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Congressional Database Obsession: The Transparency in Music Licensing and Ownership Act is Quietly Adding Cosponsors

January 29, 2018 1 comment

MTP readers will recall the many, many attempts at producing a real-time global rights database (and expensive failures).  When Rep. Sensenbrenner introduced the Transparency in Music Licensing and Ownership Act last year, we roundly criticized the bill as an 11th Century solution to a 21st Century problem, the Domesday Book meets a unicorn.  But the bill was roundly cheered by the MIC Coalition, which includes the National Association of Broadcasters.

Not only that, but by imposing a registration formality on all the songwriters of the world, it’s entirely a capitulation to Professor Pamela Samuelson’s ineffectual Copyright Principles Project, the wildest dreams of Lawrence Lessig and probably the clawing of the latest debacle of the anti-copyright crowd, the Restatement of Copyright.  Not to mention a violation of international law (Berne Convention and TRIPS).

With all the talk about the controversial Music Modernization Act, one would have thought that a pre-condition of introducing the bill is that the Transparency in Music Licensing and Ownership Act would have been withdrawn.

To the contrary, Rep. Sensenbrenner has been quietly adding co-sponsors to the Transparency in Music Licensing and Ownership Act and is now up to 15, although the acceleration may have tapered off.

Why?  One reason is that at the heart of the Music Modernization Act is the very type of arguably unlawful registration formality from the Transparency in Music Licensing and Ownership Act–the register or lose it type–that no doubt makes Lessig start to drool, metaphorically speaking, of course.  And should also bring cheer to the MIC Coalition.

No one is asking when the Transparency in Music Licensing and Ownership Act will be dropped, but in a way they don’t have to.  Supporters of the bill (like the MIC Coalition) get a lot of what they want in the Music Modernization Act–a Lessig-style registration requirement that is essentially an orphan works bill in disguise.  Maybe that’s why they’re supporting the MMA alongside the orphan works holdouts from 2006, the last time an “omnibus” bill failed (that started out as “SIRA” for “Section 115 Reform Act.”

That bus was not magic, either.

Industry Letter to USTR re NAFTA Reform

January 26, 2018 Comments off

If like me you haven’t been following the NAFTA renegotiation that closely, it’s time to focus.  It was only a matter of time before Google and its fellow travelers among the usual suspects (Professors Goldman, Geist and Lemley, EFF, Public Knowledge, Center for Democracy and Technology, R Street, Engine and assorted other whingers) piped up about seeking even safer harbors.  These handwringers are especially amped up over perpetuating in the NAFTA treaty the loophole in the Communications Decency Act that the Congress is trying to close right now in the Stop Enabling Sex Traffickers Act.

Neil Turkewitz has a post that explains the context on copyright issues in NAFTA–“If we reward lack of accountability, we surely invite an unaccountable universe.”

If you want to chime in, you can Tweet to the USTR @USTradeRep.

A music industry coalition has written to USTR Bob Lighthizer on the issue:

January 22, 2018

The Honorable Robert Lighthizer
Ambassador
United States Trade Representative
600 17th Street NW Washington, DC 20508

Dear Ambassador Lighthizer:

On behalf of the North American music community, we are writing to express our united resolve that strong copyright protection for creative industries be central to the North American Free Trade Agreement (“NAFTA”) modernization agenda. Our community comprises music composers and lyricists, performers, record companies, music publishers, managers and collecting societies in the United States, Canada, and Mexico. We are small and large businesses, employing millions, and contributing significantly to GDP.

The North American music industry’s economic role is vital and growing, driving physical and digital trade, producing innovative and diverse new business models, and fostering investment in technological innovation. The United States, Canada and Mexico each have unique, vibrant and diverse musical traditions, which together make North America the world leader in music production and consumption. Our economic contributions depend on the protection of our industry’s creative content through copyright.

Accordingly, we support a modernized NAFTA that unambiguously protects copyrighted creative content and that rejects flawed provisions that perpetuate the misuse of safe harbors. Such flawed provisions grant a few large technology companies unintended immunity from copyright infringement liability, fostering unfair competition and resulting in unjust profit at the expense of music creators.

A few dominant platforms have pushed for provisions in NAFTA that fail to adequately protect our industry, disincentivize taking reasonable measures to protect intellectual property, and provide immunity from liability without sufficient safeguards for copyright holders. We have serious concerns that attempts to translate these complex and sensitive issues into a trade commitment would depart from our respective national laws and undermine the viability of the North American music community.

The immense potential North American markets for legitimate music exemplify the objectives of free trade, and the modernization of NAFTA provides a tremendous opportunity to expand such trade. However, flawed provisions on safe harbors threaten these gains and our future growth by disadvantaging our creative industries and undermining legitimate digital trade in the region.

Creativity, North American trade and economic growth are inextricably interwoven. We all stand to benefit from strong protections for creative content in a renegotiated NAFTA. Thank you for your work on this shared objective and we look forward to a strong trade future.

Sincerely,

American Association of Independent Music
American Federation of Musicians
Americana Music Association
Association of Independent Music Publishers
Asociación Mexicana de Productores de Fonogramas y Videogramas
Asociación Nacional de Intérpretes
Asociación Protectora de los Derechos Intelectuales Fonográficos
American Society of Composers, Authors and Publishers
Azoff Music Management
Broadcast Music, Inc
Canadian Music Publishers Association
Canadian Musical Reproduction Rights Agency
Christian Music Trade Association
Church Music Publishers Association
Editores Mexicanos de Música
Gospel Music Association
Global Music Rights
Living Legends Foundation
Music Canada
Music Managers Forum, U.S.
National Music Publishers’ Association
Nashville Songwriters Association International
Productores Nacionales de Fonogramas, Videogramas y Multimedia
Recording Industry Association of America
The Recording Academy
Rhythm & Blues Foundation
Sociedad de Autores y Compositores de México
Screen Actors Guild-American Federation of Television and Radio Artists
Society of European Stage Authors and Composers
Songwriters Guild of America
Society of Composers, Authors and Music Publishers of Canada
SoundExchange
Sociedad Mexicana de Productores de Fonogramas, Videogramas y Multimedia
USAlliance for Music

Does the Music Modernization Act Codify Exposure Bucks?

January 26, 2018 1 comment

Exposure Bucks

If you’ve followed the Fair Play Fair Pay legislation and the #IRespectMusic campaign, you know that at the heart of the broadcasters’ rationale for not paying performance royalties to artists for over the air broadcast is the “promotion” argument.  Simply put, the broadcasters tell us that the reason that the U.S. should deny artists a performance royalty for over the air broadcast is because of promotional value.  Or what we call “Exposure Bucks.”  Congressman Jerry Nadler and our friend Blake Morgan have been trying to get this wrong righted.

Also recall that the mechanical royalties to be governed by the Music Modernization Act are set by the Copyright Royalty Judges who are tasked with conjuring up a compulsory mechanical royalty rate.  Currently, the judges set mechanical rates based on certain policy factors.  For many years, songwriters have wanted to replace the policy-based method with what’s called “willing buyer/willing seller”–which is a process of divination by which the judges guess at what a willing buyer would pay to a willing seller for a rate.  For a compulsory license.

You know, the rate for which there hasn’t been a free market in over 100 years.

The Music Modernization Act would change the policy factor standard to willing buyer/willing seller but it should not be assumed that the change alone will result in an increased royalty to songwriters.  Particularly because the MMA creates a kind of “willingness Plus” standard that instructs the judges to take several economic factors into account in addition to market place benchmarks.

And also remember that the Music Modernization Act sets a rate for digital streaming only–you know, the pay-to-playlist world of recommendation algorithms that reenforce paid-for playlists and who knows what else in the background to distort listener choices.

There’s another factor here–the Music Modernization Act creates a new mechanical royalty collective agency (kind of like Harry Fox Agency on steroids) that the law mandates all the songwriters in the world authorize to license their songs in the U.S. (unless their songs are subject to a direct license).  The MMA requires digital music services pay for the operating costs of the new collective–another selling point.

Said another way–the fox pays for the locks on the chicken coop designed to keep out the fox.

Who gets to determine how much the services are to pay for the operating costs of the collective?  The Copyright Royalty Judges of course.  Because they are so well-suited to that task.

This cost-shifting alone supposedly will result in more money for songwriters because the costs of collecting and paying will be borne by those paying the royalty.  Which only makes sense as long as those paying the royalty don’t convince the judges that the royalty  they pay should itself be reduced by the cost of the new collective.  See what happened there?

So two moving parts–let’s stay away from reducing royalties based on promotional value that isn’t really promotional and let’s prohibit the judges from taking into account the cost of the collective in setting rates (since the cost-shifting is supposed to be a great trickle down benefit to songwriters and letting services pay with one hand and take away with the other is no saving at all).

Here’s what the MMA actually says about the willing buyer/willing seller divination standard (at p. 10):

The Copyright Royalty Judges shall establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller.  In determining such rates and terms for digital phonorecord deliveries, the Copyright Royalty Judges shall base their decision on economic, competitive, and programming information presented by the parties, including—

‘‘(i) whether use of the compulsory licensee’s service may substitute for or may promote the sales of phonorecords or otherwise may interfere with or may enhance the musical work copyright owner’s other streams of revenue from its musical works; and

‘‘(ii) the relative roles of the copyright owner and the compulsory licensee in the copy righted work and the service made available to the public with respect to the relative creative contribution, technological contribution, capital  investment, cost, and risk.’’;

So–unless there is an express prohibition that stops services from asking the judges to reduce royalty rates by a factor representing the cost of the collective–which the judges themselves would have set–then there’s nothing that stops the services from giving with one hand and taking away with the other.  I haven’t found that prohibition in the MMA so far.  Under the relevant language, the services give by paying the costs of the collective, and they take that back by reducing the royalty rate.  This glitch seems to be clearly contemplated by the MMA.

And of course, it certainly looks like the judges are forced to take into account promotional value of streaming services for which at least Spotify are frequently paid already according to reports.  Summing up all the pay to playlist payments may make it easier to calculate the value of promotion on streaming services, but then again the services may not really want to disclose how much of their activity is bought and paid for.

So, it appears that songwriters may actually be worse off under the MMA than they are now.

Music Modernization Act Is A Great Fit with the Register of Copyrights Selection and Accountability Act

January 25, 2018 1 comment

The Music Modernization Act was introduced in the U.S. Senate by Sens. Hatch and Alexander and it’s a great fit with another bill co-sponsored by Sen. Hatch that’s way more likely to pass the Senate: The Register of Copyrights Selection and Accountability Act.

If you recall, the House of Representatives version of the Register of Copyrights Selection and Accountability Act passed the house on one of the most lopsided votes in a very long time–378 yeas to 48 neas.  Like the Music Modernization Act, the Register of Copyrights Selection and Accountability Act brings much needed reform to the Copyright Office and removes the appointment of the head of the Copyright Office from the uneven purview of the Librarian of Congress.

Due to an historical quirk, the pre-New Deal Copyright Office has been located in the Library of Congress since its inception.  The last person who should be making this appointment is the Librarian of Congress who is unsuited to the task based on the controversial and antagonistic way she handled what I believe was a retaliatory firing of the last Register.  As we know from recent history, the rights of Congressional employees to question their separation is not a happy story.

This is the perfect opportunity to pass a popular bill in the Senate and if the Music Modernization Act benefits, then many would be happy about that, too.

Nicole Haff & Cassie Daum: Timed Out and Tuned Out: The Forfeiture of Unclaimed Royalties and the Loss of Meaningful Access to Litigation Under the Music Modernization Act

January 25, 2018 Comments off

The authors educate us on two major flaws in the Music Modernization Act:  unmatched royalties and the unprecedented denial of statutory damages and attorneys’ fees for successfully litigated infringment claims.

The U.S. government has done practically nothing in 20 years to protect songwriters from the massive onslaught of those tech companies that benefit directly from getting rid of the statutory damages available to any copyright owner, big or small.  The one hammer that every songwriter has to protect their rights is the statutory damages and attorneys’ fees rules that have been in place for 100 years.  If the government takes away these rights, what will replace them?  Apparently nothing.  Well, a private attorney general is better than no attorney general at all.

While many in the music industry welcome this bill, smaller publishers and songwriters may be surprised to learn that several of the provisions in the Music Modernization Act may harm their interests–and appears to be designed in part to shut up the working songwriter.  The authors offer thoughtful analysis on this latest affront to property rights protected by the Constitution.

via Nicole Haff & Cassie Daum: Timed Out and Tuned Out: The Forfeiture of Unclaimed Royalties and the Loss of Meaningful Access to Litigation Under the Music Modernization Act 

Does the Music Modernization Act Foreshadow the Decline of Performance Rights Socities in the US?

January 23, 2018 Comments off

It seems like every time I read the controversial Music Modernization Act (“MMA”) I run across a loose end or unintended consequence–and here’s another one.  Many of us–myself included–argued for years that PROs like ASCAP, BMI, GMR and SESAC should be allowed to license both the performance right and the mechanical reproduction right for streaming uses.  (Recall that the consent decrees prevent this efficiency in licensing for ASCAP and BMI.)

Mechanical rates could continue to be set in the normal course of the absurdly cumbersome Copyright Royalty Judges and the performance rates could continue to be set in the normal course of the absurdly cumbersome rate courts for ASCAP and BMI–but the one-stop licenses could be issued by PROs for their respective writers’ contributory shares of their songs.  But–these appeals to efficiency were made in the absence of a mechanical collecting society in the U.S.  The MMA changes those arguments.

Let’s be honest–there are plenty of tech folk who despise the PROs and there’s at least one Congressman–James Sensenbrenner–who sure looks like he does, too.  Would any of them shed a tear if the PROs just went away?  Rep. Sensenbrenner’s Transparency in Music Licensing and Ownership Act which we heavily criticized certainly appeared to have the destruction of PROs in mind.

Enter the MMA and its proposal to establish a quango-like mechanical collective.  Without accepting or rejecting the proposed bill (which we are still digesting), I think it’s worth pointing out that there’s an interesting twist here when you consider the longevity of the PROs.

Recall that the Antitrust Division of the Department of Justice invited a legislative solution to continued consent degree regulation of ASCAP and BMI in its 2016 statement closing the Division’s review of the consent decrees:

[T]he Division recognizes the incongruity in the oversight over the licensing of performance rights and other copyrights in compositions and sound recordings and believes that the protections provided by the consent decrees could be addressed through a legislative solution that brings performance rights licensing under a similar regulatory umbrella as other rights. The Division encourages the development of a comprehensive legislative solution that ensures a competitive marketplace and obviates the need for continued Division oversight of the PROs.

In a post MMA world, why would the argument for one stop licensing for at least streaming not simply be flipped from the PROs administering streaming mechanical licenses to the MMA mechanical collective administering both streaming mechanical licenses and the performance rights in a new form of one-stop blanket license?  Why have the PROs at all if you have a massive government mandated collective that enjoys an antitrust exemption for compulsory licenses?  And if you have a government mandated one-stop shop in a future version of the MMA, would such a ruling trump any private contracts to the contrary between songwriters and their PRO?

Giving PROs a legislated push toward oblivion would certainly check a box at the Digital Media Association (if not cross one off the bucket list) as well as the MIC Coalition–and possibly be very satisfactory to Mr. Sensenbrenner.  Not to mention that it would arguably follow the Antitrust Division’s guidance.

Personally, I think that outcome would be terrible for songwriters, but there are no assurances in the MMA that it can’t happen that I have found so far.  And that may be the left cross to follow if the Transparency in Music Licensing and Ownership Act is not withdrawn–and by the way there are no guarantees of the withdrawal of that loose end either, at least not so far.

Shocker: Is Spotify Lawyer Leading “Scholarly” Project to Create Fake Treatise?

January 18, 2018 1 comment

The anti-copyright crowd have a few different ways to turn astroturf into deceptively scholarly work product.  One way is to take over otherwise credible brands to insert their own truthiness.

In a highly predictable move, the American Law Institute, a reliable old brand in the law, appears to have had some sudden interest in writing up a “Restatement of Copyright” treatise.  The ALI’s restatements of the law have been around a very long time, but they mostly deal with bodies of law that rely heavily on judge-made law such as agency, property or contracts.

The advantage of having a Restatement that says what you want it to say is that those toiling against artists and songwriters can cite it as an authoritative source in legal briefs, scholarly writings, amicus briefs, etc.  Handy, eh?

The ALI Restatement of Copyright seems to have been the brainchild of one Pamela Samuelson, she of the Samuelson-Glushko technology and policy legal academic centers–Silicon Valley’s answer to the Confucious Institutes.  The project is nominally under the watchful eye of Professor Christopher Sprigman, from whose intellectual loins sprang Spotify’s defense of “sorry just kidding” in the Bluewater lawsuit for Spotify’s alleged nonpayment of mechanical royalties.  Sprigman is trying to convince the court that mechanical royalties don’t exist, don’t you know.

The Restatement of Copyright has been on the horizon for quite some time as it takes a lot of effort to produce one of these treatises.  So naturally, one must ask–why the sudden interest at the American Law Institute in such a costly project that we’ve struggled along without for a hundred years or so?  You don’t suppose someone is…paying for the costs of this work?  And who might be interested in picking up the tab for the project?

Perhaps the same company that paid for five–count ’em–five–research projects by Professor Sprigman.  That we know of.

sprigman google academics

According to the useful “Google Academics, Inc.” database created by the Google Transparency Project, Google funded these articles co-written by Sprigman (two of which criticize moral rights):

Valuing Publication And Attribution In Intellectual Property: Sprigman, Christopher, Christopher Buccafusco, and Zachary Burns. “Valuing Publication and Attribution in Intellectual Property.” (2012)

What’s A Name Worth?: Experimental Tests Of The Value Of Attribution In Intellectual Property:  Sprigman, Christopher Jon, Christopher Buccafusco, and Zachary C. Burns. “What’s a name worth?: Experimental tests of the value of attribution in Intellectual Property.” (2013)

What’s In, And What’S Out: How IP’s Boundary Rules Shape Innovation:  McKenna, Mark P., and Christopher Jon Sprigman. “What’s In, and What’s Out: How IP’s Boundary Rules Shape Innovation.” (2016)

Experimental Tests Of Intellectual Property Laws’ Creativity Thresholds, Buccafusco, Christopher, Zachary C. Burns, Jeanne C. Fromer, and Christopher Jon Sprigman. “Experimental tests of Intellectual Property laws‰Ûª creativity thresholds.” (2014)

Innovation Heuristics: Experiments On Sequential Creativity In Intellectual Property:  Bechtold, Stefan, Christopher Buccafusco, and Christopher Jon Sprigman. “Innovation heuristics: experiments on sequential creativity in Intellectual Property.” Ind. LJ 91 (2015): 1251

And speaking of astroturf, what’s also interesting is that Sprigman appears to have filed comments in Copyright Office moral rights study that incorporated concepts in Google-funded papers and cited to one of them without disclosing Google’s funding as far as I can tell. (https://www.regulations.gov/document?D=COLC-2017-0003-0019).

So a perfect lawyer to advance the interests of Spotify, the savior of the music business and to gift the legal community with the Restatement of Copyright, a crystalization of his genius.

Lucky us.

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