The beginning-of-winter Copykat!

The Electronic Frontier Foundation is not really happy at this moment

The Electronic Frontier Foundation published recently an article about the problem of the CASE Act of 2017. We will summarize it, but you can find the entire article here !

The CASE Act of 2017 has been criticised for many reasons, but the EFF here is quite clear: they don’t want it. For them, the CASE Act will have several unwanted consequences, and the first of them is the fact that the Copyright Office will become a Copyright Court. This is the worst that could happen for them, because “the Copyright Office it not known for its neutrality on copyright issues”. According to the EFF, this will magnify the problem of copyright’s unpredictable civil penalties.

Indeed, the CASE Act of 2017 would set up a “Copyright Claims Board” within the Copyright Office, staffed by three judges empowered to hear copyright complaints from all over the country. The proceedings will be voluntary, but if a respondent fails to opt-out, the proceedings become binding and the outcome can be enforced in federal court. According to the CASE Act, the board car issue damages award up to $15 000 per work infringed, or €30 000 per proceeding. And of course, if the parties consent, it can issue “agreements to cease infringing activities” … that become binding injunctions.

For the EFF, the opt-in method “would have greater incentive to design proceedings that safeguard the respondent’s interests, and clear standards that everyone can understand. Equally importantly, an opt-in approach would help ensure that both participants affirmatively choose to litigate their dispute in this new court, and help prevent copyright holders from abusing the system to obtain inexpensive default judgments that will be hard to appeal”.

And you, what do you think?

EU Parliament voted for a copyright reform aimed at making more TV shows and films available online across borders

Commercial TV broadcasters, football leagues and film producers scored a win on Tuesday when European Union lawmakers watered down a copyright reform aimed at making more TV shows and films available online across borders.

The EU Parliament

EU Parliament voted to restrict the scope of the copyright proposal to news and current affairs, excluding TV shows and films. It means that broadcasters will be able to show their news content online across the EU, but only after clearing the rights in their home country!

The original proposal was contested by the media industry. According to them, voting this kind of proposal would have lead to “pan-European licensing, diluting the value of exclusive rights and squeezing out smaller broadcasters that would be unable to afford pan-EU rights”. Indeed, films and TV shows are often broadcast when selling exclusive distribution rights on a country-by-country basis.

However, the vote is not final and dissenters still have hope as the EU Parliament will have to find compromise with member states in the coming months. 

Call collect?

A couple of snippets of news from the world of collection societies: First off, The US Copyright Royalty Board is to raises some of the music streaming royalty rates instigating a change based on a cost of living adjustment for the rates paid to copyright holders by online webcasters. The rates increased to $0.0018 for commercial ad-supported non-interactive music streaming services, and $0.0023 per performance for paid services. That's up slightly from $0.0017 and $0.0022, respectively. Additional rate announcements from the CRB are expected in the coming days.  And the collecting societies representing song rights saw the monies they collect worldwide rise by 6.8% to €8 billion last year – a jump in part fuelled by a 52% increase in digital income – according to new figures published by CISAC. Across all its member societies, digital income was up 51.4% at just under €1 billion. CISAC notes that the boost mainly came from premium streaming services. 

Except this? Except that?

The World Intellectual Property Organisation is going to take a long hard look at the issue of limitations and exceptions to copyright, and provide a draft action plans, one each for libraries, archives, museums, educational research institutions, and persons with other disabilities than sight impairment. The plans, being discussed in this week’s committee meeting, include brainstorming sessions, studies, and regional seminars, and conferences to advance understanding and issues related to copyright for those particular actors. The WIPO secretariat has circulated a document [pdf] providing draft action plans for different strands of the discussions for the 2018-2019 biennium.  

Web-blocking in Switzerland and South-Africa?

You may no know what web-blocking is… This is the anti-piracy tactic where rights owners can get injunctions forcing internet service providers to block their customers from accessing piracy websites. For right owners, this is the perfect anti-piracy tool, and they surely hope that this tool would soon be available in more and more countries.

A new Cybercrimes and Cybersecurity Bill is currently on trail in South Africa, and the local entertainment industry asked for web-blocking. The local entertainment industry took the example of some European countries, in which there is already this web-blocking tool, and asked the ISPs to consider adopting this method. Just like in some European countries, such as France with its “Hadopi”, they also asked for the ISPs to send warning letters to suspected online infringers, and maybe even monitor infringement on their networks.

Unfortunately, none of that is going to be included in the Cybercrimes and Cybersecurity Bill. Ministers opposed them that their proposals were not within the remit of the Bill. However, another Bill is coming, based on seeking to amend the country’s copyright law, and these proposals would be better put forward for that legislation.

In Switzerland, we’re focusing on a copyright review. A lot of critics have been going on for some time on the fact that the copyright regime is ill-equipped to deal with infringement. Indeed, in Switzerland, casual downloading and streaming of unlicensed content is covered by the pesky private exception.

Various new anti-piracy measures have been proposed during the current copyright review and an update on which proposals will go forward was published last week. A possible takedown-and-stay-down requirement has been proposed… Is something great coming?

According to Torrentfreak, Swiss lawmakers have already knocked back proposals that web-blocking be introduced there. However, as people will still be able to “pirate” copyrighted material (as long as that content is consumed privately), it does not include videogames and software. And here is something new: any supposed losses will be compensated via a compulsory tax of 13 Swiss francs, levied on media playback devices including phones and tablets.

You may also note that uploading is explicitly ruled out. Rights-holders will be able to capture IP addresses of suspected infringers in order to file a criminal complaint with authorities! That being said, there will be no system of warning notices.

As you see, the news is coming, and it sounds better than before!

This Copykat from Lolita S.

Wild Boys Sometimes Lose It: Duran Duran fail to reclaim their US copyright

This post is by David Brophy writing on the IPKat

A few weeks after his eighteenth birthday, Duran Duran co-founder Nick Rhodes signed a music publishing agreement assigning his existing and future copyrights to a publisher, as did the other band members. None of them was aged more than 21 at the time.

Had they taken advice from a copyright lawyer at the time (1980), one can imagine a conversation along the following lines:

Duran Duran: Please please tell me now: Is there something I should know? Is there something I should say?

 Lawyer: You mean, is there something you should say, before your copyright goes away?

Duran Duran: That's funny, for a lawyer. But we didn't agree to pay you a hundred quid for your songwriting talents. What do you think about this contract?

Nick Rhodes, co-founder of Duran Duran (photo: Eva Rinaldi, CC BY_SA 2.0)

Lawyer: Well, you're agreeing here to assign all of your existing and future copyrights worldwide for their full term. That's pretty standard stuff. But there's a new Copyright Act in the United States, just two years old, and it will allow you to reclaim your copyright from the publishers after 35 years. Which is nice, though it does rather assume anyone will be buying your records in 2015 (no offence). 

Duran Duran: Eh thanks. What exactly should we do? 

Lawyer: When the 35 year mark is approaching, you'll simply serve a notice on the publisher. Tell them you want your copyright back, lodge a copy of the Notice with the Copyright Office and hey presto it will revert to you. So in your contract, you could include a clause stating that the assignment is without prejudice to your rights under section 203 of the US Copyright Act to terminate the assignment of the US copyright. 

Duran Duran: They'll never go for it. Have you seen our haircuts? They won't change their standard contract for us. And if they don't sign us up, nobody will.

Lawyer: Well don't worry about it. When Congress was passing the law, they had unequal relationships like that in mind. Here's what they say in House Report 94–1476 introducing the law: 

"A provision of this sort is needed because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited ... Instead of being automatic, as is theoretically the case under the present renewal provision, the termination of a transfer or license under section 203 would require the serving of an advance notice within specified time limits and under specified conditions. However, although affirmative action is needed to effect a termination, the right to take this action cannot be waived in advance or contracted away."  

And it's right here in section 203(5): "Termination of the grant [of a transfer or licence of copyright] may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant." So basically, it doesn't matter what you sign now. You can't contract away the right to claim the copyright back when the time comes. 

Duran Duran: Cool. Now about your fees. We've been thinking. Maybe we can cut you in on the royalties for our first three albums instead? 

Lawyer: Thank you, but my understanding is that you have never even been inside a recording studio. I think I'd prefer the hundred pounds we agreed on. In cash please, boys.

Factual background

This conversation never happened of course, and indeed we don't know if the band took any advice or knew about the possibility of claiming the US copyright back in the future. What we do know is the band members signed a music publishing agreement assigning the "entire copyrights" in their existing and future works for the "full term" of the copyrights, to Gloucester Place Music Ltd (then called Tritec Music Ltd, and now part of the Sony/ATV group).

In 2014, with the 35 year point approaching, band members Nick Rhodes, Simon Le Bon, John Taylor, Andy Taylor and Roger Taylor, duly served Notices under section 203 in respect of 37 songs, including most of their best-known works like "Girls on Film", "Rio", "Hungry Like The Wolf" and "Is There Something I Should Know?".

Gloucester Place Music responded by seeking a determination from the English High Court that such Notices, if not retracted, would represent a breach of contract, i.e. by improperly terminating an assignmentwhich the band members had no right to do.

Effect of contractual agreement

Mr Justice Arnold has decided in favour of the publisher and against the band members. The case is Gloucester Place Music Ltd v Le Bon & Ors [2016] EWHC 3091 (Ch). His decision is based on the fact that the contract was made under English law, and on its proper interpretation the parties are assumed to have been aware when entering into the Agreements, at least in general terms, of the effect of section 203, and to have nevertheless contracted away the US copyright for its full term. He summarised at [44]:

"The language of clause 3(a) is wide and general. Particularly when read together with clause 4, I consider that what the language would have conveyed to a reasonable person having the relevant background knowledge was that the parties' intention was that the "entire copyrights" in the Compositions should vest, and remain vested, in the Claimant for the "full term" of the copyrights. That implicitly precludes the Group Members from exercising rights under US law which have the result that the Claimant's ownership of the copyrights is brought to an end prior to their expiry. Moreover, this interpretation is reinforced by clause 6(b), by which the Group Members promised not to transfer any interest in the copyrights to any other person, which I read in context as meaning any person other than the Claimant. (This is clearer from the wording of clause 6(b) of the Service Company Music Publishing Agreements, which refers to "any person, firm or corporation other than Tritec".) In effect, what the Group Members have done by exercising their rights of termination is to transfer the reversionary interest in the copyrights from the Claimant to themselves."

The reference to "a reasonable person having the relevant background knowledge" was held to include some knowledge of US copyright law. In other words, someone signing a contract such as this was assumed to know, at least in general terms, about the possibility of reclaiming copyright in the US.

Insofar as it goes, this may be a pretty unremarkable interpretation of a contract under English law. But what about the fact that under US law the right to terminate the assignment cannot be contracted away?

Conflict with US law

Arnold J. noted the US law aspect but pointed to the fact that Article 7(1) of the Rome Convention, which provides for effect to be given to the mandatory rules of the law of another country with which the situation has a close connection, does not have the force of law in the United Kingdom by virtue of section 2(2) of the Contracts (Applicable Law) Act 1990.

The issues of US law were treated as questions of fact. No expert evidence had been provided as to the meaning of the US statute, nor had permission been sought to do so. So efffectively they were never brought properly before the court.

The solicitor for the defendants (i.e. the band members and their service companies) had made a statement in his witness statement that:

"As a consequence of Section 203, a US Court would not allow a claim for damages for breach of a contractual agreement because the statutory termination right supersedes any contractual right. This applies whether that contract was governed under English or US law." 

The defendants argued that this was admissible evidence, and was unchallenged. Arnold J had little time for this argument. It was no more than a statement of case with which they could expect the other side to take issue at trial. It was a statement made by an English solicitor who, he noted, claimed no expertise in US law, with no basis given and no citation of any decided cases supporting the assertion, and nor did it address whether the position was the same in the period 1980-1983.

To the IPKat it appears that this failure to introduce evidence as to US law represented a major oversight by the defendants, or at least a very risky assumption that the point was self-evident. This Kat cannot tell whether the outcome would have changed if the judge had evidence that the position as stated by the solicitor was both correct as to the law now and at the relevant time, but the failure to adduce this evidence undermined the defendants' reliance on the US law point.

Nick Rhodes, commenting on the judgment, said "We are shocked that English contract law is being used to overturn artists’ rights in another territory. If left untested, this judgment sets a very bad precedent for all songwriters of our era and so we are deciding how properly to proceed."

The IPKat would like to see the case appealed, and would prefer to see artists free to exercise their statutory rights, but is less convinced that the decision sets a "very bad precedent". A future litigant who introduces strong expert evidence on the US law point would at the minimum ensure that the court would have to consider afresh the conflict of laws question.

Rhodes also commented that the band members signed the agreement as "unsuspecting teenagers ... when we knew no better". This bears out the "unequal relationship" rationale for section 203, and is another reason why it would be extremely interesting to see the US law point properly considered.

Arnold J's decision serves a salutory purpose, reminding anyone signing a publishing agreement that the court will interpret the agreement from the viewpoint of a reasonable person with the necessary background information, including some knowledge of copyright law. This makes obtaining good advice all the more critical when the bargaining position is unequal. 

Posted By David Brophy to The IPKat on 12/06/2016