Copyright

Major Music Licensing Reform Bill Clears Committee

The House Judiciary Committee on Wednesday unanimously approved the Music Modernization Act (MMA), an omnibus bill that would bring the biggest changes to how music is licensed and paid for in more than a generation. The vote was 32-0.

The bill incorporates components of four other bills that were originally introduced separately. They include the original Music Modernization Act, which for the first time creates a blanket license for mechanical rights in the U.S. and establishes a new organization to administer the license and collect the royalties; the CLASSICS Act, which requires digital radio services to pay performance royalties for previously exempt pre-1972 sound recordings; the AMP Act, which codifies current industry practice of honoring so-called Letters of Direction by artists who wish to share performance royalties with producers and engineers; and a provision taken from the Fair Play, Fair Pay Act that establishes a new, “willing buyer, willing seller” standard for setting statutory royalties.

Left out of the bill were other elements of the Fair Play, Fair Pay Act that would have required terrestrial radio stations to pay performance royalties for sound recordings. That provision was strongly opposed by broadcasters and their opposition could have derailed the omnibus bill had it been included.

Although supporters of performance royalties for radio play, primarily the record labels, vowed to push ahead on those provisions their exclusion from the MMA leaves their fate far from certain. The National Association of Broadcasters has successfully resisted similar legislative efforts over many years, and without the cover of the broad coalition backing the MMA the labels’ efforts could be thwarted again.

National Music Publishers Association CEO David Israelite, a principal architect of the MMA, praised today’s vote.

“The House Judiciary Committee’s approval of the Music Modernization Act (MMA) is a critical step towards finally fixing the system to pay songwriters what they deserve,” he said in a statement. “There is unprecedented consensus and momentum behind this bill, and we look forward to seeing it soon pass the full House.”

Although no date has been set for the bill to be taken up by the full House, it is expected to get a vote within the next several weeks.

The Senate has yet to take up the bill in its current form, although individual elements of it have been introduced there. The Senate is not obligated to follow the House’s lead in combining the four individual bills, but the broad support for the bill from disparate industry groups, and the rare display of unanimous, bi-partisan support for it from the House committee is likely to create strong pressure on the Senate to follow suit.

“After years of compromise and collaboration across the music, tech and policy sectors to reach this point, the Music Modernization Act of 2018 will help songwriters to be better compensated for their work and positively impact how their music is licensed,” Copyright Alliance CEO Keith Kupferschmid said of today’s action. “We commend Chairman Goodlatte (R-VA) and Ranking Member Nadler (D-NY), Representatives Collins (R-GA) and Jeffries (D-NY), and all who demonstrated vigorous backing for this critical piece of legislation, enabling it to be passed through committee with decisive and overwhelming bipartisan support.”

Kupferschmid will lead a panel discussion on copyright and licensing reform, including the Music Modernization Act, at the RightsTech Summit on Oct. 5 in New York.

The Music Modernization Act: Making the Case for Open Data

The Music Modernization Act (MMA) has been scheduled for a vote in the House Judiciary Committee on April 9th, where it’s expected to pass with bipartisan support, committee chairman Bob Goodlatte’s (R-Va.) office confirmed Wednesday.

Still to be determined is whether it will go to the House floor as a standalone bill, or gets bundled into a package of music-related measures, including the CLASSICS Act, and the Allocation for Music Producers (AMP) Act. Either way, the MMA stands to be the most significant piece of legislation affecting music licensing in a generation.

“It’s also the only significant piece of legislation affecting music licensing in a generation,” quipped National Music Publishers Association CEO David Israelite during a panel discussion on Capitol Hill this week on music licensing issues.

In addition to being a rare example these days of genuine bipartisanship in congress, the MMA has proved an even more rare example of consensus among nearly all the (frequently warring) institutional voices within the music industry, including organizations representing digital service providers, publishers, songwriters, and record labels.

The bill is aimed at solving an enduring problem within the music industry that has grown more acute with the rise of streaming as the dominate mode of distribution for sound recordings: uncertainty and inefficiency in licensing mechanical reproduction rights for musical compositions.

Under U.S. copyright law, songs are subject to a compulsory mechanical license. Once a song is published, anyone can record it by notifying the songwriter or representative of their intent and paying the statutory royalty set by the Copyright Royalty Board. Unlike the performance right for songs, however, where a venue or service provider can obtain blanket licenses from ASCAP, BMI, SESAC, and GRD for their entire catalogs of works, covering nearly every song published in the U.S., and unlike other major territories, there is currently no blanket licensing facility here for mechanical rights. Instead, a service provider like Spotify or Apple Music, with upwards of 30 million or more sound recordings in their libraries, must locate, notify, and pay the songwriters or administrators for each of those recordings individually, many of which have complex, and often opaque fractional ownership structures.

Alleged failures to correctly locate and pay the appropriate rights owners have led to a raft of litigation against service providers for copyright infringement, including the $1.6 billion lawsuit currently pending against Spotify brought by Wixen Music Publishing.

The MMA would address that problem by creating a blanket license for mechanical rights and creating a new entity, selected by the Copyright Office, to administer it. Instead of having to pay each songwriters individually, service providers could write one check to the new entity, which would assume the burden of locating and paying the appropriate rights owners. The costs of operating the new entity would be paid by service providers, eliminating the need for the new entity to charge a commission to songwriters.

Songwriters and publishers would gain greater certainty of being paid, while service providers would be relieved of an enormous administrative burden and protected against the risk of litigation.

It is that alignment of interests that has led to the broad consensus in support of the MMA within the industry. But the MMA’s most important contribution could be to prove the case for open data and open protocols.

In addition to administering the blanket mechanical license, the new licensing entity envisioned by the MMA would, for the first time, create an open, publicly available database matching sound recordings to musical compositions and their authors and owners.

“We’re really changing the paradigm on data,” said NMPA’s Israelite, one of the MMA’s main architects. “Throughout the history of the music business databases have been regarded as proprietary. ..We want to encourage competition.”

By making critical ownership data public, MMA’s backers hope, entrepreneurs will be able to develop new applications and services beyond the current crop of streaming services, bringing new investment and new revenue into the music business.

“I don’t think streaming is the be-all and end-all in terms of business models,”  Panos Panay, VP for innovation and strategy at Berklee College of Music and a leader of the Open Music Initiative, said during the same panel discussion. OMI is working to develop open protocols for the exchange of music rights data, which could achieve some of the same effects as the proposed MMA database.

“With open protocols you can build an ecosystem, you can have innovation” Panay said. “The MMA, hopefully, will let this industry finally move beyond its past. If we get this right, we won’t have to stop at streaming. All sorts of new applications could be developed to create all sorts of new revenue streams.”

If that pans out, it could provide a valuable proof of concept for other rights based industries. An open and verified database of authenticity and provenance for images and artworks, for instance, could help unlock new licensing and e-commerce opportunities that are today held back by high levels of uncertainty and fraud.

Likewise, the lack of an open, comprehensive database of rights to published works makes it difficult for would-be developers to learn what works are available for license in which territories, holding back the creation of potentially new, digital applications and revenue streams for authors and publishers.

Much will depend on how well the new music rights database is maintained. There are companies in the market today, such as Music Reports and Loudr, that have already compiled comprehensive databases matching sound recordings to compositions and their rights owners, and they invest significant money and effort to verify the data and keep it current. Whether the administrators of the new open, non-proprietary database will have the same incentive to maintain it at a high level of accuracy and currency remains to be seen.

“Everyone will benefit from having this, and everyone is hurt by not having it,” Panay said of envisioned new database. “I think the important thing is that puts a focus on the data, and the importance of good data.”

 

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

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.

 

Momentum Builds For Music Database, But Controversy May Follow

The music industry has been discussing and debating for years the merits of creating a comprehensive, publicly accessible database of musical works and sound recordings and the ownership information attendant to each — something that does not currently exist. But various multi-stakeholder efforts to compile such a catalog have faltered amid disputes over cost, control, and access, most spectacularly the ill-fated Global Repertoire Database initiative spearheaded by a group of music publishers and performance rights organizations.

Rep. James Sensenbrenner

The need for such data, meanwhile, has only grown more acute, as the volume of new recordings being released each month as exploded and music streaming services churn through vast catalogs, leading to an eruption of disputes and litigation over the proper payment of royalties to rights owners.

Momentum seems to be building, however, behind renewed efforts to compile the universal look-up catalog, although controversy is already bubbling up around some of those efforts. Last week, Rep. James Sensenbrenner (R-Wisc.), the chairman of the House Judiciary Committee’s Intellectual Property Subcommittee introduced the Transparency in Music Licensing Ownership Act, which would instruct the U.S. Copyright Office to compile an open, comprehensive database linking metadata about sound recordings with metadata and ownership information about musical works so that users of sound recordings would be able to identify and locate the current rights owners of the musical works involved. The bill would also appropriate money to compile and maintain the database.

To encourage rights owners to register their works with Copyright Office for inclusion in the database the bill would also limit their ability to bring legal action against alleged infringers if the rights owner has not provided up-to-date information to the Copyright Office.

“Across the country, businesses and establishments play or perform music for the enjoyment of their patrons, but the process of ensuring they are legally able to do so, as well as those who hold the license to the music or recordings being played are fairly compensated, is convoluted and difficult,” Sensenbrenner said in a press release. “The Transparency in Music Licensing Ownership Act is a step forward in simplifying the process and helping business owners to identify copyright holders in one easy location to ensure they comply with licensing and payment requirements.”

How far Sensenbrenner’s bill will go in the current congress is an open question. Very little legislation in moving on Capitol Hill these days amid gridlock over health care reform and the multiple investigations into Russian meddling in the 2016 election. It’s also possible the effort could get dragged into the still unresolved controversy over the appointment of a new Register of Copyrights, a position sill unfilled since the previous Register, Maria Pallante was removed last year by the new Librarian of Congress, Dr. Carla Hayden.

But Sensenbrenner’s bill seems to have lit a fire under other music industry stakeholders who already make commercial use of elements of the data the bill would make public. On Wednesday, the two leading PROs in the U.S., ASCAP and BMI, announced plans to combine their respective catalogs of musical works into a single, unified database and to make it available to others in the industry.

“ASCAP and BMI are proactively and voluntarily moving the entire industry a step forward to more accurate, reliable and user-friendly data, ASCAP CEO Elizabeth Matthews said in a press release. “We believe in a free market with more industry cooperation and alignment on data issues.  Together, ASCAP and BMI have the most expertise in building and managing complex copyright ownership databases.”

Sensenbrenner immediately blasted the move, however, as an attempt to preempt his legislation.

“If BMI and ASCAP were serious about establishing a music database, not only would they have spoken to my office and other interested

Robert Kasunic, Associate Register of Copyrights and Director of Registration Policy and Practice, U.S. Copyright Office

Members of Congress about their plans, but they would have also included their fellow PROs in the initiative,” he said in a statement. “With their announcement today, they are grasping at straws; trying to maintain power over a failing process that only serves their interests, not those of the American consumer.”

The upcoming RightsTech Summit, which will be held September 27th in New York City, will tackle the daunting data challenges music industry and other media sectors face today as digital platforms strain legacy rights management and licensing systems, as well as the renewed efforts to create a comprehensive music rights database.

Executives from Rumblefish and the Harry Fox Agency, Music Reports, and other private companies making commercial use of the data targeted by Sensenbrenner’s bill will discuss the benefits and drawbacks of data sharing and the technological challenges associated with making it available.

The summit will also feature a one-on-one fireside chat with Robert Kasunic, Associate Register of Copyrights and Director of Registration Policy and Practice at the U.S. Copyright Office, who will address copyright reform efforts in the U.S. and elsewhere, including the Transparency in Music Licensing Ownership Act.

For information on registering for the RightsTech Summit, click here.

 

Midem 2017: Blockchain & Copyright

The big Blockchain & Copyright panel at Midem on Thursday, featuring RightsTech Summit alums Benji Rogers, co-founder of the dotBlockchain Music project, and attorney Sophie Goossens, focused more on metadata and the mechanics of smart contracts than on issues related to copyight per se. But it was a very interesting and useful discussion nonetheless, especially in addressing the incentive problem inherent to persuading organizations that control proprietary data sets to share their data in the interests of the industry as a whole.

Here’s the full video of the panel:

 

Binded Aims to Make Copyright ‘Seamless’ on Web

San Francisco-based startup Binded on Thursday launched its new, blockchain-based platform to allow artists to register their authorship of their works at the moment of creation. It also announced a $950,000 fundraising round led by Mistletoe, Asahi Shimbun, and Vectr Ventures, bringing its total fundraising to date to $1.5 million.

Formerly known as Blockai, Binded allows artists to upload images to their private “copyright vault,” where it’s given a unique fingerprint identifying them as the author. That information is then saved permanent on the Bitcoin blockchain. The artist then receives a digital certificate with proof of authorship. 

Facebook Takes Aim at the ‘Value Gap’

Facebook is developing a system to automatically identify copyrighted works posted to its massive social network similar to YouTube’s Content ID system, according to a report in the Financial Times (here’s Billboard’s rewrite of the paywalled FT story).

Word of the move comes just weeks after an op-ed by National Music Publishers Association head David Isrealite appeared in Billboard calling on Facebook to address a growing infringement problem on the network, particularly with respect to user-posted videos featuring cover versions of songs that were never properly licensed from the publisher.

“In a recent snapshot search of 33 of today’s top songs, NMPA identified 887 videos using those songs with over 619 million views, which amounts to an average of nearly 700,000 views per video,” Isrealite wrote. “In reality, the scope of the problem is likely much greater because, due to privacy settings on Facebook, it’s almost impossible to gauge the true scale.”

Up to now, Facebook has generally fallen back on the DMCA safe harbor to deal with copyrighted work posted without a license to its platform, removing infringing material when requested by a rights owner but not actively policing copyrighted content uploaded to its platform. According to Billboard, however, Facebook has begun discussions with the major record companies about licensing content directly, although those talks are apparently in the early stages.

Facebook actually rolled out a tool called Rights Manager last year to help rights owners keep their copyrighted works off the network, but that system was mainly designed to address the problem of video “freebooting,” in which Facebook users take videos from YouTube and other sources and post them to their walls, often generating millions of views without compensation to the rights owner.

According to this week’s published reports, the new system is aimed more at policing music use on the platform, and seems driven at least in part by Facebook’s desire to avoid the sort of sustained, naming-and-shaming campaign the music industry has mounted against YouTube over the so-called value gap.

What’s not clear from the published reports is what Facebook has in mind for what to do about the unlicensed content the new system identifies. But here’s hoping it doesn’t follow YouTube’s example too slavishly.

YouTube’s Content ID essentially offers rights owners a binary choice: take the content down, or leave it up and let YouTube run ads against it on terms set by YouTube. What YouTube doesn’t really offer rights owners is a means to effectively engage with users who are viewing or posting the content.

Facebook has an opportunity to offer rights owners a much richer environment to engage with music fans. If someone has gone to the trouble of covering your song and making a video of it, they’re probably a fan. And when they post it publicly on their Facebook wall you know exactly who they are. Even if the user shares the content only with his or her friends, Facebook knows who they are and it knows a lot about who their friends and other connections are.

More important, Facebook has the means to allow artists to engage directly with those fans and potential fans. Such engagement may have limited appeal to songwriters and publishers, but it could prove to be a boon to recording artists and labels by literally putting a face on their fans.

Even for songwriters and publishers, the type and volume of data Facebook’s new system could potentially yield on how, where, and how often their content is being consumed could be valuable.

In short, Facebook has a chance to bridge the value gap by offering rights owners more choices than simply take-down or hand-me-down monetization.

 

EU proposals could see news publishers paid by Google and Facebook 

News publishers would have stronger rights to demand payment from digital giants such as Google and Facebook in exchange for using their content, under proposed European rules that are designed to shore up the collapsing revenues of traditional media companies.

The measures are part of a series of reforms that the European commission plans to put out to consultation in September. They are designed to strengthen the rights of those who create and invest in original content, from authors and musicians to record labels, broadcasters and publishers.

Source: EU proposals could see news publishers paid by Google and Facebook | Technology | The Guardian

In Copyright Law, Computers and Robots Don’t Count

A century ago, the cutting edge in artistic robotics was the player piano. The Supreme Court heard a player-piano case in 1908 and held that the paper rolls “read” by the player pianos weren’t infringing. The rolls, Justice William Day reasoned, “[c]onvey[] no meaning, then, to the eye of even an expert musician.” Instead, they “form a part of a machine. … They are a mechanical invention made for the sole purpose of performing tunes mechanically upon a musical instrument.” The anthropocentrism is unmistakable. I’ve cataloged many different settings where copyright law finds ways to overlook copying as long as no humans are in the loop.

On the one hand, this makes perfect sense. Copyright is designed to encourage human creativity for human audiences. If a book falls in a forest and no one reads it, does it make an infringement? It seems like the only sensible answer is “No harm, no foul.” On the other hand, there’s something strange about a rule that tells technologists just to turn the robots loose. It encourages uses that don’t have much to do with human aesthetics while discouraging uses that do.

Source: In Copyright Law, Computers and Robots Don’t Count

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