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How Spotify Has Waged War With The Music Industry

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Categories: Articles, Copyright, Music Industry, Music Publishing, Royalties, Streaming, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By:  Erin M. Jacobson, Esq.

This article was first published on Forbes.com.

Spotify has waged a war with the music industry. The streaming company has a history of not paying mechanical royalties to songwriters and music publishers, and has already settled two separate class action lawsuits for failure to pay mechanical royalties – the first brought on behalf of music publishers by the National Music Publisher’s Association (NMPA) and the second, known as the Lowery/Ferrick case, brought by independent songwriters. Now, a host of top songwriters, including Tom Petty and members of Rage Against the Machine, Weezer, The Black Keys, and more, have come forward urging the court not to approve the terms of the Lowery/Ferrick case. These songwriters oppose the settlement amount in the Lowery/Ferrick case because when the costs are broken down, Spotify’s liability for not paying mechanical royalties would be to pay a mere $3.82 per infringed composition. The maximum liability under the law for copyright infringement is $150,000 per infringed composition. Quite the difference.

As I previously reported, Spotify was also hit with two independent lawsuits – again for failure to pay mechanical royalties — brought by songwriter/publisher Bob Gaudio and music administrator Bluewater Services Corporation. Even more recently, seven other music publishers have sued Spotify for the same violation.

The Gaudio/Bluewater suits accused Spotify’s practices being reminiscent of Napster, which caused Spotify to fire back with the outrageous claim that Spotify should not have to pay mechanical royalties to songwriters and music publishers at all. More realistically, Spotify has argued that copyright law does not define streaming and places the burden on the plaintiffs to show that Spotify is creating a “reproduction” and therefore required to pay mechanical royalties.

As I explained in my last article, streaming requires several licenses – sound recording licenses from the record labels; performance licenses for the compositions from performance rights organizations such as ASCAP and BMI; and mechanical licenses for the reproduction of the compositions. Spotify now argues that it is akin to other streaming services like Pandora, who only have to pay performance royalties. However, Spotify’s argument is flawed for several reasons.

  • First, Pandora and similar services online radio services are classified as non-interactive services because a user cannot choose to listen to a specific song on demand. This is similar to terrestrial radio, except it’s online instead of on the FM dial. In contrast, a Spotify user can choose and play any song the user wishes on demand, which makes Spotify an interactive service. Copyright law makes important distinctions between non-interactive and interactive services, and for the relevant purposes here, the most important difference is that non-interactive services are only required to pay performance royalties (as the use is only a performance, again, like terrestrial radio) and interactive services are required to pay both performance and mechanical royalties (because the nature of the technology actually consists of a reproduction of the data file in addition to the performance itself). Therefore, Spotify cannot rely on the requirements of a separately classified type of service when those requirements don’t apply to Spotify’s service.
  • Second, Spotify has previously stated that it “needs” mechanical rights as part of its operations and has argued in rate court proceedings to weigh in on what mechanical rate amounts it should have to pay. It is both hypocritical and faulty reasoning for Spotify to say it needs certain rights and subsequently argue the opposite.
  • Third, Spotify has previously settled the two class action lawsuits mentioned above in order to rectify its previous non-payment of mechanical royalties. Spotify’s excuse in these cases was that it was too difficult to pay everyone owed due to the lack of a comprehensive music industry database. Once again, Spotify previously accepted that it needed to pay mechanical royalties, but made excuses for its failure to do so, which is in direct opposition to its current claim that it does not need to pay mechanical royalties at all.
  • Fourth, the music industry has long ago come to a consensus that an interactive stream does require a mechanical license and there is evidence that Spotify actually does create reproductions of the files, specifically on users’ mobile phones.

While Spotify’s argument that a stream does not require a mechanical license was recently rejected in court, Spotify can still continue asserting that argument going forward. If a legal decision in Spotify’s favor set a precedent on this issue, it could mean massive losses of income to songwriters, music publishers, and the music industry as a whole. While there are several theories as to why Spotify has taken this approach, the simplest answer seems the most obvious – Spotify doesn’t want to pay. The scariest part of this whole situation is that with Spotify’s massive amount of funds, it has the power to continue litigating this issue with efforts to change the laws and practices of the industry to conform to its unwillingness to pay for the music it uses. It is unacceptable that Spotify has built its entire business on the usage of music content, but yet continually tries to get out of paying for the very content that sustains its customer base. Without music, there is no Spotify and it’s time Spotify stopped making excuses and started to value the music that built its business.

*This article does not constitute legal advice.

Erin M. Jacobson is a music attorney whose clients include Grammy and Emmy Award winners, legacy clients and catalogs, songwriters, music publishers, record labels, and independent artists and companies. She is based in Los Angeles where she handles a wide variety of music agreements and negotiations, in addition to owning and overseeing all operations for Indie Artist Resource, the independent musician’s resource for legal and business protection. Ms. Jacobson also serves on the boards of the California Copyright Conference (CCC) and Association of Independent Music Publishers (AIMP).

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How Do You Prove That Someone Stole Your Song?

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Categories: Articles, Copyright, Infringement, Law, Legal Disputes, Legal Issues, Music, Music Industry, Tags: , , , , , , , , , , , , , , , , , , , ,

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Image via hivesociety.com

A lot of musicians email me claiming they have great cases for copyright infringement. Copyright infringement does happen, but there are more people who think they have a case than those who actually do. (Please note that I am not a litigator and the below explanation is only a general overview of the basic principles in a copyright infringement suit. Actual cases may include nuances not discussed in this article.)

In order to sue for copyright infringement, you must have your work’s copyright registered with the United States Copyright Office. You can register your works yourself (the online registration fee is about $35), but I recommend an attorney like me or a service like Indie Artist Resource to file the registration for you, as some of the questions and principles covered in the application can be confusing.

Keep in mind that under copyright law, two similar works can be created independently of each other without infringement. For example, two independent musicians on opposite sides of the country could create original and copyrightable songs that sound very similar to each other, without knowing each other or ever hearing each other’s music. After all, there are only so many notes and chords that can be played.

However, if you do feel someone has actually infringed your music, you will have to prove that you have a valid copyright and your work was sufficiently original to warrant the validity of that copyright. Next, you will have to show that the alleged infringer copied your work. The analysis for infringement involves examining these three areas:

1. Direct copying
Here, you would have to show that the accused infringer directly copied the first work when creating his subsequent work. There is often no way to show direct copying, so the courts will instead look at the next two areas described below.

2. Access
When direct copying cannot be proven, courts will often infer that copying occurred if it is shown that the accused infringer had access to the allegedly infringed composition. This can be proven by showing that someone had direct access to your work, such as if you gave a copy of the song directly to the alleged infringer, or gave it to someone who had access to that person, like a producer or label executive.

Access can also be shown if the prior work is widely disseminated, such as a famous hit played on the radio and well known by the public. Here’s an example of how access was surprisingly proven in a real case: In Bright Tunes Music Corp. v. Harrisongs Music, Ltd.,[1] George Harrison’s song “My Sweet Lord” was deemed to infringe on the song “He’s So Fine” recorded by The Chiffons in 1962.[2] The court didn’t require actual proof that Harrison had heard “He’s So Fine” before; it relied on the fact that “He’s So Fine” had the top position on the Billboard charts in the U.S. for five weeks and hit No. 12 in England in 1963[3] – coincidentally at the same time The Beatles were becoming famous.[4]

The court concluded that Harrison unconsciously plagiarized “He’s So Fine” when he composed “My Sweet Lord” because “his subconscious knew [the musical combination of notes] had worked in a song his conscious mind did not remember.”[5] The court went on to further conclude that it did not believe Harrison deliberately copied the song,[6] but ruled against him anyway because access to “He’s So Fine” was assumed due to its fame and the two songs had enough similarities to satisfy the court.[7]

Therefore, if you have written a song, but it is not well known by others and you have not given it to someone where you can show a direct connection to the person who supposedly copied your song, you don’t have a case. It’s not enough to write and record a song that only a small number of people have heard, and then try to file a lawsuit when something shows up on the radio that you think sounds similar, when in reality you have no proof to show the other person even knew of your song.

3. Substantial similarity
The third analysis looks at the similarities, if any, between the two songs. If the degree of access to the first song is high, the amount of proof required to show similarity between the two songs will be lower than if there was not easy access to the first song.

Here, a court will look objectively at which parts of the first song were allegedly copied, such as the melody, lyrics, etc. A court will also look at the subjective opinion of lay listeners, which is basically whether the average person would think the two songs sounded the same or similar enough when listening to them both.

This point in the analysis is where many people argue that it is supposedly acceptable to copy three notes of an existing composition or sample three seconds or less of an existing recording without infringing copyright. In fact, there are no such rules allowing this practice. Infringement is infringement.

If you have looked at the facts and can truly show that someone has either directly copied your song or has had access to your song, and their song is very similar to yours, then you will need to contact an entertainment/copyright litigator to discuss the potential merits of your case. Keep in mind that these lawyers do expect to get paid for their services, although there are a few who may be willing to take important cases on a contingency. Check with the lawyer on his or her practices.

Footnotes:
[1] Bright Tunes Music Corp. v. Harrisongs Music, Ltd., 420 F. Supp. 177 (1976).
[2] Id.
[3] Id. at 179.
[4] Id.
[5] Id. at 180.
[6] Id. at 181.
[7] Id.

This post was originally published at Sonicbids.com.

Disclaimer: This article is for educational and informational purposes only and not for the purpose of providing legal advice. The content contained in this article is not legal advice or a legal opinion on any specific matter or matters. If this article is considered an advertisement, it is general in nature and not directed towards any particular person or entity. This article does not constitute or create a lawyer-client relationship between Erin M. Jacobson, Esq. and you or any other user. The law may vary based on the facts or particular circumstances or the law in your state. You should not act, or fail to act, upon this information without seeking the professional counsel of an attorney licensed in your state.