Tag: Music Modernization Act

Record Labels File Suit Against Internet Archive for Copyright Infringement

Pride goeth before destruction, and an haughty spirit before a fall. (Proverbs 16:18 KJV)

Citing 2,749 works in suit, six of the major music labels (UMG, et al.) have filed a multi-count complaint against Internet Archive (IA), Brewster Kahle personally, Kahle’s foundation, and an audio digitizing service operated by an individual named George Blood. Total potential damage award with legal fees:  around a half-billion dollars. Likelihood of defendants’ success, assuming all factual allegations are well-founded:  less than zero. So, while I have no idea how much cash on hand Kahle has to burn, this suit highlights a question I have often asked myself—namely how eager is he to put his money where his anti-copyright mouth is?

As the outcome in the book publishers’ lawsuit, Hachette et al., makes clear, cockamamie theories about how the law works may find an audience in the blogosphere, but they make poor arguments in court. In that case, Internet Archive relied on a cockamamie theory called Controlled Digital Lending (CDL) and hitched that wagon to a belief that the practice was shielded by the doctrine of fair use. The defendant lost on every point, and a negotiated judgment is already filed with the court notwithstanding IA’s right to appeal.

In this new case with the record labels, IA does not even have the gossamer of an unfounded theory to weave into its response. Instead, the initiative IA calls “The Great 78 Project” is alleged to entail knowing evasion of compliance with clearly defined statute. Without going into each of the counts against each of the defendants, the crux of the matter is that Great 78 makes digital copies of sound recordings from 78RPM vinyl records and hosts those files for unlimited streaming or downloading. So, if any of those sound recordings are still under copyright, this implicates violation of three of the exclusive rights under Section 106 of the Copyright Act—reproduction, distribution, and public performance by digital audio transmission (§106(1), (3), & (6) respectively).

The Great 78 Project purports to make available rare and difficult-to-find sound recordings, and presumably, some portion of the collection comprises works in the public domain (PD) and/or truly rare works that are not commercially available. But headlining the more than 2,000 works in suit, the complaint cites recordings that are neither in the PD nor rare by any means. Popular recordings by Elvis Presley, Duke Ellington, Billie Holiday, Ray Charles, Chuck Berry, Frank Sinatra, Ella Fitzgerald, Louis Armstrong, and Hank Williams are named as prime examples that can be accessed by legal, commercial means, including major streaming services.

The reason commercial availability of the sound recordings is relevant in this case is that under the provisions of the Music Modernization Act (MMA) of 2018, a library/archive is permitted to make pre-1972 sound recordings available if, among other conditions, it makes a good-faith effort to determine that the recordings are not commercially available. That is a pared down description, but it’s the basic principle, which IA apparently chose to ignore. According to the complaint, IA made no effort to fulfill its obligation to comply with any of the following Copyright Office guidelines:

…a reasonable search for purposes of 17 U.S.C § 1401)(c) must include, among other things: (i) searching the Copyright Office’s database of indexed schedules listing right owners’ pre-1972 sound recordings; (ii) searching Google, Yahoo!, or Bing; (iii) searching at least one of the following streaming services: Amazon Music Unlimited, Apple Music, Spotify, or TIDAL; (iv) searching YouTube; (v) searching SoundExchange’s repertoire database; (vi) searching at least one major seller of physical product, namely Amazon.com.

Moreover, the complaint cites compelling evidence that the defendants understood their obligations under §1401 and that failure to comply would constitute copyright infringement of works like the sound recordings in suit. For instance, IA stated in a blog post about the MMA shortly after it was signed into law, “But, as we understand it, the MMA means that libraries can make some of these older recordings freely available to the public as long as we do a reasonable search to determine that they are not commercially available.” The only logical conclusion, therefore, is that defendants ignored the “reasonable search” guidelines because it is obvious that many of the sound recordings at issue can be found commercially available by a young child using Google.

Will Kahle’s Copyright Hubris Kill His Archive?

A significant distinction between this suit and the Hachette case is that Brewster Kahle and the Kahle/Austin Foundation are named defendants. The complaint alleges that Kahle is directly involved in IA policy, activities, and promotion, including the Great 78 Project, that he funds the foundation through his trust, and the foundation, in turn, funds the project. “At Kahle’s direction, the Foundation used the funds Kahle had contributed to sponsor the Internet Archive’s massive and growing infringement. The Foundation donated money to Internet Archive that Internet Archive used to pay costs in furtherance of its infringement…” the complaint states.

The Internet Archive and its friends will, no doubt, repeat populist claims that they are serving the public, behaving as a library should, and that they are being targeted by a greedy industry. But the conduct alleged in the UMG complaint reveals an even more brazen decision to circumvent copyright law than the CDL scheme underlying the Hachette suit. In the book publishers’ case, IA advanced a theory (albeit a poor one) that it was acting within the confines of the law, but here, it simply elected to evade clearly articulated statutory confines and take its chances. And this time, the cost could indeed be the whole operation.

I get why many people want to support IA, not the least being that a large part of the organization is both legal and highly useful. Among those who simply agree with Kahle et al. that copyright should not exist, that pre-1972 sound recordings should not be protected, etc., fine. That’s an opinion to which people are entitled. But beyond that general view, IA supporters should not be confused into thinking this case is about big bad industry beating up on a library doing library-like things. Assuming the factual allegations are correct, there is barely a distinction between the alleged infringing conduct in the Great 78 Project and The Pirate Bay. And to the extent the legitimate archive has been treated like a front for mass infringement projects, the blame for that decision rests with Kahle and his colleagues, not with the music or book publishers.

Since the first post I wrote about Internet Archive, I have acknowledged that the repository of public domain and truly rare material is an invaluable research tool. In fact, that post in October of 2017 asked directly whether the anti-copyright rhetoric was necessary to the organization, but since then, it has become clear that Kahle has used IA’s operation and reputation to engage in much more than rhetoric. And in this potentially costly litigation with the record labels, it is conceivable that this hubristic crusade against copyright law could, as the proverb says, lead to the collapse of an otherwise good enterprise.

Photo by: panoramaimages

Music Modernization Act Passes Senate by Unanimous Consent

Well, at least bipartisanship still exists when it comes to protecting America’s music creators.  Late yesterday, the omnibus bill known as the Music Modernization Act passed the Senate by unanimous consent.  On Monday, the chamber initiated a hotline process, which may be implemented when a bill is presumed to be uncontroversial.  Once triggered, Senators have 24 hours to raise any objections—one objection will kick the bill back into the normal debate/vote process—after which the bill will pass unanimously.  The MMA, to be renamed the Orrin G. Hatch Music Modernization Act in honor of the Senator’s retirement and the fact that he is a songwriter, ultimately earned 81 sponsors.

The soul of the MMA is a new royalty system designed to fairly compensate songwriters and composers in the digital marketplace.  This aspect of the bill has been hailed by multiple stakeholders in both the music and digital services market as a landmark achievement in private-sector and legislative compromise.

For too long, this class of creators was subject to a royalty system initially designed in the age of player pianos, so it has hardly reflected the market realities of the digital age.  The MMA establishes a new digital licensing collective, overseen by both songwriters and digital platform owners; it creates a new blanket mechanical license to enable easier and more complete licensing; and it reshapes the manner in which rates are set in order to better conform to fair-market prices.

ASCAP Chairman of the Board, songwriter Paul Williams stated, “”Today, we made history by joining together and working for Senate passage of the Music Modernization Act, bringing us one step closer to a music licensing framework that reflects how people listen to music today.”

This digital-royalty spine of the MMA met with relatively little debate among nearly stakeholders and passed the Senate in the same form* in which it passed the House in April with a vote of 415-0.  Likewise, the AMP Act segment of the MMA, which compensates engineers, producers, and sound mixers passed without objection or modification.  The only part of the omnibus bill that did invite debate—not to mention some outlandish claims by the anti-copyright crowd—was the CLASSICS Act, which is designed to compensate owners of sound-recordings for public performance via non-interactive streaming services like Sirius XM.

Amended CLASSICS Passes and Returns to the House

It was no surprise of course that Sirius XM opposed the CLASSICS Act.  They didn’t want to pay royalties to pre-1972 artists if they could avoid it.  But some of the usual suspects in the anti-copyright crowd also sought to oppose the bill on ideological grounds, calling it a massive term extension, a land-grab by the labels, and even a “reversal of copyright doctrine.”  As usual, the librarians and archivists jumped on this bandwagon (I still don’t get these folks), claiming that, if passed, CLASSICS would create new uncertainty for their institutions.

While most of these objections were a bit overwrought—and some were just plain made up—in response to so narrowly-written a bill, CLASSICS does unquestionably highlight the hodgepodge body of law (i.e. common law and federal statute) theoretically governing sound recordings made before 1972.  Nobody disputes that it’s a mess, but some of the opponents to CLASSICS argued that the law should be overhauled entirely (a monumental task) rather than ameliorate one small aspect of the law in order to get these musical artists paid by Sirius et al right now (a far more moderate task).  Nevertheless, in response to some of the concerns about duration of terms and the interests of libraries, the Senate made a few key modifications to CLASSICS that are expected to be adopted by the House for final congressional passage of the law.

The Senate version of CLASSICS creates a specific regime for use of these sound recordings by non-commercial entities, and it establishes a “rolling basis” duration of protection of 95 years after publication.  The House version had left the status quo intact, whereby all pre-1972 sound recordings are protected by state law until 2067.  These amendments look like reasonable concessions in keeping with the spirit and intent of CLASSICS; and it seems unlikely that any objections will be raised to alter the course of the MMA toward full passage. (This does not mean, of course, that the anti-copyright crowd won’t complain. Some already have.)

Not only should the many stakeholders who worked for years on this legislation be proud of what they have accomplished—let alone in such a schismatic political climate—but the MMA is entirely consistent with the history of copyright amendment in the United States.  While anti-copyright academics and tech-industry pundits continue to insist that copyright law must be weakened in order to foster innovation and serve the public interest, the historical narrative has been quite different.  Rather than bluntly weakening the law, it has always been the case that copyright is rewritten to fit the contours of new markets—responding to but not at all stifling new technologies.

UPDATE:  Having seen the latest language of the bill, there are a few small changes, including a five-year moratorium on rate increases.  Perhaps a more detailed in a future post.

What does Public Knowledge have against the CLASSICS of music?

On April 25, a pretty extraordinary thing happened. Especially in a time of staggering political dysfunction, it was pretty impressive to see the House of Representatives pass an omnibus bill overhauling copyright law for music in the digital market with a vote of 415-0. Now headed to the Senate, the bill, known generally as the Music Modernization Act (MMA), combines three major pieces of legislation that have been in development for several years—the MMA, the CLASSICS Act, and the AMP Act.

In very simple terms, the legislation achieves the following results: 1) better and more accurate payments by digital service providers (e.g. Spotify) to songwriters (MMA); 2) federal protection for certain digital public performances of pre-1972 sound recordings (CLASSICS); and 3) compensation for engineers, mixers, or producers where they contribute to co-authorship of sound recordings (AMP). The entire package represents unprecedented examples of compromise between the digital service providers (DSPs) and the music industry; and in simple terms again, what the DSPs get out of the deal is an easier licensing regime and a new blanket liability protection that will put an end to the types of class-action lawsuits that Spotify faced for streaming unlicensed songs.

As the entire bill moves to the Senate, certain critics like Public Knowledge are now targeting the CLASSICS Act as “bad law,” recommending the Senate “consider” it separately from the rest of the omnibus bill passed by the House. Of course, if PK thinks CLASSICS is “bad law,” then I assume we can read “consider” to mean “kill,” which is certainly the assumption made by David Lowery in this post on The Trichordist. “Now it appears that through the use of proxies and two-faced lobbying DiMA [Digital Media Association] is trying to abrogate the entire compromise by stripping out the Pre-1972 and producer/mixer protections,” Lowery writes.

For an organization that claims to be a public advocate, Public Knowledge demonstrates remarkable consistency in advocating copyright policy most favorable to the business interests of internet service providers; and their objection to the CLASSICS Act is just the latest example. I’ll address a few specifics in a subsequent post, but the bottom line for the average consumer is this: having the digital service companies pay license fees to stream pre-1972 recordings will not in any way negatively affect the quality of our music-streaming experiences. I mean you don’t walk into a coffee bar with its comfy couches, free WiFi, and friendly service and say, “Wait a minute! They sell fair-trade coffee in this place?? I’m outta here.”

What the CLASSICS Act Addresses

Sound recordings were added as a category of works protected by federal copyright law on February 15, 1972. But for reasons nobody is quite sure about, recordings fixed prior to that date were exempted from the federal statute and left to the protection of common law copyright in each state. At the time, all copyrights and works were still subject to the 1909 Act until the new federal law, the 1976 Act, went into effect for works created after January 1, 1978. And although sound recordings were a protected category, the radio broadcasters successfully lobbied against licensing for “public performance” of sound recordings on the then not-unreasonable claim that radio broadcast played a substantial role in record sales.

Later, with advances in digital and subscription services, a 1995 amendment added copyright protection (§106(6) of the statute) for “public performance of sound recordings by means of digital transmission.” But this still did not apply to recordings made before February 15, 1972. Fast forward to the current market, when digital streaming now owns a huge portion of the “radio” market and obliterates the need for record sales for a growing number of consumers, and this leaves performance licensing as almost the only source of revenue for sound recordings. Meanwhile, more than a few great sound recordings were made before 1972 that consumers are going to stream millions of times. So, the CLASSICS Act creates a means by which the performing artists who made those recordings can share in the new market.

Why Does Public Knowledge Care?

If streaming services have to pay royalties for these sound recordings, that’s as it should be; and if it has no bearing on consumers (in fact, it is more likely to improve our listening experience), why is Public Knowledge even piping up on the issue? It’s tempting to say that organizations like this just plain hate copyright and will, therefore, assail any proposal that strengthens the position of any rights holder. Or one might conclude, as Lowery does, that PK is acting as an industry-funded proxy to save the streaming services money by trying to kill this bill in the Senate.

Still, PK and other critics have presented a few law & policy arguments, and I’ll look at those in my next post on this topic. As a prelude, let me say for now that pre-72 recordings is an oddball in copyright law, allowing critics to cite a lot of draconian-sounding theory, even fogging the discussion by alluding to Edison’s 1877 sound recordings as remaining in a theoretical state of perpetual copyright. In practical terms, the CLASSICS Act is simply about compensating the artists (most likely active from the 1950s-1970s) who made the sound recordings you and I listen to all the time. And in legal terms, the bill actually appears to solve some of the problems Public Knowledge cites in its objections. But that’s for the next post.