Class Certification Denied In Foreign Streaming Royalties Case

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Leonard Williams v. Warner Music Group Corp., No. 2:18-cv-09691-RGK-PJW (C.D. Cal. Feb. 27, 2020) [Doc. 76]

On December 21, 2018, Leonard Williams and The Lenny Williams Production Company (“Plaintiffs) filed a class action against Warner Music Group, Warner Bros. Records, and several Doe defendants. The complaint asserted various causes of action based on the alleged failure by the Defendants to pay the full royalty amounts due to Williams and other artists for digital streaming of songs in foreign countries. The Plaintiffs then filed a motion to certify the putative class where the proposed class encompassed artists who have an agreement with Warner that either: (1) expressly provides for streaming royalties, (2) does not expressly provide for streaming royalties, but contains a general licensing provision, or (3) has neither a digital streaming or general licensing provision. In ruling on the motion to certify, the court recited the typicality requirement of Federal Rule of Civil Procedure 23(a)(3) and found that Williams’ contract fell into the third category of contracts, which presented unique defenses that “threaten[ed] to become the focus of th[e] litigation.” As a result, the Court concluded that under Federal Rule of Civil Procedure 23(a)(3) Plaintiffs’ claims or defenses were not typical of the class he sought to represent and denied the motion to certify the class.

Proposal To Make Illegal Streaming A Felony

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Statement of David Bitkower, Acting Deputy Assistant Attorney General, Criminal Division, U.S. Dep't of Justice, before the Committee on the Judiciary, Subcommittee on Courts, Intellectual Property, and the Internet, U.S. House of Representatives, for a hearing entitled "Copyright Remedies," presented on July 24, 2014.  [Link].

In a congressional hearing, a Department of Justice officer states that the Department supports a felony penalty for illegal streaming of music.  (See statement, p. 7).  Currently, there are felony penalties for illegal distribution and reproduction (downloads), but only misdemeanor penalties for illegal public performance (streaming).

Aimee Mann Copyright Claim Survives Dismissal Based On Terminated License

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Aimee Mann v. MediaNet Digital, Inc., et al., No. 2:13-cv-05269 (C.D. Cal. filed 11/27/13) [Doc. 26].

Plaintiff Aimee Mann (“Mann”), a songwriter and recording artist, brought this copyright infringement action against Defendant MediaNet Digital, Inc. (“MediaNet”), f/k/a MusicNet, a distributor of streaming music, online radio, and music downloads to companies like Songza, Stub Hub, Soundtracker, MTV, Yahoo Music, and Time Warner Cable (among others).  MediaNet moved to dismiss the copyright claims and Plaintiff's claim for rescission of a license agreement.  The Court denied the motion to dismiss the copyright claims, but dismissed the rescission claim with leave to replead.

On the copyright claims, MediaNet argued that Mann’s claim for direct infringement should be dismissed because: (i) MediaNet had a valid license at all relevant times and therefore cannot be liable for copyright
infringement, and (ii) the License Agreement was not terminated on December 4, 2006 as a matter of
law.  The Court found that MediaNet did not have a statutory compulsory license (17 U.S.C. 115).  The Court also found that the 2003 License Agreement was no longer in effect.  Relying on New York General Obligations Law § 5-903, Mann asserted that because MediaNet failed to alert her to the existence of the auto-renewal provision, the License Agreement was not automatically renewed after its initial term ended on December 4, 2006.  The Court agreed that the auto-renewal of the License Agreement is unenforceable under § 5-903. As such, Mann’s allegation that MediaNet exploited her pre-December 5, 2003 and post-December 4, 2006 compositions after the initial term of the License Agreement stated a claim for copyright infringement.  The Court further found that Mann had stated claims for secondary copyright liability (contributory, inducing and vicarious liability).

However, Mann's claim for rescission was dismissed with leave to replead.  The Court found rescission is an equitable remedy and that that Mann had failed to explain why the non-payment of royalties could not be adequately remedied by monetary damages. "This failure is fatal to her rescission claim."

ASCAP Required To License ALL Songs In Its Repertory To Pandora

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In re Petition of Pandora Media, Inc., No. 1:12-cv-08035-DLC (S.D.N.Y. Opinion & Order filed 09/17/13) [Doc. 70], related to U.S. v. ASCAP, No. 41 Civ. 1395.

ASCAP must license all songs in its repertory to Pandora, even though certain music publishers have purported to withdraw from ASCAP the right to license their compositions to “New Media” services such as Pandora, holds the ASCAP rate court in interpreting the consent decree under which ASCAP operates.  "Because the language of the consent decree unambiguously requires ASCAP to provide Pandora with a license to perform all of the works in its repertory, and because ASCAP retains the works of 'withdrawing' publishers in its repertory even if it purports to lack the right to license them to a subclass of New Media entities, Pandora’s motion for summary judgment is granted."

In April 2011, ASCAP began to allow members to withdraw from ASCAP its rights to license their music to New Media outlets, while allowing ASCAP to retain the right to license those works to other outlets.  Subsequently, several music publishers withdrew their New Media licensing rights from ASCAP, and Pandora then engaged in license negotiations directly with those publishers.  On July 1, 2013, Pandora filed a motion for summary judgment, seeking a determination that “ASCAP publisher ‘withdrawals’ [of New Media rights] during the term of Pandora’s consent decree license do not affect the scope of the ASCAP
repertory subject to that license."  ASCAP argued that “’ASCAP repertory’ refers only to the rights in musical works that ASCAP has been granted by its members as of a particular moment in time.” Pandora argued that ASCAP repertory” is a “defined term[] articulated in terms of ‘works’ or ‘compositions,’ as opposed to in terms of a gerrymandered parcel of ‘rights.’” The Court found that Pandora was correct.  “ASCAP repertory” is defined in the consent decree in terms of “works” and not “individual rights” in works with respect to classes of potential licensees.  The Court also held that Pandora's subsequent negotiations with the publishers did not alter interpretation of the consent decree because Pandora is not a party to the consent decree.

Spanish Radio Stations Hit With Copyright Suit By Puerto Rican Publisher And Performance Right Society

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Latin American Music Co., Inc. v. Spanish Broadcasting System, Inc.. No. 13-cv-1526 (S.D.N.Y. filed March 7, 2013).

Plaintiffs are a Puerto Rican publisher and a performing rights society (ACEMLA) alleging that the owners of several Spanish-language terrestrial radio stations (with websites that simultaneously stream the stations' content over the internet) are playing Plaintiffs' songs over the radio/web without a license.  An injunction is sought.

Aussie Court: No Extra Royalties From Radios Streaming On Web

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Phonographic Performance Company of Australia Ltd v Commercial Radio Australia Limited
[Feb. 15, 2012] FCA 93.

The issue before the Australia Federal Court was whether the scope of the non-exclusive licence of the right to broadcast certain sound recordings granted by a copyright collection agency to radio stations included the right to play those recordings in radio programs transmitted by FM broadcast as a simulcast with transmission of the same program via the Internet.

Phonographic Performance Company of Australia Ltd (PPCA) is a copyright collecting society representing the interests of copyright owners and recording artists in relation to the broadcast, communication to the public and public performance of recorded music and music videos in Australia. It offers non-exclusive licences of the copyright in a large repertoire of commercially released sound recordings for particular purposes. Commercial Radio Australia Limited (formerly called “The Federation of Australian Radio Broadcasters Limited”) (CRA) is an incorporated industry body representing the interests of commercial radio broadcasters in Australia who make use of such sound recordings in their day-to-day commercial activities.

By an umbrella Licence Agreement between PPCA and CRA (the Industry Agreement), PPCA agreed to grant to each member of CRA a nonexclusive licence of “… the Broadcasting Right in the PPCA Sound Recordings” for a certain period. Some radio stations which are members of
CRA have streamed their radio programs on the Internet. This streaming service involves the
simultaneous transmission of radio programs using the broadcasting services bands and the
Internet. The content of the radio programs made available over the radio and via the Internet
is the same. PPCA contends that, as a result of the the interplay between certain provisions of the Australian broadcasting and copyright law, the licence which PPCA agreed to grant to members of CRA did not include the right to make available to the public PPCA Sound Recordings in radio programs delivered via the Internet at the same time as making those recordings available to the public by means of a radio broadcast. CRA argues, on the other hand, that the existing licence does include that right.

The Court held that the simulcast transmission of the same radio program via the FM waves and the Internet is also a “broadcast” within the current definition of that term in s 10(1) of the Copyright Act and, for that reason, is within the scope of the licence which PPCA agreed to grant to the members of CRA and which it did grant from time to time to members of CRA upon the terms and conditions set out in the Member Agreement. PPCA failed to make out its case.

EMI Sues Video Sharing Website

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EMI has filed two related complaints, one by its labels and the other by its publishing units, against the video-sharing website Vimeo .

Capitol Records, LLC v. Vimeo, LLC, No. 09 CV 10101-DAB (S.D.N.Y. complaint filed Dec. 10, 2009); and, EMI Blackwood Music, Inc. v. Vimeo, LLC, No. 09 CV 10105 (S.D.N.Y. complaint filed December 10, 2009).

Both complaints claim direct, contributory and vicarious copyright infringement, and inducement to infringe. The Capitol complaint includes misappropriation and unjust enrichment claims.


EMI Sues Seeqpod & Favtape.com

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Capitol Records LLC et. al. v. Seeqpod, Inc., No. 09 cv 1584 (S.D.N.Y. filed 2/20/09).

"The Seeqpod site and service are designed to, and do, encourage and facilitate the search for, and the unlawful production, distribution and public performance of, copyrighted sound recordings and the copyrighted compositions embodied therein. In response to a user's query for a particular recording or recording artist, SeeqPod's proprietary algorithims - which SeeqPod's CEO and founder, Kazian Franks refers to as SeeqPod's "targeted crawling system" - crawl the Internet specifically to locate and index unlawful MP3 files of copyrighted sound recordings and compositions. SeeqPod then formats and presents the results as direct links to those unlawful files. A click on any one of these links will automatically cause the recording and composition to be reproduced and performed, via "streaming" technology, on and via SeeqPod's own MP3 software "player."

Paragraph 48.

Streaming Royalties

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Royalties Deal in Online Music

Record labels, music publishers, songwriters and online music services have reached an agreement on how to compensate music creators for online distribution of their content, they said.
...
Under the proposal, providers of such services will pay a royalty of 10.5 percent of revenue after other royalties are calculated.

From The Digital Media Association (DiMA):

The agreement, in the form of draft regulations submitted to the Copyright Royalty Judges, proposes for the first time mechanical royalty rates for
interactive streaming and limited downloads, including for subscription and
ad-supported services. The agreement proposes a flexible percentage of revenue
rate structure, with minimum payments in certain circumstances.

Limited download and interactive streaming services will generally pay a mechanical royalty of 10.5 percent of revenue, less any amounts owed for performance royalties. In certain instances, royalty-free promotional streaming is allowed. Outside the scope of the draft regulations, the parties confirmed that non-interactive, audio-only streaming services do not require reproduction or distribution licenses from copyright owners.

The agreement does not address royalty rates for physical product or permanent music downloads. The Copyright Royalty Judges are expectedto issue a ruling on those rates on or before October 2

Streaming Rate - ASCAP

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ASCAP license fee dispute over streaming digital services, rate holding here. USA v. ASCAP, No. 41-1395 (WCC) (S.D.N.Y., White Plains, opinion and order 4/30/08):

"[T]he fee for a blanket license for unlimited performance of all music in the ASCAP repetory for all open periods to December 31, 2009 shall be determined by multiplying the total revenue of the licensed business unit ... less customary deductions for advertising sales commissions and traffic acquisition costs, by a music-use-adjustment fraction whose numerator is the total number of hours music is streamed to users by the licensee ... and whose denominator is the total number of hours of use of the licensee's website ... and applying to the resulting music-use-adjusted revenue a fee rate of 2.5%."

[See conclusion].

Chinese Firms Face the Music on Downloads

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Wall Street Journal reports:
A Chinese court has agreed to consider copyright-infringement cases against two China-based Internet heavyweights that offer illicit music downloading, potentially pening Chinese companies to hefty damage claims they have previously dodged.

The music-industry lawsuits claim $9 million in damages against Baidu.com Inc., and $7.5 million against Sogou, the music-delivery service operated by Sohu.com Inc.

CBS wants Last.fm to be First on Your Dial

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CBS is adding on-demand, full-track streaming to its music social-networking site Last.fm. Free on-demands streams will be limited to three times per track, and cannot be downloaded to a portable player (e.g., an iPod).

Forbes notes that this is a "sign of the recording industry's growing interest in free, advertising-supported access to music". Yet, Last.fm plans to ultimately offer users a chance to purchase a monthly subscription allowing them to listen to songs as many times as they want.

Rolling Stone notes that the Last.fm deal with major record labels is heating up "the arms race" between Amazon and Apple iTunes.