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2019 LEGAL ROUND-UP – AND WHAT IT MEANS FOR THE MUSIC INDUSTRY IN 2020

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Categories: Articles, Business, Legal Disputes, Legal Issues, Music Industry, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

By:  Erin M. Jacobson, Esq.

 

This article was originally published on Synchtank’s Synchblog.

 

It’s been an interesting year in the music legal field. Some outcomes were positive steps forward for the music industry, and some, well, not so much. Here’s a recap of some of the most talked-about legal happenings of 2019, and what they could mean for 2020.


Katy Perry’s “Dark Horse” Infringement Lawsuit

Background: Christian rapper Marcus Gray, professionally known as “Flame”, sued Katy Perry and her collaborators stating that Perry’s song “Dark Horse” infringed on his song, “Joyful Noise”. Perry and her team testified that they had never heard “Joyful Noise” and therefore could not have copied a song of which they had no knowledge. The actual musical evidence was lacking in similarity as well.  However, the jury decided against Perry and her team because (1) the songs have a similar sound repeated in them, (2) “Joyful Noise” had been nominated for a Grammy in the Christian music category, and (3) Katy Perry had once been a Christian artist before she hit pop superstardom. Perry has appealed the lawsuit and the appeal is currently pending.

What it Means: Copyright infringement lawsuits require two elements to be proved, substantial similarity and access. The two works must show enough similarity that one could attest one creator had copied the other, and the infringing party must have had access to, i.e. heard, the allegedly infringed song. Access is often proven by performance of the infringed song on the radio, a producer who worked with the both artists or their team sharing music with the infringing artist, or other similar manner of delivery. Perry and her team were found guilty of infringement despite a lack of compelling evidence for both elements.

Copyright law also allows for independent creation, meaning that two people can write songs that sound similar, despite never having heard each other’s songs. However, it seems this tenant has been forgotten in this and many other recent infringement cases.

What to Look for in 2020: While there are definitely legitimate cases of infringement, verdicts like this will encourage the filing of more frivolous cases. Many artists are already afraid that anything they create will be taken advantage of by opportunistic people looking to boost their own fame by capitalizing on the publicity of someone else’s creation. Hopefully, we will see this verdict overturned on appeal.

 

Led Zeppelin “Stairway to Heaven” Copyright Lawsuit

Background: The trustee for Randy California, the late lead singer of the band Spirit, sued Robert Plant and Jimmy Page, saying “Stairway to Heaven” infringed on Spirit’s composition, “Taurus”. Despite the fact both of these songs are decades old, the case went to trial.  In this case, there was access (Spirit had toured with Led Zeppelin in the late 1960s) and some similarity, but no infringement was found. The lawyer for California’s estate appealed, and the new decision is currently pending.

What It Means: Those in the music industry agree this verdict was correct. While California could have sued during his lifetime, he chose not to do so, and the evidence here was not compelling enough to prove the infringement claim.

What to Look for in 2020: Hopefully, the original decision will be upheld. The industry needs some precedent for correct rulings in copyright infringement cases.

 

Spotify’s Appeal of the Mechanical Royalty Rate Increase

Background: Last year, the Copyright Royalty Board (“CRB”) judges decided that music publishers and songwriters will get an increase on their mechanical royalty rates. The timing of this proceeding happened to coincide with the efforts of the music industry to pass the Music Modernization Act (the “MMA”). The digital service providers (“DSPs”), including Spotify, Pandora, Google, Apple, etc. rallied in cooperation with the music industry to pass the MMA. After the MMA was passed, the DSPs (except Apple) appealed the CRB’s decision to increase mechanical royalties.  The appeal is pending.

What It Means: The CRB decision provides for a 44% increase in mechanical royalties to songwriters and music publishers, with incremental raises from the current rates until the 44% is reached in 2022. The DSPs supported the passage of the MMA to gain immunity for being sued for copyright infringement for failure to license and pay for all of the music streamed on their services. Once achieving that immunity, they appealed the CRB decision to try to avoid paying fair rates to songwriters.

What to Look for in 2020: CRB decisions are historically difficult to overturn, so hopefully the music industry will receive the new rates it was promised. Despite the goliath size and bank accounts of the DSPs, they need to realize they cannot push the music industry around and must pay fairly for the content on which many of the them have built their businesses.

 

Passage of the Music Modernization Act

Background: The Music Modernization Act passed in October of 2018, which promised more streamlined licensing procedures for music on streaming services, a new, centralized registration database, and hopefully a better system for creators and rights owners to be paid streaming royalties. 2019 has been all about actually turning these promises into reality. The Music Licensing Collective board was elected to oversee the operations of this new structure, they negotiated the funding for the database with the DSPs, and choose a vendor to build the infrastructure and supply the data (recently revealed to be The Harry Fox Agency).

What It Means: There will be a lot of changes in data practice, and a lot of work for creators and rights’ owners to learn a new system and register their works with the new database.

What to Look for in 2020: The database is slated to roll out in beta-mode, with it planned to be fully operational by 2021.  2020 will involve a lot of data uploads.

 

Taylor Swift’s Master Recordings Dispute

Background: Taylor Swift hit it big while signed to Big Machine Records, and then moved on to Universal Music Group.  Big Machine decided to sell its catalogue of masters to Scooter Braun, backed by some investment funds. Swift and Braun have a longstanding personal beef, and when the sale occurred, Swift took to social media to express her horror at her nemesis owning her masters. Swift stated she was not given the opportunity to buy her masters back. The parties engaged in a public back-and-forth. Taylor announced she will re-record all of her old masters in 2020 once her re-recording restriction from her Big Machine contract has expired. Later, Swift said Braun was blocking her from performing her older songs on the American Music Awards and using the older music in an upcoming Netflix documentary. Another public battle ensued, with Swift ultimately being able to perform as planned.  Now stories have emerged that Swift is denying all licensing requests for her music until she is able to re-record her masters in 2020 and then will resume licensing with masters she owns.

What It Means: Regarding the American Music Awards performance, this is the first time that a record label has publicly argued that a recorded television performance violates a contractual re-recording restriction, when normally that restriction is limited to recording new audio masters. When Swift does re-record her masters, it could negatively impact Braun’s recoupment of his investment. This dispute has opened the eyes of many artists as to what they may give up when signing a record deal, and there is a growing trend toward artists seeking to retain master ownership.

What to Look for in 2020: Swift will most likely continue with her plan to re-record her masters. More public mudslinging may ensue. Artists overall will increasingly seek opportunities that allow them to retain master ownership.

 

Overall, 2020 will see a lot of changes in the music industry. Hopefully, the results will be just as exciting as the anticipation for their arrival.

 

 

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Radio Seeks to Pay Songwriters Lower Rates — Again (Forbes.com)

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Categories: Articles, Business, Legal Disputes, Legal Issues, Music, Music Industry, Music Industry Interviews, Performance, Royalties, Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Radio Seeks to Pay Songwriters Lower Rates — Again

By:  Erin M. Jacobson, Esq.

This article was originally published on Forbes.com.

A committee representing roughly 10,000 commercial radio stations has sued performance rights organization Global Music Rights (“GMR”) in an effort to further reduce the amount radio stations pay to music composition creators and rights owners for performances of their works. This committee is the Radio Music Licensing Committee (“RMLC”) and it claims that GMR has created an artificial monopoly over works in its repertoire.

Performance rights organizations (“PRO’s”) are organizations that track and collect performance royalties on behalf of songwriters and music publishers. In the United States, there are four PRO’s: ASCAP, BMI, SESAC, and GMR. ASCAP and BMI are the two largest U.S. PRO’s and are also non-profit organizations. Since 1941, ASCAP and BMI have been subject to consent decrees issued by the Department of Justice. These consent decrees are agreements that allow the government to regulate ASCAP and BMI’s license fees and how they operate in order to prevent monopolization and encourage competition. SESAC and GMR are both independent, privately owned companies that operate on a for-profit basis and are not subject to consent decrees.

Music industry mogul Irving Azoff founded GMR in 2013 in order to provide a more boutique experience for managing performance rights licensing and potentially command higher rates for the performances of works in its repertoire, which includes compositions written and/or performed by artists such as Adele, The Beatles, Pharrell Williams, Katy Perry, Madonna, and many more.

Because GMR is not subject to a consent decree, it can deny a license to perform the works in its repertoire and can also negotiate license rates as it sees fit. The RMLC argues that the license fees required by GMR are exorbitant and seeks to lower them by forcing GMR to submit to judicial rate-setting proceedings, which would require a judge to mandate the rates GMR can charge its licensees. This is similar to procedures mandated for ASCAP and BMI, but without subjecting GMR to a full consent decree. The RMLC previously filed a similar suit against SESAC and reached a settlement in the RMLC’s favor.

Terrestrial radio makes its money on advertising revenue, and while radio is far from dead, it no longer holds the status of its heyday. Terrestrial radio and other broadcasters regularly fight to reduce license fees, as terrestrial radio lobbyists were also part of the group in favor of the Department of Justice’s crackdown on ASCAP and BMI’s licensing platforms, the outcome of which is still pending.

Most observers of this situation usually fail to mention that the public perception of radio’s purpose is music promotion. Without music driving the listenership of certain stations, those particular stations would not earn the ad revenue from advertisers who want to reach those stations’ listeners. However, the stations repeatedly seek to reduce compensation to the songwriters and music rights owners that create the very music that establishes their listenership and drives their revenues.

Terrestrial radio isn’t the only industry trying to reduce payments to music creators and rights’ owners. Those of us who regularly handle music licenses know that attempts to undervalue music also come from Internet and digital companies, as well as small bars and restaurants. Visual productions seeking synchronization and master use licenses also regularly try to lowball license fees or request gratis uses.

It is up to music creators and rights’ owners to value music (#valuemusic) and require proper payment for uses of their music, and to those that use music to recognize the value that music brings to their project or 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 catalogues, 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.

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June Music Legal and Business Roundup

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

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Image via freeimages.com

Here’s a recap of my article’s this month:

 

The most talked-about topic in the music legal world this month was certainly the copyright infringement case where band Spirit is sued Led Zeppelin over allegations that “Stairway to Heaven” infringed on Spirit’s song “Taurus.”  The good news is that Led Zeppelin Wins ‘Stairway to Heaven’ Jury Trial!

Here’s a recap of the week’s trial coverage:

What was also exciting is the recent push by artists to urge online content providers like YouTube to #valuemusic.  This call to action also involves the request to reform the Digital Millennium Copyright Act (DMCA) which allows safe harbor provisions for YouTube and other online content providers.

In other news, those on the other side of the spectrum are filing lawsuits to force certain musical compositions into the public domain so that they don’t have to pay the license fees for them.  This is one of a few lawsuits to follow the “Happy Birthday” case.  This is certainly not a way to #valuemusic.