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Week In Review

By Chris Helsel

SiriusXM Settles Suit Over Pre-1972 Song Royalties

As astute Week in Review readers surely know by now, federal copyright protection for song recordings applies only to those created in 1972 or later. For that reason, digital radio services such as SiriusXM and Pandora have long escaped paying recording royalties for the golden oldies. However, that may all change in the wake of a settlement agreement reached this week between SiriusXM and a group of major record labels.

On Friday, the satellite radio provider announced that it would pay $210 million to Sony, Universal, Warner and Abkco (an independent company that owns rights to early Rolling Stones songs). The settlement concludes a major California state court suit that followed on the heels of a similar one brought by members of the 1960s band the Turtles, who sued in three federal courts under state laws in New York, California and Florida. The Turtles' suit, which was granted class action status, remains unresolved in New York and California, though SiriusXM was granted summary judgment in Florida this week.

The settlement, which was reached in June but only disclosed this week, covers SiriusXM's use of pre-1972 songs through 2017. Beginning in 2018, the company will negotiate new licenses for the use of the old tunes. The settlement also drastically decreases the size of the class in the Turtles' suit, as SiriusXM said in its filing that the labels and Abkco supplied around 80% of the pre-1972 songs it played.

The labels also have a similar case pending against the Iradio portal Pandora. Despite the SiriusXM settlement, Pandora has expressed its intention to continue its defense of declining to pay royalties on pre-1972 songs. "We are confident in Pandora's legal position on this issue," said the company in a statement.


Taylor Swift Speaks, Apple Listens

Apple's highly-anticipated new streaming service, Apple Music, is due for worldwide release this week. The service, which will compete with mostly-free music streaming platforms such as Spotify and Rhapsody, will include a $10 streaming subscription plan, a free Internet radio station and a media platform designed to allow artists to upload songs and other content for fans, in addition to direct access to the iTunes download store.

Despite the obvious appeal of such a comprehensive and innovative service, its impending release caused dismay among many within the music industry due to the company's announcement that it would not be paying any royalties to artists during Apple Music's trial period.

Among those upset with this news was multi-platinum record selling and seven-time Grammy Award winner Taylor Swift. The 25-year-old singer-songwriter, whom Forbes named the 65th most powerful woman in the world earlier this year, took to the social media site Tumblr to air her grievances. In a letter posted last Sunday morning entitled "To Apple, Love Taylor," she sharply criticized the company's royalties policy and announced that she was withholding her latest album, "1989," from Apple Music. Ms. Swift made it clear that she was speaking not only for herself, but also for countless other musicians who were too afraid to speak out against the tech titan.

In her letter, Ms. Swift, who also pulled her music from Spotify last year in a similar royalties dispute, called Apple's stated policy "shocking, disappointing and completely unlike this historically progressive company. We don't ask you for free iPhones," she added. "Please don't ask us to provide you with our music for no compensation."

Not even 24 hours later, Apple (which even prior to the new service's release is already the world's biggest music retailer) completely changed its course. In an interview last Sunday night, Eddy Cue, Apple's senior vice president of Internet software and services, said, "When I woke up this morning and read Taylor's note, it really solidified that we need to make a change." The company confirmed that it will now pay full royalty rates for music during the free trial.

Prior to succumbing to Ms. Swift's letter, Apple's original policy called for a royalty-less three-month free trial, after which time the company would pay a rate slightly higher than industry standard - 71.5% of sales, compared to the usual 70%. This plan outraged (and terrified) many record executives, particularly at smaller independent labels with thin margins, as the prospect of surrendering a large chunk of royalties for three months could have spelled financial ruin.

Instead, thanks to the efforts of Ms. Swift, Apple now plans to pay full royalties to both record companies and music publishers for the use of music during the trial period. While Apple declined to reveal how much money the added royalty payments would cost the company, it did receive a bit of good news later in the week: Ms. Swift's entire catalog - including "1989" - will be available on Apple Music.

Following his announcement, Mr. Cue took to Twitter to address the policy change: "We hear you @taylorswift13 and indie artists. Love, Apple."

An hour later, Ms. Swift responded in kind, much to the delight of her nearly sixty million Twitter followers: "I am elated and relieved," she wrote. "Thank you for your words of support today. They listened to us."


Justin Bieber and Usher Face "Blurred Lines"-esque Copyright Suit

A federal appellate judge in Virginia ruled last week that the trial court erred in dismissing a 2013 copyright claim brought against pop musicians Justin Bieber and Usher T. Raymond IV (known professionally as simply Usher) over their 2010 hit, "Somebody to Love."

The plaintiffs, Devin Copeland a/k/a De Rico and his songwriting partner, Mareio Overton, alleged that Mr. Raymond had been played an early version of their song of the same title, which was written in 2008. According to the suit, which seeks $10 million in damages, Mr. Raymond then played the song for young Mr. Bieber, who soon thereafter recorded a substantially similar tune without the songwriters' permission. The song, which is apparently unrelated to the same-named classic tunes by Jefferson Airplane and Queen, originally appeared on Mr. Bieber's 2010 debut album and a remix featuring Mr. Raymond that was released later that year climbed to No. 15 on the Billboard chart.

Last year, a trial court judge dismissed the case after finding that the two songs sounded considerably different. Judge Pamela Harris of the Fourth Circuit wasn't so sure, however, and held that the two songs' "choruses are similar enough and also significant enough that a reasonable jury could find the songs intrinsically similar." Judge Harris also demonstrated her music critic chops in declaring that it was irrelevant that the versions released by Mr. Bieber and Mr. Raymond were "dance pop, perhaps with hints of electronica" while Mr. Copeland's recording was "squarely" R&B.

In any event, the determination of whether the defendants illegally copied elements of the plaintiffs' recording is now up to a federal jury.

In a similar dispute decided recently, a federal jury sitting in Los Angeles found that Robin Thicke and Pharell Williams improperly incorporated elements of the 1977 Marvin Gaye number "Got to Give It Up" into their 2013 mega-hit "Blurred Lines." The Gaye family was awarded $7.3 million in damages. If the allegations against Mr. Bieber and Mr. Raymond are indeed true, the plaintiffs' claim could be even stronger than that of the Gaye family's, considering the fact that Mr. Copeland's representatives allegedly brought "Somebody to Love" directly to Mr. Raymond and the two songs' lyrics overlap considerably.

Regarding Judge Harris's decision in the instant case, plaintiffs' attorney Duncan Byers celebrated the ruling, telling the media that the appeals court "recognized what my clients have said all along: It's the same melody and the same chorus."


Comic-Con Finally Demonstrates Willingness to Defend Trademark Rights Against Increasing Number of Similarly-Named Rival Fantasy Conventions

San Diego's Comic-Con International, popularly known as Comic-Con, commences once again this week in Southern California. Since 1970, the convention has brought together enthusiasts of a variety of fantasy genres, including graphic novels, superhero movies, video games and animation. The exploding popularity of the event has spawned a plethora of imitators across the globe, and Comic-Con's legal team has only recently begun actively defending its trademark in the courtroom.

Interestingly, although the convention has used the "Comic-Con" name since 1970, San Diego Comic Convention (the nonprofit that operates the event) did not formally register the trademark in the name until 2007. The belated move came after numerous competing conventions with similar names - many of which are operated for profit - began popping up across the country and even overseas. One such competitor, New York Comic Con (note the lack of a hyphen), became the first comic book convention in North America to draw more attendees (151,000 to 130,000) than the San Diego original last year.

Despite Comic-Con's delay in registering the mark, its attorneys correctly point out that registration is not required to protect a trademark. Historically, the nonprofit has been hesitant to bring suit to protect its trademark, with litigation used only for "the most egregious cases."

Recently, however, one competitor went too far, and the San Diego group brought action. The nonprofit sued the operators of Salt Lake Comic Con for infringement last August after the group drove Audis decked out in advertisements for the Utah convention through the streets of San Diego. Rather than back down, Salt Lake Comic Con countersued, asking the Southern District of California to declare the San Diego nonprofit's trademark claims invalid. The litigation remains active.

As the original Comic-Con continues to grow in both size and star-power (in recent years, Hollywood studios have spent lavishly to use the platform to promote superhero blockbusters and the like), it should come as no surprise that more imitators continue to sprout up with each passing year. Further, given the nonprofit's recently demonstrated willingness to defend its mark in the courtroom, I should think we can expect a hike in related litigation as well.


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This page contains a single entry from the blog posted on June 30, 2015 11:09 AM.

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