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1. Registration of a song with a PRO does not provide any copyright protection.

Closeup of earbuds and smartphoneThe most common misunderstanding I encounter from songwriters is that registering their songs with one of the U.S. music performance rights organizations (“PROs”), i.e. ASCAP, BMI, SESAC or GMR, gives the songwriter some protection of their intellectual property rights in their songs. That is simply not the case. Registration of a song with a PRO simply puts the song into the licensable database of the PRO and makes the proprietor information publicly available.

Music performance rights organizations, also known as performing rights societies, act as licensing agents for songwriters and music publishers with respect to the public performance of their songs. In order to play a copyrighted song on radio (over-the-air, satellite and internet), on television (network, cable, satellite and internet), perform it live (bars, concert halls and festivals) or digitally stream it (Pandora, Spotify, etc.), a public performance license must be obtained from the writer and publisher.

Registering a song or catalog of songs with a PRO will enable a songwriter or publisher to receive public performance rights and allow them to participate in events or take advantage of collective negotiating efforts, but that is all the registration does. The PRO registration does not register the copyright in a song or provide any licensing benefits other than public performance. In order to obtain the full benefits of copyright law protection, the writer or publisher should register their songs with the U.S. Copyright Office.

Although copyright registration is not a prerequisite to copyright protection, it is certainly “cheap insurance” from an intellectual property standpoint. If registration is made within three months of publication of the song or at any time prior to an infringement of the song, the copyright owner is entitled to seek statutory damages and attorney’s fees in federal court. That means a losing infringer may have to pay the owner’s legal fees and the damages awarded to the owner may be substantially increased based on the copyright law.

In addition to registering their songs with a PRO, songwriters and publishers should take the additional step of registering the copyrights in their songs with the Copyright Office. PRO registration is beneficial for searching writer/publisher information and for performance royalty collection purposes, but songwriters and publishers should not assume that registration provides any more expansive advantages than it actually does.

2. PROs issue licenses for public performance of songs and collect performance royalties (that is basically all they do).

The right of public performance is one of the exclusive rights granted to copyright owners under the U.S. Copyright Act (see 17 U.S. Code §106). Although copyright law allows songwriters and publishers to license performance rights themselves, it would be impossible (or at least impractical) for them to negotiate licenses with every radio station, television station, concert hall, etc. So, the concept of performing rights organizations arose. PROs aggregate the performing rights of writers and publishers, negotiate licenses with users of their music, collect the income from those licenses, and distribute that income to the applicable writers and publishers after deducting their operating expenses.

PROs track performances using various reporting and sampling techniques, and they offer both catalog licenses and per-use licenses. PROs do provide certain career development assistance, legislation advocacy efforts and philanthropic help for their members and outside musicians. They consistently present concerts, expos, seminars, workshops, camps and other activities for their members and the public, but that is where their efforts stop. PROs are not huge rights clearing houses for song catalogs.

3. Registration of a song with a PRO does not facilitate issuing mechanical licenses or synchronization licenses.

PROs do not issue mechanical licenses, synchronization licenses or any music publishing licenses other than public performance licenses. Registration of a song with a PRO makes the relevant writer/publisher information searchable for the song, which may help a potential licensee locate the proprietor of a song. However, the applicable PRO does not have any involvement in procuring, negotiating or issuing mechanical licenses for recordings of songs by recording artists or synchronization licenses for uses of songs in films, television programs, video games or other audiovisual productions. Those types of licensing must be handled separately by a songwriter’s music publisher and/or attorney.

Spotify, the world’s largest music streaming service, was sued last week for over $366 million by two music publishers, Bluewater Music Services in Nashville and a group of companies affiliated with Bob Gaudio, the award-winning songwriter and member of Franki Valli and the Four Seasons.

Closeup of earbuds and smartphoneEach plaintiff claims in their lawsuit that Spotify failed to comply with the requirements of Section 115 of the U.S. Copyright Act for obtaining mechanical licenses to use the plaintiff’s songs on Spotify’s streaming service, thereby infringing the plaintiff’s copyrights. Under U.S. law, streaming companies like Spotify are not required to negotiate mechanical licenses with publishers, but they must send publishers written notices of their intention to obtain compulsory licenses. The plaintiffs claim that Spotify did not provide proper notices to them and continued to stream their songs without mechanical licenses.

When a stream occurs, it utilizes two of the exclusive rights granted to a copyright owner of a song, the reproduction right and the communication right. In the music publishing business, those are known as “mechanical rights” and “performing rights.” Performance rights are licensed in the U.S. by performing rights organizations, like ASCAP, BMI and SESAC, which each represent different catalogs of songs. Mechanical rights in the U.S. are licensed primarily through The Harry Fox Agency, which acts as a licensing agent for music publishers, but mechanical rights in many songs must be obtained from individual publishers or songwriters, who can be challenging to locate and communicate with.

This is not the first time Spotify has been admonished for failing to implement adequate procedures to notify song proprietors of Spotify’s intention to add their songs to its playlist. In 2016, Spotify reached a $30 million settlement with the National Music Publishers’ Association (NMPA) for unpaid mechanical royalties and Spotify recently settled a class action suit by a group of songwriters led by David Lowery for $43.3 million. The largest members of the NMPA are the major music publishing companies, whose parent companies own a combined 18% of Spotify, according to the recent lawsuits. The lawsuits claim the three major U.S. record companies stand to make $700 million each if Spotify pursues a public offering (which is anticipated this year), thus fostering speculation those companies settled the lawsuits to protect that windfall.

In those prior lawsuits, Spotify emphasized the difficulty of identifying and contacting each song publisher and the company agreed in the settlements to “work collaboratively to improve the gathering and collecting of information about composition owners to help ensure those owners are paid their royalties in the future.” The complaints in the recent lawsuits claim that Spotify has “built no infrastructure capable of collecting compositional information and failed to ask for such information.”

In most countries outside the U.S., mechanical rights are licensed via a centralized collective licensing organization, which represents all the song owners in the particular country. Even if music publishers license their songs directly to a streaming service, the mechanical rights “society” in their country usually handles the administration associated with collecting and paying out the royalties due. In the U.S., there is no industry-wide or national organization to assist with processing mechanical licensing and collecting mechanical royalties

Although the U.S. music industry has acknowledged that a global music rights database is necessary, no one has yet made it a reality. Everyone seems to agree that songwriters and music publishers should be paid properly when their songs are streamed, and some argue it is the responsibility of the well-financed streaming firms to design a system to identify songs and make appropriate payments. Others argue the music publishing establishment should create a industry-wide system for identification and payment.

If the U.S. were to adopt the nationwide collective licensing model utilized in almost all other countries and create a centralized mechanical licensing entity, the recent lawsuits against Spotify would never have been necessary. Unfortunately, that is not likely to occur due to the entrenched and vested business interests involved, and the reluctance to collaborate and share databases of song information, which many consider to be proprietary.

Copyright: <a href=’https://www.123rf.com/profile_pasta77′>pasta77 / 123RF Stock Photo</a>

An ugly dispute between two reality stars has the potential to create precedent on the responsibility of television networks for posts by its talent on social media sites.

The protagonists are Mykel Hawke and Joseph Teti, both veterans of Special Forces. The seeds were sown when Teti, who was Hawke’s former employee, was given a show by Discovery Network called Dual Survival. Hawke already had a similar show on Discovery, entitled Man, Woman, Wild. Things only got worse after Hawke’s show was cancelled. The parties traded attacks on Facebook. Hawke accused Teti of complicity in a fatal helicopter crash and of misrepresenting his military service. Teti questioned Hawke’s mental health. Litigation ensued.

The battle ultimately involved four juridsictions. In Texas, Hawke sought a protective order against Teti’s alleged stalking. Teti’s riposte was to file a defamation action in North Carolina. Hawke counterattacked in South Carolina, bringing his own suit for defamation and tortious interference. In a creative move, Hawke’s lawyers named Discovery as a co-defendant in this action. Their theory is that Discovery is responsible for the social media posts of its employee Teti. The complaint alleges that Discovery “failed to take action to stop the defamatory statements from being posted online,” and failed to “adequately train personnel in public interaction, when and what types of communications employees should say publicly and/or put into print.”

Teti was dismissed from the South Carolina suit for lack of personal jurisdiction. Discovery, now sole defendant, moved for summary judgment and subsequently removed the case to federal court in Maryland.

Discovery’s first argument for summary judgment goes to the underlying alleged defamation: simply that the facts will not support a claim that Teti’s statements meet the legal standard for defamation.

The network moves on to rebut its alleged direct liability for the posts. It says that in response to Hawke’s complaints about Teti’s posts on the official Dual Survival Facebook page, it applied a filter to block any posts containing Hawke’s name. It also claims that Hawke has been unable to state with certainty whether particular statements were made on an official page or on Teti’s personal social media accounts. Discovery also denies that it ever directed or encouraged Teti to say the things he did.

As far as vicarious liability goes, Discovery argues that Teti’s remarks were “outside the course and scope of his duties at Discovery.” It asserts that Teti made the posts entirely on his own, on his own time, not on the set, and using his own internet connection and devices.

Discovery also makes an interesting statutory argument under Section 230 of the Communications Decency Act. That section provides that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” It is due to this section that, for example, it would likely have been futile for Hawke to sue Facebook itself for the contents of the Dual Survival Facebook page. Discovery argues that by creating and administering the page on which third parties could share content, it should be likewise regarded as an “interactive computer service” with complete immunity from Hawke’s causes of action.

In just a few short years, social media have transformed our world. Cases such as this one have the potential to establish the legal principles that will guide parties’  behavior going forward.

The Jukebox musical is alive and well and living on Broadway. From the songs of Gloria Estefan to Carole King, from Frankie Valli to Abba, we are amidst a 20-year old trend to present pop music’s biggest hits on the live theatrical stage. Indeed, blockbusters like Jersey Boys, Mamma Mia and Rock of Ages have encouraged music rights holders to exploit their catalogues in what has proven for some to be a very lucrative market, and the 2018-2019 Broadway season continues to welcome jukebox properties to the Great White Way.

Woman singing with microphone
Copyright: arturkurjan / 123RF Stock Photo

The licensing of a non-dramatic musical composition (for example, a pop song) for use within a dramatico-musical stage play (aka a musical) is often misunderstood by creatives and rights holders alike. To debunk some commonly held misconceptions, here is my 60-second elevator summary:

  1. A grand right is a right that subsists in the entire dramatico-musical play as a single work – not the music in and of itself. As such, a “grand right” combines the elements of the music, lyrics and book of a dramatico-musical or operatic work into a single right. A grand right is usually owned and controlled by the theatrical producers and/or composers who create the dramatico-musical or opera. When your child’s middle-school performs Annie for the ninth year in a row, that performance is the exercise of a grand performance right.
  2. If you are looking to incorporate existing, non-dramatic compositions into a dramatic work, for example, in the creation of a jukebox musical, you will need to obtain a dramatic performance license. Whereas performance rights societies such as ASCAP are able to grant licenses for non-dramatic performances of non-dramatic compositions (e.g., to allow your gym to play Rihanna), only the copyright owner of the non-dramatic composition can grant a dramatic performance license – customarily, the music publisher.
  3. Always keep in mind, dramatic performance licenses do not include a grant of life rights and/or underlying rights to the story of the writers or performers of the non-dramatic compositions. If you intend on acquiring a dramatic performance license to tell the story of your favorite band, you will also need to obtain some kind of life rights and/or underlying rights agreement.

Understanding these distinctions can save creatives and producers time and expense in the long run, particularly in this evolving and competitive ancillary rights market.

Charlie Nelson Keever writes:

The Supreme Court ruled this morning that a federal law that prohibits the government from registering trademarks that “disparage” others violates the First Amendment.

Members of an Asian-American rock band filed a lawsuit after the U.S. Patent and Trademark Office (PTO) kept the band from registering its name, The Slants, a reference to the derisive slur sometimes wielded against Asian-Americans. The PTO said the name was likely to denigrate a significant number of Asian-Americans in violation of the Lanham Act, which prohibits any trademark that could “disparage … or bring … into contempt[t] or disrepute” any “persons, living or dead.”

Rock star cartoon
Copyright: kennykiernanillustration / 123RF Stock Photo

The band’s founder, Simon Tam, said the point of the band’s name is just the opposite. “[Growing up] the notion of having slanted eyes was always considered a negative thing… Kids would pull their eyes back in a slant-eyed gesture to make fun of us. … I wanted to change it to something that was powerful, something that was considered beautiful or a point of pride instead.”

The Supreme Court sided with The Slants.

“The disparagement clause violates the First Amendment’s Free Speech Clause,” Justice Samuel Alito wrote in his opinion for the court. “Contrary to the Government’s contention, trademarks are private, not government speech.” Alito noted that the government “still has an interest in preventing speech expressing ideas that offend,” but suggested the “disparagement clause” was overly broad.

This case could have a broad impact on how the First Amendment will be applied in other trademark cases. In 2014, the PTO canceled the Washington Redskins’ trademarks, finding the term “Redskins” disparages Native Americans under the same statutory clause that was quashed by the Supreme Court today. The team is calling today’s ruling a win. Redskins attorney Lisa Blatt said in a statement, “The Supreme Court vindicated the team’s position that the First Amendment blocks the government from denying or cancelling a trademark registration based on the government’s opinion.” The Redskins’ case has been on hold in the U.S. Court of Appeals for the 4th Circuit in Richmond, pending today’s decision.

Charlie Nelson Keever is a summer associate in the firm’s Los Angeles office.

Copyright: ratru / 123RF Stock Photo

We reported previously that LA City Attorney Mike Feuer had brought misdemeanor criminal charges against five casting workshops and 25 individuals under the Krekorian Talent Scam Prevention Act. Feuer alleged that the workshops–purportedly for training actors in audition techniques–were actually pay-to-play schemes in which aspiring thespians would pay for the opportunity to be seen by casting directors.

On June 5, one of the accused, Bradley Sachs, pleaded no contest to the charges. He was placed on 36 months summary probation and sentenced to serve either 10 days in jail or perform 150 hours of community service. He also agreed to pay investigative costs, and not to be involved in any talent training service until completion of his probation. Sachs’ company, The Actors Alley, shut down when the charges were first announced.

Although it had previously expressed support for the defendants, the Casting Society of America declined to make a statement on Sachs’ plea on the grounds that he is not a CSA member.

Copyright: buzzfuss / 123RF Stock Photo
Copyright: buzzfuss / 123RF Stock Photo

TBS comedian and late-night talk show host Conan O’Brien was given good reason to frown Monday when a federal judge denied summary judgment as to three of the five jokes comedy writer Alex Kaseberg claims O’Brien and his writing team stole from Kaseberg’s Twitter feed between December 2014 and June 2015. The three jokes left standing: a gag about New England Patriots’ quarterback Tom Brady giving Seattle Seahawks coach Pete Carroll the new car Brady promised to award the MVP of Superbowl XLIX, a jeer about a hypothetical street named after Bruce Jenner (i.e., “cul-de-sacless”), and a discovery that the Washington Monument is ten inches shorter than previously recorded because of “shrinkage” resulting from cold weather.

As we previously reported, O’Brien filed for summary judgment in February arguing the jokes were created independently of Kaseberg’s tweets and derive from current events and common themes of life.  Judge Janis Sammartino agreed the jokes contain inherent newsworthiness and therefore carry “thin” copyright protection where proof of infringement requires verbatim plagiarism.  The court also found the other two jokes poking fun at the N.Y. Jets and Delta Airlines were independently created and/or too different to withstand summary judgment.  However, with respect to the other three jeers, Judge Sammartino found the material issue of whether O’Brien and his team had access to Kasberg’s Twitter feed and whether O’Brien’s jokes are substantially similar to Kasberg’s Twitter content remain disputed.

The defeat leaves O’Brien with the choice of settlement or trial.  Although copyright infringement suits between comics rarely come before a jury, given O’Brien’s caustic deposition testimony where he declares “accusing a comedian of stealing a joke is the worst thing you can accuse them of… short of murder,” the future of this case remains uncertain.

Netflix handed a pleasant surprise to Hollywood when in announced that it is committing to spend its $6 billion annual budget for original productions in California rather than chasing tax incentives in other states and countries. Ted Sarandos, Nexflix’s chief content officer, explained the decision this way.  “[It’s] very

Smart TV
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tough on families and eventually it grinds on the talent,” he said. “Shooting in LA is an investment in the quality of the show.”

Encouraging as this may be, it shouldn’t be viewed as the leading edge of a trend. The Netflix business model is very different from other content providers. It’s proved itself willing to spend whatever it takes to establish an insurmountable subscriber lead to head off growing competition from other subscription services, and it’s willing to accept lower profits to accomplish this goal. The commitment to LA production will make it that much easier to attract A-list talent who will appreciate working close to home.

 

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Hollywood is on pins and needles at the prospect of a Writers Guild of America (WGA) walkout, which could occur as early as May 2. On April 24, the Guild announced that a strike authorization vote had passed with 96% support. Although the vote is largely symbolic–a second vote would be required to begin an actual strike–it succeeded in sending the message that writers are ready and willing to take that next step.

The last writers’ strike, in 2007-08, lasted 100 days and created severe hardships throughout the industry, although the WGA claims the strike was ultimately a win for its members. The threat of another strike has created an atmosphere of mild panic as studios rush to close deals and stockpile scripts. Although many insiders express optimism that a walkout can be averted, the consensus is that this is too close to call.

There are three critical issues on the table as negotiations enter their home stretch.

  • Compensation: The WGA asserts that average writers’ earnings have been going down despite the explosion of “peak TV.” Staff writers are paid on an episodic basis. Wage scales were historically set on the expectation that a typical television season would comprise 22 episodes. While this may still be the case on broadcast TV, most shows on cable and streaming services have seasons of 12 episodes or fewer. Yet despite this cutback, the exclusivity provisions in writers’ contracts prohibit them from finding other work during hiatus periods.
  • Pension & Health: This Guild made this less of a priority in previous negotiations. As a result, it predicts that the Pension & Health Plans will be out of money by 2020. The shortfall is exacerbated by an aging membership and the overall decline in compensation. The Guild is looking for a big boost in contributions from employers in order to shore up the plans.
  • Streaming Residuals: Budgets for series on subscription streaming services such as Netflix and Amazon are frequently higher than those for broadcast television, but the residuals structure is much less favorable. The Directors Guild reached a deal in December that tripled residual payments from such services, so the studios and networks clearly have room to move on this issue. It’s an open question, however, whether the concessions they are prepared to make will be adequate to the writers’ particular needs.

We will know very shortly whether the industry is facing another shutdown. Meanwhile, dust off those unscripted projects.

We reported recently that Los Angeles City Attorney Mike Feuer brought misdemeanor charges against five casting workshops, alleging that they were in effect charging actors for auditions in violation of the Krekorian Talent Scam Prevention Act. At the time, the Casting Society of America supported Feuer’s action, even though at least some of the individuals charged were CSA members. When the indictments were announced, CSA then-president Richard Hicks was quoted saying “the CSA fully supports the work of the city attorney’s office.”

Man in handcuffs covering face
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Following a change in leadership, the CSA reversed its position, going so far as to launch a defense fund, organized by NCIS casting director Jason Kennedy, whose goal is to raise $45,000 to assist their legal fight. The fund has raised $18,000 so far, led by current president Matthew Lessall and, interestingly, Richard Hicks. Hicks would not reply to a request from The Hollywood Reporter to explain his changed position, nor would other fund contributors who were on record opposing the workshops in the past.