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Pandora’s Answer in Wixen v. Pandora (Lyricfind): Can you ever find what you don’t look for?

August 31, 2019 Comments off

Remember Wixen Music Publishing sued Pandora over Lyricfind’s purported license for song lyrics.  The case is being heard in Los Angeles before District Judge Stephen V. Wilson.   (If that name rings a bell, he was the trial judge in Metro-Goldwyn-Mayer Studios, Inc. v. Grokster.)

Specifically, Wixen makes this allegation in paragraph 5 of the complaint (my emphasis):

Pandora may claim that it had obtained licenses to display the lyrics to the Musical Compositions from one or more sources, including an entity called LyricFind, the self-proclaimed “largest lyric licensing service” in the world, which  claims that it “has licensing from over 4,000 music publishers, including all majors.” However, as Pandora knows, and has known, LyricFind did not have the authority to grant licenses to Pandora for the display of any of the lyrics to the Musical Compositions on its service.

Pandora has now answered Wixen’s complaint, which is pretty much the typical “we deny everything those guys said” type approach with one exception that caught my eye.  It could be nothing, but it is an odd phrasing to me.

In response to paragraph 5 of Wixen’s complaint, Pandora responds to Wixen’s allegations (also in paragraph 5 of the Answer, my emphasis):

The allegations of Paragraph 5 [of the Complaint] contain speculation and conclusions of law to which no responsive pleading is required. To the extent a response is required, Pandora: (i) lacks information and belief as to the allegation that LyricFind is “the self-proclaimed ‘largest lyric licensing service’ in the world, which claims that it ‘haslicensing from over 4,000 music publishers, including all majors,’” and on that basis denies such allegation, (ii) lacks information and belief as to whether LyricFind had the “authority to grant licenses to Pandora for the display of any of the lyrics to the Musical Compositions on [Pandora’s] service”, and on that basis denies such allegation, and (iii) denies the remainder of the allegations of Paragraph 5.

Maybe this is a nothing issue and maybe I am over-thinking it.  God knows this would not be the first time that happened.  However, I do find it an odd phrasing.

Wixen’s allegation was that Pandora knew that LyricFind did not have authority to grant Pandora the rights to Wixen-represented songs.  How might Wixen think Pandora “knows and has known” LyricFind did not have the rights?  A simple explanation might be because Wixen told them so, and probably told them so more than once.  In fact, I would not be surprised if Wixen told them so repeatedly while Pandora disregarded Wixen and continued to exploit the song lyrics at issue.  (And this is the primary reason these companies get sued in my experience.)

Note that there is no qualifier on this allegation by Wixen such as “on information and belief” which usually means that the speaker is not speaking from first hand knowledge, but rather something they have been told and that they believe at the moment of utterance.  This is kind of like saying “our client informs us that….”

Pandora’s response is not “we have a contract with LyricFind in which they represent they have the rights” or better yet, “LyricFind has provided Pandora with the underlying license from Wixen demonstrating that they have the rights.”  Remember, this is arguably a core issue in the Wixen case, if not the core issue:  Did Pandora reasonably rely on their license with LyricFind that represented that LyricFind had the rights to Wixen’s catalog?  Or, did Pandora have actual knowledge that LyricFind did not have the rights to Wixen’s songs?

At this point, it is hard to know the answer to either of these questions definitively.  But–it does seem that if LyricFind did have the rights, and assuming LyricFind’s license to Pandora was otherwise solid, isn’t it kind of game over at that point?  Wouldn’t you think Pandora would be screaming it from the rooftops?

Instead, Pandora seems to be saying it lacks first hand knowledge of what authority LyricFind had to grant rights to Pandora, and on the basis of their lack of knowledge denies Wixen’s allegation (the apparent antecedent of “that basis” in the Answer).  Which I guess means that they haven’t asked LyricFind, and that’s kind of the dog that didn’t bark.  Wouldn’t you think they’d make it their business to find out?  Perhaps even long ago?  But to put a bit finer edge on it, perhaps a bit uncharitably, can you ever find what you don’t look for?

Wixen, of course, can very likely discover through a subpoena or deposition what communications exist between Pandora and LyricFind on this issue, so if they did talk about it, it’s only a matter of time until it comes out, unless they can somehow keep those communications from discovery which I doubt.

Not taking anything away from Wixen Music Publishing, but this case is quite interesting because it could have wider ranging ramifications–if LyricFind did not have the rights to license Wixen repertoire to a client the size of Pandora but did so anyway, how many others are caught up in that mess?  That’s a pickle of a whole different water, to mix a metaphor.

Status conference with Judge Wilson on September 9, stay tuned.

Wixen Music Publishing Lawsuit Against Pandora Raises Questions About Lyric Licensing

June 19, 2019 Comments off

In the “it was only a matter of time” department, Wixen Music Publishing has sued Pandora over infringing reproductions of the lyrics in songs it represents.  (For those reading along at home, Wixen is represented by badass David Steinberg, so good luck Pandora.)

All these cases against tech companies start with very similar facts–they were given a chance to fix the problem and they either entirely ignored the copyright owner (like David Lowery and Bluewater) or they obfuscated and tried to deflect blame, or did both.  Here’s the key fact from this Wixen case:

Plaintiff’s representatives put Pandora on actual notice of its infringing conduct in early 2018, yet Pandora did not even attempt to address its infringing conduct until May 2019, when it first purported to cease displaying some of the lyrics to the Musical Compositions on its service….Pandora’s infringement is therefore willful and deliberate.

In other words–Pandora apparently blew off its responsibilities for over a year and still didn’t fix the problem.  Here’s a practice point–when Wixen or someone like Wixen calls, you need to fix your problem.  Right. Now.

But this case raises an interesting side point that may indicate a likely waypoint down the trail.  There is a company called LyricFind that licenses lyrics for many publishers according to their advertising.  Wixen notes in the complaint:

Pandora may claim that it had obtained licenses to display the lyrics to the Musical Compositions from one or more sources, including an entity called LyricFind, the self-proclaimed “largest lyric licensing service” in the world, which claims that it “has licensing from over 4,000 music publishers, including all majors.” However, as Pandora knows, and has known, LyricFind did not have the authority to grant licenses to Pandora for the display of any of the lyrics to the Musical Compositions on its service.

How does Pandora know this?  Probably because Wixen (and possibly other publishers) told them so.  It’s entirely possible that Pandora has a license with LyricFind for the songs it represents, but if Wixen hasn’t authorized LyricFind to represent them for lyric licensing (which they evidently have not), then this is an irrelevant fact.

I have to believe until shown otherwise that LyricFind would be the first to tell their licensees that LyricFind does not purport to license all the lyrics for every song ever written or that ever may be written in any language from any songwriter or publisher in any country on the face of the Earth.

The problem seems to be the same problem that Big Tech has had with music from the beginning–the tech companies don’t want to have to confirm their rights because that involves human beings and human beings costs money.  It’s this dismally poor administration of licenses by the licensees that seems to be the stumbling block.

However, it does make for interesting viewing to see exactly what was said by whom when about what, and what assurances were given.  My bet is that the next step will be like the Music Modernization Act–a retroactive safe harbor with a blanket license and a statutory monopoly.

Read the Wixen complaint here.

Fair Pay, Fair Fight: Will the Circle Be Unbroken for Artist Airplay Royalties?

January 31, 2019 Comments off

The Music Modernization Act brought fairness to pre-72 artists who waited 20 years for the government to confirm what everyone knew—that non interactive digital music services like Pandora and Sirius should be paying them performance royalties like everyone else.  Not that they didn’t try–Liberty Media’s lobbyists tried to administer an 11th hour beat down of old guys and dead cats in the Senate in the waning hours of the Music Modernization Act in an unholy alliance with Big Tech in that very special DC room of mirrors led by Oregon Senator Ron Wyden.

So what makes anyone think that we’ll get fairness without a fight after the merger of Sirius and Pandora announced this week, since parent corporation Liberty Media has now managed to consolidate its hold on 34% of LiveNation “…creates what the companies call the world’s largest audio entertainment company…Policy experts also say the merger empowers a company that’s aggressively fought to suppress royalty payments for artists and copyright holders.”

Now that the CLASSICS Act, as inserted in the omnibus MMA, confirmed that those pre-72 artists are entitled to their non interactive royalties, we can recognize that treating pre-72 artists fairly was just another fake concession dreamed up by digital services starting with Sirius and Pandora (and their lobbying group, the Digital Media Association) for something that should have never happened in the first place.  Now we can all turn back to the real test of fundamental fairness—terrestrial performance royalties.

Why wasn’t this fundamental right included in the MMA?  In the run-up to the initial version of the MMA (before CLASSICS and AMP were added to create the omnibus bill that passed), we were all told by the bill’s sales team to forget ever getting a terrestrial royalty.  It was something that was simply never going to happen because the lobbying power of the MIC Coalition was simply too strong.

Bunk.

If you’ve never heard of the MIC Coalition, it is a lobbying group that was assembled in 2015 for the purpose of stopping the Fair Play Fair Pay legislation introduced in the House of Representatives by now House Judiciary Chairman Jerry Nadler.  Google, of course, is a founding member of the MIC Coalition alongside Amazon, NPR, iHeart Media, Pandora, Salem Media Group, Cox Media Group, the NRB Music Licensing Committee, the American Hotel & Lodging Association, the National Association of Broadcasters, the National Restaurant Association, the National Retail Federation, the Educational Media Foundation, the Computer and Communications Industry Association, the Consumer Electronics Association (now Consumer Technology Association) and of course the Digital Media Association.

mic coalition first logo

Shortly after the MIC Coalition was founded, Amazon and NPR resigned from the organization and the Radio Music License Committee, the Brewers Association, and Wine America joined.  Then individual companies removed their logos and the public facing membership became only the trade associations.

mic coalition logo

It must be said, of course, that the MIC Coalition is a Goliath-like array of lobbying muscle.  But that’s kind of the point.  Even so, you’d be a fool not to take it very seriously.  Now for some of the Washington folk, this may seem like time to run up the white flag before Longshanks.  But I’m happy to say that the neither the I Respect Music campaign nor the MusicFirst Coalition have flinched, and I’m just Texan enough to call that a fair fight.  I fully expect that now-Chairman Nadler will want to revisit his Fair Play Fair Pay legislation in the coming days of the new Congress.  We’re behind him 110%.  I for one am ready for the fight and craving the fray.

This new battle was joined with A2IM CEO Richard James Burgess in an op-ed last November that summed up the status quo:

The musicFIRST coalition (A2IM, AFM, Recording Academy, Sag-AFTRA,
SoundExchange, RIAA), has been in negotiations with the NAB (National Association of Broadcasters) under House Judiciary Committee Chairman Goodlatte’s guidance. The objective was a consensus agreement, which the Chairman would enshrine in legislation. Legislation is essential to ensure that artists, musicians, singers, producers, and labels are not only paid for U.S. airplay but also from spins in the rest of the world. It is estimated that these U.S. creators and the U.S. economy are losing hundreds of millions of foreign-trade dollars each year because the NAB has so effectively blocked this legislation.  If such a law should pass, the U.S. would no longer be aligned with countries like North Korea, China, and Iran in suffering a radio industry that doesn’t compensate creators.

Sadly, NAB CEO, Gordon Smith, telegraphed radio’s true intentions on April 9 when he cited “Five Big Wins,” with number three being, “We again fought back attempts by the record labels to tax radio stations simply for promoting and playing the music listeners love to hear.”  In the same speech he boasted, “And, most recently, broadcasters were instrumental in securing $1 billion in legislation passed by Congress to reimburse radio and television stations for their costs during the spectrum repacking process, ensuring viewers and listeners don’t lose access to their stations.”

I find it fascinating that Smith has the gall to refer to a small royalty for the use of our music as a tax (a tax is paid to the government, not to property owners, for the use of their property). Then, in the next breath, he bragged about extracting a billion dollars from our government for the radio industry.

Music on the radio has enriched listeners’ lives and built empires for some radio station owners. We call on Congress to ensure that U.S. music artists and their funders are finally paid their fair share. Let us not enter a second “Century of Shame.”

And SoundExchange CEO Mike Huppe’s Billboard op-ed last December was another call to arms for fair treatment:

Efforts by the music industry to find a common ground of “fairness” with the broadcasters have thus far failed. That is why we need to heed Frank Sinatra’s call to organize and demand that Congress pass legislation to give creators royalties when their music is played on terrestrial radio.

Like the MMA, the terrestrial radio royalty will be a heavy lift in Washington, no joke–particularly after the consolidation of Sirius and Pandora.  And like the MMA, I suspect it will take everyone’s efforts to make it happen.  Unlike the MMA, it’s not an omnibus bill that cuts across our industry with something for almost everyone.  The only reason the MMA didn’t contain the terrestrial royalty is because the consensus view—not mine, but I went along with it—was that terrestrial was a bridge too far.  Now that everyone else got theirs with MMA, the question is who will remember that deal and who will forget their obligations.

We, of course, will be where we always are.  That’s not the question, though.  The question is what is the rest of the MMA coalition prepared to do?  I, for one, certainly know what my expectation of them is going to be, no flinching and no excuses.  We will be watching to see if the circle remains unbroken the next time we are called to stand up and be counted.

And if they don’t we’ll go it alone.

 

 

(A version of this post first appeared in MusicTechPolicy Monthly newsletter.)

Holding the Line on Tradeoffs for Statutory Damages

October 1, 2017 1 comment

It is very likely that we will hear about a move to make significant amendments to the Copyright Act at some point before the beginning of campaign season in 2018.  There are a high number of copyright-related bills that have been introduced in the House of Representatives in the current session, so brace yourself for an “omnibus” copyright bill that would try to cobble them all together Frankenstein-style.

A Frankenstein omnibus bill would be a very bad idea in my view and will inevitably lead to horse trading of fake issues against a false deadline.  Omnibus bills are a bad idea for songwriters and artists, particularly independent songwriters and artists, because omnibus bills tend to bring together Corporate America in attack formation.

MIC Coaltion

The MIC Coalition

When you consider that Google and Facebook are part of Corporate America (not to mention Apple), the odds of the independent songwriter and artist, but really any songwriter and artist, just holding onto the few crumbs they currently have crash and burn.  The odds of actually righting wrongs or–God forbid–getting rid of the legacy consent decrees that protect Big Business vanish into the limit.

Of course, what certain elements of Big Tech would really like to do is push all licensing of music into one organization that they could then control through consent decrees or other government regulation and supervision by exercise of the massive lobbying and litigation muscle of the MIC Coalition and DIMA.  While I realize that may actually sound anti-competitive, it is typical of monopolists to use the antitrust law to destroy competition (as Professor Taplin has taught us).   That’s certainly what has happened with the PRO consent decrees–reduced competition and lower royalties.  Not to mention such a licensing organization would collapse under its own complexity.  This is probably why the Copyright Office envisioned a “Music Rights Organization” that would combine the PROs and mechanical rights licensing but provided the relief valve of an new opt-out right so that songwriters could escape the madness.  (“Under the Office’s proposal, except to the extent they chose to opt out of the blanket statutory system, publishers and songwriters would license their public performance and mechanical rights through MROs.”  Copyright Office Music Licensing Study at p. 9)

If you want some ideas about the kinds of property rights that Big Tech wants the government to take away from songwriters and artists, just read Spotify’s most recent filing in the songwriter litigation in Nashville where their lawyer tries to define away mechanical royalties (unsurprisingly, the lawyer is a long-time protege of Lessig).  Why?  Because they are being brought to a trial by their peers on statutory damages for copyright infringement and the potential for having to pay the songwriters’ lawyers due to a statutory right to recover attorneys fees.  (Statutory damages for copyright infringement has long been an attack point of Big Tech and we get a preview of where they want it to go in Pamela Samuelson’s “Copyright Principles Project”–essentially abolished.)

One way or another, the Big Tech cartel (which includes all the companies in the MIC Coalition and MIC Coalition member the Digital Media Association which itself has members like Spotify and, curiously, Apple) is very likely going to go after statutory damages and try to create yet another “safe harbor” for themselves with no burdens–a “friction free” way to infringe pretty much at will because the actual damages for streaming royalties will be pennies.

If the cartel succeeds in eliminating statutory damages and attorneys fees awards, this will truly make copyright infringement litigation toothless and entirely eliminate the one tool that independent songwriters and artists have to protect their rights.  It will neuter massive copyright infringement as alleged in all of the Spotify class actions, not to mention cases like Limewire.

Oh, you say–did you just switch from song copyrights to sound recording copyrights by referencing Limewire?  Yes, I did–because that’s exactly what I predict the DIMA and MIC Coalition have in mind.  Why do I say this?  Because that’s what these companies are backing in the radioactive Transparency in Music Licensing and Ownership bill (HR 3350).  And if you blow up all the current separate bills into one omnibus copyright “reform” bill, the pieces may reconstitute in forms you didn’t expect.

But realize that in almost all the many copyright bills currently before the House of Representatives, the other side is trying to bootstrap unjust harm into a negotiation chip to shakedown creators.  And it’s not just pending legislation–the shakedown is especially observable with the millions of notices of intention to rely on statutory mechanical licenses for songs filed with the Copyright Office.  That’s a nice song you got there, it would be a shame if something happened to it.

Big Tech’s basic negotiation method is to rely on a loophole, bootstrap the loophole to build up the pressure on people who can’t fight back, then run the shakedown to get concessions that should never be made.  This is what Google has done with the DMCA and is the same shakedown tactic on mass NOIs taken by Google, Amazon, Pandora, Spotify, and others–but curiously not Apple.  Somehow Apple has made it work with the most successful digital music platform in history.

Let’s go down the issue list:

Bootstrapped Issue Fix Bill
Pandora and Sirius stopped paying artists for digital royalties on pre-72 recordings—because of loophole based on federal copyright protection for sound recordings Start paying artist royalties on classic recordings made before 1972 CLASSICS Act
Terrestrial radio created a loophole so they don’t have to pay performance royalties to artists on sound recordings; stop artists from opting out Start paying artist royalties for broadcast radio (with protection for noncommercial and small broadcasters) Fair Pay Fair Play Act, PROMOTE Act
Big tech suddenly started using a loophole to file millions of “address unknown” NOIs with Copyright Office after indie songwriters filed class actions Require Big Tech to use existing databases to look up copyright owners or don’t use the songs or recordings. None
No “central database” that has all songs (but no requirement to actually look up anything), requires double registration If songwriters and artists don’t register, then no statutory damages Transparency in Music Licensing and Ownership Act

Blown up into parts:

–Avoid raising mechanical royalty rate or paying artist royalties on terrestrial at all

–How to use the lack of the mythical “central database” as a bright and shiny object to avoid paying royalties and shirk liability for not doing copyright research, an absurd position for companies that owe much of their wealth to their unprecedented ability to profile people around the world and “organize the world’s information”

–Avoid paying statutory damages

–How to avoid paying royalties that should have paid anyway (pre-72, terrestrial, mass NOI) through distorted interpretations of the law or even safer harbors

–Avoid an obligation to actually look up anything (new databases)

–Use any work they want if all they have to pay is actual damages and no attorneys fees

–Keep songwriters and artists from opting out

–Create biggest black box possible

It should be apparent which way Big Tech is trying to push the creative community.  It is important for creators to understand that any legislative concession that the MIC Coalition or DIMA win against songwriters or artists they will then turn around and try to extract in the next shakedown–authors, photographers, film makers, all the copyright categories.

It is in everyone’s interest to support a healthy creative community that will continue to engage fans and do enough commerce to create value for the tech monopolies.  But–it is crucial to understand that it doesn’t work the other way around.

The purpose of the creative community is not to create value for tech monopolies.  It is to support compelling artists and help them engage with fans, and sometimes it is art for art’s sake alone.  If those artists throw off some commercial gain that the tech monopolies can turn to profit themselves, fine.  But creating profit for these monopolists is not the goal of artists.

Instead of creating fake problems to try to extract concessions that further undermine creators like offering ice in winter, the tech monopolies like Google, Spotify, Amazon and Pandora should identify real problems and work with us toward real solutions–and not a loophole-driven shakedown.

 

 

Hey Alexa, Where’s My Money? Address Unknown Update Courtesy of Paperchain

July 17, 2017 1 comment

We get an update this week on the total “address unknown” mass NOIs filed with the Copyright Office for the royalty-free windfall loophole.  This time we have to thank our our friends at Paperchain in Sydney for doing the work of decompressing the massive numbers of unsearchable compressed files posted on the Copyright Office website.  As you can see, there’s been an increase of approximately 70% since January 2017.   (For background, see my article.)

As you can see, Amazon is still far and away the leader in this latest loophole designed to stiff songwriters, followed closely by Google.  However, Spotify is moving on up.  Spotify does get extra points for starting late in March 2017, but they are catching up fast filing over 5,000,000 as of last month.

To put this in context–the Copyright Office as recently as September 2015 posted these “address unknown” NOIs in a single searchable PDF.  However, the Copyright Office  apparently changed the practice abruptly in early 2016 once the Big Tech hammer came down.  Based on the last PDF I could find, the total number of “address unknown” NOIs filed with the copyright office from January 2010 to September 2015 was approximately 4,800.

NOI 2015 Era Date Detail

Compare that approximately 4,800 in five years to approximately 45 million in 18 months.

Notable in its absence:  Apple Music has not filed a single address unknown NOI.  Somehow Apple seems satisfied with their licensing practice based on an absence of a single NOI.

NOI Table
Licensee Paperchain 4/16-6/17
Total 45,856,225
Amazon Digital Services 23,977,548
Google, Inc. 10,386,238
Spotify 5,020,002
Microsoft 3,522,100
iHeart Communications 1,565,763
Pandora Media, Inc. 1,316,512
The Overflow.com Inc. 66,326

Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 1) — Music Tech Solutions

September 29, 2016 Comments off

Google, Amazon and MRI are reportedly filing “millions” of NOIs with the Copyright Office after buying data out the back door of the Library of Congress–all to avoid paying statutory royalties.  This takes “carpet bombing NOIs” to a whole new level of hurt for songwriters, and forces the Copyright Office to be complicit in the wholesale rip off.

via Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 1) — Music Tech Solutions

@hannajkarp: Will Pandora Be Allowed to Create A Spotify-Style Black Box for Songwriters AND Screw pre-72 Artists? — Artist Rights Watch

August 22, 2016 Comments off

 

Members of MIC Coalition That Lobbied DOJ for Changes to ASCAP and BMI Consent Decrees

 

Songwriters are about to allow another digital service to launch with all the makings of another Spotify-style black box.  How will Pandora use the new Copyright Office NOI filing rules to screw songwriters and will foreign societies allow a US user to benefit from blanket licensing when it is not fully licensed in the US?

via @hannajkarp: Will Pandora Be Allowed to Create A Spotify-Style Black Box for Songwriters AND Screw pre-72 Artists? — Artist Rights Watch

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