Thank you, Alex.
17 March 2010
(I was going to call this “The Wind that Shakes the IP” but even I have geek limits.)
Right now, people all over my country are stumbling into bars, drinking some horrible green-food-colored excuse for a beer, and singing the songs of the ol’ country (the population of which seemingly quadruples every March 17th). Some of these songs are time immemoriam, or at least in the public domain (“Foggy Dew,” “When Irish Eyes Are Smiling,” etc.), but a lot of them are not. Usually, when a song that’s still protected under copyright is publicly performed like this a royalty is generated for the songwriter. In the US this means the venue will get a license from ASCAP, BMI, and/or SESAC, which allows the venue to publicly perform most protected music. These organizations will then log performances through a variety of metrics and distribute the license fees amongst all of their member songwriters. (There are cynics who criticize this model for a variety of reasons, but that’s beyond the scope of this humble blog post.)
But this often isn’t the case. American copyright law has some interesting carve-outs for bars and other establishments that routinely play music. Starting in 1975 with the Supreme Court case of Twentieth Century Music v. Aiken, the US has recognized what we nerds call the “homestyle” exception to public performance royalties. In short, the “homestyle” exception provides that a person or establishment that has “a single receiving apparatus of a kind commonly used in private homes” does not have to pay for any music piped in from that receiver. This exception was expanded in 1997 with the Fairness in Music Licensing Act, which exempts an establishment from liability for public performances if, in the case of a restaurant or bar:
- The source of the music comes from a radio station;
- the establishment has 3,750 square feet or less of space;
- the broadcast is to not more than 6 loudspeakers (no more than 4 can be in any given room);
- no charge is made to hear the transmission;
- the transmission is not further transmitted; and
- the original transmission is duly licensed.
(This does indeed exclude a lot of bars, but many are still included.)
The intuitive appeal of such a statute is easy to understand, especially for a Congressman. Small businesses operate on sliver-thin budgets, and anything that can save them money comes as a kindness for their (usually politically active) proprietors. What most people don’t know is that this exception puts the US out of compliance with international obligations, and has cost the United States millions of dollars in royalties. And a lot of that liability traces back to the playing of Irish tunes without paying the Irish songwriters.
Alain Lapter wrote a 45-page treatment of the issue for the Chicago-Kent Journal of Intellectual Property (PDF) which gives a much more thorough analysis, but here’s the synopsis: The US is party to two important international agreements in copyright: (1) the Berne Convention, a long-standing treaty between nations regarding substantive copyright protection (though the US is a very late adopter); and (2) the General Agreements on Tariffs and Trade, which included the Trade Related Aspects of Intellectual Property Rights (“TRIPs”). Berne gives countries a minimum level of protection for member nations, and is very strict in terms of preserving rights for artists. Under Berne, all artists have the exclusive right to to control the public performance and public broadcast of their works. Given this strict language, the Fairness in Music Licensing Act is pretty squarely in violation of the terms of the Berne Convention.
The US does not enter into self-executing treaties in the IP space, so even though Berne would likely stand in conflict with the Fairness in Music Licensing Act it would be of no consequence. TRIPs, however, has a mechanism for enforcement under the World Trade Organization (“WTO”). The treaty further incorporates most of the Berne convention under its Article 13, so now a violation of Berne has some teeth. And in this case, it bit.
When the Fairness in Music Licensing Act came into being, the Irish Music Rights Organization filed a complaint with the European Union, and they in turn brought a complaint under the WTO. After a fairly hearty analysis, the dispute resolution panel found that the Fairness in Music Licensing Act did indeed violate US international obligations. Accordingly, the WTO imposed a deadline of July 2001 for the US to amend the Act to come into compliance with TRIPs. The US failed to meet that deadline. The arbitration panel thus ordered the United States to pay royalties to the tune of $1,219,900 per year. In 2003 the US and the European Community entered into a settlement, whereby the US would pay $3.3 million dollars to a fund for European rights societies, and in turn the US would be given until the end of 2003 to bring its law into compliance with Berne and TRIPs.
This brings us to tonight. Interestingly, nothing has happened since the 2003 agreement. The US has made no motion to amend the Fairness in Music Licensing Act, and has further stopped paying the European songwriter societies as agreed to in the arbitration. Lapter in his excellent article includes a great deal of analysis about proposed revisions to the WTO dispute panel and arguments for better compliance with international agreements, but this discussion remains entirely in the academic realm. Meanwhile, many bars will pipe in Irish music tonight with no money going to Irish songwriters. The government appears wholly indifferent to the international consequences of this.
13 March 2010
I think we’re in the last throes, if you will, of the in-snow-gency. All that’s left of the knock-out snowstorm from last month are a series of really gross (and still pretty large) piles of snow in Chinatown:
9 March 2010
Very quickly between classes here, I want to let you guys know that, as Techdirt notes, EFF has recently released their anual analysis of the Unintended Consequences of the DMCA. It’s always worth a read.
It’s important to keep in mind as we all try to get inside the minds of those negotiating the much-discussed-but-little-understood ACTA treaty, that (at least for me) the problem is not that the law will directly change American law. Ben Sheffner makes an excellent case as to why this is unlikely to change American law, and, aside from the three-strikes concern, I have no reason to doubt this claim. The problem I have with ACTA – aside form the secrecy and the lingering Internet cutoff threat – is that it will lock in DMCA-like provisions in the rest of the world. It will become harder to act on the advice of organizations like EFF and modify our (admittedly already-codified) law.
This is, in many ways, rescaling one of my favorite arguments in favor of federalism: when states are free to regulate individually, the states can function as “laboratories” experimenting in policy judgments to solve common problems. States in turn can learn from each other and adopt regulations accordingly, and the greatest policy structures will ideally prevail. I’m not saying the DMCA is uniformly bad, but I can’t believe that it’s the best we can do to solve the complicated intersections of technology, security, trade, and copyright. I bet, left to their own devices, other countries can do far better, and we should not be foreclosing this experimentation.
8 March 2010
(from Flickr user samsaundersleeds)
We’re seeing far too many tragic music deaths this year.
Yesterday, Sparklehorse frontman Mark Linkous was found dead from a self-inflicted gunshot wound. Only two days earlier we found out that the band’s latest work, a collaboration with Danger Mouse and David Lynch called Dark Night of the Soul, finally cleared some legal hurdles that have kept the album out of fan hands for nearly a year. (I wrote about those legal hurdles back in May 2009.) According to a statement copied at Brooklyn Vegan, there’s a nearly-finished album for Anti- Records in the pipeline, so this might not be the last we see of this excellent, excellent band. I’ve considered Good Morning Spider a desert-island record for years now, and am quite sad to hear of Linkous’ passing.
Rest in peace.
1 March 2010
Berklee College of Music runs a music business journal which addresses the problems of our beloved industry with a little more academic vigor than most other outlets. Usually, I rely on them for some valued in-depth perspective on a lot of issues. But their coverage of the Live Nation / Ticketmaster merger is simply miserable.
The journal published two articles on the subject for their most recent issue. The first is a fairly straightforward pros-and-cons piece which, aside from only getting one opinion on either side, serves as a sufficient history piece. The second is a pro-merger take by someone who I can only assume is a student at Berklee, highlighting the purported efficiencies of the transaction.
The (entirely citation-free) piece offers only conclusory statements about the “efficiency” of a merger, and seems to be confusing a lot of the details of both the settlement and the industry. The author seems confused, for example, that no mention was made in the DoJ settlement of major record companies, as if the record industry’s role would have any bearing on a live-music merger. He predicts the end of service charges on tickets, with no evidence to support it. He suggests TicketsNow (a Ticketmaster affiliate) avoided antitrust investigation for their unsavory ticket resale practices, which is totally wrong. He says TM/LN will now finally have the market power to engage in pure price discrimination, but does not even mention how that might fall under the criminal liability of the Robinson-Patman Act. The author seems to also fundamentally misunderstand the nature of Live Nation, talent agencies, and a lot of the structure of the business, and adds this structurally imbalanced suggestion as to the impact on independent actors in the music industry:
But this is not the death of all things independent. To the contrary, independent segments of the industry will survive through strategic partnerships and consolidation.
So the solution for independent businesses is to consolidate, and thus no longer be independent?
There’s substantive issues to address here, but the article takes so many sharp turns I can’t do the merits any justice. (Paradoxically at the end the author supposes that “Live Nation Entertainment will suffer eventual divestiture at the hands of a Republican administration.” Don’t look for any reasoning to back up the assertion that Republicans, historically softer on antitrust, will feel compelled to split up Live Nation once they take power.) This was a tremendously disappointing read. As one of the only academic music business journals out there, I expected a hell of a lot more from Berklee.