The Pyncheons’ Dilemma: Limiting the MLC’s AI “Emergency Enforcement Powers”

In case you missed it, the Copyright Office apparently has empowered the Mechanical Licensing Collective with executive and even law enforcement powers that the Copyright Office itself doesn’t have and never has had. If you missed it, don’t feel like a chump–it was after all a bright cold day in April, and the clocks were striking thirteen.

The specific anointment of more powers for the MLC came in the context of the artificial intelligence panic. Rather astonishing given that the AI train has been coming for decades, yet the panic has suddenly arisen. The frothing has come to a full boil in the 100 days or so since ChatGPT was all the rage at SXSW for globalists, also known as the World Economic Forum Winter Meeting in Davos, Switzerland. While policymakers could have dealt with the rather obvious downsides back when Google started funding the singularity and immortality we didn’t–and I smell an MMA-style safe harbor coming any minute.

As recently reported on The Trichordist, the general counsel of the Copyright Office sent a “guidance letter” to MLC CEO Kris Ahrend essentially approving a policy of the MLC to hold back your money in disputes created by the MLC:

Where circumstances reasonably indicate to the collective that a musical work registered in its database lacks the human authorship necessary to qualify for copyright protection (for example, where a songwriter claims that they created an extraordinary number of musical works in an unusually short time period or makes affirmative statements that a musical work was created by AI), it is appropriate for the collective to conduct a timely investigation into the work’s copyrightability and hold any royalties that would otherwise be allocated to that work pending its investigation.

So think about that complex sentence a moment. First, consider the basics. What is a “reasonable indication”? How did an AI work get registered with the MLC in the first place? What does “lacks” mean in this context? Some but not all? All but not some? What’s “timely” and what’s an “investigation”? Straight out of House of the Seven Gables. But the worst part is authorizing the MLC to “hold” your money.

In order for there to be any royalties to “hold” by the MLC, there would need to be royalties invoiced by and paid to the MLC by the services. In order for there to be any royalties payable by the MLC for a specific song, the MLC would need to have calculated a per stream rate for the particular song under the mind-numbing royalty calculations for streaming mechanicals.

In order for the MLC to be able to attribute royalties to a particular work (i.e., in order to know what should be held per the Copyright Office after a “timely investigation” by the boffins, if any, at the MLC quango) there would need to be a stream count for each accounting period where the amateur sleuths detected an absence of human authorship. And on a service-by-service basis. If a song survives this trial by ordeal, that stream count would be plugged into the absurdly complex royalty calculation in order to produce the potentially payable royalties for a particular service before the “is you or ain’t you” investigation into your humanity by the soul-searchers from Nashville.

And then there’s everyone else who gets a share of that month’s “pie” based on a denominator that includes the potentially non-human stream count. (Not to mention some of the other stuff you find in that denominator that has no business being there.) Can you say double double, toil and trouble?

See how that works? If you just hold the money and don’t also hold the streams (or “units”) before you run everyone else’s statements, then the denominator in all the statements will be overstated by the streams that were the subject of the hold. In each accounting period, of course, and on a service-by-service basis.

If you don’t hold the streams and it turns out that the work was created by a human, let’s call her Joan, then no harm no foul, Joan’s streams get included in the denominator for the entire congregation and life goes on. But–if the MLC’s inquisition ends up in a determination by the MLC that Joan is not human or maybe she just hears voices or something anomalous, then that denominator is wrong because it has too many streams.

Too many streams in the denominator means, of course, that every human is paid too little. And if the “suspense” hold crosses over accounting periods that means that each accounting period where royalties are held but units are not will result in an underpayment for everyone else. All of the statements for everyone who was paid off of a particular service will have to be recalculated in each accounting period.

And then Joan really will be hearing some voices and they won’t be imaginary.

If you’re going to make this soul survivor thing work, it seems that you want to conduct these investigations (see, e.g., the guild of 17th century “witch prickers“) before royalties are invoiced by the MLC, not after. If you agree with that assertion, then it seems that the inquiry trial should be conducted at the DSP so that the DSP never reports the suspect usage to the MLC in the first place. Because remember what we are looking for here is the appearance of human authorship or lack thereof, that would be the signs that a human soul had been replaced by a machine. Who is better positioned than the DSP to make that determination?

Of course, you could just see if the purported songwriter could swim. This was a very popular test for a human soul at one point in time and came highly recommended by the OBs (“original boffins,” see King James I’s Daemonologie).

Because as the guidance letter tells the MLC, it’s the appearance that’s the thing.

[T]he Office advises that a work that appears to lack sufficient human authorship is appropriately treated by The MLC as an “anomal[y],” consistent with its Guidelines for Adjustments, and The MLC should “place Royalties in Suspense while it researches and analyzes the issue.” Such research could include corresponding with the individual or entity claiming ownership of the work or [could include] inquiring whether the Office has registered the work and whether there are any disclaimers or notes in the registration record.

Remember, this entire subject is not about a dispute between two copyright owners. This guidance is about a dispute between THE MLC and a putative copyright owner. The MLC is creating the dispute and the Copyright Office purports to empower the MLC to take your money–a right which the Copyright Office itself does not have without referring the issue to the Department of Justice, if then. So I’m not really sure what is going on here.

Understand, I don’t question whether someone should be keeping an eye on actual AI, stopping actual AI from collecting royalties, and most importantly to me, stopping AI from infringing on copyrights through training on scraped and unauthorized content. What I do question is whether the MLC has any ability to take any action in this context or any other. Particularly when it creates an implication that the MLC can put itself adverse to its members because of the monstrously vague and porous Title I of the Music Modernization Act which has no expression of Congressional intent on this point and which offers no remedy or due process for members to fight back against this taking. 

Just like I agree with the Copyright Office that the MLC should not make substantive legal decisions about termination rights, I think we should be consistent and stop them from making substantive legal decisions about anything else, including copyrightability. I don’t have any illusions about what was the real game with Title I, but when the MLC can’t even do the job that Congress tasked them with, they should not be spending a minute on making legal interpretations that are in the domain of Congress, the Copyright Office itself or Article III judges regardless of whether the MLC board members are inferior officers of the United States

This next bit is also right up there with spectral evidence–and realize that while the guidance letter starts out discussing AI, it wouldn’t take much to broaden out the MLC’s nonexistent enforcement powers.

If The MLC subsequently concludes that the work qualifies for copyright protection and the section 115 license, it should distribute any royalties and interest in suspense to the copyright owner. Alternatively, if The MLC believes that the work does not qualify for copyright protection following its research and analysis, it should notify the individual or entity claiming ownership of the work of its determination and that associated royalties will be subject to an adjustment. This conclusion and adjustment may be challenged by initiating an “Adjustment Dispute” consistent with The MLC’s policies. If legal proceedings are initiated to challenge The MLC’s actions, the disputed royalties and interest should remain suspended until those proceedings are resolved.

The “dispute” is not about the royalty “adjustment”, which is a nice way of saying “taking your money.” The dispute is about the MLC’s unlawful taking and unilateral decision (without even a by your leave to the Copyright Office in real time) to take your money. If you thought that the Harry Fox Agency’s arrogance belied a belief that they thought they were the government, now you’ve got the MLC AND the Copyright Office acting like the MLC has the powers of the government to take without this Fifth Amendment business. And you’ll notice there’s not one soul involved–speaking of souls–who was elected dog catcher in the entire process.

If you review the MLC “Guidelines” that the Copyright Office seems so enamored by, you’ll notice that there is no due process and as far as I can tell, the Guidelines are not adopted as regulations in a manner compliant with the Administrative Procedures Act. By deferring to these absurd “Guidelines,” the Copyright Office is essentially granting the Guidelines the force of regulations as a practical matter, which is, in my view, exactly what they objected to in the termination rule making.

If this is constitutional, we’ve got much bigger problems.

On the other hand, this will all be much easier to understand if the guidance letter is merely intended as a prelude to proper regulations that comply with both Congressional intent and the Administrative Procedures Act, or, as it’s known in some circles, the rule of law.  If that’s the action here, I’m all ears.