Understanding David Lowery's Lawsuit Against Spotify: The Insanity Of Music Licensing
from the dig-deep dept
We generally don’t talk much about musician David Lowery around here any more. We covered a few stories about him a few years ago, and he seemed to take it ridiculously personally, and continues to attack me with false and misleading claims. Every so often someone sends me a link to a blog post he’s written and it’s almost always laughably wrong (for example, in one recent story he falsely claimed that “Google” is on Spotify’s board — because a former Google exec who is no longer at the company also happens to be on Spotify’s board). So, take the following with that caveat in mind. I tried to be objective in the analysis, but some will likely suggest that’s impossible given his years-long attacks on me.
Lowery, if you don’t know, is a decently successful musician who has ranted against any new service or business model for musicians. When he was first getting attention over this it was about iTunes, but lately it’s been things like Spotify, Pandora and YouTube. He appears to pine for the “old days” when there was less competition and a clearer career path for musicians like himself. So his concern is always that these companies are somehow “cheating” him and his friends out of money. Mostly this has been idle, if frequently misleading, whining. But right before the new year, it turned into an actual lawsuit against Spotify that he’s hoping to turn into a class action. You can read the whole complaint here (or embedded below), though I warn you: to understand it, you need to go pretty deep into the arcane nature of music licensing.
Here’s the thing about copyright law: historically, as new technologies come along, copyright has a lot of trouble dealing with them. And, typically, the pattern is that the industry freaks out and tries to stop the new technology, but eventually someone duct tapes on a new bit of copyright law to cover it. Unfortunately, this means that there are all these weird peripheral sections of copyright law that are supposed to apply to specific circumstances, which then get made obsolete by later technological situations, and it leads to lots of confusion and anger… and lawsuits.
Stick with me through the next few paragraphs. It’s going to seem ridiculously impossible to ever do anything that involves licensing music after you get through all of this, in part because it’s been made so cumbersome thanks to all this duct tape.
So, everyone knows that music is covered by copyright. And, if you follow these things moderately closely, you may also know that the copyright on a recorded song involves two different copyrights: there’s the copyright in the sound recording (for the musicians who recorded the song, but usually held by the record label) and a copyright in the composition which is held by the songwriter. But things get much more complex even beyond that. And that’s because there are different exclusive rights under copyright law, such as rights for reproduction, distribution and public performance.
On top of that, there are different types of licenses for these different parts and different rules for how such licenses can be obtained and who can obtain them in which situations. The rules and licensing are different for terrestrial radio than they are for satellite radio than they are for “non-interactive” streaming radio (e.g., Pandora) than they are for “interactive” streaming services (e.g. Spotify). Pandora, for example, gets to make use of compulsory licenses relying on a rate set by a group of old judges known as the Copyright Royalty Board (you may have heard that they just raised the rates, but not nearly as high as some were asking for).
With Spotify, on the other hand, most of the licenses actually had to be negotiated. But because of all the different aspects, there was a lot to negotiate. There are deals to be made with the copyright holders for the sound recordings (mostly the labels, some of whom took equity stakes in Spotify to make those deals happen) along with licenses from the “Performance Rights Organizations” (PROs) like ASCAP and BMI for “performing” the works. Then there are mechanical licenses which are for reproducing or distributing the composition, and cover a variety of things — and are generally available in a compulsory fashion (i.e., if you want them, as long as you pay, you can get them). They’re called “mechanical” licenses from back in the day when reproducing a work actually was a big “mechanical” process. When someone wants to cover a song, they can get a compulsory mechanical license for that (which is why artists cannot stop anyone from covering their songs — much to Prince’s dismay). You also need a mechanical license to reproduce and distribute a “phonorecord” of a musical work.
Most mechanical licenses are managed and sold via an organization called The Harry Fox Agency (HFA), who works on behalf of music publishers (companies who tend to hold the copyrights on the musical compositions, rather than the actual recordings) that teamed up to create the agency a long, long time ago. There is also a complex bit of copyright law, known as Section 115, which gives the specifics on compulsory licensing of mechanical licenses in certain circumstances, if certain rules are followed. But here’s the crazy thing: it’s 2016 now, streaming services have been around for years, and still no one’s entirely sure if Section 115 compulsories actually apply to them. It’s never actually been tested and many services (including Spotify) assume they do, but a potentially big question is whether or not they really do. Isn’t that kind of insane?
There are actually even more things that go into copyright licensing for music and I simplified some elements of this, but hopefully this gives you an idea of how absolutely insane all of it is. But… it’s necessary to understand all of that to figure out what’s going on with Lowery’s lawsuit. Almost all of the press coverage doesn’t delve into any of this, and just says that he’s claiming Spotify isn’t paying for some of the music that’s available on the service. But it’s not a case where Spotify is just putting songs on its service willy-nilly. Spotify absolutely is licensing the sound recordings from the copyright holders, and then the performance licenses from the PROs. And it’s getting mechanicals via HFA and/or via Section 115.
However — and here’s the big issue — while Spotify gets the recordings directly from the copyright holder, and thus knows who to pay the royalties to, those songs often do not include the necessary metadata to connect the publishing/songwriting side of things to the recordings. So while the company knows who to pay for some parts of what it needs to pay, for others it has no idea. Under the law, the money for such royalties needs to be kept in escrow to pay at some later time when the details are sorted out — which is something that Spotify claims to do. The company recently announced that it’s building a giant database to connect the publishing/songwriting info with the database it already has on the sound recordings, in order to distribute the $17 million or so it’s been holding in escrow. This seems like a move in the right direction, but to some songwriters, they argue that it’s “proof” that Spotify didn’t properly license songs. That’s possible, but unlikely. Spotify is holding the money in escrow because it that’s the requirement when you do not have the necessary info to pay the compulsory licenses.
Lowery is arguing that Spotify is simply failing to obtain the necessary mechanical licenses for many of the compositions in its database, including a bunch of his songs. There is, separately, an “unfair business practices” claim that we’ll also discuss in a minute. Over the past week or so since the news of this lawsuit came out, I’ve spoken to half a dozen different copyright lawyers to try to understand the details, and they’re all at least slightly perplexed by the lawsuit, with some noting that details need to come out later to further explain the argument.
A few copyright lawyers I spoke to were flat out confused as to why Spotify would even need a mechanical license in the first place, seeing as it’s streaming music, rather than “reproducing” and “distributing” it such that Spotify users end up with a full copy to keep. There are two possible responses to this that I (and some other lawyers I spoke to) can come up with, though Lowery’s lawsuit does not clarify which of these he’s arguing (or if it’s something else entirely). One is that Lowery considers merely streaming music to be “distribution” and “reproduction” of a “phonorecord.” Indeed, this appears to be the argument that Audiam, a company that has been deeply involved in this issue, makes on its website: every stream requires a mechanical license royalty.
One copyright lawyer I discussed this with called such an argument “meritless” but I actually wonder how the courts would shake out on it. It would get down pretty deep into the weeds of the technology behind streaming, and what counts as a “reproduction” and “distribution” of a work, and whether or not the ephemeral copies that are created in the streaming process require mechanical licenses even though they disappear as soon as they’re played. You may recall that one of the key copyright cases a few years ago, regularly referred to as the “Cablevision” case but technically Cartoon Network v. CSC Holdings, found that such ephemeral copies are not copies for the purpose of copyright law. But that’s technically only law in the 2nd Circuit, not the 9th Circuit where Lowery’s case was filed.
The Supreme Court refused to hear the appeal in the Cablevision case. If Lowery’s case does focus on such ephemeral streams, it could reopen that dangerous can of worms, and raise serious questions about copyright for cloud computing (remember, a study showed that the ruling in the Cablevision case was a key driver in jumpstarting the cloud computing industry).
Still, there may be a plausible argument that Spotify is “distributing” a song when it streams it, but again that’s not exactly settled law. Either way, Spotify appears to be acting as if that is the case anyway in trying to secure mechanical licenses, so perhaps this won’t be a huge deal in the case.
The other, perhaps more plausible, explanation is that the issue is really only in cases where Spotify allows users to actually download a song for offline play (a feature for Spotify Premium users). In those cases, it’s much more compelling that Spotify would need a mechanical license, because the copies are not so ephemeral. But, it would also explain why the numbers for the mechanical royalties are so much lower (the fact that set off so much focus on all of this), because the mechanicals wouldn’t apply in most streaming situations.
In either case, Lowery might run into a second stumbling block: Spotify can (and likely will) argue that it complied with the rules required in Section 115(b) for a “notice of intention” in order to get the compulsory mechanical license. Basically, Spotify would argue that it did what is necessary to get a compulsory mechanical license when it was unsure of who held the publishing/songwriting rights on a song. If it actually did do this, Lowery’s case may be dead in the water — though I’m guessing Lowery’s lawyers will argue that it failed in some aspect of properly using Section 115 — or, as mentioned above, that Section 115 doesn’t actually apply to streaming services. If Spotify did not actually follow Section 115’s rules, then Lowery’s case suddenly is a lot stronger. Similarly, if a court suddenly determines that Section 115 doesn’t apply… well, then a lot of streaming services are in serious trouble. Update: As noted by a commenter, the Copyright Office publishes the list of Section 115 Notices of Intent that it gets — and it does not appear that Spotify is on it. So that suggests that Spotify may not have followed the rules of Section 115, which may mean the company is in deep trouble.
Separately, Lowery argues that Spotify’s actions are “egregious and willful” — the latter of which is necessary to seek a maximum statutory damage amount of $150,000 per work infringed. Again, assuming that Spotify did in fact do as it has claimed, and followed the rules for Section 115 compulsory licenses, it’s going to be much more difficult to convince anyone that the actions were “willful.” Similarly, if you read this article by a copyright lawyer who appears to agree with Lowery (though it was written before Lowery’s lawsuit), you see that as soon as Spotify was aware of how to pay the money, it did so. That’s going to make the whole “egregious and willful” claim an uphill battle. But, we shall see…
Finally, there’s the “unfair business practices” claim. Here’s the crux of that one:
On information and belief, Plaintiff alleges that Spotify: (a) depresses the value of the royalties owed to Plaintiff and the Class Members? for use of their Works through an arbitrary and non-negotiated payment structure; and (b) captures and holds funds which are otherwise distributable and earns interest thereon, thereby profiting off its own unlawful conduct. These business practices are unlawful and unfair pursuant to California Business & Professions Code § 17200
This again seemed like a non-starter to a few copyright lawyers I spoke to. First, it seems like it’s just another copyright claim, hidden as a state unfair business practices claim — meaning it might get tossed out. Copyright law is (nowadays) entirely a federal issue, and attempts to bring in state laws are generally tossed out as federal copyright law “preempts” such claims. Furthermore, since copyright law allows holding such royalties in escrow, it seems difficult to argue that this is somehow illegal under California law. And I have no idea what is even meant by “depresses the value of royalties owed.”
In the end, there’s a lot that’s not entirely clear about the lawsuit, and it’s left many people scratching their heads. It is possible under a unique set of circumstances (some of which would involve fairly egregious behavior on the part of Spotify) that Lowery may have a case here. Similarly, if a court decides that Section 115 doesn’t actually apply to streaming services, that would give Lowery a major win. But there are many, many arguments for why the lawsuit has little chance (Update: see the update above about why Spotify may not have complied with Section 115, which, if true, makes Lowery’s case stronger). The one issue that concerns me most, however, is whether or not he will actually start arguing that ephemeral copies represent a “reproduction” and/or “distribution” under copyright law. Either way… stay tuned.
Filed Under: copyright, david lowery, licensing, mechanicals, music streaming, section 115, songwriting
Companies: harry fox agency, hfa, spotify
Comments on “Understanding David Lowery's Lawsuit Against Spotify: The Insanity Of Music Licensing”
Groan....
So, basically, copyright maximalist uses the insane licensing arena duct-taped together because of copyright maximalism to self-aggrandize and self-enrich over claims that new business didn’t find the cheese at the end of the insane licensing maze maximalist props up as the solution to everything…and claims THE BUSINESS is the problem?
Awesome….
Re: Groan....
Get ready for a duct tape solution that fixes this problem but further complicates everything down the road.
TL;DR
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I didn’t make it all the way through. But somewhere out there, there’s at least one guy looking for a dominatrix who’ll chain him up and spank him with a riding crop while reading this article to him.
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That would be me.
The tl;sr version is that Lowery’s lawsuit is deeply flawed, partly because of IP insanity, and partly because Lowery comes across in the filing as an utter ass.
Why doesn't this guy become a lawyer
If he knows so much about the arcane workings of music copyright law, why doesn’t he become a lawyer instead of a musician? He could probably make a lot more money at it.
Hi Mike, It’s pretty simple. If Spotify filed the NOIs, you would be able to see them on the USCO’s website. They aren’t there. Spotify instead decided that it could just hold the money in escrow. You claim that this escrow maneuver is following the law, but nowhere in Section 115 or the CFR does it say that escrow is an alternative to an NOI.
You claim: “Under the law, the money for such royalties needs to be kept in escrow to pay at some later time when the details are sorted out — which is something that Spotify claims to do.” Can you actually cite the law that backs that up? Nope. It doesn’t exist.
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Wow, sounds so simple a fifth grader could do it.
/s
Re: So where are the NOIs?
So, I just went and looked at the USCO (United States Copyright Office) web site and I don’t see any NOIs for any company. Can you elaborate on where these NOIs are supposed to be found online?
Re: Re: So where are the NOIs?
So, I just went and looked at the USCO (United States Copyright Office) web site and I don’t see any NOIs for any company. Can you elaborate on where these NOIs are supposed to be found online?
There’s a giant list here:
http://copyright.gov/licensing/115.pdf
Re: Re: Re: So where are the NOIs?
The NOI list mostly lists companies like Harry Fox Agency, RightsFlow, MediaNet, Legacy Productions, etc., which are intermediaries acting on behalf of tens of thousands of actual licensees. So I don’t think it’s necessarily true that “Spotify is not on that list”, is it?
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Hi Mike, It’s pretty simple. If Spotify filed the NOIs, you would be able to see them on the USCO’s website. They aren’t there. Spotify instead decided that it could just hold the money in escrow. You claim that this escrow maneuver is following the law, but nowhere in Section 115 or the CFR does it say that escrow is an alternative to an NOI.
I’ve updated the post. I didn’t realize that the NOIs were public like that, and you’re right that I don’t see any from Spotify, which makes Lowery’s case much stronger.
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Cool beans. I suspect, though, that they might be listed under “Harry Fox Agency Inc” since HFA handles the licensing for Spotify. Still, Lowery’s songs aren’t there.
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Plus the “17 million in escrow” is a joke. They will owe far more than that in mechanicals.
Hmm...
Trying to decide if “coverit” was intentional or just an ironic typo…
“Take the bonehead bowling, take him bowling”
Swift Economics 101:
When negotiations with the publisher [1] for increased earnings fail, target distributors for legal recourse [2].
[1] Who own our distribution copyright because we freely gave it away and now regret it.
[2] Because they’ll cave, and fans have no problem paying for the same song multiple times.
When will artists like Taylor Swift and David Lowery get it through their heads by pulling crap like this, it’s their fans who pay for their ignorance.
Re: You answered your own question
[2] Because they’ll cave, and fans have no problem paying for the same song multiple times.
When will artists like Taylor Swift and David Lowery get it through their heads by pulling crap like this, it’s their fans who pay for their ignorance.
So long as their idiot fans keep paying, why should they care?
…there may be a plausible argument that Spotify is “distributing” a song when it streams it, but again that’s not exactly settled law…
Well it does meet one of the definitions of “distributing” according to dictionary.com:
…to promote, sell, and ship or deliver (an item or line of merchandise) to individual customers, especially in a specified region or area…
What might not be settled law is if Spotify’s “distributions” meets the definition of an item or line of merchandise.
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I’m not so sure. For streaming to fall under that definition, it seems like letting someone borrow something would as well, given the customer listens to it once, but doesn’t actually have the song once it’s over with.
If I sell something to someone, such that there’s a transfer of ownership, where they now have something they didn’t before, then yeah, that would fall under ‘distribution’.
However, if I let someone listen or watch something, taking it back after they’re done with it, such that afterwards they have nothing that they didn’t have before, I don’t see that as falling under the definition.
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The exclusive right of distribution is defined in 17 USC 106(3) as “distribut[ion of] copies … to the public by sale or other transfer of ownership, or by rental, lease, or lending.”
Note that it’s subject to the first sale exception of section 109, which allows pretty much any distribution of lawfully made copies once they’ve been bought by someone.
Of course, the definition of copies (and phonorecords in this case) is such that transmission through the Internet really isn’t distribution at all, but the courts continue to pretend otherwise.
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17 U.S.C. § 101 – Definitions
Emphasis added: Material objects.
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Of course, the definition of copies (and phonorecords in this case) is such that transmission through the Internet really isn’t distribution at all, but the courts continue to pretend otherwise.
So the recipient of the transmission has a copy, but the transmitter did not distribute a copy? How do you figure?
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As the above poster notes, copies (and phonorecords) are material objects. A computer file isn’t a copy. A computer storage device, like a hard drive or flash drive, is a material object, and is therefore a copy.
Distribution therefore requires a change in possession or ownership of a tangible object, probably accompanied by physical movement of the object.
If you know how to send a solid object through the Internet, like in Star Trek, you’re a lot smarter than me. The way it normally works though is that the person on the downloading side creates a new copy by fixing the intangible work into a material object that never went anywhere.
So while downloading is and always has infringed on the reproduction right because a new copy is made, what is often called distribution is more accurately performance or display. Which can still perhaps be infringing, but isn’t distribution.
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17 U.S.C. § 101– Definitions
(Emphasis added.)
Yes, it is indeed true that some judges have given an expansive reading to “fixed”, by reading ”transitory duration” as any period over an infinitesimal. Such readings have been criticized. It is improper to effectively delete the fixation requirement from the definition of a “copy” or “phonorecord”.
In a larger vein, I’d point out that telephone, radio and television were all well-established technologies when the 1976 Copyright Act was drafted. In that era, Congress was not completely medieval in their understanding of long-distance communication technology.
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I get what you’re saying, but I think that train has left the station–and it’s pretty facile to argue that an uploader hasn’t distributed anything. Moreover, no court has ever agreed with that read of Section 106(3), and the argument is foreclosed by Tasini.
Regardless, the issue here with Lowery is Section 115, and that section makes clear that Section 106(3) is broader than you read it.
Section 115(A)(1): “When phonorecords of a nondramatic musical work have been distributed to the public in the United States under the authority of the copyright owner, any other person, including those who make phonorecords or digital phonorecord deliveries, may, by complying with the provisions of this section, obtain a compulsory license to make and distribute phonorecords of the work.”
If Section 106(3) did not apply to “digital phonorecord deliveries,” there’d be no need for a compulsory license in the first place. And this section makes clear that these “deliveries” are being “distributed,” not displayed or performed.
In case that’s not clear enough, Section 115(G)(i) says: “A digital phonorecord delivery of a sound recording is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506, unless” there’s permission or a compulsory license.
Digital phonorecord deliveries implicate the public distribution rightn under Section 106(3). It’s silly to argue otherwise.
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The issue is whether this applies only to digital downloads (a la iTunes), which everyone agrees it does, or whether it also applies to digital streams. For example, streaming video sites are generally considered to implicate the performance right, but not the reproduction right.
I agree that it does, but only because of the definitions section in 115 itself. (I quoted it below.)
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I get what you’re saying, but I think that train has left the station–and it’s pretty facile to argue that an uploader hasn’t distributed anything.
By the plain language of sections 106(3) and 101, he hasn’t. I’m not saying that he may not be infringing; he may have infringed the public performance or public display rights, and may have secondary liability for the downloader’s direct infringement of the reproduction right. No one is saying that uploaders can get off scot-free. But to treat it otherwise is to turn every infringement of public performance or public display in which another party makes a copy into a distribution infringement; if you illegally put up a billboard with a copyrighted picture on it, and someone photographed it with their phone, your ‘logic’ insists that the rays of light going to the camera sensor is a distribution. Yours is an absurd position.
Moreover, no court has ever agreed with that read of Section 106(3)
I don’t think anyone’s ever bothered to make the argument. Probably because it would have little beneficial effect even should it succeed, and frankly most of the lawyers I’ve met are not all that knowledgable about the fine points of the relevant technology so they never even notice.
the argument is foreclosed by Tasini
No it’s not.
Part of Tasini dealt with CD-ROM copies, which being material, certainly were distributed within the plain meaning of the statute. The other part was online; the Court didn’t bother to distinguish between the two.
Further, the argument was not raised as, again, it wouldn’t’ve helped either side. Plaintiffs might have liked the idea that online databases were not engaged in distribution, since display doesn’t fall within the ambit of section 201, but when they tried to do this (in the trial court) they instead argued that the display of any information on a screen was an infringement of the display right. The trial court shut that down, finding that the rights in section 201 meant publication in a broad sense, which encompassed onscreen display. Defendants, for the same reason, were in the odd position of wanting to pretend that the online databases were engaged in distribution, for the protection of section 201.
The Supreme Court got close to actually considering the issue, but dropped the ball.
Regardless, the issue here with Lowery is Section 115, and that section makes clear that Section 106(3) is broader than you read it.
No, actually section 115 says something quite different.
From section 115(d), where the definition is located:
So apparently, Congress agrees that the nature of the beast is transmission which results in a reproduction. Transmissions which are public performances or display can certainly be actionable infringements under sections 501 and 106(6), so you haven’t found any solid support for your argument so far as I can see.
There is some weird language, I’d agree, where the statute says that you can distribute by means of a transmission, but I’d say that this indicates that the term ‘distribute’ as used in that context is not the same as the 106(3) distribution right, but is instead rather broader (much like the Tasini trial court’s reading of reproduction and distribution to mean publication generally, come to think of it).
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By the plain language of sections 106(3) and 101, he hasn’t.
I agree that your strict textual read of those two statutes is plausible, though I’m not a strict textualist. I think purpose matters too. But throw in the DPRSRA of 1995, and I think your read is outdated. You may have been right in 1994, but not after.
I’m not saying that he may not be infringing; he may have infringed the public performance or public display rights, and may have secondary liability for the downloader’s direct infringement of the reproduction right. No one is saying that uploaders can get off scot-free.
I think an uploader is directly liable for violating the distribution right and indirectly liable for violating the reproduction right. It’s both!
But to treat it otherwise is to turn every infringement of public performance or public display in which another party makes a copy into a distribution infringement; if you illegally put up a billboard with a copyrighted picture on it, and someone photographed it with their phone, your ‘logic’ insists that the rays of light going to the camera sensor is a distribution. Yours is an absurd position.
This is where you lose me. If I erect a billboard, that’s a public display, not a public distribution. What makes it a display, instead of a distribution, is the fact that you can look up an see it. You say my position is absurd, but mine follows case law and distinguishes between the three public rights: display, performance, and distribution. Yours blends them together.
I don’t think anyone’s ever bothered to make the argument. Probably because it would have little beneficial effect even should it succeed, and frankly most of the lawyers I’ve met are not all that knowledgable about the fine points of the relevant technology so they never even notice.
Of course they have, and they still do. You mentioned above: “Of course, the definition of copies (and phonorecords in this case) is such that transmission through the Internet really isn’t distribution at all, but the courts continue to pretend otherwise.” I assumed you were talking about the cases where the defendant claimed that digital transmissions aren’t distributions.
There’s a lengthy discussion of the issue in London-Sire: https://scholar.google.com/scholar_case?case=11339207100949783661
Heck, Cox even made the argument in the case with BMG. The court didn’t buy it there either:
This argument gets used frequently, and no court has ever bought it–despite what you seem to see as a slam-dunk in the other direction.
No it’s not.
Part of Tasini dealt with CD-ROM copies, which being material, certainly were distributed within the plain meaning of the statute. The other part was online; the Court didn’t bother to distinguish between the two.
The Court said: “LEXIS/NEXIS, by selling copies of the Articles through the NEXIS Database, ‘distribute copies’ of the Articles ‘to the public by sale,’ § 106(3)[.]” This is the Court saying that the electronic transmissions are distributions under Section 106(3). How is that not clear?
So apparently, Congress agrees that the nature of the beast is transmission which results in a reproduction. Transmissions which are public performances or display can certainly be actionable infringements under sections 501 and 106(6), so you haven’t found any solid support for your argument so far as I can see.
That definition only proves my point. Section 115 says that digital phonorecord deliveries (DPDs) are distributions if they result in a reproduction. Thus, uploaders distribute and downloaders reproduce. The definition also says that whether that delivery is ALSO a performance, i.e., it can be simultaneously be perceived, is irrelevant to whether it’s also a distribution. A transmission can be both a distribution and a performance, or it can be one or the other. The rights are different, though you’re blending them together.
There is some weird language, I’d agree, where the statute says that you can distribute by means of a transmission, but I’d say that this indicates that the term ‘distribute’ as used in that context is not the same as the 106(3) distribution right, but is instead rather broader (much like the Tasini trial court’s reading of reproduction and distribution to mean publication generally, come to think of it).
The problem with your approach is that Section 106 creates the rights and Section 115 merely defines their scope. Section 115 doesn’t create rights in DPDs–Section 106 does. The point of Section 115 was to CLARIFY the scope of Section 106: “[T]he bill clarifies the application of the existing reproduction and distribution rights of musical work and sound recording copyright owners in the context of certain digital transmissions.” S. Rep. No. 104‐128, at 10 (1995).
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17 U.S.C. § 115(c)(3)(G)
That subparagraph within § 115 creates a cause of action for infringement: A ‘digital phonorecord delivery right’, if you will.
The § 115(c)(G)(3) digital phonorecord delivery right is distinct from the § 106 performance and digital audio transmission rights.
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The DPRSRA of 1995 added a public performance right for sound recordings. This right wasn’t codified in Section 115–it was added as Section 106(6): “in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.”
The DPRSRA of 1995 also clarified that musical works are covered under Section 106(3). It didn’t change the language of Section 106, like it needed to do for sound recordings, because Section 106(3) already covered it. If Congress thought that digital distributions were a new right, it would have changed the language in Section 106.
Yes, a “digital phonorecord delivery of a sound recording is actionable as an act of infringement under section 501,” but that’s true of ALL the rights in Section 106. Section 115 doesn’t create the cause of action–it points to Section 501, where all civil causes of action for copyright infringement come from.
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17 U.S.C. § 501
Emphasis added: 106 through 122.
Note further, while unquoted here, the references later in § 501 to “actionable as an act of infringement” pursuant to §§ 111, 119, 122.
The codification of a right under any particular number may sometimes be a helpful interpretive guide, but it does not override the substance of the statute.
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You noticeably didn’t address my point that the DPRSRA of 1995 added Section 106(6) because it was a new right for sound recordings but left Section 106(3) the same because it was clarifying an existing right for musical works. I also quoted the relevant legislative history: “[T]he bill clarifies the application of the existing reproduction and distribution rights of musical work and sound recording copyright owners in the context of certain digital transmissions.” S. Rep. No. 104‐128, at 10 (1995).
Section 106 is titled “Exclusive rights in copyrighted works,” and that’s where the rights come from. There’s also Section 106A: “Rights of certain authors to attribution and integrity.” Those two sections grant rights.
Sections 107-122 spell out the scope of those rights. Section 107 provides “Limitations on exclusive rights: Fair use.” Section 108 provides “Limitations on exclusive rights: Reproduction by libraries and archives.” Section 109 provides “Limitations on exclusive rights: Effect of transfer of particular copy or phonorecord.” Etc.
Section 115 likewise provides “Scope of exclusive rights in nondramatic musical works: Compulsory license for making and distributing phonorecords.” It doesn’t grant the right–it defines its scope. It’s literally right there in the title, as it is for each and every limitation in Sections 107-122.
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Now you’re arguing that the caption overrides the text?
How hard would you laugh, if someone argued that all the definitions are in § 101 ? And that anything outside § 101 is therefore not a definition—sorta by ‘definition’?
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The text is the law, of course. The titles help you understand how Congress arranged things. Sections 106-106A are the rights, and Sections 107-122 are limitations on the scope of those rights.
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I think an uploader is directly liable for violating the distribution right and indirectly liable for violating the reproduction right. It’s both!
I don’t have a problem with secondary liability for the reproduction right, provided that the actual requirements are proven. Shouldn’t be too hard ordinarily.
This is where you lose me.
Okay, let’s go through it step by step:
Alice erects a billboard with an infringing photograph on it. Bob holds up his phone and takes a picture of it.
Meanwhile, Carol sets up a computer with the same infringing photograph on it. Carol’s computer is connected to Dave’s computer via a fiber optic cable. Dave downloads the photograph to his computer.
We seem to be in agreement that both Bob and Dave have created new copies; they’ve infringed on the reproduction right.
We both agree that Alice has engaged in public display, by setting up the billboard. Alice did not make another copy and give it to Bob; Bob made his own copy. The means by which he was able to do so was by using his camera to observe rays of light travelling from the billboard into the camera sensor, and fixing an image based on that in the camera. At no point does anything change whether the ultimate source of the light is the sun, because it’s daytime, or a spotlight provided by Alice, because it’s nighttime and they’re in a cave.
Well, this is identical to what’s going on between Carol and Dave. Carol is not making another copy and giving it to Dave. Instead, Dave is making his own copy by using his computer to observe rays of light travelling from Carol’s computer via the fiber optic cable, and fixing an image based on that in the computer.
If it’s relevant, it doesn’t matter that Bob can physically see the billboard, while Dave cannot physically see or understand what’s coming out of Carol’s computer; both are using devices (basically identical devices) and human-readability hasn’t been important for a long time anyway.
Whatever Alice and Carol are doing, it’s the same thing — using rays of light to provide intangible information to their partners, who proceed to make copies; I’d say both ladies are engaged in public display. You, on the other hand, have no problem with the easy example of a billboard being public display, but the second a computer enters the picture, as it were, you switch over to distribution for no good reason. At the very least, would it kill you to be consistent?
Frankly, knowing a number of lawyers, and a number of judges, I think that the real issue is that most members of the legal profession don’t know a damn thing about how computers work. There are exceptions, but a lot of people imagine that electronic files are material objects, when in fact they’re intangible, and it’s the media that the files are fixed in which are material objects. Likewise, people often think that files are created on a server then sent to the downloader’s computer, when in fact computers really only are able to copy things; it’s the one trick they have, and they use it for everything. Sending a file to someone is no different than reading aloud to someone over the telephone who is writing things down. If I call the house to ask for the list of groceries I need to pick up on my way home, the scrap of paper doesn’t vanish from the kitchen and pop out of my phone. Instead I write down what I am told and at the end there are two copies of the list.
This — that people believe we inhabit a world were Wonkavision is how things work — is the culprit, IMO.
There’s a lengthy discussion of the issue in London-Sire
London-Sire is an interesting case. Thanks for citing it, I hadn’t seen this one before. I don’t find it to be the least bit convincing, though.
In particular, I loved this bit:
That is just humpty dumptyism right there. But wait, it gets better.
That’s wrong; materiality means exactly tangible objects, for only in such objects can a work be fixed.
And this is just beyond ridiculous, given that the section I have emboldened is a correct description of what is going on. How does one go from totally wrong to actually right in the same breath like that?
And of course, what’s she cite? The unsupported dicta from Tasini, which as already discussed is of no value on this point.
This doesn’t even make sense; distribution without anything being distributed, and conflation of reproduction and distribution.
This, I’d agree with. But none of this policy requires pretending that display and performance are distribution.
Man, I thought Judge Gertner was generally okay, having observed the Tenenbaum case (aside from her and Tenenbaum’s ridiculous counsel letting plaintiffs get away with a seriously incorrect jury instruction on statutory damages), but this is really going to make me revise my opinion of her.
If she wanted to side with plaintiffs, she should’ve just allowed them to amend their complaint from 106(3) to 106(6), or to make a secondary liability argument which we both think would likely succeed.
This is the Court saying that the electronic transmissions are distributions under Section 106(3). How is that not clear?
I assume you’re quoting the Supreme Court there. Again, it’s dicta; the question was never properly raised. Even craptastic London-Sire actually cites Tasini with a bit of ambivalence: “See also New York Times Co. v. Tasini 533 U.S. 483, 490-91, 121 S.Ct. 2381, 150 L.Ed.2d 500 (2001) (appearing to assume that electronic-only distributions constitute material objects).”
Section 115 says that digital phonorecord deliveries (DPDs) are distributions if they result in a reproduction.
What it says is that you can distribute material objects by means of a transmission. Congress is either describing teleportation, which can’t possibly be correct, or one of the two terms, either distribute, or phonorecord, has a different meaning in section 115 than it does elsewhere in the statute. You (and the London-Sire court) seem to argue that a phonorecord doesn’t really have to be a material object despite the statutory language saying ‘material object.’ Given that that’s a defined term of art in the statute, I think it’s more likely that the mystery word is distribute, which is not defined in the statute and is a fairly ordinary word subject to different and sometimes hopelessly casual meanings.
God, I’d love to see a well-written statute replace the 1976 Act. It may be better organized than the previous Copyright Acts, but damn if it still isn’t a mess.
Even the layman’s explanation is so arcane as to make me wonder.
Many random nuisance complaint out of the plaintiff, then out of the blue something this arcane and technical?
The cynic in me now wonders if maybe someone like the *AA are using this suit as a false face? A shill? A cats-paw? Basically a back-door means of shutting down music streaming without appearing to be involved, even indirectly.
1999: Napster takes the world by storm. A whole generation realizes that everything has changed: this magnificent technology that connects us all across oceans and borders has created a new dawn of art and media, where reproduction is functionally free and all human culture shall forever be openly accessible to all human beings. It is glorious; it is exciting. We are livin’ la vida loca, folks – hey now you’re an all star, and I don’t want no scrubs.
2016: Beneath the surface, nothing has really changed. Anyone who truly wants some music finds it with a few mouse clicks. Budding musicians pirate the world and absorb it all, because what artist who loves their art could resist and do anything but that? The same is now true of film and television. It’s as easy as, if not easier than, it has ever been. Of course, very little of it is official — turns out, a bunch of people with no artistic bones in their body are really opposed to this obvious advancement for humankind, and they’ve even brainwashed some actual artists-gone-intellectuals into taking the same stance. They’ve only let a handful of official distribution channels survive, and they’ve kept such a choke-hold on them that they’re barely managing it. And still, apparently, they aren’t pulling their weight — in fact, they don’t even seem to have tried to convince people that music should still cost as much as it did when it involved manufacturing millions of little plastic discs and shipping them internationally!
SO HOLD ONTO YOUR HATS! That guy from that band, you know the one, has Beethoven in the name… He’s here to put an end to this nonsense. Sixteen years is long enough: it’s time for music on the internet to go away forever.
More complications
The whole situation is even more complicated than the article describes. Unsurprisingly, Lowery’s lawsuit doesn’t bring these complications up, either, since they both favor Spotify.
First of all, it doesn’t consider the case where there are multiple songwriters. I’ll let the FMC explain it:
– Where’s My Mechanicals? The Ultimate Explainer
Given that many songs have two authors (including most pop songs), and other songs have many many more, this almost certainly accounts for the majority of unlocated songwriters.
Second of all, it doesn’t go into the contracts between Spotify, the Harry Fox Agency (HFA), and the publishers/songwriters they represent (HFA calls them “affiliates”).
HFA offers a standard license for streaming in limited quantities. And, as a licencee, you are explicitly exempt from sending NOI’s:
– https://www.harryfox.com/documents/songfile/samplelicense_interactive_streams.pdf
HFA also takes over this duty if you sign up with their Slingshot service. In that case, I don’t know if the songwriter even needs to be licensed by HFA; HFA might send out the NOI’s on your behalf.
Larger streaming services (like Spotify) must sign direct deals with HFA, but I would be utterly shocked if there wasn’t similar language in their contract. So, if Spotify is using any songs that are licenced by HFA, they almost certainly don’t have to file NOI’s.
Of course, that only applies to songs that are licenced by HFA. True, HFA does administer the licenses for the vast, vast majority of commercial songs, but not all of them. (In fact, if your song isn’t published by a record label, you can’t become an affiliate.) There is certainly going to be a factual issue as to whether HFA represented that they could license songs (or did in fact issue license for songs) where they didn’t administer 100% of the rights.
It should also be noted that the HFA contract also specifies that HFA has a right to audit their licensees. So, it’s not like they weren’t aware of what songs Spotify was playing.
I’m guessing that there was some sort of problem on HFA’s end, since Spotify is building their own database, and negotiating with the NMPA, instead of relying on HFA like they previously were. (But who knows, it could also be because HFA was recently bought by SESAC.) Whatever the issue, if this does become a class-action lawsuit, this is going to be a pretty tiny class. It would be a class composed of songwriters who are played on Spotify but not represented by HFA.
Does any of this apply to Lowery’s songs? Perhaps, perhaps not. The particular songs in the lawsuit, at least, do not come up if you do a public search for them in HFA Songfile. (Unlike his Camper Van Beethoven songs.)
Regardless, I don’t think he has a snowball’s chance in Hell of proving “willful” infringement.
Also, this is the first I’ve heard the theory that non-interactive streams were not covered by statutory mechanicals. HFA explicitly says they are, and most industry folks seem to believe that as well. It also seems pretty clear in the statutes:
– 17 USC 115
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Awesome clarifications. However, what I see here is precisely what the article points out: insanity. You just got it up a notch. Think about how many ideas died before even existing in terms of streaming and other useful services for music (and pretty much anything IP related) because the people behind it looked at the madness and decided it was too much or found out the costs were too high? I mean, look at the available services and tell me: is there any of them that isn’t walking a narrow line managing losses/measly profits while trying to deal with such madness?
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Oh, believe me – if you thought my point was to express how “easy” or “straightforward” it is to license content, then what we’ve got here is a failure to communicate.
Copyright law is insane.
So, a company, armed with lawyers and experts negotiated licences directly with the records labels and copyright owners, but the system is so ridiculously complicated that they still may not have got everything lined up properly.
No wonder Lowery and his idiot sycophants argue so vehemently against the obvious need to change the copyright system. This way, even when they prove to be utter failures in the new marketplace, they can just sue themselves a nice profit.
Yet, of course, it will always be the person listening to something without paying a toll who is the cause of artists going unpaid. Not the system that’s built to ensure that even the most honest good faith attempts to build a legal service are guarantee to miss payments somewhere.
Duct Tape
historically, as new technologies come along, copyright has a lot of trouble dealing with them.
Not quite true. While the US copyright first indeed ignored compositions, drawings and paintings, there is otherwise nothing new until the advent of the computer that would have made the copyright act of 1790 unworkable.
But other early copyright laws were much more generic. They speak of “work” and not of “printing” but only of “publishing”, and they also don’t have clauses for “sheets found in possession” and such, making them indeed work with any technology that comes along.
The only reason people are duct-taping around the copyright is because they perceive some new technology as threat. And not because the copyright itself couldn’t deal with it.
New laws required
All the existing laws governing royalties are out of date. The internet has simply turned the “old rules” upside down.
We all agree that artists, writer should earn some form of income from their creation.
But let us be frank. Most royalties came for record sales. A minority came from airplay simply because logs were only collected from handful of major market stations who played only the top 40 of each genre, a list compiled by the major record companies based on pre-order sales.
Even though all stations paid royalties the majority of the money went to the major Labels.
With online streamers such as Spotify at least everybody gets a cut.
Think about this. 100 major stations play the top 40. That mounts to millions of people hearing the same song two to three times a day, They are the artists who get the money. 1000 non major stations may play a song 100 times. That artist gets nothing because the station’s logs are not collected by the royalty magnets.
What is needed is whole new way of collecting data from every AM/FM and Online station in the world and royalties distributed evenly.
I will will well and truly dead before the major labels allow that to happen.
Bottom line is the system is corrupt
$$$$$$$$$ Lowery $$$$$$$$$$
Well, I went to listen to some CVB today on Spotify and I realized all of my songs were “not available in the United States.” So I did some research and found out Lowery is still trying to save the world with his ridiculous shining-armor bullshit.
So, I need some advice. How can I listen now? I have purchased every single CD these guys have ever put out (including 2011’s flaming turd “The Palace Guards”). I have been spending money on Lowery for so long that I even bought a few albums twice (including Key Lime Pie on a lime green cassette). I’ve seen him live at least 25 times and purchased overpriced shirts at the shows. So my question is, how do I even listen to his music now? Am I supposed to carry all of the legally purchased music around with me in a backpack, or should I buy it AGAIN through iTunes (which I never use)? Please tell me what to do here, I’m just a stupid customer with a wallet.
Spotify
Firstly the copyright laws depend on what country you live in.
Outside the USA different companies/distributors have exclusive rights to USA products. If that company/distributor has the distribution rights to a particular artist, label etc then they can demand that Spotify or any streaming service to exclude those artists etc from being stream into the company/distributor country.
So the blame is with your local distributor.
Again, depending on which country you live in you may be allowed to rip the cd’s you have purchased to a format that can be played on an MP3 or similar player.
In the UK the High Court ruled it illegal. In Australia it is legal. It is called “Format Shifting”
Compulsory License
I received a compulsory license notification from Spotify a couple of weeks ago. The information they provides is scant. The only contact information they provide is a New York mailing address. Is there any way to track what’s happening with a particular artist and song? It seems to me that a lot of compulsory license notifications never even reach the copyright holder because of address changes over the years. Any ideas would be appreciated.