From the “Stairway to Heaven” trial to the ongoing litigation surrounding pre-1972 recordings, 2016 was a big year for music law - but 2017 is shaping up to be even bigger.
The music industry’s battle against stream-ripping, changes to consent decrees and a potential Supreme Court case involving DMCA exemptions are all on the docket. So The Hollywood Reporter asked Steve Marks, general counsel for the Recording Industry Association of America, what’s at stake in the year ahead and which cases he’ll be watching most closely.
Author: Ashley Cullins
What do you feel were the biggest developments in music law in 2016?
The past year included a number of decisions where courts wrestled with whether certain online services using music must obtain a license. The online services invoked the DMCA as a liability shield for the widespread use of music on their platform, and the decisions demonstrate that the DMCA continues to litter the marketplace with outcomes that place competitors in different positions. In October, the Second Circuit emphasized in EMI v. MP3Tunes that a service cannot adopt policies to “willfully blind” itself of infringement by users of the service and recognized that the Defendants could have knowledge based on “red flags” given the facts in the record. This decision differed from a June decision by the Second Circuit in Capitol v. Vimeo, where the court applied a very stringent view of “red flag knowledge” and “willful blindness,” saying categorically that each must be based on knowledge of specific infringements. This reading of the DMCA effectively reads “red flag knowledge” out of the statute; after all, the definition of a “red flag” is that it provides a person enough information that the person should take some steps to address a problem. If this reasoning were to prevail, it would provide perverse incentives for services to profit from the music drawing users to their service without paying creators and undermine the balance that Congress thought it struck when enacting the DMCA.
The Vimeo case also highlighted another big issue for the music industry - the protection of pre-72 recordings. In that case the issue was whether the DMCA - a federal law that provides limitations and exceptions to copyright law - applies to pre-72 recordings, which are otherwise covered by state law. Curiously the court made the leap that this federal law of limitations and exceptions applies to pre-72 recordings, even though federal law provides no protection for pre-72 recordings. For example, the owner of a pre-72 recording cannot avail itself of statutory damages under federal law or receive royalties under the statutory license.
This issue is playing out more generally in cases where pre-72 owners such as The Turtles are seeking royalties from services such as Pandora and SiriusXM. On Dec. 20, the highest court in New York ruled that SiriusXM does not need a license for a public performance even though it has many channels that primarily use pre-72 recordings, though other state law claims such as unfair competition may be available. Keep in mind that SiriusXM is a $22 BILLION dollar company that by its own projections is slated to rake in a record $5 billion in revenues in 2016.
Which lawsuits will you be watching most closely in the coming year?
Read More/Original Source: http://www.hollywoodreporter.com/thr-esq/riaa-exec-2017-will-be-a-critical-year-music-law-q-a-959080/