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Librarian of Congress Fails to Alert Oversight Committees of Massive Abuse of Copyright Loophole by Google and Amazon to Use Songs Without Paying U.S. or Foreign Songwriters 

October 28, 2016 Comments off

[Editor Charlie sez: This post first appeared in the MusicTechPolicy Monthly newsletter.]

The Librarian of Congress?  You may ask what in the world does the Librarian of Congress have to do with the music business?  The answer is–more than you might think, mostly due to the fact that the U.S. Copyright Office is under the direct and total control of the Librarian.  The recently installed Librarian of Congress, Carla Hayden, seems more than willing to look the other way when crony capitalists with Obama Administration influence come calling.

Google and Amazon are the first two vastly wealthy multinational media companies to enjoy the Librarian’s collaboration.  These two companies are currently exploiting a copyright law loophole to sell the world’s music without paying royalties to the world’s songwriters on millions–millions–of songs.  How?  A process that starts with buying from the Library of Congress a data file that contains some of the post-1978 copyright registrations and other recorded documents–and by paying a hefty fee to the Library of Congress.

It’s not exactly a back door purchase, but you have to know who to ask (Bonita Brown at bobr@loc.gov) and you have to know what page it’s on.  We asked the research desk at the Library of Congress and they had no idea what we were talking about.

Here’s the page for the “Copyright Select” weekly updates, price AQ:

And here’s the scam:  Users of the compulsory mechanical license have to send a “notice of intention” to the song copyright owner (“NOI”).  Finding that copyright owner is usually a process of song research in readily available databases.  In Google’s case, this would include Google’s own Content Management System and data it acquired in its purchase of Patrick Sullivan’s company Rightsflow (which is essentially a snapshot of the Harry Fox Agency database that was either sold to Rightsflow or came under its control some other way).

However–in a remnant from the 1909 Copyright Act that required registrations in order to enjoy the rights of a copyright owner, Google need not look further than the public records of the Copyright Office in order to comply with the search requirements of the compulsory license.  Even if Google has actual knowledge of the song owner’s contact.

 
Reflect on the phrase “Google can’t find the song owner.”  The largest purveyor of other people’s information in commercial history cannot find someone?  Sound like moral hazard?
Here’s an example in Google’s filing of “Fragile” by Sting.  Google is claiming that it can’t find Sting and that there’s no Copyright Office filing for “Fragile (Live”.  Aside from the fact that Google probably has a direct publishing license for Fragile through Sony/ATV-EMI, it is patently absurd to register an address unknown NOI for “Fragile”.

The reason Google gets away with it is due to the negligence of the Librarian of Congress.  The Librarian allows this scam to get started and has no controls in place to determine if Google and Amazon are even entitled to the filings which they are clearly not in Sting’s case.  And it clearly isn’t just hit songwriters–it’s mostly the little guys who are being bullied by Big Government and Big Tech.

But the Librarian wouldn’t know because the Librarian never checked.

If Google can’t find the song owner (as determined by Google, not by the Library of Congress), the law allows Google to send that NOI for the unfindable song owner to the Copyright Office.  And Google and Amazon are sending these “address unknown” notices to the Copyright Office in the millions at great expense to the taxpayer because the filing fees for NOIs can’t possibly come anywhere near covering the cost of the processing.

Why are Google and Amazon doing this?  One reason is that by filing the NOIs, they do not have to pay royalties until the songwriter identifies themselves in the Copyright Office system, they cannot be sued as infringers, and they cannot ever be audited.

I happened to speak to a representative of one of the mass NOI filing companies after a recent panel in Los Angeles who assured me that the reason that his clients were filing these NOIs was not because they did not want to pay royalties but because they were so worried about liability from a “Jeff Price jihad” and that his clients fully intended to pay royalties retroactively once the song owner became known unlike the record companies who are “thieves”.

I believe that he believes that his client believes that they’re just trying to avoid being sued for not having the rights, but humor this unbeliever.  My bet would be that getting that retroactive payment will take the effort worthy of an act of Congress.

Perhaps literally.

If his new boss clients had a reputation for or history of treating creators fairly, I’d be far more inclined to bet on sunshine and puppy dog tails, but they don’t so I won’t.  The problem would be easy to solve–all they would need to do is issue a press release or even a blog post on the Google Public Policy blog stating that it is the official position of the company to pay retroactively.  Even if you accept his premise that record companies and music publishers are “thieves,” they never filed millions of NOIs.  In the meantime while we’re waiting for that post, I think we have to act as if it is not coming.

But what is really clear is that the Librarian of Congress is turning a blind eye to this abuse, and is even aiding and abetting this overt attack on songwriters by selling the crucial data.  Not to mention injecting the Library into picking winners and losers in ongoing class actions.

Another problem with the Librarian’s position is that there is a real possibility that permitting the mass filings of millions of NOIs for foreign works may very well violate international copyright and trade treaties and could land the U.S. back in a WTO arbitration at great cost to the taxpayer.

So another debacle by the Librarian of Congress that really hurts songwriters, exposes the U.S. taxpayer to great costs and for which the government is entirely unaccountable unless Congress exercises its oversight authority through the House Committee on Administration and finds out what is going on over there.

For more detail on government complicity in the mass NOIs, see this three part post.

@emzanotti: Power Grab: Is Google Trying to End Copyrights Once and For All? — Artist Rights Watch

October 27, 2016 Comments off

Google has targeted music, books, movies and is making a play for an even greater target: television. And they’ve already stacked the government deck in their favor. What’s at stake here? One of the greatest land-grabs in the history of content. And no one is looking.

via @emzanotti: Power Grab: Is Google Trying to End Copyrights Once and For All? — Artist Rights Watch

And Your Little Dog, Too: The Librarian of Congress Gives Us A Lesson in Constructive Termination

October 25, 2016 2 comments

Remember when the Librarian of Congress issued a press release about how Maria Pallante was being promoted from the Register of Copyrights to something that sounded awfully functionary–and not a promotion.  I don’t know how the Librarian runs things, but it’s not exactly industry standard to lock someone out of their email account when you’re promoting them.

Notwithstanding the Librarian’s press release on Friday, we now know that Pallante turned down the “promotion” and has now resigned.

Thanks to the vigilant journalist Robert Levine, we now have access to the memorandum from the Librarian of Congress to Maria Pallante that prompted her resignation.  And it sure looks like what’s called a “constructive termination” to me.  (See California jury instructions for “constructive discharge” or “constructive termination”.)

The essence of constructive termination is that it is essentially the same as firing the person, except you don’t.  You just move them out of their current responsibilities, give them tasks for which they are unsuited or that would radically underutilize their talents, move them to different surroundings or offices, take away their staff, and severely limit their contact with others, especially persons senior to the person doing the constructive termination.

The idea is that while you haven’t actually terminated them, you’ve “made their lives miserable” and created a hostile work environment that any reasonable person would resign from.

This is usually done in retaliation for something the employee has done that angered their boss–you know, like writing a memo for Members of Congress against full work licensing or opposing the FCC’s position on set top boxes.

The in house lawyers usually manage to head off this kind of thing at the pass, but occasionally an inexperienced executive loses their mind and walks right into a constructive termination situation because they are too bull headed to listen to their lawyers.  Those cases are costly and usually nasty.

So here’s the relevant parts of that memo from the Librarian of Congress to Pallante:

Effective today, I am reassigning you to the  position of Senior Advisor to the  Librarian [meaningless title–check].  I need your expertise on  the  application  of copyright law  as  I plan for the  Library to expand its service to the American people by making the national collection as widely accessible as possible and ensuring that it includes digital  works as  well  as  traditional materials.   I want  to  be sure that we execute these  plans  in full consideration  of  both the special  provisions  that copyright law makes for the Library of Congress and our responsibilities to copyright owners.  Your expertise will  be very helpful in accomplishing  these goals.  [That last is the kind of thing you put in one of these memos when you know the opposite is true.  If her expertise was so gosh darned helpful, then why is she being moved?]

According to analysis from the HathiTrust [a repository of digitized works from Google Books and the Internet Archive that was sued by the Authors Guild], as many as 50% of the books published in the U.S. between 1923 and 1963 may be in the public domain.  To maximize our ability to make the national collection available online, the Library needs a well-defined, efficient procedure for determining the rights status of books first published  between  1923-1968.

Please complete an analysis of the various strategies taken by other organizations in determining the copyright status of published U.S. books. Develop a legally sufficient and efficient procedure that Library reference staff could follow to clear books from this period for digitization and online distribution. Document the approach in an easily understood and visually engaging manner that issuitable for publishing on the Web….

I would like you to undertake a comprehensive study that identifies new and sustainable retail opportunities for the Library and examines best practices of retail operations in a variety of cultural institutions….[selling t-shirts?]

Please consult with David Mao about deadlines [enter the short leash]. Each week, please provide David and me with a report on the activities you’ve undertaken on these assignments. [Sounds like David Mao is her direct report, right?  I thought this gig reported to the Librarian]  If you need research assistance, contact David or me before tasking anyone. I do not anticipate that this assignment will require any communications with Members of Congress or congressional staff.  I am arranging suitable office space for you and will arrange for you to complete the move from you’re your [sic] current office to the new space by Oct. 31, 2016.

And there you have it.  Pretty good case for retaliation constructive termination, although we expected better from a senior government official.

You’re not in Kansas anymore.

Google Fires Head of U.S. Copyright Office — Artist Rights Watch

October 21, 2016 1 comment

In a typically backstabbing lame duck kabuki dance, Google has fired Maria Pallante, the head of the U.S. Copyright Office. This is a real tragedy because Register Pallante was even handed and concerned about treating everyone involved with copyright fairly–consumers as well as creators, not to mention cooperating with Google and Amazon in permitting the […]

via Google Fires Head of U.S. Copyright Office — Artist Rights Watch

@musictechpolicy Revisited: Welcome to State Sponsored Theft: Iceland is Becoming a Pirate Utopia (from 2013) — Artist Rights Watch

October 19, 2016 Comments off

This MusicTechPolicy.com post from April 28, 2013 may be worth reviewing given the news that Lessig is about to take over the Icelandic government through his Pirate Party vehicle. The latest Wikileaks release shows the contempt in which Lessig is held by leading progressives and the Clinton Campaign (not to mention Lessig pal Zephyr Teachout) and how quickly they are scampering to publicly embrace him, which of course feeds his ego beyond category.

via @musictechpolicy Revisited: Welcome to State Sponsored Theft: Iceland is Becoming a Pirate Utopia (from 2013) — Artist Rights Watch

Google and Amazon Leverage Copyright Loophole to Use Songs Without Paying Songwriters

October 15, 2016 4 comments

Two vastly wealthy multinational media companies are exploiting a copyright law loophole to sell the world’s music without paying royalties to the world’s songwriters on millions–millions–of songs. Why? Because Google and Amazon–purveyors of Big Data–claim they “can’t” find contact information for song owners in a Google search. So these two companies are exploiting songs without paying royalties by filing millions of notices with the Copyright Office at a huge cost in filing fees that only megacorporations can afford–an unprecedented land grab in nature, size and scope.

That’s right–Google and Amazon are falling over themselves to use their market power to stiff songwriters yet again. And as I will show, it is not just obscure songs that are affected. New releases, including one example from Sting, are also targets suggesting significant revenue loss to songwriters.  (I go into this in more detail on this series of posts.)

I happened to speak to a representative of one of the mass NOI filing companies after a recent panel in Los Angeles who assured me that the reason that his clients were filing these NOIs was not because they did not want to pay royalties but because they were so worried about liability from a “Jeff Price jihad” and that his clients fully intended to pay royalties retroactively once the song owner became known unlike the record companies who are “thieves”.   I believe that he believes that his client believes that they’re just trying to avoid being sued for not having the rights, but humor this unbeliever.  My bet would be that getting that retroactive payment will take the effort worthy of an act of Congress.

Perhaps literally.

If his new boss clients had a reputation for or history of treating creators fairly, I’d be far more inclined to bet on sunshine and puppy dog tails, but they don’t so I won’t.  The problem would be easy to solve–all they would need to do is issue a press release or even a blog post on the Google Public Policy blog stating that it is the official position of the company to pay retroactively.  Even if you accept his premise that record companies and music publishers are “thieves,” they never filed millions of NOIs.  In the meantime while we’re waiting for that post, I think we have to act as if it is not coming.

The U.S. Compulsory License

Songwriters are the most regulated workers in America. The government sets wage and price controls on most uses of songs and practically everything else about a songwriter’s business–except fulfilling government’s basic role of keeping them safe from piracy and multinational monopolists gaming the system. Congress needs to stop this latest scam.

The latest loophole that Google and Amazon are hacking is uniquely American–the compulsory license for songs. No other country has one. Most songwriters would prefer that the U.S. repeal this legacy anachronism from 1909 that keeps the government’s boot on their throats.

In order to get the government’s license, services only need notify the songwriter (or their publisher) that the service intends to use the song under the compulsory license. Of course, sending this notice of their intention to use the song (called an “NOI”) requires knowing who to send it to, and that is the “hack” that Google and Amazon are exploiting now. Others services surely will follow their market leadership if Congress fails to act.

The hack uses market power to manipulate a loophole in how those NOIs are sent. Common sense tells you that to send a notice, you must know who to send it to, even for a song. But does common sense also tell you that if you don’t know, the law should allow you to exploit the songs without compensation? Particularly if you’re the biggest purveyor of data in human history?

The legacy compulsory license allows services to exploit songs if they decide they can’t find the songwriter–and not pay royalties until the songwriter finds them.

That’s right–Google and Amazon trade on a loophole that allows them to serve NOIs on the U.S. Copyright Office if the song owner cannot be found in the public records of the Copyright Office regardless of what other information is readily available to these services, including their own. And once Google or Amazon serve that “address unknown” NOI, they don’t have to pay royalties and they cannot be sued for copyright infringement–so the millions in filing fees they will spend at the Copyright Office is a kind of insurance premium. This excerpt from the Copyright Act states the rule:

sec-115-noi-unknown
Why Can’t Google Search?

The “address unknown” NOI starts from this premise: Google is supposed to search for the song owner’s contact to send NOIs.

That’s right–Google is supposed to search. Think about that. This 1976 rule was never intended to apply to a music user with Google’s search monopoly. Yet, if Google “can’t” find the song owner after a search, then Google can serve an “address unknown” NOI to the Copyright Office and then exploit the song for free until the songwriter can be “identified” in the Copyright Office records–which may be never.

That registration by songwriters–while prudent–is costly and entirely voluntary. Forcing songwriters to register essentially turns the system into a version of YouTube’s “opt out” debacle, and probably violates international copyright treaties.

But the idea that Google can’t find someone is a remarkable thought. Gmail alone has over one billion users. Google knows everything about everyone and makes billions of dollars from reselling and manipulating that information. Not to mention the fact that Google bought the music licensing service Rightsflow–itself an NOI mill. Not to mention ten years of information Google has scraped from Content ID on YouTube or sheet music on Google Books.

Amazon also has a phenomenal amount of information about music ownership. As one of the biggest CD and DVD retailers, Amazon certainly has a head start in song research.

However–it appears that Google and Amazon are not using their own data for NOIs. Instead, they apparently are buying databases from the Library of Congress that tell them whether a song is registered for copyright or otherwise recorded in the digitized Copyright Office files (which songwriters are not obligated to do in order to get the benefits of the compulsory license). Those Library of Congress databases at best only cover copyrights after 1978 for technical reasons, so tens of thousands of jazz, blues and classical compositions created before 1978 are not included, as well as songs from outside the US before or after 1978.

LOC Prices Databases.png

Why buy this data when these giant corporations already have so much information at their fingertips? Because the point for the services is not to find out who actually owns the songs, the point is to find out if the Copyright Office has a record of who owns the songs based on the Library of Congress data.

That is the hack.

Kafka-esque Moral Hazard

In other words–the government allows Google to claim they can’t find the songwriter even if Google’s own data would reveal their identity just because the song owner isn’t included in the Library of Congress database at the time Google searches. And there’s the “gotcha”.

Kafka’s next book is in there somewhere.

Offering all the world’s music all at once presents a licensing problem that no system will be able to solve due to the sheer numerosity and disaggregation of the creative process. How many songs will be written by the time you finish reading this post and how would you find out who wrote them?

So it should not be surprising that the market has offered a few ways to solve for this problem: Direct licenses (bypassing the NOI altogether) and NOI clearance companies that specialize in maintaining song owner information to send out mass mailings of NOIs (sometimes called “carpet bombing NOIs”).

These are two significant methods available to Google and Amazon and my guess is that these monoliths employ both methods for their interactive streaming services (the kind of service that competes with Apple and Spotify).

What’s the Alternative?

If Google and Amazon cannot find the song owner under their direct licenses or through an NOI company, how can they find the song owner? The easy answer is don’t use the song. But that approach is counter to offering all the world’s music at scale by creating supply that is not responsive to demand.

Deciding which songs are right for “address unknown” NOIs requires some Silicon Valley style hocus pocus. Remember–it’s not that Google can’t find the song owner. The loophole requires that they can’t find the copyright owner in the pubic records of the Copyright Office, even if Google has actual knowledge of their whereabouts.

Then you have to believe that Google knows where to get the information for which direct licenses they want, they know how to carpet bomb NOIs, they have a decade of information in Content ID, but when it comes to some songs, Google has to turn to the Library of Congress? And Google’s only choice is to serve “address unknown” NOIs on the Copyright Office?

Once served, the Copyright Office posts these mass filings on their website in large Excel files so that songwriters can sift through the haystack to find their needles. This hit and miss and self-serving process is fraught with moral hazard and should not be the law in 2016.

This is what the filing looks like–but realize that “1 NOI” means “1 NOI With An Excel file with over 40,000 songs on it”.

co-nois-1

Sting Songs Give Some Examples

A spot check of a couple of Google’s filings reveals that Google is not getting it right. Let’s use three Sting songs for an example.

Sting’s recent release “50,000” (coincidentally a tribute to David Bowie and Prince) is on Google’s “address unknown” NOI list. That song is probably subject to a direct license, but the song copyright registration may not yet have been processed. There’s almost always a delay in processing copyright registrations, so new releases will rarely appear in the Library of Congress database day and date with the song’s release. Google will not be paying royalties on Sting’s song, but will be exploiting it.

That’s right–a song that is a tribute to an artist rights advocate like Prince is itself being ripped off.

50000-noi

Google has also filed an “address unknown” NOI for a song entitled “Fragile (Live)”. My bet is that “Fragile (Live)” is “Fragile”, the well known hit song and anthem of the environmental movement.

sting-fragile-google-noi
This likely means that someone at Google seems to think–or wants to think–that “Fragile (Live)” is a different song than “Fragile”, probably because there is a sound recording registered for “Fragile (Live)” in the sound recording metadata but no song registered by that name in the Library of Congress database. And why would there be if it is the same song? We humans have a way to catch this kind of mistake.

It’s called listening.

This pattern repeats with “Brand New Day (Cornelius Mix)”, also included on Google’s “address unknown” NOI. Again, a version of the sound recording, not the song. The song remains the same.

sting-brand-new-day-mix

It is highly likely that the songs “Fragile” and “Brand New Day” were registered with the Copyright Office long ago. That’s probably why the “Live” and remixed versions of the sound recordings show up in Google’s NOI filing for the songs and the original versions do not.

In this case, not only are these songs likely covered under a direct license with Sting’s publisher, but even if they are not, the song owner’s information is identified in the public records of the Copyright Office. The loophole does not apply, but Google takes it anyway and the cost of checking up on a multinational media company falls on the songwriter.

And given that it’s Google, the songwriter will probably have to sue them to a final non-appealable judgment in order to fix the mistake that should never have been allowed to happen in the first place.

The Congress Must Act

The government’s compulsory license has become distorted by rent-seeking behavior by multinational media corporations. It should be stopped or substantially modified. If Google is allowed to use this loophole to profit at the expense of songwriters from its considerable influence peddling and litigiousness, that will be crony capitalism writ large.

Despite the assurances of the mass NOI filing agent, my view is that until I see it in writing, I have to assume that Google and Amazon took this route because it not only offered an opportunity to react to Jeff Price or David Lowery who have the temerity to speak up on behalf of song owners, it had the added bonus of actually stiffing songwriters. The reason I think that is so is because that’s what they chose to do rather than taking the obvious alternative–just not using someone’s property if you decide you can’t find the owner.

Save the Date! Oct 13 in LA MUSIC 2020 Panel at @AIMPorg

October 4, 2016 Comments off

I’m looking forward to participating on a great panel on fixing our future in the music business, moderated by the brilliant Dr. Gigi Johnson, founder and executive director of the UCLA Center for Music Innovation.

Music 2020: Recreating Music’s Future will be a lunch time panel held on October 13 in Los Angeles under the auspices of the Association of Independent Music Publishers an important voice for independent publishers in our policy efforts.  I’m part of an august group: Sam Kling, SVP Creative Operations, SESAC & AIMP Board Member and Vickie Nauman, Founder & Owner, CrossBorderWorks, both of whom I know to be deep thinkers on problem solving in our business.

The event is to be held at Lawry’s, 100 North La Cienega Blvd. (near Wilshire) in Beverly Hills from 11:30 am to 1:45 pm on October 13.  Reservations are required and lunch is served.  Tickets are $44 for AIMP members and $57 for non-members.

Click here to get to the AIMP website to sign up!

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