives in California, a recent employment law case may raise concerns over copyright

A California court ruling from April has raised concerns regarding its potential impact on copyright ownership. In Dynamex Operations West, Inc. v. Superior Court of Los Angelesthe matter before the court was a wage dispute, which required the court to consider the standard to apply in determining whether workers should be classified as employees, or as independent contractors. 

Nowhere in the 85-page judgement is “copyright” or even “intellectual property” mentioned. 
However, in a state with so many media and software companies, the new ruling could affect whether a creator or a company gets to claim ownership as the original author of a work. In deciding if a worker is eligible for statutory employment protections, Dynamex replaced a complex multi-factor consideration with a simple three-part “ABC” test. Now, Californian companies are burdened with the requirement to prove that all three parts weigh against an employment relationship. 


What does this mean for copyright law? 
The rise of the gig economy, which is characterised by short-term contracts and freelance work, poses new questions for intellectual property ownership. To determine if someone is an employee for purposes of copyright authorship, American Federal courts currently use a test in the US Treasury Department’s Internal Revenue Service code. 

If, however, the courts start looking to the Dynamex case for guidance, people’s expectations might change. Speaking to Bloomberg Law, music industry lawyer Michael S. Poster explained: “If, under California law, a lot more people are going to be treated as employees rather than as independent contractors, chances are that a lot of their work product that they would have retained a copyright interest in might belong to their employer.” 



Although the Copyright Act of 1976 provides authors with initial copyright interests, under the work-made-for-hire doctrine, it is the employer that is considered to be the author. (Section 201(b)). On the other hand, if the author is an independent contractor or freelancer – rather than an employee – ownership is retained by the individual creator, unless there is a contractual agreement to the contrary. 

For participants in the gig economy, the Dynamex ruling could simply prompt media and software companies to hire fewer independent contractors, and instead only hire people as employees. Although the copyright implications of Dynamex are unknown, the decision underscores the need for employers and workers alike to ensure that any contract for services includes a carefully drafted intellectual property rights clause – especially for those in creative industries.

And finally, for those of us still using our local library…

The Digital Economy Act 2017 (Commencement No 6) Regulations 2018 (SI 2018/690) have passed and will come into force this week in England, Wales and Scotland. The regulations give effect to section 31 (lending of e-books by public libraries) of the Digital Economy Act 2017. This impacts the Public Lending Right scheme, which in the United Kingdom is a programme administered by the British Library intended to compensate authors for the potential loss of sales from their works being available in public libraries.

The new section amends the definition of "lent out" in the Public Lending Right Act 1979 (PLRA 1979) thereby extending it to “communication by means of electronic transmission to a place other than library premises.” Being “lent out” now captures the remote lending of e-books and audio-books, resulting in the extension of the public lending right under the PLRA 1979 to remote lending. The provision also amends the Copyright, Designs and Patents Act 1988. 

Copyright in an e-book or e-audio-book within the public lending right scheme is not infringed when borrowed through a public library, provided that the e-book or e-audio-book in question has been lawfully acquired by the public library. Additionally, the lending must comply with any purchase or licensing terms to which the book may be subject.


Thursday, 7 June 2018

The COPYKAT


Whilst everyone’s focus was on the implementation of GDPR, the Coreper (Council's permanent representatives’ committee) has agreed its position on a draft Directive on Copyright in the Digital Single Market [DSM Directive] (previously covered on IPKat here). The main objective of the Directive is to modernise the copyright framework and adapt it to the digital age. The compromise text of the Council would create a new right for press publishers for the online protection of their press publications, addresses the value gap between rightsholders and online platforms (covered previously on CopyKat), encourages collaboration between online content sharing services and rightsholders and seeks to create exceptions to copyright on text and data mining. (Full text of the agreed position is available here)

Nevertheless, there are many views which believe that rather than improving protection of the copyrighted material, the Directive will cause a lot of harm. One of them is MEP  Julia Reda (Pirate Party, Germany), who notes that the reform may require paying money (link tax) by “merely linking to a news site” and that concerns about how that might negatively impact the entire internet “are being woefully ignored”. Furthermore, she points out at the provision which will “make platforms directly liable for all copyright infringements by their users”. The platforms will be able to avoid “unreasonable liability if they can show they’ve done everything in their power to prevent copyrighted content from appearing online – namely, by deploying upload filters”. Such obligation will be particularly harmful to small and mid-size companies making it nearly impossible for many of them to function in the EU. The Directive, apart from the motivation to harmonise the laws across the EU, also aims to “level the playing field” between big international internet companies and traditional publishers. As observed by Sterling the introduction of new provisions rather than improving the situation of publishers, is likely to cause damage to both users and publishers interests. ‘Save your internet’ campaign believes that adoption of Article 13 of the Copyright Directive proposal, which requires online services to take ‘effective and proportionate’ action to prevent copyright infringements, will in fact, “impose widespread censorship of all the content you share online”. According to Centrum Cyfrowe, the “ongoing reform could be a chance to make life easier, work more productive and fun - well - more fun! Instead, the reform misses the right perspective on the future”. Therefore, many of the organisations still believe that the public should now reach out to MEPs before the reform becomes the law, in order to address the concerns related to proposed changes. The debate on the new DSM Directive is definitely going to be the one worth watching.  



Being currently one of the most popular games and attracting millions of players, Fortnite and PlayerUnknown's Battlegrounds (PUBG) relying on the concept of ‘last player standing’ online games, although being similar, so far have managed to co-exist together on the market. Nevertheless, recently the makers of PUBG have filed a lawsuit in South Korea against producers of Fortnite (Epic Games) for alleged copyright infringement. Although the report does not specifically mention the claims, PUBG accuses Epic Games of copying user interface and game items. PUBG makers have been quite active in chasing app developers who copied specific elements from their game, as well as, PUBG cheaters. Nonetheless, the lawsuit against Epic Games is surprising, given the number of active users playing the Fortnite game. TorrentFreak believes that the lawsuit will not cause an end to the Fortnite game, with a high possibility of a settlement, or a court order requiring to alter certain elements of the game.



The Michael Jackson estate has sued ABC, as well as its parent company Disney for using without their permission Jackson’s music videos, songs, live video footage from the concerts and also extracts from ‘This is It’ movie, in a documentary called ‘The Last Days of Michael Jackson’, which aired in May. As reported by CMU Daily, the estate has criticised the programme before the broadcast, given that they have not been consulted about the documentary. Howard Weitzman, representing the estate confirmed the lawsuit by saying that "Disney and ABC committed wilful and intentional copyright infringement when they used the estate's copyrighted materials without the estate's permission”. In response to the lawsuit, ABC has defended the broadcast by saying that the documentary “explored the life, career and legacy of Michael Jackson, who remains of great interest to people worldwide, and did not infringe on his estate’s rights”. Given that ABC was stating that the documentary will be a news programme and therefore its use of third-party materials is legal, it is believed that the defendants will rely on a ‘fair use’ defence.


The long-lasting battle between the family of late Egyptian film composer Baligh Hamdi and Jay-Z over the moral rights (previously discussed by CopyKat here) has now been decided by the US Court of Appeals for the Ninth Circuit. The family in its claim filed in 2007 has accused Jay-Z of sampling in his ‘Big Pimpin’’ track samples of the song ‘Khosara’ created by Hamdi. In its 2015 the District Court has ruled that the family lacked legal standing against Jay-Z given that in 2002, the family has transferred all of his economic rights to Egyptian individual Mohsen Jaber, including the right to create derivative works adapted from “Khosara”. In its ruling, the Ninth Court held that in order to “have standing to sue for copyright infringement alleged to have been done by Jay­Z’s adaptation of ‘Khosara’, [the family] must have retained the exclusive right to prepare derivative works of ‘Khosara’, such as Big Pimpin’”. In relation to the moral rights argument, the Court ruled that with the notion that an author’s work is “almost universally understood to be an extension of the author’s personhood”, moral rights aim to protect the creator’s “personal or moral interests” in the work. Therefore, moral rights are not transferable to another party. The appeals court has also agreed with the representatives of Jay-Z who brought an argument saying that the case was entirely about moral rights under the Egyptian law and therefore should not be pursued in the US court. The court has ruled that moral rights that the family retained by Egyptian law are not enforceable in a US federal court. Circuit Judge Carols Bea added that “even in Egypt, [the family’s] moral rights would be insufficient to win him anything but an injunction”. Attorney Christine Lepera representing Jay-Z said that this decision “provides an important road map regarding the distinction between moral rights which are not actionable in the United States, and the economic right in a copyright, which is". The decision, therefore, sets an important precedent regarding the moral rights of foreign creators in the US. (Law 360)



In 2015 Spotify was sued by musician David Lowery, who claimed that the music service had unlawfully reproduced and distributed songs without obtaining owner’s permission. A similar case was filed separately later by songwriter Melissa Ferrick. The two cases were consolidated and earlier this year the parties have agreed on a settlement fee. The proposed deal was however opposed by over 500 musicians and copyright owners, who called it as “grossly insufficient”. In its recent decision, District Judge Alison Nathan at the US District Court for the Southern District of New York overruled those objections and decided to approve the settlement between the parties. According to the settlement, Spotify will pay $43.45 million for past streaming, The settlement also provides a process for class members who had claimed relief to receive ongoing royalties for future streaming and will cover any copyright owner whose songs or musical compositions were made available between Dec. 28, 2012 and June 28, 2017. As noted in the settlement order, there are more than 535,000 potential Class Members. Together with ensuring payment of past and future compensation, the new settlement details a process where Spotify and the class counsel “will work collaboratively to improve the gathering and collecting of information about composition owners to help ensure those owners are paid their royalties in the future” (MusicWeek). As noted by District Judge Nathan, the objectors tend to focus on the value of the immediate payment while largely ignoring the future royalty payment programme and the non-monetary benefits that the settlement provides”. Therefore, it should be considered that “the amount of the settlement is not unreasonable”. In Nathan’s view, the settlement is “fair, reasonable and adequate”.




In the ongoing debate whether online platforms can be liable for copyright infringement, the Commercial Court in Vienna (Handelsgericht) has ruled this week that YouTube is not a neutral host provided and it must prevent third parties from uploading copyright infringing content. The preliminary decision of the Court, which is not yet legally binding, related to a suit filed in 2014 by Austrian commercial TV channel Puls 4 against YouTube, after the content from its channel, which was protected by copyright was uploaded to the platform. YouTube has argued that it provided a technical service and therefore fell under the scope of the ‘Safe Harbour’ exemption under the EU’s E-Commerce Act, which provides that intermediaries providing technical service are not liable for the content uploaded by their users. Handelsgericht has disagreed with this argument say that YouTube’s activity in “sorting, filtering and linking” content on its platform, “in particular by creating tables of contents according to predefined categories” helps determine the surfing behaviour of its users. If the decision is held up, it may have an enormous impact not only on YouTube but also on other services such as Facebook, which would be required to monitor the content that appears on their websites. Now both parties have four weeks to petition the court before the binding ruling is issued. It is also expected that if the ruling stands, YouTube will appeal.