Friday 25 May 2018

The COPYKAT follows the money

As the world comes together today to panic about celebrate the GDPR coming into force, this COPYKAT follows the money.

Stock photo companies: uncertain standing? When a photographer licences their work to a stock photo company, is that company entitled to bring a copyright infringement claim if those images are subsequently used unlawfully? The answer, at Federal District level in the United States at least, is "maybe".

In May 2012, stock images company DRK Photo sued textbook publishing giant McGraw-Hill for alleged copyright infringement. DRK claimed that McGraw-Hill printed and distributed textbooks containing licensed images (636 unique photographs in total) which exceeded its licence agreement. However, the Court issued a summary judgement in favour of the defendants, because DRK failed to demonstrate any adequate ownership in the copyrights to confer standing.  The case, DRK Photo v. McGraw Hill et alwas then heard on Appeal from the United States District Court for the District of Arizona.  The Ninth Circuit affirmed the district court's verdict in favour of McGraw Hill. 

This case turned on a seemingly nuanced point of blackletter law, which reinforces the importance of careful drafting in intellectual property assignments and licensing agreements. Section 501(b) of the Copyright Act allows the “legal or beneficial owner of an exclusive right under a copyright” to sue for infringement. Unhelpfully, the Copyright Act does not define “beneficial owner.” The question before the Court was therefore whether the right to sue extends to an assignee, who has pre-existing interests in the copyright, and is subsequently injured by infringement.

A key precedent was established in the 1969 case of Prather v. Neva Paperbacks, Inc., which held that an assignee is a proper party to bring suit for copyright infringement. As recently as 2015, Minden Pictures, Inc. v. John Wiley & Sons, Inc held that a stock photography agency, serving as the exclusive licensing agent for allegedly infringed photographs, did have standing to sue for infringement under the Copyright Act.

In its claim against McGraw Hill, DRK contended that Minden created “a bright line rule” that all stock photography agencies have standing to bring copyright infringement claims, by virtue of their agreements with their photographers. In his judgement, Judge Hawkins slapped down DRK for “reading Minden too broadly.”

The decision went on to cite the 2005 case of Silvers v. Sony Pictures Entertainment, Inc, which reaffirmed the principle that a party with no ownership interest has no standing to sue, as “the Copyright Act does not permit copyright holders to choose third parties to bring suits on their behalf.” In evaluating the licence agreements between the photographers and DRK, the Court found that those photographs were under non-exclusive licenses. Accordingly, DRK could not be deemed the legal owner of any exclusive right pertaining to the images.

Freelancers finally make (some) bank. 
In 2001, nearly 3,000 freelance journalists filed a class-action lawsuit for copyright infringement against some of the country’s biggest publishers, including The New York Times. It’s taken 17 years, but the cheques are finally in the mail.

The Authors Guild (whose press release about the case can be read here) filed the suit, together with the American Society of Journalists and Authors, the National Writers Union, and 21 individual freelancers who were named as class representatives.  Of the original 3,000 freelancers, almost 2,500 writers made it through what has been described as “a tortuous legal process” and have already begun to receive their pieces of the $9 million (approx. £6.8m) settlement.

The case, Re Literary Works in Electronic Databases Copyright Litigation (or simply “Freelance”) concerned the copyright relationship between freelance authors, print publications, and electronic databases. In particular, the lawsuit alleged that publishers – including the New York Times, TIME, and Economist – shared licensed articles written by freelancers to the Lexis/Nexis electronic database and other digital indexers, without first obtaining the writers’ approval.
James Gleick was previously a reporter and editor for The New York Times for 10 years. He is now the president of the Authors Guild and one of the named claimants in the case. He explained, “the argument that we made was the writers got paid for one-time use. We sued The Times because they sold copyrighted work by not just their staff, but also freelance writers. And the correct thing to do would have been to ask the freelance writers for permission and then pay the writers.”

While freelance writers account for nearly 70% of all professional writers in the United States, according to a survey done by Contentlyover 20% of full-time freelancers make below the American poverty threshold for individuals.
Settlement was nearly reached in 2005, but negotiations stalled over disagreement regarding writers who had not registered copyrights for their work. In the United States, registration with the US Copyright Office is required before a suit for copyright infringement may be brought in federal court. However, the 2010 Supreme Court ruling Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 held that the settlement proceedings could continue.

The parties again reached what seemed to be a final agreement in 2014, only to endure four more years of delays caused by 41,000 objections challenging specific claims under the revised settlement agreement (Publishers Weekly). This tactic appears to have paid off for the defendants, however, as the final pay-out for the freelancers equalled only 50% of the $18 million liability cap negotiated in the initial settlement agreement.

Writing about her experience as a class member for LA Observed, Ellen Alperstein explained: “Did I receive what I was due? Nah. But more important than my check for $2,555.77 was confirmation that my work has value that our justice system respects. That organizations such as the ASJA served a vital role in my nascent career, educating me about writers' rights and my responsibility in advocating for them.”

Nightmare in Nigeria for Copyright Society. 

Controversy surrounding the Copyright Society of Nigeria (COSON) reached epic proportions earlier this month, as power struggles between the organisation and the Nigerian Copyright Commission (NCC) rumble on (Daily Trust).

Following a General Meeting of COSON in December 2017, several members sent a petition to the Governing Board to request an investigation regarding certain decisions made at the meeting. The Commission then issued directives to COSON Management, requesting that the irregularly-made decisions not be implemented. COSON Management failed to comply, and subsequently had its license revoked in line Regulation 19 (2) of the Copyright (Collective Management Organizations) Regulation 2007.

The continuing defiance of COSON Management is, according to Ezekude, “a clear indication of COSON’s unwillingness to operate within the framework of the Copyright Act” (4Traders). In return, COSON has called directly upon Nigeria’s President, Muhammadu Buhari, to immediately relieve Afam Ezekude of his position as the Director General of the NCC (

By way of background, COSON was established in 2010 as the sole collective management organisation approved by the Nigerian Copyright Commission (NCC) to act on behalf of musicians and owners of sound recordings in Nigeria. In particular, COSON undertakes negotiating, granting copyright licences and collecting royalties, and curbing the “biting case of piracy that has plagued the Nigerian music industry.”  (Music in Africa).

Before COSON was founded, multiple entities had promised to represent the interest of musicians and other creatives, including the Nigeria Copyright Council, Music Collective Society of Nigeria and the Performing Musicians Association of Nigeria. Their failure to deliver on these promises led to the call for a singular collective management organisation as a result. Ultimately, it was COSON which obtained support of other national associations and the permission to collect royalties on behalf of Nigerian artists.

When first established, COSON was heralded as “one of the most important developments in the Nigerian entertainment industry in the last fifty years“ (Lessons for Africa). Unfortunately, this ongoing drama will provide little comfort to Nigeria’s creatives.

Speaking to The Nation on the subject, Nigerian artist Paul Play Dairo stated: “When you have a monopoly, this will not be flexible. They will take things for granted. I don’t know why Nigerians feel that only one collecting society will solve their problems. And also, as a concerned Nigerian musician, I believe that I have the right to protect my intellectual property, I have the right to choose the collecting society that I want to join.”

Smokey Robinson supports CLASSICS for fairer compensation.
As the CopyKat previously covered, copyright legislation is soon to be updated in the United States. Earlier this month, Motown legend Smokey Robinson joined a number of other entertainers before the United States Congress to throw weight behind stronger copyright protections for artists and rights owners. The proposed Music Modernisation Act (MMA) has received wide bipartisan support from Democrats and Republicans alike. Musicians from all backgrounds likewise welcome the new payment provisions in particular, as many assert that making a living off sales of albums and CDs is "a thing of the past" as users increasingly turn to streaming.

The MMA will be comprised of several separate titles (sections). Title II, entitled “Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society (CLASSICS) Act” will focus on public performance rights for pre-1972 recordings. If passed, musicians with pre-1972 recordings will receive royalty payments when their tracks are played on the radio, with royalties then allocated for recordings played on the Internet, cable, and satellite radio.

This will amend current copyright law, which only protects music produced after Feb. 15, 1972. Robinson explaining that musicians deserve to be compensated in the same way, regardless of the recording dates of their particular music. The CLASSICS Act is intended (inter alia) “to fix the quirk in the law that created this loophole” (Variety).

“The records of the 50’s and 60’s aren’t called “classics” because of their age,” he noted. “They’re called classics because of their greatness. They still resonate today. They add value to our lives and bring people together. They define America.”

Robinson then detailed that during an audit of a digital services company several years ago, he discovered the company owed him $250,000 in royalties. After confronting them, he was offered $12,000 and told, “If you don’t like it, sue us.” In his written testimony, Robinson explained that few artists have the financial resources to commence legal proceedings, and would therefore benefit from statutory damages protection. You can watch a clip of Robinson answering Senator Cornyn’s question about statutory damages here.

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