Major Labels Accused Of $6 Billion Worth Of Copyright Infringement In Canada

from the oops dept

The major labels and their friends like to throw around huge numbers of "damages" when it comes to copyright infringement. But how about when they're on the receiving end of a copyright infringement lawsuit. Up in Canada, there's a class action lawsuit against the Canadian divisions of all of the major record labels, suggesting that the labels have infringed on the copyrights of artists to the tune of $6 billion (Updated: the original math was off, it's actually $6 billion, not $60). As Michael Geist explains:
The claims arise from a longstanding practice of the recording industry in Canada, described in the lawsuit as "exploit now, pay later if at all." It involves the use of works that are often included in compilation CDs (ie. the top dance tracks of 2009) or live recordings. The record labels create, press, distribute, and sell the CDs, but do not obtain the necessary copyright licences.

Instead, the names of the songs on the CDs are placed on a "pending list", which signifies that approval and payment is pending. The pending list dates back to the late 1980s, when Canada changed its copyright law by replacing a compulsory licence with the need for specific authorization for each use. It is perhaps better characterized as a copyright infringement admission list, however, since for each use of the work, the record label openly admits that it has not obtained copyright permission and not paid any royalty or fee.

Over the years, the size of the pending list has grown dramatically, now containing over 300,000 songs. From Beyonce to Bruce Springsteen, the artists waiting for payment are far from obscure, as thousands of Canadian and foreign artists have seen their copyrights used without permission and payment.
And yet, amazingly, the record labels -- these "strong defenders" of the importance of copyright and paying for every use -- somehow have decided that it makes no sense to pay this bill. The list itself details about $50 million in unpaid royalties that are owed, often to well known musicians who it would be quite easy for the industry to find and pay up. As for the $6 billion number? Well, the class action lawsuit that's been filed seeks statutory damages starting at $20,000 per infringement and going up from there. Given that these same record labels have been defending those same (or, similar, in the US, at least) statutory rates for infringement, you have to wonder how they can realistically claim that those statutory rates shouldn't apply to themselves as well.

Once again, though, we're seeing what's really happening. The record labels are copyright defenders only when they profit unfairly from it. When they can screw over others via ignoring copyright, they have no problem doing so.

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  1. identicon
    Doctor Strange, 7 Dec 2009 @ 9:11pm

    If this is true then it will be very embarrassing, and potentially very bad, for the CRIA. I will be interested to see the response.

    I was not aware that Canada did not have a mechanical/compulsory/statutory license for music like we do here in the US. I know that people complain about the various kinds of unfairness that mechanical licenses can engender. However, if you're at all concerned about many of the practical drawbacks of the current copyright system (needing to get permission for common uses, or copyright holders deciding to charge exorbitant rates), then mechanical licenses can be a compromise. For example, a large measure of Jonathan Coulton's early fame was derived from (freely) releasing an acoustic cover of "Baby Got Back", which he was able to do because of mechanical licenses.

    In this case, you should probably feel free to gloat about how this is the record companies being hoisted on their own petards. (Whether you wait until you hear a response from them, or determine whether any of the allegations in the suit are true or not, is up to you).

    However, remember that what you're essentially defending is a lawsuit that violates nearly every premise of Techdirt groupthink, and that if it were levied against anyone OTHER than the record companies (or, say, Lily Allen) you'd be denouncing it left and right:

    1. The lead plaintiff in the suit has been dead since 1988.

    2. The "pending list" seems to have been born around the same time the lead plaintiff died, and this is the first lawsuit about it? Is there anything like a doctrine of Laches in Canada? Either way, after a few minutes' Googling, I cannot find more than one or two indirect references to the "pending list" in Canada other than Geist's blog post (or scraped copies of it, or blogs about scraped copies of it).

    3. If these artists were smart, they would have given away all their music for free. As such, they should be thanking the record companies for all the publicity. If the record companies managed to sell some scarce goods (CDs) with the music on them, without paying the artists anything, then good for them. That's how the market rolls.

    4. The artists here (well, the ones that aren't dead) seem to have a business model problem. Since getting screwed by the record companies is inevitable, they need to just get over that. Rather than expending their efforts in a lawsuit that has no social value, they should get back to innovating and choosing smart business models that work instead of whining.

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