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- Copyright in the Digital Age
- By: Beverly Robin Green,
- Green & Green
- Marin County & San Francisco
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- U.S. Copyright Law, 17 U.S.C. § 101 et seq., evolved over half a
Millennium:
- From English common law over 500 yrs. ago, w/the advent of first
threats of technology-the then hi tech Gutenberg Press & the
English Statute of Anne, to protect writings, 300 yrs. ago, to a
Constitutional Right
- Article 1, § 1 of the U.S. Constitution
- Granted Congress the power to promote copyright in the “useful arts”
by protecting for “limited times” the rights of “authors” in their
“writings”…[also patent law]
- Always balancing act of rights: 1st Amendment freedom of
speech arguments, “Fair Use” defense factors & the protection of the public from
monopolies- antitrust
defense issue raised in Napster case…
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- 1st US Act-limited to “writings”
- White Smith v. Apollo
28 S.Ct. 319 U.S. (1908)
- S.Ct. construed “writings” narrowly;
Held “Mechanically” made and readable copies of music on then
hi-tech piano rolls were not “writings” as was sheet music, and not
entitled to © protection!
- Could have been death to fledgling US music publishing industry, but
Congress came to rescue…
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- Congress addressed this new technology in the 1909 Act & corrected
this negative effect by:
- Extending language of © protection to so-called “Mechanical” copies,
- Creating so-called “Mechanical Rights” and the “Mechanical Royalties”
that are such an important source of income to the music publishing
industry today
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- Major © Law Revisions, eff. 1.1.78, still the Basic “New” © Law; recent
Laws amend this Law
- Copy “RIGHTS” include EXCLUSIVE rights to:
- 1) so-called “Reproduction Right”- Basic “copy right” to “Copy”,
reproduce or make copies or phonorecords of a copyrighted work
- 2) “Derivative Rights” – Broad rights to prepare derivative works based
on the copyrighted work,
- 3) “Distribution Rights” – To distribute, by sale, rental, lease, or
lending, a copyrighted work,
- 4) “Performance Rights” To publicly perform a copyrighted work (with
great differences between the earlier & broader protection granted
to musical works and the much more recent and limited protection
granted to sound recordings), and
- 5) Rights to publicly display a copyrighted work.
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- © Law Separate Categories of Copyrightable “Works” including the Music
as a separate Copyrightable Work from Sound Recordings
- So called “Performance right” only applied to underlying Musical work
(PA), & Not separate SR of music
- The © owner of the Music is called the Music “Publisher”; while the ©
owner of the SR is usually the Record Co.
- Federal copyright protection for SR only since amendment effective to SR
fixed since Feb.15, 1972
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- Digital Performance Right in Sound Recordings Act of 1995 (DPRA) P.L.
104-39; S.227
- Expanded SR rights to Limited “Performance Right”, ONLY for certain
DIGITAL PERFORMANCES, with
- Exceptions for Digital “Broadcasts” (similar to Radio BC) &
Statutory License/Rates for certain Subscription Services not
interactive or on-demand (digital only=NOT fully RECIPROCAL for $$$
payments under EU treaties).
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- To Implement WIPO (World Intellectual Property Organization) Treaties
for RECIPROCITY of © protection
and
- To address other technology related © Issues, Incl.
- Prohibit circumvention of technology measures to protect © (also Film
Industry CSS issue)
- Provide Online © Infringement Liability Limitations for online service
providers under CERTAIN categories & conditions, and
- To extend the Digital Performance Rights Act to incl. so-called “streaming audio”
& “webcasting”
- © Office Arbitration Panel rates – after hearings, came back higher
than 3%-15% gross; Webcasters claimed $.007-$.014 per song (70 cents
per performance per thousand listeners) would drive them out of
business, anti-trust; asked Congress to intervene…Oct. 7 House passed
“Small Webcasters Amendment” -under $1mil pay $500-$5,000/5-7%Gr.;
Non-Profits pay 20 cents per thousand
- Savings Clauses: Digital Millennium Act does Not effect “Fair Use” or
Vicarious or Contributory Infr.
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- Copyright Law recognizes the distinction between ownership of a physical
property and ownership of the © in the property
- The Common Law so-called “First Sale Doctrine” allows the owner of a
particular work to dispose of that copy-based on the CL principle that
restraints on alienation of property are to be avoided
- But does NOT give you a right to do whatever you want with a copy
- The First Sale Doctrine is a primarily a limitation on the copyright
owner’s exclusive distribution right, not the reproduction right.
§109”(a)…the owner of a particular copy of phonorecord lawfully made…is
entitled, without the authority of the copyright owner, to sell or
otherwise dispose of the possession of that copy or phonorecord.”…[But,
under the “Record Rental Amendment”]
- “(b)(1) (A) NOTWITHSTANDING…UNLESS AUTHORIZED BY THE OWNERS OF COPYRIGHT
in the sound recording or...COMPUTER PROGRAM…and in the case of a SOUND
RECORDING in the MUSICAL WORKS embodied therein, neither the owner of
particular phonorecord nor…computer program… may [NOT], for the purposes
of direct or indirect commercial advantage, DISPOSE OF THE POSSESSION
PHONORECORD OR COMPUTER PROGRAM (including any tape, disk, or other
medium embodying such program) by rental, lease, or lending, or BY ANY
OTHER ACT OR PRACTICE IN THE NATURE OF RENTAL, LEASE, OR LENDING.”
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- In the Executive Summary of the Digital Millennium Copyright Act of
1998, the CO found that
- “There is no dispute that §109 applies to works in digital form”, and
that physical copies in a digital format, such as CDs or DVDs, are
subject to the law in the same way as physical copies in analog form
- The CO recommended no change in §109 of the law
- Some would argue that digital media (e-books, DVDs) must be able to be
unlocked to be playable on all computers BUT the law is valid, says the
CO, But even in the “old days”
piano rolls were not all playable on all pianos and a CD cannot be
played on a record player, an 8mm on a VCR; it is NOT NEW that
copyrightable works are not accessible by all players.
- Rec. Co’s face consumer pressure to “unlock” CDs (Balancing of the Legal
& the Business Aspects)
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- 1998 Act Incr.1976 Act Term by 20 years to Life + 70 years (conforms
to EU treaties/reciprocity)
- Latest of several (11) extensions of the term, since Congress was
granted the Const. power to protect © for “limited times”; from 14 yrs. to 28, to renew to 56,
to 75, to life + 50 (95 for corps-WMFH).
- Still “limited time” & © materials can still be used under certain
circumstances & conditions
- 1st A. Const. Chall. –never before challenged, rejected by
US Court of Appls. D.C. Cir.; BUT S.Ct. granted CERT. in Eldred v.
Ashcroft 01-618 [Feb, 02] S.Ct. Hearing this last week-Wed., Oct. 9,
2002
- Push by Internet “Library” host of “free” PD materials & Stanford
U Law Prof. could cost movie studios & heirs of authors/composers
Million$$, But Disney’s “Mickey Mouse” would still be protected by
later versions, and Trademark Law
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- WMFH defined in the current law 17 U.S.C. § 101
- “Work for Hire” applies only under 2 circumstances, only if:
- Artists are Employees of the Record Companies (applying traditional
common law tests of employment) or
- If Independent contractors, if work specially ordered or commissioned,
AND by written contract, only for certain categories, BUT SR are not
inthe WMFH categories
- One Major Defense Issue raised in “Napster” was whether the Record Cos.
could rightfully claim SRs as “work made for hire” or whether the
recording artists have claim to their work:
- The RIAA lobbied for & got, in 1999, a so-called “technical
correction” amendment to include SRs as a WMFH category, but when
caught, it was repealed retroactively in 2000, w/a specific provision
“that neither the amendment nor its deletion can be given any legal
significance.”
- A new Artists lobbying group, the “Recording Artists Coalition” (RAC)
filed a brief in Napster against the RIAA on these issues = HELD: The
Record Companies must prove OWNERSHIP (Best Practice = WMFH +
ASSIGNMENT)
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- The major recording industry trade group, the RIAA-the “Recording Industry
Association of America” repr. mostly the
so-called “Big 5” Major Int’l Labels: 1) German based
Bertelsmann Music Group BMG-over 200 labels incl.Arista, RCA
Records; 2)
France Vivendi UniversalMusicGroup-A&M,
IslandDefJam,Geffen,MCA,Motown,Polydor,Verve…;
3)Japan’sSonyMusicEnt.-Columbia,Epic,Sony…; 4)UK based EMI Recorded
Music- Capitol,Angel,Chrysallis Priority,Virgin;
5)AOL Time Warner’s Warner Music
Group-Atlantic,Electra,WarnerBros.Records…;
- ALL MAJOR INT’L CORPORATIONS;
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- Besides WMFH/Ownership issues, Other Artist v. Rec. Co. Issues incl.
- so-called “7-year rule” – anti-slavery provisions of California Labor
code §2855-Personal Services Contracts
- Subdiv. (a) Limits employment contract to 7 years, BUT Record Companies
lobbied exceptions for Recording Commitment Obligations to continue as
enforceable under Recording k’s;
(up to 10 “options”, 20 yrs=Unfair to Artists)
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- Love v. Universal: Courtney Love, widow of Nirvana’s Kurt Cobain
(“Smell’s Like Teen Spirit”) sued Universal over the 7-year rule stretch
and other overreaching Rec. Industry “standard” contracts; vowed to
fight it to the end to change industry practices; on Oct. 2, an LA Court
ruled she could proceed to trial on most counts; next day, she settled;
settlement incl. rights to Universal to release Nirvana’s “You Know
You’re Right” – get it now on KaZaa!
- Dixie Chicks- similar suit ag. Sony Music settled in June.
- In Jan., another LA Court ordered Universal to pay $4.75 million to a
group of 300+ artists, in a class action suit lead by Peggy Lee, for
royalties they were cheated out of by Universal’s Decca Records, since
the 1940’s.
- = No suits pending to resolve
these issues…
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- Suits ag. Giant Int’l Co’s take too much time & $
- With no suits pending, Recording Artists Rights Groups are back to the
Legislature, Lobbying for 1) changes to the CA Labor Law to enforce the
CA 7-yr. limit on record contracts and 2) new laws to hold Rec.
Cos. Accountable for payment of royalties – testimony from Bing Crosby’s
widow, to the Eagles Don Henley, to the Backstreet Boys, that rec. co’s.
“standard” accounting/audit provisions and practices cheat artists out
of millions of dollars of
royalties…
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- Napster A & M Records, Inc.
vs. Napster, Inc.
U.S.D.C. N Dist California, No. C 99-5183 MHP No. C 00-0074 MHP
was the 1st court
challenge by the majors-RIAA-major record cos. & music publishers
against the rampant “free” Internet use of music
- The Napster case tested how the
cobbled together Copyright Law applied to new challenges of technology
& the internet & “The Law Won”
- Napster had 40-60 million “free” users downloading music
- Not the 1st time there was “free” music, traditional Radio
was “free”, too, BUT technology was such that radio was promotional;
limited, & not interactive, on demand, or downloadable; not so
easily or perfectly copied; or on massive scale; promoted music sales
- Traditional “Fair Use” factors were held to be considered as an affirmative defense (even though they
did Not apply to Napster’s use)
- Also, Napster was lobbying Congress for some kind of “compulsory” licensing on record
companies for digital downloads, something like the compulsory licensing
provisions of the Copyright Law (17 U.S.C. §115) that apply to
mechanical licensing of musical compositions, to digital downloads of sound
recordings
- As confirmed in Napster, © infringement still requires:
- 1) proof of ownership of
copyright &
- 2) infringement of one or more exclusive bundle of rights in ©
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- Napster argued its service was capable of non-infringing, personal use
of “time-shifting”, as allowed by the S.Ct. Sony v. Universal 104 S.Ct.
774, 464 U. S. 417 (1984).
- Under Sony, or the “Betamax” case, the copyright holder cannot extend
his monopoly to products "capable of substantial noninfringing
uses."
- But US No. Dist. Court Chief Judge Patel rejected the comparison &
granted prelim. inj. ag. Napster noting:
- Napster’s control over the service (as opposed to a mere manufacturer)
&
- The “VAST SCALE” and “MASSIVE SCALE” of “illegal copying”and
distribution by “millions of users” swapping unauthorized files they
don’t own
- The Post-Napster Infringers have even more USERS!
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- Napster’s argument as to stretching “time-shifting” to “space-shifting”
as allowed for MP3 Players, also rejected
- RIAA v. Diamond Multimedia Sys., Inc.
1999 9th Cir. (U.S.C.A. .9th Cir. 1999) 180 F.3d
1072, involved an inapplicable statute (Audio Home Recording Act of
1992)
- MP3 Player case allowed
space-shifting as a non-commercial personal use
- Note: the MP3.com WEBSITE was earlier held to be infringing, just like
Napster, and their counsel (CooleyGodward) were sued for Malpractice! (Best
Practice=Don’t just tell clients what they want to hear!)
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- The U S Court of Appeals for the Ninth Circuit upheld Judge Patel’s
preliminary injunction ruling, and her fair use analysis:
- “FAIR USE” affirmative defense factors listed in 17 U.S.C. § 107; they are factors only; used
to guide the court's fair use determination
- These 4 FAIR USE factors are:
- (1) the PURPOSE AND CHARACTER OF THE USE;
- Downloading MP3 files is not transformative (not a parody as in Campbell
v. Acuff-Rose Music (1994)).
- Napster file hosting service is a commercial, large scale, anonymous
use; not a non-commercial,
personal use
- (2) the NATURE OF THE COPYRIGHTED WORK;
- Note: Music and SR are entitled
to more protection than “fact-based” works, as closer to the core of
intended © protection
- [1] 510 U.S. 569 (1994)
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- (3) the “AMOUNT AND SUBSTANTIALITY of the portion used" IN
RELATION to the work as a whole; and
- Note that file transfers necessarily involve copying the entirety of
the work (while entire copying WAS allowed as time-shifting in the Sony
Betamax video player case)
- (4) the EFFECT OF THE USE UPON THE POTENTIAL MARKET for the work OR the
VALUE of the work.
- "The importance of this [fourth] factor will vary, not only with
the amount of harm, but also with the relative strength of the showing
on the other factors." Campbell,
591 n.21.”
- Rec. Cos. Argued undercutting own efforts to start digital music
services; leading to new Anti-trust allegations
- CONCLUSION: Between the
massive, commercial use (Factor 1), the most protected status of the
creative works to be protected (Factor 2), the entirety of the copying
(Factor 3) and the alleged effect on the market (Factor 4) , the
factors weight against “Fair Use” for Napster.
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- Record Cos. own Digital Subscription Services-Complexities of Licensing:
- PressPlay joint venture of Sony and Universal Music, but NO Beatles or
Beach Boys under “B”, for instance, and MusicNet joint venture of
Warner, BMG and EMI boasts 75,000 songs from thousands of artists, while
independent Listen.com claims 15,000 albums from 6,000 artists licensed
from all the Big 5, none are very complete and all are complex and
costly to users used to it all for free.
- All are losing $$$, won’t disclose how many subscribers
- Public is generally rejecting the idea of limited materials, & any paid,
subscription online music services, and
- Still expecting everything on the net to be for “free”
- Labels lobbying for laws to go after infringers, resorting to
“spoofing”, better access, quality, extras, may be “draws” (BonJovi
release injunction just denied ag. Universal by DownloadCard PIN code
developer, case to continue…)
- Societal change, Education needed: Ad campaign w/BritneySpears,
Eminem, StevieWonder,Madonna, EltonJohn, Vanessa Carlton- print ads running now; TV spots on
the way-The Message:
- “Stealing Our Music OnLine is as Bad as Stealing a CD from a Store”
(Don’t rip off the artists you love)
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- E-Book Publishing Cases demonstrate that the courts are
developing a consistent policy of protecting copyrights from the printed
page to the digital compact disk or onto the internet.
- National Geographic - ownership of the photographs and the scope of the
license, and narrow application of the privilege (not the right) of 17
U.S.C. §201 ( c )= NG on compact disc was not a mere “revision” of a
collective work, but a new, derivative work, one of the exclusive
bundle of rights of the © owner (17 U.S.C. § 106(2)).
- Tasini US Supreme Court also ruled that re-publication of copyrighted
works of freelance writers in an electronic database, when the articles
were only licensed for use in print, also constituted copyright
infringement, by creating a new work, (instead of just a revision of an
existing collective work).
- Random House v. Rosetta Books Rosetta contracted with authors to sell
e-versions of books; Random
House tried to enjoin, claiming contractual rights to publish all
books, including digital books;
Held: 2nd Cir.
Affirmed denial of Preliminary Injunction; to trial.
- Note: Book Publishing Industry
Practices as to © & Contracts, Very Different from Music Publishing
and Music Recording Industry Business Practices & Contracts!
- [1] Jerry Greenberg v. National Geographic Society, (U.S.C.A. 11th Cir
March 22, 2001) No. 00-10510.
- [2] New York Times Co., Inc. v. Tasini (June 25, 2001), 121 S.Ct. 2381
U.S. 483, 150 L.Ed.2d 500
- [3] Random House, Inc. v. Rosetta Books LLC (U.S.C.A. 2nd Cir. Mar. 8,
2002) 150 F. Supp. 2d 613
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- Sound recording industry, shrinking-international mergers- only 5 or so
“major” record labels” (RIAA), grown as strong or stronger than the
music publishing industry and is leading the way with new laws and
business models:
- Anti-trust issues (own online monopoly?)
- Copyright ownership issues (WMFH, k, statutes),
- Fair use issues (as reviewed in
Napster),
- Digital Copy Protection issues (Uni/Eminem CD),
- Internet, and new, Intl. P2P (Kaaza) issues
- Requires understanding & development of entertainment industry
law/business models.
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- It’s a TOY! Tiny electronic chip, plays min. of popular song – mini
players-Destiny’s Child singing their hit “Survivor”
- Made by Hasbro’s Tiger Electronics, world’s largest elec. Toy mftr. –
they license content for toys all the time…
- But went to Music Ind. to License digital music-hit brick wall w/ threat
& uncertainty of Napster & the Internet, the MI refused to
license anything “digital”- Hasbro came to Music Lawyer, & w/knowl.
of existing business models & relationships, were able to est.
new business models to license
the recordings, songs, & advertising from various record labels,
artists, writers & publishers for Hit Clips-
- Now, WSJ, Hit Clips was last years biggest new toy & all the big
rec. co’s & artists are lining up to be the next Hit Clip!
- AND, so, this story shows that, like the DC song, ©, & the
Entertainment Industry will “SURVIVE” In the Digital Age.
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- Beverly Robin Green [1]
- Law Offices of Green & Green
- www.entertainmentlegal.com
- bev@musiclawyer.com
- [1] AV rated, Member, IP Section
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Notes