Big sums at stake in Serbia

On 27 July 2010, the Belgrade Commercial Court issued a first instance decision in which it ordered the public broadcaster Radio Television of Serbia (RTS) to pay Serbian copyright organization SOKOJ the not insubstantial sum of EUR 1,293,739 (US$ 1,653,614) for broadcasting music without paying royalties to its composers.

This is apparently just a skirmish in a very long battle between SOKOJ and RTS, with the prospect of an appeal in the offing. According to SOKOJ, this is "the most important decision ever made in the field of copyright protection" [presumably in Serbia, at any rate] and that it makes it clear that the legislation in this area must be respected. There's plenty of money at stake as well as principle: if the decision becomes final. RTS will have to pay SOKOJ nearly EUR 2 million (US$ 2,556,334) after the addition of interest. These sums are very large if one takes into account the cost of living in Serbia.

The 1709 Blog hopes to find out more about this dispute and, in particular, about the grounds of any defences.

Source: PETOSEVIC newsletter here.

US record labels say that copyright law "isn't working"

Speaking at the Technology Policy Institute's Aspen Forum, The President of the Recording Industry Association of America, Cary Sherman, has said that the current U.S. copyright law "isn't working" for content owners and contains a number of loopholes - the main one he objected to is, of course, the safe harbour protection given to internet service provides (ISPs), web companies and telecomms providers. According to CNet, Sherman said the 1998 Digital Millennium Copyright Act "isn't working for content people at all," saying "You cannot monitor all the infringements on the Internet. It's simply not possible. We don't have the ability to search all the places infringing content appears, such as cyberlockers like [file-hosting firm] RapidShare." Sherman added that YouTube is doing a good job of filtering and removing copyright-infringing videos but added that Google could do much more than simply having YouTube remove videos making the example thsat "If you enter in "Beyoncé MP3" as a Google seach the "the chances are, the first thing you'll see is illegal sites." In response Lance Kavanaugh for YouTube, said that the DCMA is working exactly as Congress intended it to. "There's legal plumbing to allow that to happen, to allow those small companies to innovate without [the] crushing fear of lawsuits, as long as they follow certain rules," he said. "Congress was prescient. They struck the right balance". Youtube recently avoided liability in a case brought against them by Viacom, owners of MTV, for hosting MTV content without Viacom's permission because they operated a take-down system although Viacom plan to appeal the decision.

Sherman's comments, on an Act which was heavily lobbied over by ISPs, internet companies and the content owners - is based on the growing concern that the Act contains real and dangerous loopholes (well, dangerous for content owners) which allow ISPs and other web-based companies to ignore online copyright infringement without any legal comeback - although despite his concerns, Sherman added that he did not see new legislation as the solution to this at this stage - preferring to reach agreements with web firms directly. He explained: "We're working on [discussions with broadband providers], and we'd like to extend that kind of relationship - not just to ISPs, but search engines, payment processors, advertisers. But Sherman then added "if legislation is an appropriate way to facilitate that kind of cooperation, fine" saying it may be necessary for the U.S. Congress to enact a new law formalizing agreements with intermediaries such as broadband providers, Web hosts, payment processors, and search engines - one presumes the RIAA are contemplating asking the US legislature for new laws along the same lines as the various "three strikes" laws passed in the UK, France, Taiwan, South Korea and New Zealand.

The RIAA have also signed up to a new letter sent to Google and US ISP Verizon regarding their recent announcement on so called "net neutrality". The consortium of American content owners which included indie labels body A2IM and collecting societies BMI, ASCAP and SESAC, called on the two web giants to add cracking down on piracy to their joint mission.

Interestingly in related news, online advertising firm Triton Media is being sued by several movie studios for "contributory" and "induced" copyright infringement, over its alleged dealings with unauthorized websites offering their content for free. Disney and Warner Bros filed suit against Triton, alleging the firm helped websites like PirateCity.org and Watch-Movies-Links.net profit from piracy by handling their advertising sales. The studios said the advertising agency knew the sites were offering unauthorized content because they sent notices to Arizona-based Triton. The lawsuit seeks an injunction against Triton providing advertising services to the sites in the future, and unspecified monetary damages.

In other RIAA news, Joel Tenenbaum, the Boston University graduate student who lost his case against the recording industry for illegally downloading and sharing music has said that he will be appealing a federal judge’s order that he pay four record labels $67,500 in damages for copyright infringement, even though that amount is only a tenth of what a jury said he should pay for copyright infringement on 30 songs. The original order was a whopping $675,000. “Sixty-seven-and-half thousand dollars only sounds reasonable because it was so much before’’ said the 26-year-old former Providence resident, who then added that he would have to declare bankruptcy if forced to pay the smaller award. His lawyer, Harvard Law professor Charles Nesson, has filed a one-page notice saying he will appeal with the US Court of Appeals for the First Circuit. Nesson said in an interview that he plans to challenge several rulings Judge Nancy Gertner made at trial, including her refusal to let jurors hear that Tenenbaum offered to settle the labels’ claims against him in November 2005 for $500. The four record labels who brought the action (Sony BMG, Warners, Arista and Universal) have filed a similar notice and RIAA spokeperson Cara Duckworth said in a statement yesterday that the labels “had no choice but to appeal the erroneous and unprecedented decision’’ by Judge Gertner on July 9 to slash the award by 90 percent". “The ruling casts aside a jury verdict squarely within the range established by Congress and clearly supported by the undisputed harm to the recording industry and the egregiousness of the defendant’s conduct,’’ she said.

http://news.cnet.com/8301-13578_3-20014468-38.html
http://tinyurl.com/29326mq (Hollywood Reporter)
http://en.wikipedia.org/wiki/RIAA_v._Tenenbaum

Too many California girls?

A few weeks ago, this blog reported here about the efforts of Performing Rights Organizations (PROs) to collect royalties from commercial users of music throughout the United States. Notably, PROs have developed proprietary technology that can recognize millions of songs even by just a few notes. Using this technology, the PROs can easily recognized when music they represent has been "sampled," interwoven in part into a new piece of music by another artist, thus generating royalty obligations.

Now comes news that Rondor Music International, the publishing company that controls the rights to the Beach Boys' "California Girls" has sent a claim notice to Katy Perry, Snoop Dogg, and their co-writers and publishers demanding that they add the Beach Boys' members as co-authors of their song "California Gurls" because the song references the Beach Boys' classic song.

The incident highlights the potential deviation of interests between writers/performers and the publishers managing the rights. The Beach Boys, when asked, responded that they love Perry's song and appreciated the influence their own song had in the creation of California Gurls. In fact, Brian Wilson said "the melody is infectious, and I'm flattered that Snoop Dogg used our lyric on the tag," and Mike Love summed up his opinion by saying,

"[it] obviously brings to mind our 'California Girls,' it's just in a different vernacular, a different way of appreciating the same things. The Beach Boys have always accentuated the positive, and [Perry's] is a positive message about California Girls, so what's not to like?"

Music publishers like Rondor, by contrast, don't appreciate imitation without remuneration. The Perry/Snoop Dogg song absolutely evokes the Beach Boys' classic, but it has its own flavor and lyrics, with the exception of one nearly identical line ("I really wish you all could be California girls"). Is there enough overlap to warrant co-writing credits and copyright interests? Rondor certainly believes so: "It is up to the six writers and various publishers of 'California Gurls' to decide whether they honor the claim or not." On the other hand, there are certainly agruments, like fair use, that could lead to a finding against Rondor if this incident ever lands in court. No hint yet on what action Rondor may take if the Beach Boys aren't granted the co-writing credits sought.

Database rights: a reader asks

A reader has posed the following question, to see what the readers of this blog might think:

"Company A purchases the majority share of Company B; a share purchase agreement is signed. The IP clause in the agreement states that Company A has the use of the IP rights of Company B, including Company B's database (a customer list, updated from time to time). After the purchase, Company A merges the information in the database with its own data (with the approval of Company B).

Company B subsequently goes into liquidation. There has been no assignment of the rights in the database, but the database has been substantially changed due to the merging of the data with Company A's own data. I know that, if the merging with the data was a "substantial change" to the contents which would be sufficient to satisfy the requirement for a "substantial new investment", then the amended database would qualify for a new 15 year term of protection. If this is the case, I would think that Company A is the author of the new database, and is entitled to keep using it (and entitled to tell the administrator they can't sell the new database).

However, I don't think Company A can do anything about the database in the form it was in when Company B initially created it, because at that time, Company B was the author of that database".

Do you agree? Please post your comments below.

German industrial expansion: blame it on copyright?

"The Real Reason for Germany's Industrial Expansion?" by Frank Thadeusz, published on Spiegel Online here, has already been the subject of this post on the IPKat by Mark Schweizer which has already attracted a fair degree of serious comment. The author's byline, "Did Germany experience rapid industrial expansion in the 19th century due to an absence of copyright law? A German historian argues that the massive proliferation of books, and thus knowledge, laid the foundation for the country's industrial might", tells you why it's so interesting. Enjoy!

Are pop videos overrated?

Last week Mr Justice Floyd allowed an appeal from a decision of the Copyright Tribunal over the royalty TV channels should pay for broadcasting music videos. CSC Media Group, which operates seven TV music channels, licenses its videos from Video Performance Ltd (VPL). As VPL is a collective licensing body, CSC had the right to refer the terms of its expiring licence to the Copyright Tribunal. Last year, the Tribunal determined that the correct fee for CSC to pay VPL should be 12.5% of revenues rather than the existing 20% (pro-rated according to amount of VPL content used).

Decisions of the Tribunal can be appealed on a point of law. The Copyright, Designs and Patents Act 1988 requires the Tribunal to set reasonable terms and in determining what is reasonable it should have regard to the terms of other similar licences. The High Court argued that the most relevant licence for the Tribunal to consider was VPL’s licence to BSkyB, which had a 20% royalty. Although the Tribunal had referred to the BSkyB licence, it only did so after it had already made its mind up that the royalty should fall within a window of 10–15%. This meant that the BSkyB licence was given insufficient weight in its decision-making process. The Tribunal had ‘had regard’ to it, but not primary regard. The Tribunal had erred in law: it had jumped through the right hoops – but in the wrong order.

But is it really undisputable good sense to use the BSkyB licence as the principal measuring stick for the CSC licence when both were from the same collective-licensing body? Both licensees must have experienced a similar imbalance of bargaining power – VPL was the only possible licensor for the content they required and it had apparently made the 20% non-negotiable for years. If anything, BSkyB may have been even more unenthusiastic about the terms than CSC – unable to make good business out of music video, it wasted no time in selling off its channels even before its licence was signed.

The record labels vs the broadcasters - what’s phones got 2 do with it?

Here's a novel way to resolve a dispute between two parties. Ask the government to put an obligation on a third party to cure all your ills. The long-running dispute between US radio broadcasters and the recording industry over the royalties broadcasters should have to pay to use recorded music has taken an unexpected turn with a proposed settlement where a suggested new federal mandate would require all new mobile phones to come with a built-in FM radio chip. The National Association of Broadcasters (NAB) has long been fighting any proposals that would require radio stations to pay royalties to record labels and performers for the right to play their sound recordings on the air. The US (unusually) has no current legal requirement for a royalty for the use of recordings for FM stations - although now in the US internet, cable and satellite radio services and stations do have to pay an equivalent of the UK’s PPL royalty: Broadcasters have long argued that airplay provides free promotion and drives music purchases and concert ticket sales.

The new idea is to push forward a proposed settlement that would establish a tiered system of royalty payments that would bring in a total of roughly $100 million for the music industry. Commercial radio stations with more than $1.25 million in annual revenue would pay royalties totalling 1 percent of revenue. The smallest commercial and not for profit stations would pay either 1 percent of revenue or $100 annually, whichever is less.

The prospect that the US government could dictate key design decisions for mobiles has alarmed electronics manufacturers as well as consumer groups, not least as many say they don’t actually want or need FM on their phones, that it is an outdated and redundant idea and that practical problems such as a second antenna, reduced battery life, additional weight and more bulk would be unattractive to consumers. Gary Shapiro, Presient of the Consumer Electronics Association said “Consumers clearly aren’t interested in (ad laden) FM radio on their mobile phones and other consumer gadgets - especially with the availability of Pandora, Slacker and other similar smartphone music apps that are now widely popular" adding the “backroom scheme” from the broadcasters and the labels to have Congress mandate broadcast radios in portable devices, including mobile phones, “is the height of absurdity” adding “Rather than adapt to the digital marketplace, NAB and RIAA act like buggy-whip industries that refuse to innovate and seek to impose penalties on those that do.”

Both the House of Representatives and the Senate Judiciary Committees have passed bills that would give recording labels and artists a share of advertising revenue that the FM radio stations generate by playing their recordings, but neither of those contained a FM chip mandate. As both bills have stalled due to fierce broadcaster resistance, legislators asked the NAB and MusicFirst (for the labels and for recording artists) to try to negotiate a compromise. Hence the new mobile idea.

It seems that the parties are nowhere near concluding the deal despite optimism from the record labels with Recording Industry Association of America boss Mitch Bainwol saying that whilst “Nothing is locked down just yet" the parties were on "the precipice of an historic breakthrough”. Hmmmmmmmmm!

http://www.myce.com/news/riaa-broadcasters-want-fm-radio-mandatory-on-smartphones-33362/

Another ECJ reference on monitoring and SABAM

This blog has already reported here on the ECJ reference in the case of SABAM v Tiscali.

To that case has now been added another reference from the Belgian courts in the case of Netlog v SABAM. At this stage, details in English are hard to come by, but it appears that Netlog, a social networking site, was subject to a similar attack from SABAM as that which Tiscali/Scarlet received. The difference, of course, is that as a social network, Netlog sits in a different point in the value chain than the ISP and therefore at a different point in the intersection between the various applicable legislation (e-commerce directive, data protection legislation, IP enforcement directive).

The Belgian court rejected SABAM's demands for Netlog to implement filtering and sent the case to the ECJ. It has been filed under case number C-360/10 - but at this stage, the author has been unable to track down any further details of the questions. Netlog's lawyers were quoted as saying they had won on all counts (although I guess his clients would have been even happier for the case to have been dismissed, rather than sent to the ECJ for another year or two of litigation).