PRS for Music begins legal action against SoundCloud

PRS for Music has written to it's members saying it is beginning legal action against online music streaming platform SoundCloud after "five years of unsuccessful negotiations". The PRS says:

"SoundCloud actively promotes and shares music. Launched in 2008, the service now has more than 175m unique listeners per month. Unfortunately, the organisation continues to deny it needs a PRS for Music licence for its existing service available in the UK and Europe, meaning it is not remunerating our members when their music is streamed by the SoundCloud platform.". The PRS letter goes on to say: "We have asked SoundCloud numerous times to recognise their responsibilities to take a licence to stop the infringement of our members’ copyrights but so far our requests have not been met. Therefore we now have no choice but to pursue the issue through the courts."

The letter explains that whilst SoundCloud has taken down some of PRS repertoire,  a recent list of some 4,500 musical works which the PRS say were being made available on the service and which they were asking SoundCloud to licence  or remove resulted in this: "SoundCloud decided to respond to our claim by informing us that it had removed 250 posts. Unfortunately, we have no visibility or clarity on SoundCloud’s approach to removing works, so it is not currently clear why these particular posts have been selected by them given the wider issue of infringement that is occurring. Ultimately, it is SoundCloud’s decision as to whether it starts paying for the ongoing use of our members’ music or stops using these works entirely."
   
The letter from Karen Buse, Executive Director, Membership and International at PRS for Music, ends by saying "We remain hopeful that this matter can be resolved without the need for extended litigation. Members will appreciate that this is now a legal matter and our ability to communicate around it is therefore limited by the legal process. However, we will try to share information and updates whenever we can."

SoundCloud has issued its own statement responding to the letter saying: “It is regrettable that PRS appears to be following this course of action in the midst of an active commercial negotiation with SoundCloud. We believe this approach does not serve the best interests of any of the parties involved, in particular the members of the PRS, many of whom are active users of our platform and who rely on it to share their work and communicate with their fanbase.”


“SoundCloud is a platform by creators, for creators. No one in the world is doing more to enable creators to build and connect with their audience while protecting the rights of creators, including PRS members. We are working hard to create a platform where all creators can be paid for their work, and already have deals in place with thousands of copyright owners, including record labels, publishers and independent artists.”

SoundCloud's content is currently uploaded by creators, marketing companies, record labels and even music publishers - and  whilst the PRS letter notes "When a writer or publisher becomes a member of the Performing Right Society, they assign certain rights to their works over for us to administer, so it’s our job to ensure we collect and distribute royalties due to them" this move certainly may irritate some of the PRS's own membership who see a real value in SoundCloud. A court case would almost certainly look at the European take on 'safe harbours' and how SoundCloud's take down policies would fit with that - but going forwards, and if SoundCloud is going to adapt to a streaming model more akin to Spotify, its hard to see why it would want a war with the PRS at this juncture.

The letter can be found here - an interesting analysis on MusicAlly here, and more comment and thoughts on Music Business Worldwide here - not least on the position of Warners Music Group and Universal Music here - presumed equity holders in SoundCloud - but through their publishing divisions - members of PRS for Music as well. 

Craigslist's claim for copyright in user listings fails

Craigslist is the global classified advertisements website with sections devoted to jobs, housing, personals, for sale, items wanted, services, community, gigs, résumés, and discussion forums which began in the USA in 1995 when Craig Newmark started an email distribution list of friends, featuring local events in the San Francisco Bay Area, before becoming a web-based service in 1996 and expanding into other classified categories. It started expanding to other U.S. cities in 2000, and currently covers 50 countries with a search engine, discussion forums, flagging system, self-posting process, homepage design, personals categories and 'best-of-Craigslist' feature. Over 100 million classified ads run on its site each month.   Now let’s be clear – postings are usually user generated and the only moderated content was for the now defunct US ‘adult’ section.

So what’s the fuss? Well, back in 2012 mashup sites such as padmapper.com and housingmaps.com began overlaying Craigslist data with additional data such as Google Maps, and adding their own search filters to improve usability. PadMapper took real estate listings and added ‘value’ to them, taking a series of data points such as the  cost of apartment, location, size and then allowed the customer to search on that basis. And when the customer found what they wanted, they would then be directed back to Craigslist to read the full posting and complete the transaction .

Despite what might be considered a ‘win win’ situation, Craigslist were not best pleased, and In June 2012, Craigslist changed its terms of service to disallow the practice. In July 2012, Craigslist filed a lawsuit against padmapper.com along and 3taps, who ‘scraped’ the data from Craigslist, and a third defendant, Lovely. The claim was twofold: A copyright claim and then claims relating to the  violation of the Craigslist terms of service (ToS) and further claims under the Computer Fraud & Abuse Act (CFAA): Craigslist’s ToS do allow for websites like Google and Bing to “scrape” and index their website, but do not allow for other non-general indexing websites to do so. Some of these latter claims continue – somewhat controversially.

The copyright claim was based on Craigslist argument that (1) Craigslist retained copyright to postings made by its customers and (2) taking these data points of cost and location constituted infringement. US District Judge Charles Breyer has now said that the copyright claim must fail as Craigslist never owned the copyright material, save the Judge allowed the copyright claims to proceed for user-created posts submitted between July 16, 2012 and August 8, 2012 because Craigslist required that users provide the site with “exclusive” rights to their submissions during those weeks. That language was dropped from it's submission form after widespread criticism.  Judge Breyer said that although Craigslist posts were “original” enough to warrant copyright protection, save for that short period, the ToS didn’t give Craigslist exclusive rights to the users’ posts.

As an aside, the CFAA claim continues - but to widespread criticism: 

“It’s curious that a company that prominently displays opposition to the CFAA and encourages customers to get involved to fix the CFAA, is at the same time suing start-ups for violating the CFAA for precisely the problems for which tech activists have ridiculed the CFAA”.

It’s worth noting In 2005, San Francisco Craigslist's ‘men seeking men’ section was attributed to facilitating sexual encounters and was the second most common correlation to syphilis infections and the company was facing pressure from the San Francisco Department of Public Health, which prompted CEO to say that the site has a very small staff and that the public must "police themselves".  However advertisements for "adult" (previously "erotic") services were initially given special treatment, then closed entirely on September 4, 2010. At the time Matt Zimmerman, senior staff attorney for the Electronic Frontier Foundation, said, "Craigslist isn't legally culpable for these posts, but the public pressure has increased and Craigslist is a small company" whilst Brian Carver, attorney and assistant professor at UC Berkeley, said that legal threats could have a chilling effect on online expression. "If you impose liability on Craigslist, YouTube and Facebook for anything their users do, then they're not going to take chances. It would likely result in the takedown of what might otherwise be perfectly legitimate free expression."

So once the darling of the tech world, it's now in the doghouse, accused of bullying and trying to stifle innovation - and competitors - with one commentator saying

“A lawsuit of this nature is much more suited to an old legacy gatekeeper, rather than a company that is supposedly of the internet generation. To say it's disappointing that Craigslist would engage in these kinds of tactics is an understatement”

http://gigaom.com/2013/04/30/court-says-craigslists-hacking-copyright-claims-against-padmapper-and-rivals-hold-up-for-now/

http://www.forbes.com/sites/derekkhanna/2013/04/30/craigslists-allegations-of-copyright-violations-thrown-out/

http://en.wikipedia.org/wiki/Craigslist