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Apple Music Leads the Way on Song Metadata “…to ensure songwriters get paid…”

March 1, 2017 Comments off

apple-lyrics

This is great news from Apple, who is leading the way as usual….with one exception.  Apple says to “make sure the ownership of your song is registered with a publisher, and that they have registered ownership with relevant publishing agencies such as ASCAP, BMI, PRS, Harry Fox and Music Reports.”  That obviously is misleading.

First of all, we can’t be that surprised that Apple has this impression because as we all know, it is frequently lost on HFA and MRI that neither of them is in fact the government.  However, given that Amazon, Google, Pandora and others are sending millions upon millions of NOIs to the Copyright Office claiming to have no idea who owns songs by very well known artists, it should make it obvious that the one place you need to “register” your song copyright ownership is with the U.S. Copyright Office.

Why Apple doesn’t mention this at all is a bit odd, but it’s an easy mistake to overlook.  We know that Google is already refusing to take so much as an address update from publishers unless it comes from the “Public Catalog” of the Copyright Office–which is essentially not possible to update unless you have already registered a copyright or recorded a document.

Plus Apple omits companies like Crunch Digital, Global Music Rights and SESAC from the list for reasons that are unclear.  Even though SESAC owns the Harry Fox Agency, if you’re going to mention ASCAP and BMI, why wouldn’t you also mention SESAC and GMR?

It’s also misleading to state that you have to have “the ownership of your songs…register[ed] with a publisher” which may happen frequently, but is not required to enjoy ownership rights.  Many artist/writer publishers are simply dbas of the artist/writer anyway that allows the artist/writer to cash a check for the publisher’s share of revenue from a PRO.

So great that Apple is enabling the delivery of song ownership information, great that they’re licensing lyrics, but not so great that even Apple didn’t get it quite right.

 

Under a Red Flag: The Other Side of Whack a Mole–will it be back to the future for MCNs?

February 21, 2013 Comments off

Après moi, le déluge

Attributed to King Louis XV of France

Right after Google’s YouTube acquisition, Googler Zahava Levine appeared on a bar association panel in Los Angeles and sneered at the assembled entertainment lawyers that even though YouTube was using their clients’ works without permission, YouTube would continue to rely on the DMCA notice and takedown.  Unless, of course, “Hollywood” wanted to stop playing whack a mole and make a deal.

And the assembled room witnessed the birth of an urban legend: The Notice and Shakedown.

And what  many told me they thought (after where do they find these people) was why would Google want to play whack a mole.  Surely this game of “catch me if you can” is going to come back to bite them?  (See Parlophone.)

Fast forward a few years and enter the multichannel network (or MCN), somewhat shadowy groups of content producers and aggregators on YouTube.  If I had to bet, my bet would be that when Google contract with MCNs, Google place a fig leaf on clearances for music used in MCN programming–they place the burden on the MCN.  If Google then gets a claim for infringement, they simply tender it to the MCN as an indemnity claim.

Enter the Very Successful MCNs.  These MCNs make real money and attract real investment, sometimes from Google itself.  Based on the announcement of the Universal deal, it now becomes apparent that there must be a significant amount of uncleared music on these MCNs.  And, of course, if Google invests in an MCN that has a contract with YouTube…Google will have diligenced the MCN as part of its investment (or certainly had the chance to do so).

So what does that mean for Google’s “see no evil” version of its Notice and Shakedown defenses?  I think it’s called “actual knowledge” that appears under a red flag.

Why is this meaningful?

Hard on the heels of the news of Universal’s deal with Fullscreen and Makers, the National Music Publishers Association made it clear that just because one publisher made a deal with two MCNs doesn’t mean that those two MCNs don’t have a problem with other songwriters, and that other MCNs don’t have a problem with all the songwriters.

‘Recent news that two large multi-channel networks (MCNs), MakerStudios and Fullscreen, have reached a licensing deal with Universal Music Publishing Group is an important first step in compensating songwriters.  But let me be clear – all MCNs must be licensed for the use of all songs. This agreement between two MCNs and one music publishing company does not solve the entirety of the problem.  As the popularity of digital entertainment has grown, MCNs have significantly profited, often without compensating the songwriters whose work is being used.

Those who use the works of songwriters in videos must fairly compensate those songwriters and music publishers, and NMPA is committed to finding a complete solution.”

So let’s crystallize that for the MCNs:  If you get down on your knees and beg to be sued, don’t be surprised if someone sues you.

And your good buddies, you know, your “partners,” at Google?  They will throw you under the bus in a heartbeat.  If they haven’t already.

Listen up–Google advertised the sale of prescription drugs to kids.  They distributed sex club apps that exploit teens.  Do you really think people who can do that give a damn about an MCN?

And ask yourself this Mr. MCN investors–why do you want to play whack a mole?  What possible motivation could you have?  Because you don’t make as much money as Google, so your profit motive is radically different than theirs.

I’d say there’s another element of brilliance to the Universal deal–they got their songwriters’ money out first.

How the Rate Court Cottage Industry is Leading to the Destruction of Collective Licensing

January 19, 2013 1 comment

The news that Sony/ATV made a direct deal with Pandora produced some strangely paranoid chatter in the echo chamber.  Sony/ATV can bring Pandora to their knees, getting around the rate court, etc.  I think it’s actually much simpler than that.

What appears to have happened is quite simple–Sony/ATV opted out of letting ASCAP and BMI license their catalog (which now includes EMI so is really quite massive).  This is perfectly legal, nothing shady, although a bit unusual.  They’ve announced they intend to take some digital licensing in house, so everyone should have expected this was coming.

It is perfectly legal because of the antitrust consent decrees that ASCAP and BMI operate under.  A condition of these consent decrees is that every affiliate of ASCAP and BMI retains the right to “opt out” of the blanket licenses (and rates) offered by these societies.  No reason need be given–it is a right that all enjoy.  (SESAC is a private company that does not (yet) operate under a consent decree.)

If a publisher opts out of one license or type of license, they can remain in the blanket license for all other licenses that are in place.  So for example, Sony/ATV can opt out for Pandora, but stay in for broadcast radio or venue licenses.

Why might a publisher opt out of a blanket license?  One reason is financial–they don’t have to pay the PRO collection fee on that revenue stream.  But another reason is that if they stay in the blanket license, then they are subject to rate court proceedings brought against the PRO if negotiations with a licensee (say Pandora) fail.

Rate court proceedings were relatively rare occurances prior to the arrival of Big Tech in our lives.  They have become increasingly common and almost always involve digital services.  In fact, they almost always involve the same lawyers representing the digital services.

Rate court proceedings cost a lot of money.  Millions in legal fees.  And the twist is that if you stay in the blanket license, ASCAP and BMI pretty much have no choice but to submit to the rate court proceeding which is required by their respective consent decrees.  So in this way while the PRO licenses are voluntary–not statutory like the compulsory mechanical license–and the rates are not set by the Copyright Royalty Judges–because they are not statutory rates–the rates are set by U.S. Federal District Courts sitting as rate courts.  (For example, Judge Stanton is the BMI rate court judge in the Southern District of New York.  MTP readers will remember him as the judge in the Viacom v. Google lawsuit who handed Google a complete victory over Viacom at trial in an opinion I found meandering and bizarre, which subsequently was substantially overturned on appeal.)

Rate court proceedings are in many ways similar to the Copyright Royalty Judges and take into account a variety of economic factors, including market rate deals for the same type of license.

Blanket licenses issued by the PROs are one of the great efficiencies in music licensing.  Rate court proceedings gum up the works and undermine the benefit of lower transaction costs in collective licensing.  I wonder if at the end of the day when one takes into account the legal fees and transaction costs concerned when Big Tech fights negotiated rates whether anyone actually comes out ahead.

Meaning if you compare the position of the parties before the rate court black hole and the ultimate rate imposed by the rate court, did the Big Tech company that used its litigation budget to force songwriters into the rate court proceeding actually end up better off?  Or did they just get their jollies from dragging songwriters through costly litigation so that the next time around the PROs were more likely to acquiesce?

One thing that you often hear these Big Tech types say about their direct licenses is that songwriters are better off to not be represented by PROs because even though the direct license rate is lower, it’s more than the songwriter would get through the PRO because they don’t have to pay the PRO “commission”.

Of course, the other benefit from PRO licensing that songwriters get that isn’t discussed is that the songwriters can audit collectively under the PRO’s blanket license.  Big Tech companies hate audits.  The more direct licenses, the less likely that any one songwriter will ever exercise an audit right.  And eventually the audit right will be withdrawn (as is already happening with the YouTube indie publisher license).

So how does this effect Sony/ATV?  Recall that Pandora sued ASCAP in the rate court to try to screw songwriters right about the same time they began their campaign to screw artists in the Congress with the so-called Internet Radio Fairness Act.

If I had to bet, I would bet that Sony/ATV said enough of this BS and withdrew from ASCAP and BMI for purposes of licensing Pandora.  That takes Sony/ATV out of the rate court.  They made a deal with Pandora for a higher rate and shorter term than will ultimately come down in the ASCAP rate court.

Note:  Of course, ASCAP may be able to use the Sony/ATV deal as evidence of a significant market rate for the Pandora service in the rate court, even though Sony/ATV is not party to the case.

Pandora had the choice of excluding all Sony/ATV songs from their service or make a direct deal with the publisher.  And now that Pandora has made that deal once, they will always.

And that’s really all there is to it.

But–if Pandora had not been advised to go to the rate court, would Sony/ATV have made the same decision?

Is Pandora lucky that Sony/ATV didn’t just opt out of the ASCAP and BMI blanket licenses and not license Pandora at all?  That would probably have brought down the service.

And–given the antagonism that was heaped on Pandora by songwriters from outside the US, will the societies representing these songwriters elect to opt out of the reciprocal agreements they have with ASCAP and BMI regarding Pandora and just not license Pandora?

Will other publishers follow Sony/ATV and avoid the rate court?  Won’t that mean that the cost of the rate court will be shared by an ever smaller group of songwriters forced to litigate by Big Tech?

One thing we don’t need is less efficiency and higher transaction costs in music licensing.  Most Big Tech companies and their shills whine about fragmented music licensing, yet the same people drive up those transaction costs while enriching a small group of lawyers who undermine the benefits of blanket licensing.

Do these Big Tech companies have the right to do this?  Sure.  Does it benefit them in the long run to jack songwriters around?  Not really.  If there’s anyone who has an existential threat from Big Tech it is the professional songwriter, often overlooked yet the most important part of the equation.

Continually trying to jack these people around accomplishes one thing:  It hastens the day of full commoditization of culture by Big Tech.  This is what they may think they want, but I would suggest to you that they really don’t.

So they may have the right to do it, but that doesn’t make it smart.  But then I’m just a country lawyer and I’m not as smart as these city fellers.

You can’t blame Sony/ATV given their options.  I’d have done the same.

The MTP Interview: An Inconvenient Truth: Songwriters Guild President Rick Carnes talks about the effect of piracy on American songwriters

March 10, 2012 5 comments
[Ed: This post originally appeared on MTP on January 30, 2009–how little has changed

American songwriters are one of our greatest sources of culture as well as important contributors to America’s “soft power“–our ability to win hearts and minds around the world by attraction and not by force. As Professor Joseph Nye would say “Lennon trumped Lenin.” (See Center for Strategic & International Studies Smart Powerfavored by the Obama Administration in the “change” direction for U.S. foreign policy.)But Internet analysts, self-appointed futurists as well as self-annointed consumer advocates almost always misunderstand the role of songwriters and the negative effects that rampant piracy has had on them. People who just write songs don’t sell t-shirts, don’t play shows, don’t have all the other income streams available to them that the EFFluviati point to as subsititute revenues for the cruel theft of labor value by companies like Kazaa, Morpheus, Limewire and the Pirate Bay.You hear a lot of talk about “follow on” artists or “remix culture”? Songwriters are the ones who are most often “followed upon” and “remixed out of culture”. And as noted in this interview, there are fewer and fewer original professional songwriters around every year.Rick Carnes is the President of the Songwriters Guild of America, and is a tireless advocate for American songwriters on Captiol Hill. He lives in Nashville, the songwriting capitol of the world.

[Interview for MTP by Chris Castle]

MTP: There is a popular image of a songwriter sitting in front of a piano in a little cubicle at the Brill Building or Music Row and grinding out the hits.What kind of business relationships do songwriters have today?

Carnes: Most songwriters today are independent operators. Music piracy was the death knell for the day of music publishers having staffs of songwriters. The Brill Building is still there but the last time I visited it was to talk to the folks at Saturday Night Live. There wasn’t a songwriter in sight. Business relationships now are with lawyers and managers. They put together the deals and venture capitalists put up the money. The deals are done to get
the next big recording artist signed to a label and then everyone gets a piece of the action in some 360 deal.Used to be you found a great singer then you looked for a great song.

Now you find a great deal maker then look for someone with deep pockets.

MTP: Are there more or fewer songwriters working today than there were 10 years ago?If there’s a change, what forces in the business are causing that change?

Carnes: The days of music publishers who have large staffs of professional songwriters seem to be over. Music publishers used to have both established writers and their ‘farm team’ of new talent. Now they have neither. The people they sign today (if any at all) are either working recording artists or ‘future’ recording artists. The days of the ‘stand alone’ songwriter appear to be over.

There are multiple causes for this situation but most of the damage was wrought by two specific problems. The first being that the internet has turned into a Cyber-Somalia.

Professional songwriters used to live on advances from their music publisher. These advances were to be recouped from record sales only (“mechanicals” is the industry term for these revenues). Music piracy killed record sales so that made it impossible for music publishers to recoup the advances they paid songwriters so they stopped signing writers and let go of the ones they had when their contracts ran out.For example, the music publisher I was writing for in 1998 had twelve great songwriters on staff. By 2008 they had no songwriters on staff. For the math impaired that is a reduction of 100%.

The second major problem was/is a practice by the record labels of putting “controlled composition” clauses in their artists recording contracts. For the non-lawyers reading this,
these clauses are a very complicated system established by the record labels to insure that they don’t have to pay the full statutory rate imposed by the US Copyright office for the songs recorded by the artist that the artist either writes or “controls”. [Editor’s note: this includes songs co-written with a producer or other writer who is not the artist or a member of a group artist. It started right about the time that another SGA member, Hoyt Axton, helped to spearhead indexing the mechanical royalty rate to the Consumer Price Index in 1976.]

Once an artist signs a recording contract containing one of these clauses (and since all the major labels have them they have little choice) the [beginning] artist will receive, at most, 75% of the statutory rate for recording any song they write or co-write. It is the co-writing that causes problems for the professional songwriters. The record labels, because they can pay a lesser rate for any song written or co-written by the recording artist, insist that the artists now write or co-write all their songs. This has lead to a tremendous drop in the number of professional songwriters and, in most cases, the quality of the songs. The public is constantly complaining about having to pay US$12 to US$18 dollars for an album with only one or two goods songs on it. You can trace the cause of this problem back to the early eighties when all the record labels began implementing control compositions clauses in their contracts. Since then the norm on an album is one or two professionally written (or co-written) songs and a lot of filler songs that the artist wrotein order to satisfy the record label’s demand for cheap music.

MTP: Tell me about what you do at the Songwriters Guild and the untold riches you are being paid for the job?

Carnes: I am President of the Songwriters Guild of America and if I am supposed to be getting “untold riches” someone forgot to tell me!The mission statement of the SGA is two words “Protect Songwriters”. That lack of specificity has forced me to show up in all kinds of places I never thought I would be! I was the lead witness in the latest Copyright Rate Board hearing. I have testified on behalf of songwriters in both the Senate and the House of Representatives on many issues concerning song writers rights, and I have spent the last ten years flying all over the country talking to people about the harm that is being done to American music by the widespread theft of songs on the internet by a mob of anonymous looters.

MTP: What is the most common question you get from your membership?

Carnes: How do I get a song cut by Beyonce?

MTP: What are your top three legislative issues for this Congress?

Carnes: The performance right in an Audio Visual download;

Controlled Compositions;

Fighting Music Piracy (as always)

(If I could add a fourth it would be a ‘bail-out’ for all the songwriters who lost their jobsbecause their intellectual property was not protected by the US Government on the Iternet)

MTP: Who are you listening to at the moment, and what new music interests you the most?

Carnes: Luca Mundaca. A fabulous new Brazilian jazz artist who plays great guitar, sings like an angel, and writes amazing melodies. I have no idea what she is singing about since I don’t speak Portuguese. But the songs knock me out anyway. That’s what I call great songwriting.

MTP: Where do you think that songwriters are going to end up in the next 5-10 years?Meaning what role do you think they have in the music business?

Carnes:Songwriters were the number one loser of income in the US economy in 2004 (Music piracy taking its toll). So we are used to tough times. I hope to see a bottom form somewhere in the steep drop in record sales and a rebound sometime in the next ten years. If that doesn’t happen I guess we will all end up sleeping in the subway!

The real role of songwriters in the music business is to add meaning to people’s lives.

That is not a job you want to leave to amateurs. It is a job for professionals.

MTP: Do you find that members of Congress do not have a clear idea about the role of songwriters as a general rule?

Carnes: I think they understand the role of songwriters better than the typical major record label executive. At least the Members I have talked to understand that the Constitution includes provisions for royalties for creators because without them the quality of life suffers. While it is true that the Copyright laws are very difficult to understand in great detail, the general principle that creators have a right to control the copying of their work is understood by all except the most radical of the ‘Free Culture’ advocates. There are a couple of people on the Hill who think that ‘Fair Use’ extends to sharing a copyrighted song with the entire world for free.

MTP: Who do you view as the greatest commercial opponents of songwriters?

Carnes: The Major record labels are our biggest ‘commercial’ opponents. They have wreaked havoc on the songwriting community by forcing controlled composition clauses into their artist recording contracts. After them it would be all those companies out there that want to use our songs to sell something else (like advertising) and not pay us a dime. Anytime you go on a website that is offering free music they have no license to use and selling your visits to that site to advertisers you are looking at one of the ‘greatest commercial opponent of songwriters’. I wish I could offer you a list but it would be too long to type in one sitting. Besides,didn’t Richard Nixon get in trouble for having an Enemies List?

I hear a lot of talk from Google and the big online companies about their “partnerships” with the “music industry”.I find more often than not when you drill down on what that means is deals with major labels.

MTP: Do you ever have any of these companies come to you to ask you what you think or try to make a deal with your members?

Carnes: Yes we have had companies come to us about deals. But that is because our catalog administration program has some hit songs that you have to have in order to compete
in the market. So in terms of whether these services are ‘reaching out’ to smaller labels
and music publishers the SGA is not a good gauge.

MTP: If you had to rank the top five online companies as the “best” meaning most friendly to songwriters, who would they be and why?

Carnes: Songwritersguild.com would be number one *grin* (a shout out here to our webmaster)

After that I am not a fan of any particular online company since I have had to spend the last three years of my life fighting them in rate court to try to get a decent interactive streaming rate. (Which we finally won!) But I am a subscriber to Rhapsody and I check out MySpace a lot since I have so many friends that are artists and in bands. MySpace, at least, has exposed a lot of indie music.

MTP: And the five “worst”?

Carnes: Whoever the top 5 p2p sites are today. And just for the record, I am not a fan of Google because I believe their search algorithm reduces all art to the lowest common denominator. That’s a real culture-killer if I ever saw one.

MTP: Anti-copyright organizations often try to tell musicians and the music industry that they have their eye on the wrong ball, that they can offset the decline in CD sales by selling another T-shirt to fans who it would be easy to find because they were all on email.

Carnes: Songwriters don’t sell T-shirts. We’re too ugly and we dress funny. Songwriter fan clubs meet in phone booths so the email lists are too small to monetize effectively.

But seriously folks, songwriters don’t sell concert tickets, or ancillary merchandise. We make our money on record sales and radio airplay. Or, we USED to make our money on record sales. Illegal downloading ended that. Now we are looking for new jobs.

The most infuriating thing about being lectured to by anti-copyright groups about how songwriters need to get a new ‘business plan’ is who gave them the right to tell us how to make a living? Who are they to say we shouldn’t fight to defend our rights? In truth, I find their suggestions are unbelievably arrogant and self-serving.

MTP: Do you find that there are a lot of self-appointed music industry experts who have never sold a record?I’m thinking of a specific event at which I was sneered at by Eben Moglun at Future of Music Policy Summit II in 2001 for questioning the affect of piracy on independent artists and I was told more or less that I was a primitive thinker because I didn’t see that declines in CD sales would be made up by merch.I’m also thinking of a panel I was on with Corynne McSherry of the EFF at which she wedged the audience by asking the crowd if “Silicon Valley” was going to let “Hollywood” push it around. Thankfully the “Silicon Valley” fans and the “Hollywood” fans hadn’t been tailgaiting or painting themselves funny colors. [Editor’s note: And if “Silicon Valley” wouldn’t listen to “Hollywood,” would “they” listen to musicians in Bollywood, Miami, Seattle, Austin, New Orleans, London, Harlem, in no particular order. Do you have similar experiences?

Carnes: There do seem to be a lot of people trying to make the rules who never played the game.

I have had some interesting back and forth on some panels but I must say that the most interesting panel I have ever witnessed was at the Leadership Music Digital Summit a couple of years back. The subject was how the music biz could ‘compete with free’.

For some reason there was an actual economist on the panel who was totally silent for the entire panel until the very last when he spoke up and said that anyone who thinks there is a business model that competes with free is out of his mind. In any Capitalist society consumers are taught from cradle to grave to always get the best ‘deal’ they can, and NO DEAL beats free. I mention his comment only because it was the first time that I ever saw these ‘self-appointed music industry experts’ ever called on any of their malarkey by a real expert and the discussion was concluded in one sentence.

Castle: If you had to pick the most important issue of 2009 for songwriters, could you and if you could, what would it be?

Carnes: Same as every year for the last 10….Illegal downloading.If I may quote a real economist, “Nothing competes with free”.

Add the question I missed:Is Rock and Roll dead?

Yes, Rock and Roll is dead. The genre’ was played out by the mid-seventies but it has survived in a zombie-like fashion for thirty years past its expiration date.

Part of the charm of Rock music is that practically anyone can play it.It can be written by amateurs and performed by teenagers without those difficult and expensive years of training that other forms of music require. Unfortunately that also makes it the perfect ‘corporate’ music. You can get kids who don’t need money to support families or pay house notes to sign contracts that no thinking adult would sign. This allows a record label to exploit ‘this year’s model’ for all they are worth until they reach the end of their contract and want to renegotiate for decent terms. Then they simply replace them with another teen idol. The simplicity of the music has allowed the major labels to treat recording artists like ‘temp workers’.

Hopefully with the decline and fall of the major label system we might finally get to see where the music really wants to go once it is released from this corporate death-grip.

[Editors note: There’s still great music being made every day, some of it is listed in our “New Music Weekend” recommendations posted (pretty much) every Friday and reposted the following Monday on MTP and on Twitter.]

20 Questions for New Artists: Band Administrator/Split Sheets

January 13, 2010 Comments off

For the next few weeks, we’re going to post sections from the article “20 Questions for New Artists” by Chris Castle and Amy Mitchell some of which has been posted various places. If you are interested in getting a free copy of the basic article, write to semaphoreindustryquestions@gmail.com before February 1. This doesn’t constitute legal advice, or any intent to form the attorney-client relationship. Chris, Amy and others will also be publishing the “Artist Glossary of Industry Terms” as a companion guide.

Band Administrator

It is a good idea for one band member to take responsibility for keeping track of the papers and information relating to the band’s business, such as receipts, bank statements, credit cards, payments, approvals for licenses, etc. This is especially important if there is no manager involved with the band. The “managing member” does need to keep the other band members informed, and should not be able to assume any liabilities or sign any contracts on behalf of the band without written consent of the other members and giving them a chance to read and understand what it is they are signing up to.

Split sheets

Song splits are probably the most sensitive conversations that the band has together. Many professional songwriters take split sheets into each writing session and sign off on the split sheet and register the song as soon as the song is completed. This is another one of those discussions that are better had before the band is making money to avoid the “selective memory disease” and can help if the band (or any member-writer) is ever accused of copyright infringement in connection with a song.

See Also: Social Networks and Domain Names/Trademarking the Band Name
See Also: Performing Rights Society Affiliations
See Also: Bank Accounts/Tax Returns/Accountants
See Also: Have you Registered with SoundExchange? Copyright 2009 Chris Castle and Amy Mitchell. All Rights Reserved.

Isohunt Collapsing: Everyone knows where the booze is

December 27, 2009 1 comment

Americans are freedom loving people and nothing says freedom
like getting away with it.

Guy Forsyth, Long Long Time © 2005 Monkey King Music

“Everyone knows where the booze is, Mr. Ness,” warned Officer Malone in David Mamet’s iconic screenplay, The Untouchables, as the federal officers were about to raid a Post Office transhipping point for bootleggers. The judicial system, at least outside of the Temporary Autonomous Zone known as San Jose (aka “TAZ 408”), today has another tool to deal with false innovation in the form of Judge Wilson’s order in the case against “innovator” Gary Fung and his Canadian-based websites.

Let it be said that there is an irony to Judge Wilson presiding over the prosecution of Gary Fung and his Canadian-based websites, but I would suggest that the one true irony is not the irony that has been reported in a few places. Judge Wilson also presided over the prosecution of the original Grokster case. The conventional wisdom on the copyleft is that Judge Wilson tried to hand the Grokster “innovators” a favorable ruling that was later (to no one’s surprise) sustained by the 9th Circuit Court of Appeals, but that was still later (also unsurprisingly) reversed by the U.S. Supreme Court in what is now the touchstone copyright infringement case used to go after defendants such as Defendant Fung. The approach is to consider (and, as here, punish) the way that a particular defendant behaved as opposed to attacking the underlying technology.

We have no way to actually know what Judge Wilson’s internal process was in Grokster, but my guess was that his initial ruling in favor of the “innovator” in Grokster that became the vehicle for the Supreme Court appeal that reversed him was not going out on a “legal limb” at all. This is probably what the Grokster lawyers would have one believe—or at least would have reporters believe.

Another view—arguably a better view–is that Judge Wilson ruled in exactly the appropriate way he should have given the state of the law at the time, the facts before him and particularly the litigants. It is a tribute to his judicial courage that he ruled as he did, probably knowing that there was a substantial likelihood that he would be reversed. And that he would, in his reversal, be handed the decision that he needed in order to rule properly in the Grokster case without fear of being reversed again.

In fact, I said at the time that Judge Wilson’s initial ruling (and on remand his subsequent rulings) was precisely accurate, and indeed, courageous as it demonstrated a total faith that the process would work. And so it did. The wheels of justice turn slowly, but they do turn.

Quite the opposite of the reportage on the Fung case, Judge Wilson didn’t go out on a “legal limb” in Grokster; he did exactly what he should have done. You only engaged in backslapping and cheering after the trial court decision if you were so disconnected from both legal history and fundamental and ancient jurisprudential principles that you actually though “sharing” with millions of your closest friends was defendable.

Reading Judge Wilson’s order granting summary judgment against “entrepreneur” Gary Fung in light of the better view of the history of Grokster, I think past becomes prologue for Defendant Fung.

In my experience, and with apologies to counsel it must be said, judges abhor bull. And in both the Grokster case and the Fung case, defendants piled up great, huge, heaping, shovel-ready mounds of it in the judge’s in-box.

Because as Officer Malone tells us, everyone knows what’s going on here—judges, most especially, but also everyone else who keeps these cases going.

Somebody is trying to get away with it. Someone is trying to escape judgement day.

Why? Probably because of the academics who have—so far anyway—no downside risk in demagoguing the issue and who have deluded people like Defendant Fung and the others into believing that somehow this time they will get away with it.

The way the game is played is that the “false innovation” of Bit Torrent is used by an operator to set up sites that are visible and most likely to be targeted for trading works of authorship that belong to other people and that are substantially unauthorized. The operator waits to be sued and sometimes never is. The operator—at least before the Pirate Bay convictions—uses any lawsuits as a way to promote itself and get free marketing to attract more users. In the legal trade post-Grokster, operating such sites is known as inducing copyright infringement—or it is very hard to imagine a scenario in which it would not be—and has been ruled illegal in the United States as it has in the Fung case.

Normally in these situations, one starts looking for Lessig (who can be counted on to voice his opposition to “what the industry calls piracy” not to be confused with “piracy”). But this time he is merely the vaporware, the ghost in the machine, echoes inside the bubble. No, there is a far more immediate proselytizer at work in his stead.

Defendant Fung, from what I have read, operated his servers in Canada. (Canada is a well-known haven for piracy and has been put on the Special 301 watch list by the Obama Administration.) Why Canada? Who advised him to operate from Vancouver? I wonder.

The truth of the case, however, I think is found in this passage from the ruling (p. 11):

“In any event, for the purposes of this case, the precise percentage of infringement is irrelevant: the evidence clearly shows that Defendants’ users infringed on a significant scale. It simply does not matter whether 75% (to pick a number) of available materials were copyrighted or 95% of available materials were copyrighted; and even if this distinction did matter, Defendants have simply failed to satisfy their summary judgment burden by submitting admissible evidence that raises a triable dispute regarding Plaintiffs’ evidence that a substantial percentage of the available files included copyright-infringing or highly likely copyright-infringing content.”

The evidence that Defendant Fung had to submit in his defense must be more than a metaphysical passing thought in a tweet by Michael Geist, more than a posting on a Facebook wall, more than an anonymous email—they must prove that which they cannot prove. And they cannot prove it because everyone knows where the booze is.

I would also point out the interesting language from Judge Wilson that what had to be rebutted was not an absolute case for actual infringement of each work, but in special cases like that of Defendant Fung, the defendant’s behavior is so bad that the standard is that plaintiffs do not have to bear the burden of demonstrating infringement for each work at issue—just that a substantial percentage of the available files included copyright-infringing or highly likely copyright-infringing content. Because everyone knows where the booze is.

And what was not expressly said by the Court is that judges (at least outside of TAZ 408) will not allow their courtrooms to be used to foist onto the law some hack, some weak-minded armwaiving about how Defendant Fung’s enterprises were just like a search engine, were just like Google. Now if Defendant Fung and his fellow travelers had managed to get Google to make a statement or much less file a letter or brief with the Court saying that they were just like Defendant Fung, the implausible commentary would still have been a fine example of bong logic, but it would have been more plausible outside of the dorm rooms of Mirrielees House.

Perhaps that kind of statement is to come on appeal, maybe through the Google Policy Fellow being established at the US-Backed Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic associated with Michael Geist, the leading Canadian commentator on Fung. It is so far unclear as to exactly how much involvement Geist has had in the Fung case itself.

The point is that the Court found that Defendant Fung was engaged exclusively or nearly-exclusively in infringing behavior in the United States and that Defendant Fung failed to present evidence to the contrary. Geist said “The interesting question is how will the court characterize (Fung’s [IsoHunt’s owner] arguments), because the broader legal implications for copyright and for many parties – search engines and the like – could be affected by the outcome of this case.”

Actually, that’s the kind of fearmongering so typical of Geist that is simply inapt in this case. That would be true if the “search engines and the like” were engaged in encouraging digital natives to take what doesn’t belong to them. But if the “search engines and the like” are not engaging in the inducing behavior, then they may have something else to worry about, but they don’t have to worry about that which now is of primary concern to Defendant Fung.

As Defendant Fung was quoted by the Court (in a line worthy of that fine little speller in Raising Arizona): “they [presumably plaintiffs] accuse us for [sic] thieves, and they r[sic] right. Only we r [sic] ‘stealing’ from the lechers (them) and not the originators (artists).” (In case it doesn’t go without saying, Defendent Fung understates the scope of his “‘stealing'” or as Lessig would likely say, “What the industry calls piracy” or as Moses would say “theft”, as even the artists who are signed to the “lechers” not to mention the unions, independent artists or in all cases the songwriters are likewise being stolen from. But then I’m an Old Testament kind of guy.)

Geist may want to have a chat with his young fan about toning down the “two wrongs make a right” line of argumentation—it doesn’t work so well with judges–just ask any of the p2p defendants.

As Geist told Torrentfreak, a frequent publisher of Geist’s writings and calls to action against the Yanks Under the Bed, “’…most of my P2P downloading tends to be torrents of video files of recent lectures or other video content.’ BitTorrent is his application of choice for downloads.” I’m not quite sure what he meant by “other video content” but it sounds like Geist himself is a good example of a potential customer of Defendant Fung.

So it should not be a surprise that Geist’s view is that he is shocked, shocked, that there’s booze in that post office:

“[Defendant Fung’s] filing [in a related Canadian case] is well worth reading as it explains BitTorrent technology and argues that [Fung’s] isoHunt is a P2P search engine that merely indexes torrent files found on other indexing sites (it describes itself as a Super-Indexer).

Further, it notes the limits of its involvement in the copying process as well as its compliance with the DMCA notice-and-takedown system. isoHunt clearly tries to position itself as a specialized search engine that does not host infringing content.”

Sound all professorial right? Not so much. Everyone knows where the booze is, Mr. Geist. (Aside from the fact that the safe harbors of the DMCA don’t apply in Canada and Geist has resolutely opposed the adoption in Canada of anything that involved a “takedown” preferring the “notice and notice and notice and notice and notice and notice and notice and notice and notice and notice….” method.)

Geist’s line of thinking clearly misses the point and was not at all persuasive to Judge Wilson:

“…Defendants’ inducement liability is overwhelmingly clear…evidence of what the Supreme Court has termed the ‘classic instance of inducement’ — a statement that ‘broadcasts a message designed to stimulate others to commit violations.’ Defendant Fung made statements on the Isohunt website encouraging or assisting infringement. He posted on his website a message telling the website’s users that they should ‘try Peer Guardian,’ a software application that can be used to frustrate copyright enforcement against file sharers.” (p. 15)

But the following is the kind of thing that makes a judge cast out the offender, hoping that he will never darken the Court’s door again (whilst leaving Defendant Fung thanking his lucky stars there was no referral to a U.S. Attorney):

“[T]he Fung websites have honorary ranking systems for those who posted a certain number of forum users messages; ranks include titles such as “I pir4te, therefore I am” and “All Day I Dream About W4rez.” In other words, the websites bestowed honors by identifying users as copyright infringers. This is strong circumstantial evidence that Defendants promoted their users’ infringing activities by consciously fostering a community that encouraged – indeed, celebrated – copyright infringement.” (emphasis mine)

So when the facile “search engines and the like” start behaving like Defendant Fung, then they will lose their cases, too. Until then, such analogies should be rejected as the red herrings they are, parading across the stage. However similar the actions of these search engines, it will take access to their internal emails to discover whether their employees shared Defendant Fung’s disdain for the law and actively induced infringement.

Perhaps the very well funded Mr. Geist should be doing some Canada research in line with the substantial Industry Canada grants that fund his operations in Ottawa—perhaps some research on Canada’s carbon footprint. (Particularly given the recent insights into hitherto unknown levels of carbon consumption by Google.) It’s certainly not my tax dollars, but it does seem unseemly to put a recipient of the distinguished Canada Research grants in the dubious position of defending a self-admitted international bad boy like Defendant Fung, no matter how attention starved he may be.

How exactly is it that a law instructor like Geist, who presumably took an oath at some point to uphold the law, can do anything but openly condemn such behavior?

Everyone knows where the booze is, Mr. Geist.

Case 2:06 Cv 05578 Svw Jc

Alert from the National Music Publishers Association regarding sheet music and the Google Books Settlement

May 3, 2009 Comments off

The Google Books settlement (which is currently being investigated by the Department of Justice, among other people) clearly includes sheet music. How you may ask? Thank your friendly librarians…and see Music Publishing and the Google Books Settlement and Why Music Publishers and their Licensees Should Care About the Google Books Settlement

The National Music Publishers Association and the Harry Fox Agency sent an alert to their members informing them of what to do that is an excellent summary of the truly bizarre situation that Google has created for songwriters and publishers around the world and is well worth reading. Actually is required reading if you are responsible for adminstering any songs, including your own.

Remember–don’t think that this just affects Americans, it doesn’t. It affects everyone.

Act now.

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