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. 

Communication without implication: when should a doctor sue?

Earlier this month, in Wilkinson v London Strategic Health Authority [2012] EWPCC 48, a decision of the Patents County Court for England and Wales, Judge Birss QC had to rule on a dispute over the ownership of copyright in training materials which were used for teaching communication skills to doctors, nurses and other staff in the field of cancer.

London, made easy ...

Dr Susan Wilkinson developed an approach to communication skills training --"the Wilkinson Variant" (WV) [note: there are three such approaches, the other two being the Maguire Variant and the Fallowfield Variant. The Wilkinson Variant is aimed at nurses, Fallowfield at doctors and Maguire at any generic healthcare professional]. Subsequently, in the summer of August 2007, Dr W signed an agreement with the London Strategic Health Authority (SHA) for a project to produce a 'connected programme', this being a unified national approach to advanced communication skills training for doctors, nurses and other staff ('ACST'). By Clause 6.6 of this agreement:

"All intellectual property rights associated with any intellectual property arising from the performance of the Services and the documents and other work prepared by the Consultant pursuant to this Agreement shall belong to SHA". 

Eventually a bundle of materials was produced which included some text that had been derived from the WV. According to Dr W, she and no-one else owned the copyright in various training materials relating to her original works: the SHA had infringed her copyright by using that material. Two SHA documents were in issue: the 'ACST Facilitators Manual' and a 'learner pack' (the SHA works).

The issues for consideration were as follows: (i) did Dr W own the copyright in her WV materials? (ii) To what extent were the SHA works derived from them? (iii) Could the 2007 agreement be interpreted as assigning Dr W's existing copyright in her already-created works to SHA? (iv) did the SHA have the benefit of an implied licence to use those works?  Dr W maintained that any licence granted to the SHA in respect of the project was limited to the purposes of the project which had been made known to her in advance, on the basis that the SHA could exploit the works within the National Health Service -- but no wider than that.

Judge Birss QC held that the copyright did indeed belong to Dr W, but that the SHA had not infringed it.  In his view:

* the copyright in the documentation of the WV belonged to Dr W at the time when the 2007 agreement was signed -- and the SHA works in question included significant extracts from those works with the consequence that the reproduction of those works would infringe her copyright  -- unless there had been a transfer of that copyright or a licence.

* On the facts, it was clear that Clause 6.6 did not operate as an assignment of any of Dr W's pre-existing copyright in the WV to the SHA. The effect of that clause was prospective, not retrospective.

* Nor could an assignment of her copyright be implied.  The implication of such a contractual term should only be made where it was necessary, and even then only to the extent that it was necessary to give effect to the intention of the parties to the contract, but not more than that, and a minimalist approach was therefore called for.

* In the circumstances, the SHA did have the benefit of an implied licence to use the WV in relation to work done under the 2007 agreement. This was because Clause 6.6 showed that it was the intention of both of the parties that the benefit of the copyright in work created under that agreement would be enjoyed by the SHA --  and no limit was placed on the SHA's enjoyment of that copyright.

* There was no clause which provided that Dr W was to have any right of control or veto what the SHA did with the project.

Last Friday there was a sequel to this, in Wilkinson v London Strategic Health Authority [2012] EWPCC 55. Both parties came before the court to argue the question of costs because, unsurprisingly, they could not agree who had won.  Dr W thought she was the victor because the court had acknowledged her ownership of the copyright, while the SHA felt they had won, having been exonerated in the copyright infringement action. The matter was complicated by the fact that the litigation commenced before the High Court and that it could have been concluded more swiftly if Dr W had cooperated with a without-prejudice attempt by the SHA's lawyers to clarify some of the issues in question in the hope of keeping costs down.

In the end, Judge Birss QC did not actually say "a plague on both your houses", but an element of that school of thought was reflected in the judge's conclusion when he said:

"... the order I will make is that the defendant must pay 27.5% of the claimant's costs of these proceedings and the claimant must pay 35% of the defendant's costs ... ".

This blogger does rather feel that this case could have been avoided entirely, or its effects greatly minimised, if the parties had directed their communication skills more appropriately in the direction of each other at an earlier stage.