Author: David Newhoff

David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

Spotify in Songwriters’ Crosshairs Again

In July, two new lawsuits were filed against the streaming service Spotify, alleging willful copyright infringement on a “staggering scale.”  Publisher Bluewater Music Services and songwriter, musician, and producer Robert Gaudio (formerly of The Four Seasons) both accuse the streaming service of infringing the reproduction and distribution rights of songwriters by failing to obtain mechanical licenses for several thousand songs represented by the two complainants combined. 

In late August, Spotify filed a motion with the court alleging that the complainants were treating their service as though it were “a new Napster,” asserting that the complaints are unclear in their allegations, and, therefore, requested a More Definite Statement. Spotify further indicated that they are prepared to defend themselves if the complainants can more clearly articulate exactly what Spotify is supposed to have done.  States Spotify …

“Plaintiffs allege that Spotify “reproduce[s]” and “distribute[s]” Plaintiffs’ works, thereby facilely checking the boxes to plead an infringement of the reproduction and distribution rights. But Plaintiffs leave Spotify guessing as to what activity Plaintiffs actually believe entails “reproduction” or “distribution.” The only activity of Spotify’s that Plaintiffs identify as infringing is its “streaming” of sound recordings embodying Plaintiffs’ copyrighted musical compositions.”

The Gaudio and Bluewater complaints lay out a broad narrative that accuses Spotify of building a multi-billion-dollar business while knowingly exploiting thousands of songs over a period of years without obtaining mechanical licenses, hence the “don’t call us Napster” response from Spotify. The complainants further state that the $43-million settlement resulting from a class-action suit brought by David Lowery and Melissa Ferrick was little more than a slap on the wrist; that it amounts to $4 per infringement; that it provides no disincentive to continue infringing; and that the lion’s share of the money will go to the major labels anyway.

Further, with Spotify poised to go public, the complaints also cite the major labels’ agreements to exchange sound recording rights for equity in the streaming company. Gaudio/Bluewater describe these deals as an obstacle to the labels themselves holding Spotify to account for using unlicensed works. 

Counter to this narrative, however, Digital Music News reports that the music publishers represented by the National Music Publishers Association (NMPA) have “declared war on Spotify,” citing CEO David Israelite stating that Spotify’s assertions in its response mean that it is now in a fight with “all songwriters.”  What did Spotify say to trigger Israelite’s comments?  Well …

Despite the demand for a “more definite statement,” the Spotify brief is a bit cryptic itself.  It balks at some of the language in the Gaudio/Bluewater complaints, defending the company as an above-board, legal service that should not be compared to pirate sites et al. They may be protesting a bit much, though.  The “infringe now, settle later” strategy of which they’ve been accused is implicit in the Lowery/Ferrick suit and is certainly an approach consistent with most tech companies whose core business depends on the exploitation of creative works.

The only salient, triable issue at the bottom of all the rhetoric is the question ofwhether Spotify repeatedly infringed Sections 106 (1) & (3) of the copyright act by making use of songs without mechanical licenses.  To this, the Spotify brief comes extremely close to claiming that they don’t need mechanical licenses. The music site Complete Music Update published a whole article under exactly that headline, and the declaration was precisely what triggered the unequivocal response from Israelite at the NMPA.

Spotify has asserted that streaming only implicates the public performance right (§106(4)), which they state is amply covered by paying license fees to the performing rights organizations (PROs) that manage those rights.  Mechanicals are required separately—and obtained as compulsory licenses for rates set by a rate court—for anyone seeking to reproduce or distribute a song. For instance, an artist who wants to record a cover song on her new album needs a mechanical license.

While it may not be completely unreasonable to argue that streaming is a public performance rather than a distribution, that would only alleviate the infringement of §106(3).  It is not possible for Spotify to provide its service without reproducing files on its servers; and there is sufficient case law (including Napster) to affirm that this type of copying implicates the reproduction right (§106(1)). Moreover, as the CMU article observes, it is worth asking why, if Spotify believes it does not need mechanical licenses, the company settled the Lowery/Ferrick class-action suit, which was entirely based on the use of songs without mechanicals.

Additionally, Spotify’s mobile app enables downloading, at least for subscribers, and this would seem to implicate distribution.  Anticipating this response from the complainants, the Spotify brief bizarrely states that it would assert a defense of fair use.  Not only does that sound like a non-starter, but it’s a pretty odd thing to say after asserting that you never needed the mechanical license in the first place. 

As for the some of the more rhetorical aspects of the briefs, Spotify accuses Gaudio/Bluewater of “dangling” big money in front of the Ferrick class members and of painting the streaming service with the same brush as Napster and other piratical enterprises.  Meanwhile, Gaudio/Bluewater make an intriguing point that as Spotify continued to raise hundreds of millions of dollars for its growth, none of those resources were apparently directed toward improving the company’s ability to ensure the mechanical licenses were paid for all the music on the platform.

Based on Israelite’s statement, if Spotify doesn’t walk back the claim, this fight could turn existential for the streaming company. As a matter of copyright history, the transition to music streaming may be one of those threshold moments that ultimately requires Congress to recalibrate the statutes according to the intent of IP in the first place. Because if the courts were to agree with Spotify that mechanicals are simply not required for streaming, and we consumers do nearly all of our listening via streaming, this would undermine the incentive for songwriters and composers, which is foundational to the existence of copyright.

Levine: How Google Money Really Influences Research

Last week, after antitrust scholar Barry Lynn praised the European Commission’s decision to fine Google for anti-competitive practices, his Open Markets program at the Google-backed New America Foundation was terminated.  Robert Levine offers a nuanced perspective on the relevance of Google-scale money in policy think tanks, suggesting that what isn’t said may be at least as significant as what is said.

“That’s one of the big problems in the think tank world–not what direct pressure Google might have put on New America, but the idea that it might not be able to afford to upset one of its main benefactors. How many scholars decided not to challenge Google not because of a confrontation but out of the desire to avoid one?,” Levine writes.

See full article at FastCompany here.

Scholar Takes on Empiricist View of IP

Photo by porpeller

Empirical evidence tells us that all human existence is a sand castle. At best, if no other cataclysm comes first (and one probably will), the inexorable expansion of our sun will wash away the Earth and any evidence that we were ever here. One possible exception may be the two records affixed to the Voyager spacecraft, still traveling years beyond their life expectancy as Voyager 1 is now about 13 billion miles from Earth. Of course, the odds of those records being discovered by intelligent beings—let alone beings that find us interesting—are less than minuscule.

Empiricism can tell us which notes, instruments, chords, time signature, and lyrics describe Chuck Berry’s recording of “Johnny B. Goode” are on board Voyagers 1 and 2; but these data can hardly explain what it is about Berry’s playing that moves us more than others—or for that matter, why anyone would invent a guitar or learn to play it in a certain way, or why humans would bother building a pair of spacecraft to explore the solar system and then choose Chuck Berry as one of a very few representatives to say, This is who we were.

“In the Bible’s second creation account, God breathes the ‘breath of life’ into the first human, charges him with the responsibility of tending the garden, and provides him with a companion with whom he will fill the Earth with descendants. In other words, God gives humanity the opportunity to create culture.”  

This excerpt comes from a new paper by David W. Opderbeck, professor at Seton Hall University School of Law.  It is a fresh response to Mark A. Lemley’s 2015 paper, which asserted that all non-empirical arguments for the purpose of intellectual property law are “faith based” in the sense that they represent the kind of magical thinking that rejects science, data, and logic.

In May, inspired by Professor Robert P. Merges’s response to Lemley, I wrote a post discussing the utilitarian vs. natural rights views of intellectual property.  But Opderbeck, an IP scholar and theologian, offers a rebuttal that is ostensibly a response to Lemley, but which more broadly balances empiricism itself with the notion of “faith,” if we can use the term to generally describe the intangible principles that motivate humans to make choices, with or without religion.

As a secularist myself, I find the subject engaging because, contrary to many assumptions about us non-believers, atheism neither demands nihilism nor moral ambiguity nor a reduction of all human activity to the cold analysis of empirical study.  In short, one need not believe in God or practice any particular religion in order to act on “faith” that first principles exist upon which we can build a humane system of law. This is particularly important in nations where laws are meant to be secular.

Intellectual property law is particularly vulnerable to attack by academic (and not so academic) theorists because it is conceptual in nature and its utility is applied by a relatively small segment of the population.  Although society as a whole benefits from IP, the legal mechanisms are generally arcane; and so, it is relatively easy to propose and evangelize wide-ranging skepticism regarding IP’s original purpose.  Moreover, because one commonly-accepted goal of IP law is “incentive,” and because we Americans tend to view everything in the context of business—and because American creators are among those who can attain considerable wealth—it is not very surprising that many opinions tilt away from a natural-rights view of IP toward a utilitarian view.  Opderbeck, however, quarrels with the premise that we should approach any body of law—not just IP—from this perspective. “Without some first principles that justify why some form of consequentialist calculus produces normatively ‘good’ results,” he writes, “the utilitarian approach hangs in mid-air.”

Here the word good refers directly to the Bible’s creation myth, as in “God saw that it was good,” which is a theologian’s way of saying that purpose cannot be defined exclusively, if ever, by measuring specific outcomes. In fact, the values we cherish most—empathy, charity, love, creativity, civil liberty, etc.—do not derive their inherent “goodness” by virtue of measurable results.  “The legal positivism and related utilitarianism Lemley espouses … can speak in terms of maximization, but it cannot answer on its own terms why maximizing social welfare is ‘good’,” Opderbeck writes.

Where I imagine confusion is likely to occur with Lemley’s description of “faith based intellectual property” is the inherent tension that often exists between secular views, which are assumed to be rational; and religious views, which are assumed to be irrational.  As a secularist, I would agree that certain religiously-based views are either dysfunctional or mere rationalizations for cruelty toward the heterodox; but the same can be said of a strictly empiricist view as well.  And this is one of the more compelling points Opderbeck makes:  that Lemley’s view “reflects a monochromatic picture of human culture. Indeed, it reduces the human to the technological, and thereby encodes the very sort of authoritarianism it purports to eschew.”

Here, Opderbeck cites the story of the Tower of Babel as an allegory for technocracy.  “The utilitarian technocrats of our age are like Babel’s tower-builders,” he writes. The effort to encompass all human values within the rubric of what is quantifiable produces a convincing simulacrum of the ziggurat: precise, logical, geometric, orderly. It reaches to heaven, but never comprehends the transcendence that awaits it there, complacent in the belief – the faith – that it occupies the center of the universe, that there is no God or other power beyond its foundations in the Earth.”

If I may presume to place this in context to the current, public debate about intellectual property and the internet, the industry’s chronic assertion that an individual, human right like copyright “stands in the way of innovation” is analogous to the Tower builders’ blind insistence that their industry represents some grand, collective endeavor without regard for direction. Meanwhile, the curse of Babel—that we will no longer understand one another—is manifest daily in our contemporary politics.  “Utilitarian theories of culture do not produce precision and order. In the end, they produce oppression and violence, which leads to the babble of Babel,” writes Opderbeck.  Sounds like Twitter to me.

On the other hand, there is something to be said for building ziggurats, and no tower has ever reached higher or come closer to “touching the hand of God” than the Voyager mission with its gold record sampler plates of human history.  And while it is true that many religious (and even not so religious) people would not describe Chuck Berry himself as “good,” and some will have even described his music as “wicked,” I think most of us (even if we’re not from Boston) would agree that his music is “wicked good.”  This wordplay of course is echoed in the song’s polysemic title “Johnny B. Goode,” implying effort toward some goal (and morality?) not yet achieved.  So, the idea that this particular recording is among the evidence we sent into the unknown distance of eons, most likely to be received by nobody, suggests that we humans need not be blindly religious in order to consider that we do some very great things as a matter of faith.