Paul Sweeting

NMPA CEO David Israelite to Speak at DEW on Modernizing Music Licensing

January 17, 2018By Paul Sweeting

Just before Christmas, a bi-partisan group of lawmakers introduced the Music Modernization Act, which, among other things, would create a new blanket license for mechanical reproduction rights to musical compositions and establish a new entity to collect and distribute mechanical royalties.

The bill is meant to address one of the abiding sources of friction within the digital music streaming business. Musical compositions in the U.S. are subject to a compulsory mechanical license, meaning anyone can record a song and sell copies of that recording by sending a notice of intent (NOI) to the composition’s copyright owners and paying a per-copy royalty set by the Copyright Royalty Board.

Unlike the public performance right, however, where performance rights organizations (PROs) like ASCAP, BMI and SESAC aggregate millions of compositions and offer a blanket license covering their entire repertoires, anyone availing themselves of the compulsory mechanical license is required to identify and pay the appropriate copyright owners individually. Where the copyright owners cannot be identified or located, the user can file the NOI with the U.S. Copyright Office and the royalties paid are held in escrow until the rights owners are located.

The system worked well enough for many years when it was rare for anyone or any outlet to make bulk use of the mechanical reproduction right. With the rise of digital streaming, however, which has been held to implicate both the public performance and the mechanical reproduction right, the lack of an efficient system for administering mechanical rights has been a constant source of tension, between digital service providers like Spoity and Apple Music on the one hand, and music publishers and songwriters on the other.

That tension has frequently erupted into litigation, including the $1.6 billion lawsuit filed against Spotify in December by Wixen Music Publishing over Spotify’s alleged failure to pay required mechanical royalties.

Should it become law, the Music Modernization Act could go a long way toward easing those tensions. Since it’s introduction, in fact, the bill has gained broad support throughout the industry. In a rare show of unity, a group of more than 20 industry organizations representing music publishers, songwriters, record labels, PROs, and service providers issued a joint statement earlier this month endorsing the bill and urging its passage.

Much of the credit for the bill’s introduction and for rallying support behind it belongs to the National Music Publishers Association (NMPA) and its CEO David Israelite, who worked closely with the bill’s sponsors on Capitol Hill and helped broker the joint statement. Israelite will sit down with me for a special fireside chat at Digital Entertainment World on February 5th to discuss the Music Monetization Act, as well as other issues facing the industry, including the music industry’s notorious data challenges, and the future of performance rights licensing in the wake of recent court cases.

This week, we asked Israelite a few preliminary questions to set the stage for his fireside chat:

RightsTech Project: Last week, a group of music industry organizations jointly endorsed the Music Modernization Act, the Classics Act and the AMP Act. To what do you attribute the sudden outbreak of cooperation among so many different stakeholders?

David Israelite: We have a window of momentum and consensus that is ripe for action. Congressional leaders like Judiciary Committee Chairman Bob Goodlatte, who retires this year, has made copyright reform a priority, and with songwriter champions like Rep. Doug Collins (R-GA) and Rep. Hakeem Jeffries (D-NY) offering consensus bills like the MMA – and the Senate hopefully following suit – there is a real opportunity to move legislation that will significantly help the future of songwriting. Additionally, the MMA is not a wish list for music publishers and songwriters – it is a bill that took months to negotiate because it helps both the tech and music industries. No one got everything they wanted – but both sides are better off with the MMA. DiMA, which represents the biggest tech companies in the world is supportive, as are the biggest songwriter groups in the U.S.

Largely because of the momentum around the MMA – the music industry has coalesced around other music bills that will help legacy artists and producers. As I have always said – we are stronger together – and we have a great opportunity to not just help our segment of the pie – but to advance the whole creative class. After years of trying to develop and unite around reasonable reforms, it is truly exciting that today we stand together and that Congress is invested in these changes as well.

Where do you think the debate over the BMI/ASCAP consent decrees goes now in the wake of the 2nd Circuit decision?

BMI’s win sends a strong message that the DOJ cannot simply reinterpret decades of industry practice and upend the lives of thousands of songwriters. The new leadership in DOJ’s antitrust division hopefully offers a new path forward, and I believe they are looking at the consent decrees with fresh eyes. My hope is that they will ultimately abolish them altogether and give songwriters the free market that other intellectual property owners enjoy.

3) What is NMPA’s position on the various PRO database initiatives (ASCAP/BMI; ASCAP/SACEM/PRS)?

The PROs currently offer searchable repertoires. Their efforts to create a single database will bring clarity to the industry – however these initiative will take time and money. I look forward to seeing their progress in the coming months.

Click here for information on how to register for Digital Entertainment World.

RightsTech Herding CryptoKitties at Digital Entertainment World

January 10, 2018By Paul Sweeting

When Satoshi Nakamoto introduced Bitcoin into the world, whoever he, she, or they were set the total number of coins that can ever be released (“mined” in Bitcoin parlance) at 21 million. While individual bitcoins can be sub-divided into an infinite number of smaller units (fractions of bitcoins), the total whole number of units is finite.

CryptoKitties fat cat Mack Flavelle

That inherent scarcity is one of the reasons for the dizzying run-up in the price of bitcoins: At any given time there is a fixed number of bitcoins in the world.

The key to establishing that scarcity is the blockchain, which leverages cryptography to ensure that individual bitcoins (and their subdivisions) are unique, identifiable, unalterable, and un-reproducible. Unlike the internet, where sending a digital file from one computer to another inescapably involves creating a new copy, bitcoins themselves are not really “sent” or transferred over a network so there is no need to create a copy. Instead, the shared ledger that records ownership of bitcoins is updated to reflect the new network address (i.e. owner) of a cryptographically unique asset on the network.

Those properties, of uniqueness and scarcity, are part of what has attracted many artists to blockchain technology. What is unique and scarce can have and hold value, and what has value can be bought and sold, traded and collected, or held as an asset in the expectation of appreciation.

Getting people not steeped in cryptography and accustomed to the infinite reproducibility of digital files on the internet to become familiar and comfortable with the concepts of digital scarcity and uniqueness, however, is a challenge. Without that buy-in from consumers, the blockchain hopes of many in the media and creative industries could be broken.

It was that challenge that Mack Flavelle and his team of developers at AxiomZen set out to tackle. Their solution? Cats.

The team came up with a collection of digital illustrations depicting goggle-eyed, cartoon cats they called CryptoKitties and created an online game allowing people to buy, sell and collect CryptoKitties using Ether. The game also leverages smart contracts to make the kitties “breedable,” based on their unique “DNA,” creating new, unique CryptoKitties.

Why cats? While there are other blockchain-based digital collectibles on the market, most are targeted at limited audiences, such as RarePepes, based on the adopted alt-right mascot Pepe the Frog. Flavelle’s goal was to appeal to a broader market and introduce ordinary consumers to digital collectibels. “Cats are part of the internet,” Flavelle tells RightsTech. “People are already familiar with the idea of trading cat videos.”

Trading in CryptoKitties has been robust. At one point, it became the dominant application on the Ethereum network, to the annoyance of others trying to use the network.

According to a third-party site that tracks sales of CryptoKitties, some virtual kittens have sold for the equivalent of more than $100,000, based on the then-current value of Ether.

Flavelle, who’s title is Fat Cat, will sit down for one-on-one fireside chat with me on February 6th, as part of the RightsTech track at the Digital Entertainment World conference in Los Angeles.

We’ll discuss the origins of CryptoKitties, what their creators have learned about the market for digital collectibles, what their popularity portends for consumer adoption of blockchain-based applications, and whether CryptoKitties are a fad or will prove to have nine lives.

Click here for information on registering for Digital Entertainment World.

Rights Owners Rack Up Victories in EU, Australia

December 13, 2017By Paul Sweeting

The copyright industries haven’t fared particularly well in U.S. trade negotiations recently, missing out on a chance to extend various copyright-protection measures when the Trump administration pulled the U.S. out of the Trans-Pacific Partner, and facing push-back on efforts to incorporate those provisions into a revised NAFTA agreement with Canada and Mexico. But they’re having better luck in Europe and Australia.

Last week, the Australian government unveiled legislation to extend the current digital safe harbors there to libraries, educational institutions, organizations for the disabled, archives, and other cultural sectors. But in a reversal from a previous government position, the legislation would exclude major commercial platforms like Facebook and Google from such protection.

Under current Australian law, the safe harbors protecting networks from liability for copyright-infringing materials uploaded by their users is limited to ISPs. Earlier this year, the government floated a proposal to expand those protections to cover a wider range or networks, including commercial services like YouTube that rely heavily on user-generated content. That proposal was shelved in March, however, and the government began a series of consultations with the copyright industries leading up to last week’s announcement.

The change in course represents a major victory for copyright owners, particularly the music industry, which has lobbied heavily for steps to help close the “value gap” it claims the safe harbors have created on social media platforms. Keeping YouTube and Facebook out of those harbors will make it easier for rights owners to negotiate favorable licensing deals with the platforms.

In Europe, meanwhile, the European Parliament voted this week to reject most provisions of the European Commission’s so-called Sat-Cab proposal that would have allowed broadcasters within the European Union to include content they had licensed for broadcast in their own territory in their pan-European digital video-on-demand and over-the-top services.

The proposal by the European Commission was intended to advance the EU’s Digital Single Market initiative but was strongly opposed by the film and TV industries that have long relied on exclusive territory-by-territory licensing to maximize revenue and secure financing for production.

The vote by the European Parliament is not the final step in the EU’s complicated procedures. The proposal now goes to the Council of Ministers made up of senior officials from the member countries, where European broadcasters have vowed to continue pushing for expanded distribution. But for now, the vote in the Parliament is a major victory for the film and TV producers, who lobbied heavily against the commission’s proposal.

That win comes on the heels of a similar victory for rights owners last month, when both the European Parliament and Council agreed to exclude most copyrighted works for at least two years from another provision of the Digital Single Market rules that strictly limits the use of “geo-blocking” measures on digital goods. The elimination of geo-blocking was strongly opposed by book publishers, who feared it would allow online booksellers such as Amazon to sell ebooks throughout the EU with a single license, undercutting the industry’s practice of licensing digital rights territory-by-territory or language-by-language.

As with the Cab-Sat proposal, the agreement on geo-blocking is not the last word on the matter. But for now, at least, the regulatory tide in the EU that had been running strongly against the copyright industries’ long-standing licensing practices appears to be turning.

The Purr-fect Blockchain Application? Collectible Digital Assets

December 6, 2017By Paul Sweeting

Many a fortune has been built on the internet, but we all know the internet’s real purpose is to share funny cat videos. So it’s perhaps no surprise that the latest iteration of a digital network — blockchain — is also being overrun with kitties.

Apart from trading Bitcoin, just about the hottest application running on a blockchain at the moment is CryptoKitties, discrete bits of digital art featuring cartoon felines that can be bought, sold, traded and even interbred with other CryptoKitties to create new, “genetically” unique pussycats. By one estimate, traffic in CryptoKitties is currently taking up 13 percent of the Ethereum networks capacity., making the application the single biggest user of that blockchain.

Apart from the internet’s natural affinity for cats the appeal of CryptoKitties lies in their collectibility. Each CryptoKitty cartoon is generated from a unique digital “genome” and is visually distinct. The application then generates a cryptographic hash of the unique image that is then registered to the Ethereum blockchain. The images therefore cannot be reproduced or forged.

Whether CryptoKitties turn out to be a passing fad, or not, they’re helping popularize the concept of blockchain-based collectible digital assets — a notion pioneered by serious-art blockchain registries like Monegraph and Ascribe. Similar efforts include Rare Pepe cards featuring the alt-right’s adopted mascot, Pepe the Frog, and Cryptopunks.

Now, digital collectibles are moving beyond the world of visual arts into music and other media sectors. Earlier this year, artist-management services provider Boogie Shack Music Group teamed with music blockchain developer Tao Network to create a new type of licensed artist merchandise in the form of blockchain-based digital tokens.

Tokens will be offered in limited editions via “initial artist offerings,” with 50 percent of the proceeds going to the artist. The tokens can be exchanged for fiat currency or Bitcoin, but since each token is cryptographically unique they can also be collected, traded, or used as currency within an artist-centric “engagement” economy, according to Tao Network founder and CEO Bryce Weiner.

“You think about a band like The Grateful Dead and there’s a whole ecosystem of collectibles among their fans,” Weiner said. “That’s an ecosystem that could be monetized with digital tokens. As the tokens increase in value it becomes like a new royalty stream for the artist. It’s an example of another right that could be monetized with blockchain.”

Tao and Boogie Shack plan to launch a token exchange to be called AltMarket in early 2018. Artists initially on board for the launch include the estate of the Wu Tang Clan’s Ol’ Dirty Bastard, and Digital Underground, with more expected to be announced soon.

Weiner will be speaking a panel in the RightsTech track at the Digital Entertainment World conference in Los Angeles on February 5-6. For information on how to register for the conference click here.

Trade Deficits: U.S. Copyright Industries Could Be Losers in Trump Trade Agenda (Updated)

November 19, 2017By Paul Sweeting

Whatever you may think of President Donald Trump’s overall international trade agenda, there hasn’t been a lot winning in it so far for the U.S.-based copyright industries.

The movie, music, games and publishing industries, among others, have spent decades since the passage of the WIPO Copyright Treaty working closely with both Republican and Democratic administrations, to use the leverage of U.S. trade negotiations to advance the cause of strengthening copyright protections around the world, by inserting protections into multilateral trade agreements. But the fruits of that labor are in danger of going unharvested as Trump pulls the U.S. back from global trade deals.

In one of his first acts as president, Trump pulled the U.S. out of the Trans-Pacific Parternship (TPP), the 12-nation pact originally intended to enshrine U.S. economic influence in Asia and throughout the Pacific Basin. To the dismay of many technology companies and consumer rights groups, the treaty’s intellectual property chapter, drafted largely by U.S. negotiators working in close consultation with U.S. copyright interests (and the pharmaceutical industry), contained a number of provisions requiring other countries to adopt strong U.S.-backed copyright protections, including anti-circumvention rules for technical protection measures, enhanced enforcement procedures and remedies, including for secondary liability, and extended terms for copyright.

Although some TPP countries have already adopted similar provisions as a result of bilateral trade agreements with the U.S., several have not. It’s hard to read the U.S. withdrawal as anything but a blow to efforts to extend enhanced protection and enforcement standards globally.

Worse for the U.S. interests, word emerged last week that the remaining 11 countries in the bloc are planning to move ahead with a revised version of TPP without the U.S. Among the key revisions to the agreement, reportedly pushed primarily by Canada, is the jettisoning of much of the intellectual property chapter, including the enhanced copyright protections.

The Trump administration says it wants to negotiate individual bilateral agreements with the other countries, but if the TPP 11 sign onto a multilateral deal that expressly rejects the U.S.-backed copyright provisions those countries likely will be less anxious to agree to them in bilateral negotiations.

Many trade experts, in fact, believe that pulling out of TPP has reduced U.S. leverage overall in trade negotiations.

History shows that “having another deal already in place or almost in place certainly strengthens your hand” in trade negotiations, the director of the Mexico Institute at the Wilson Center, Duncan Wood, told Foreign Policy magazine last week.

One area where that reduced leverage may already be telling is the negotiations demanded by Trump to revise the North American Free Trade Agreement (NAFTA) with Canada and Mexico, both TPP countries.

As the fifth of a scheduled seven rounds of talks on NAFTA got underway in Mexico last week, Canada and Mexico reportedly are pushing back firmly against efforts by the U.S. to include U.S.-backed language from TPP into the North American deal.

NAFTA, which was ratified in 1993, was negotiated before the widespread commercial adoption of the internet, and is largely silent on issues related to cross-border data flows and copyright liability on digital platforms.

Although the talks are being held behind closed doors, one area where the U.S. is believed to be trying to insert language adopted from TPP is in the intellectual property chapter.

Last week, a group of trade associations representing major technology companies, including the Internet Association, the Consumer Technology Association, and the Information Technology Industry Council, wrote to U.S. Trade Representative Robert Lightizer to express their concern that the talks had moved away from what they called the “balanced” approach to copyright the administration had previously agreed to, in favor of rules that would benefit copyright owners over users.

“Our understanding, based on numerous conversations with people knowledgeable of each party’s undisclosed positions, is that there has been no agreement to include provisions promoting copyright user rights or the principle of balance in NAFTA,” they wrote. “Absence of such provisions would make the final agreement unacceptable.”

Whatever the case, the NAFTA negotiations are in danger of breaking down altogether over other U.S. demands, which the Trump administration has said could lead to the U.S. pulling out of the 23-year old treaty.

Should NAFTA go down, any hope U.S. copyright interests have for getting stronger protections included in trade deals with Canada and Mexico would probably go with it.

UPDATE (Nov. 20th): The office of the U.S. Trade Representative has now released a list of U.S. objectives for the latest round of NAFTA talks, including extensive intellectual property provisions. Here’s the relevant portions of the list:

Intellectual Property:

Promote adequate and effective protection of intellectual property rights, including through the following:

Obtain commitments to ratify or accede to international treaties reflecting best practices in intellectual property protection and enforcement.
Provide a framework for effective cooperation between Parties on matters related to the adequate and effective protection and enforcement of intellectual property rights.
Promote transparency and efficiency in the procedures and systems that establish protection of intellectual property rights, including making more relevant information available online.
Seek provisions governing intellectual property rights that reflect a standard of protection similar to that found in U.S. law, including, but not limited to protections related to trademarks, patents, copyright and related rights (including, as appropriate, exceptions and limitations), undisclosed test or other data, and trade secrets.
Provide strong protection and enforcement for new and emerging technologies and new methods of transmitting and distributing products embodying intellectual property, including in a manner that facilitates legitimate digital trade, including, but not limited to, technological protection measures.
Ensure standards of protection and enforcement that keep pace with technological developments, and in particular ensure that rights holders have the legal and technological means to control the use of their works through the Internet and other global communication media, and to prevent the unauthorized use of their works…
Prevent the undermining of market access for U.S. products through the improper use of a country’s system for protecting or recognizing geographical indications, including such systems that fail to ensure transparency and procedural fairness, or adequately protecting generic terms for common use.
Provide the means for adequate and effective enforcement of intellectual property rights, including by requiring accessible, expeditious, and effective civil, administrative, and criminal enforcement mechanisms. Such mechanisms include, but are not limited to, strong protections against counterfeit and pirated goods.

Annual Global Royalty Collections Hit $10.8 Billion in 2016

November 15, 2017By Paul Sweeting

Score one for the power of collection rights management. The International Confederation of Societies of Authors and Composers (CISAC), which represents over 230 authors societies in the music, audiovisual, literary, dramatic, and visual arts industries around the world, released its annual Global Collections Report this week which showed global royalty collections by its member organizations reaching a record €9.2 billion (US $10.8 billion) in 2016, up 6 percent from 2015.

Music royalties, which make up the bulk of CISAC-member collections, rose 7 percent for the year, to €8.0 billion (US $9.4 billion) powered by rapid growth in streaming services in several major markets. The U.S. and Canada saw the biggest increase, at 12.5 percent, followed by the Asia-Pacific region, which grew 10.3 percent.

Use of collectively managed works, primarily music, in traditional TV and radio programming accounted for the largest slice of the collections pie, at 42.8 percent, followed by live performances and background uses, at 29.6 percent. Digital uses, however, which include music and video streaming, saw the fastest year-over-year growth, surging 51.4 percent, and now account for 10.4 percent of all collections worldwide.

The reported noted that sluggish growth in collections from video streaming services in some markets prevented the digital category from growing even faster. Declines in traditional TV viewing and the loss of viewers to over-the-top services actually led to a 1.4 percent year-over-year decline in collections from the traditional TV and radio channel.

Whether the overall surge in royalty collections by CMOs is translating into higher payments to artists and creators, however, remains a matter of contention in many creative industries, particularly music. Many songwriters, for instance, have seen their incomes fall as the bulk of music industry revenue as shifted from the sale of individual recordings to collectively managed streaming licenses.

CISAC executive director Gadi Oron, however, sees the latest results as a vindication of collective management.

“This year’s report shows the system of collective management of creators’ rights is robust, successful and ready for more growth, he said in a statement. “The big traditional revenue streams, led by broadcast and live performance, remain stable and strong. Digital royalties continue to surge and in some markets already overtake other forms of income.”

CISAC president Jean-Michel Jarre, however, himself an electronic music composer, acknowledged artists’ frustrations with current revenue flows, but put the blame on digital platforms rather than on any shortcomings in the collective-management system per se.

“Despite [the sector’s]growth…collections are nowhere near the level they should be,” he said. “Large industries that use creative content are driving down the value of our works. A simple illustration of this is the ‘transfer of value’ in the digital market where platforms such as YouTube are paying mere crumbs to authors.”

The full, 72-page report can be downloaded here.

Creative Ghosts in the Machine

October 18, 2017By Paul Sweeting

One of the highlights of last month’s RightsTech Summit was the riveting debate between Ed Klaris of KlarisIP and Drew Silverstein of Amper Music over who (or what?) should own the copyright on musical works produced autonomously by a computer powered by artificial intelligence software.

Ed Klaris, left, and Drew Silverstein at the RightsTech Summit

Klaris was clear that whoever owns the rights, it’s not the machine. Even the most autonomous of A.I. agents, he argued, by definition cannot exercise the sort of creativity and originality that U.S. copyright law requires without human input. Therefore, any originality in the work, the sine qua non of copyright, comes from humans and the copyright belongs to some human entity, whether individual or corporate.

Silverstein, whose company markets an A.I.-based music composer and performer, argued for a more expansive view of machine-made music. Claims being advanced on, or on the behalf of software output are inevitable, he proposed and it is too soon to take a categorical position on their merits.

The 30-minute debate, fascinating as it was, obviously didn’t settle the argument, which is really just getting underway. U.S. copyright law is clear on the need for a human author. It’s goal, after all, is to incentivize human creativity. But the line between man and machine is only likely to get fuzzier as technologies like artificial intelligence, machine learning, and virtual reality advance. How and where to draw that line is bound to become contentious.

The Hollywood Reporter Esq. columnist Eriq Gardner flags a fascinating case involving an infringement claim brought by the maker of MOVA, a computer-based system that captures human facial expressions and uses them to create photo-realistic graphic effects, against several Hollywood studios that used a an allegedly purloined version of MOVA to create effects in blockbuster movies, including Guardians of the Galaxy, Avengers: Age of Ultron, Deadpool, and The Curious Case of Benjamin Button, among others.

The plaintiff in the case, MOVA inventor Rearden LLC, makes a number of patent and trademark claims related to the studios’ use of an allegedly stolen version of MOVA. But it also makes the jaw-dropping claim that any originality in the creative output of the MOVA system is the result not of any human input but to the design of the system itself, and therefore Rearden owns the copyright on that output.

Rearden was founded in 1999 by Silicon Valley inventor Steve Perlman, who claims to own the MOVA software. In 2012, Perlman transferred the MOVA assets to a second company, OnLive Inc. At that point, Perlman alleges, two of his then-employees secretly formed another company and negotiated the acquisition of OnLive and the MOVA assets. In 2013 those assets were sold to Chinese investors, who transferred them around among multiple corporate entities. At the same time, the MOVA technology was licensed in the U.S. exclusively to effects-house Digital Domain 3.0, which used the technology to produce graphics work for the studio defendants.

Rearden, meanwhile, sued the Chinese companies and last year won an injunction that bars Digital Domain from continuing to use the MOVA technology.

The studio defendants, Disney, Fox and Paramount, do not dispute that the MOVA technology may have been stolen. But they strongly reject the claim that the owner of MOVA, whether Rearden or someone else, also owns the copyright on the work it produces. What show up on the screen, they claim, is chiefly the result of human inputs, from the film’s direction, the performances of the actors, and the photography of the cinematographer. To argue that the owner of the effects software also owns its output, the studios say, makes no more sense than arguing that Microsoft owns the copyright on any work produced using Word, or Adobe any work produced in Photoshop.

Rearden is having none of it, and here is the nut of its argument as spelled out in the complaint:

[H]ere, the work at issue is the program’s output, in particular, the three-dimensional Captured Surface and Tracking Mesh. The MOVA Contour system takes two-dimensional camera captures as input, and the program then synthesizes them into three-dimensional outputs with subtlety and artistry, based on creative choices made by its programmers and embodied in its copyrighted software instructions…[D]uring MOVA Contour performance capture, the director cannot choose camera angles because the cameras are fixed in the MOVA Contour rigging; there can be no “selecting and arranging the costume, draperies, and other various accessories,” because the capture is of only the random patterns on the actor’s face and neck; and there can be no “arranging and disposing the light and shade,” because the lighting is also fixed in the rigging, and a random pattern of glowing makeup applied to the actor’s skin eliminates shadows for an evenly-lit random pattern.

Similarly, defendants’ argument that Rearden’s claim is analogous to Microsoft claiming a copyright in a book by an author who used Word to write it, or Adobe claiming a copyright in the artwork by an artist who used Photoshop to create it are equally inapt. Generally, an author writes a book by typing every word into a Word document, and an artist creates a work of art by deciding on specific treatment of every pixel in a Photoshop file. But in neither case does their work provide input to software that synthesizes an original expression that is distinct from the author’s or artist’s input. Here, neither the actor nor the director create a Captured Surface or Tracking Mesh output. The actor performs, and a director may direct the performance, and two-dimensional glowing random patterns are captured. But the works at issue here are not the two-dimensional captures; rather, the works at issue are the MOVA Contour program’s output, in particular, the three dimensional Captured Surface and Tracking Mesh created entirely by the MOVA Contour program.

It’s a bold argument, and there’s no telling at this point how a court might ultimately rule on it. The argument over whether the tool maker or the tool user is the author of what the tool helps create may be settled as a matter of law. But as the tools grow ever more sophisticated, the debate over how to tell the difference is far from over.

Featured image: Google DeepDream

Art World Looks to Blockchain to Pump Up Online Sales

October 3, 2017By Paul Sweeting

Global sales of art works amount to roughly $45 billion a year, but in 2016 only $3.75 billion of that — less than 10 percent of the total — was transacted online, according to the Hiscox Online Art Report, making the art and collectibles trade a laggard in the world of e-commerce.

A big part of the reason for the lack of a more robust online marketplace is the high potential for fraud — already a $6 billion a year problem in the art world — when buying artworks sight-unseen except in digital form. Copies and knockoffs can be passed off as originals, “limited” editions can overstep their limits, certificates of authenticity can forged.

Verisart CEO Robert Norton

Several startups have have launched in recent years to tackle that problem, including Verisart, ascribe, and Tagsmart, by providing artists the means to assert their authorship and issue time-stamped, digitally signed certificates of authenticity (COAs) by registering the information on a blockchain. But online sales have yet to scale using that artist-by-artist, piece-meal approach.

Now, Burbank, Calif.-based Verisart is looking to go the wholesale route through a partner certification program and API for online sellers and galleries. Last week, it announced its first such partnership, with online gallery Avant Arte.

Under the deal, Avant Arte will apply Verisart’s certification standards across all its represented artists and sales of limited edition artworks. Each certificate will be optimized for both physical and digital use with a unique QR code, blockchain timestamp and web address.

Speaking at the RightsTech Summit in New York last week, Verisart CEO Robert Norton said, “As online retailers and galleries look to improve certification standards, we’re seeing increasing demand for blockchain enabled certificates and we’re delighted to work with Avant Arte as our first limited edition print partner.”

Added Avant Arte ATO Nico Veenman, “By partnering with Verisart, we’re applying two factor validation of ownership by combining a physical ownership certificate and a digital certificate on the blockchain including immutable and authorized information about the artwork edition.”

Avant Arte is the first company to use the Verisart’s partner API allowing bulk transfer of data and certificate customization.

(Cover image: Wikimedia Commons)

RightsTech Summit Kicks Off September 27th

September 20, 2017By Paul Sweeting

The curtain will be going up next week on the second annual RightsTech Summit. Part of the two-day New York Media Festival the Summit will feature over 40 speakers from around the world and will bring together rights owners, creators, technology developers, policymakers and investors from across the full range of media sectors, for a unique, high-level discussion focused on technology innovation around the registration, management, licensing,

Jim McKelvey

and tracking of media rights and royalties on digital platforms.

From Monkey Business to Machine-Made Music

September 13, 2017By Paul Sweeting

With the long-running litigation between People for the Ethical Treatment of Animals (PETA) and photographer David Slater over the now world famous “monkey selfie” still pending before the U.S. Ninth Circuit Court of Appeals, the two sides have agreed to settle the case and have asked the court to dismiss the appeal, according to a joint statement put out by the parties.

But the settlement of the lawsuit isn’t likely to end the debate over how courts and the law should regard works created by non-human authors. In fact, the debate may only be getting started.

For one thing, as The Hollywood Reporter’s legal columnist Eriq Gardner notes, the “settlement” between PETA and Slater doesn’t fully settle the case between them. In their joint motion to the court to dismiss the appeal, the parties also ask that the original lower-court ruling that monkeys do not have standing to enforce claims under the Copyright Act. If granted, that would presumably leave the door open for PETA or someone else to bring a future claim with a different set of facts.

“PETA contends it would be just and proper to not bind Plaintiff Naruto [the monkey] by the judgment of the district court in light of the dispute concerning PETA’s status to file the complaint which resulted in that judgment,” the complaint says.

In a footnote, Slater’s side demurs, “Pursuant to the terms of the parties’ settlement agreement, Defendants also join PETA’s request for vacatur, without joining or taking any position as to the bases for that request.”

Moreover, the statement released by the parties does not say whether they have in fact agreed on who actually owns the copyright in the photographs taken by the Naruto. According to the statement, Slater has agreed to “donate 25% of future gross revenue from the Monkey Selfie photographs to charitable organizations dedicated to protecting and improving the welfare and habitat of Naruto and crested black macaques in Indonesia.”

Does that mean he has agreed to some sort of shared, or split ownership of the copyright between himself and some other entity on behalf of Naruto? Does PETA, or someone else, have the right to an accounting of Slater’s earnings from the photographs? Who will have standing to bring claims against future unlicensed uses? The statement doesn’t say.

Since the case was settled, whatever provisions the parties may have made with respect to those questions will remain private, and do not establish any sort of legal precedent. Yet, while monkeys may not be rushing to set up Instagram accounts to show off their selfies, works created through machine-learning processes and artificial intelligence are becoming more common. And the question of how (or whether) to fit works created by non-human agents into existing licensing structures is only likely to grow more urgent.

A.I. researchers researchers at Google, for instance, have taught an artificial neural network called Creatism to take aesthetically sophisticated photographs that in A/B tests many professional photographers were unable to distinguish from human-made shots.

Google arXiv

Music composed by artificial-intelligence agents is increasingly finding its way into the soundtracks of advertisements, videogames, apps, and other contexts where suitable human-authored works are either not available or too costly.

It may not be long before A.I.-composed pop tunes start turning up in Spotify playlists alongside the works of anonymous or pseudonymous artists already popping up there.

Those questions will be the focus of two special presentations at this month’s RightsTech Summit in New York.

In one, Edward Klaris, managing partner in the media and intellectual property law firm KlarisIP will offer a global perspective on artificial intelligence and copyright protections.

A second, roundtable presentation, will focus on the specific case of machine-made music. It will feature Drew Silverstein, founder and CEO of Amper Music, an A.I. composer, performer and producer for creating music for soundtracks, and Arnaud Decker of Luxembourg-based Aiva Technologies, which has developed the first A.I. agent to be registered with a collective rights management organization.

The RightsTech Summit will be held on September 27th at the Museum of Jewish Heritage in lower-Manhattan as part of the 2-day New York Media Festival. Click here for a full list of speakers at this year’s summit. Click here for information on how to register for the RightsTech Summit and the full NY Media Festival.