SONA Fights On Against Government Overreach After Judge’s Smackdown on DOJ Over Music Licensing

Last week, federal Judge Louis Stanton delivered a smack-down on the Department of Justice (read the order here) but a suit brought by songwriters is waiting in the wings.

In a declaratory judgment, Judge Stanton sided with BMI and rejected DOJ’s proposed rule change forcing vast changes in the way copyright owners license and get paid for their work. The DOJ rule mandated a change from fractional licensing to 100% licensing. In case there was any doubt about Judge Stanton’s ruling, the opinion ends with an epic, unequivocal statement: “The Consent Decree neither bars fractional licensing nor requires full-work licensing.”

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Fractional licensing works like this: Bars, stadiums and online streaming services, among other outlets, buy licenses from organizations like BMI and ASCAP (called in the industry PROs) to be able to play a list of songs licensed to the PRO. So if you’re in a smoky bar and hear “Smoke Gets in Your Eyes,” it’s because ASCAP or BMI represents someone who owns at least a part of the copyright to the song. BMI collects from the bar the fee for the portion of the song that their member owns and passes that along to the member. You get to feel melancholy on a Friday night, the bar makes another drink sale, the artist gets paid for his work, and everyone is happy.

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The DOJ rule change would have altered this arrangement, which has been the industry practice for a long time, so that any one copyright owner can license the song at 100% of its value to one PRO and another owner could license at 100% to a different PRO. Then someone, maybe the copyright owners, have to get the percentages of fees to the other owners.

When songs have not just a few but dozens of copyright owners, you can imagine the mess. Copyright owners worry this would cause a confusion, an increase in overhead as all these payments are figured out, and decrease their negotiating power, resulting in lower revenue overall as the values of the licenses plummet.

The basic problem is more fundamental. Over decades of music creation, songwriters, performing artists, labels, and distributors like PROs have negotiated and signed contracts between themselves that govern these things. They contracted based on an understanding of how the system would work, and tightly negotiated those contracts with fractional licensing in mind. The DOJ rule would have overturned thousands, nay millions, of private contracts between parties who bargained for exactly what they wanted.

Government doesn’t get to do that.

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Plus, when songwriters collaborate now, they don’t have to stop and think about PRO affiliation. They just pick the best collaborator to get the job done. If the DOJ’s rule is implemented, songwriters would have to consider with which PRO a collaborator has signed. If government action limits who artists can work with, not only is that a ridiculous intrusion into private contracting, but will end up creating a less vibrant music universe for listeners. Bad for artists, bad for society.

Freedom to contract is the premise behind another lawsuit on the matter, filed by the grass-roots organization Songwriters of North America (SONA). While the BMI lawsuit was based on asking the court to interpret the consent decree that governs BMI and ASCAP licensing agreements, the SONA lawsuit has a completely different legal theory. (You can read the SONA complaint here.)

Despite the assertions of Public Knowledge, neither count in SONA’s lawsuit is a copyright claim. Instead, the first puts forth a Fifth Amendment claim that DOJ’s proposed actions would take property from affected parties without due process. People have a property interest in both the contracts that the rule change would overturn and the underlying copyright interests. The Fifth Amendment protects against government taking these interests with the flick of pen.

The second count is an administrative law claim, that the DOJ rule change violated the APA (Administrative Procedure Act) by acting outside of the scope of the DOJ’s authority and was adopted without procedural safeguards, among other things. SONA is asking the court to declare the rule change unconstitutional under the Fifth Amendment and unlawful under the APA.

At this point, it’s not clear whether the DOJ will fight back against Judge Stanton’s appeal or let the matter stand. If the DOJ rule change is thrown out because of Judge Stanton’s reading of the consent decree, the SONA suit may well be moot. But if the case continues, SONA has a very good case against government overreach.

IMG_4988About the Author: Rebecca Cusey is a writer and law student. She writes about movies and other things as a Senior Contributor for The Federalist and as a Policy Fellow at the American Conservative Union. She studies law at Antonin Scalia Law School at George Mason as a third-year student focusing on Intellectual Property. She lives near Washington, DC with her adorable husband and dashing children. 

Follow Rebecca on Twitter: @Rebecca_Cusey

Warner Bros DMCAs its Own Site and Everyone Misses The Point

TorrentFreak, which apparently spends valuable time combing through the Lumen database of DMCA notices, caught an error recently.

Vobile, a company that enforces copyright online for copyright owners, sent to Google on behalf of Warner Brothers a notice to take down links to infringing content under the rules of the DMCA. Vobile mistakenly included links to warnerbrothers.com, Amazon, Sky, and IMDB, sites that presumably have permission to sell Warner Brothers movies or other legitimate reasons to post content.

Vobile uses automated methods to find and report infringement. This is proprietary so I’m just going to assume little Oompa Loompas comb the internet, find the infringement, and sing rhyming tunes as they fill out DMCA notices.

Google apparently caught the error and did not remove links to the legitimate sites. I like to think Google and Warner Brothers had a good laugh over a beer or two. And that would have been the end of it except TorrentFreak used the incident to argue that DMCA notices are all too often inaccurate. (TorrentFreak also reported that Google was still “investigating” the Warner Brothers link. I wonder how they knew that. Update: Please see note below.) A few blogs picked up the story and now it’s a thing.

So, like a good reporter, I went and reviewed the DMCA notice that Vobile sent for Warner Brothers. You can view it for yourself here.

The first thing to notice is that those Oompa Loompas found a lot of links to infringing content. In this one notice to Google alone, there are 363 links to content regarding 5 movies.

Since TorrentFreak raised the issue of inaccurate reports, I decided to investigate the links themselves. I took the first batch of links that were reported to Google, 36 links to infringement of the 2006 movie “300.” (THIS IS SPARTA!) I visited each site to see what I would find, an experiment I don’t recommend for the faint of heart.

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  • Of 36 sites, all but five linked directly to sites that were actively purporting to make available the movie “300,” immediately, for free. Usually by both download or streaming.
  • Several sites had the movie available to stream immediately with no further action required.
  • At least 18 sites purported to have the movie available, but when you clicked to watch it, required you to download software. I have no way of knowing what this software was of if it was malware intended to damage my computer.
  • Three sites looked like sites where you could in the past download or stream “300,” but either the link was broken or the file was unavailable. I could not tell if this was because the content had been removed as a result of a DMCA request, for some other reason, or just a glitch.
  • One site looked like it was possible it could be licensed content. It was hard to tell without being privy to licensing agreements. Also without speaking Portuguese. But it was the only reported link in which there was any possibility at all in the universe that the content was licensed.
  • Two sites were so aggressive about forcing me to download a file they locked up my computer unless I clicked ok and I had to perform a hard reboot to (hopefully) avoid it.
  • At least one site seemed to start an auto download of files to my computer.
  • All the sites had ads, including one for gogiberry juice which I found odd in the context of “300.”
  • At least five had ads for pornography or pornographic games.

After soaking my computer and my eyeballs in bleach, I did the math. Merely checking these sites for possible infringement took me an hour and fifteen minutes (including time to reboot my computer multiple times but not including all the virus screens I’ll have to perform). That was without the time it would take to copy the link to a DMCA notice to Google asking them to remove the link. And that’s just to remove the links from Google searches. If I wanted to remove the links from other search engines or send DMCA notices to the sites themselves and their hosting ISPs, that is easily double the time. Probably triple. Maybe more.

For 36 links. Out of 363 on the takedown notice. For five movies. That day.

Of the 36 reported links I checked, 97% linked to current or previously infringing content or sites that purport to provide infringing content. 50% attempted to install software on my computer that, for all I know, may be malware.

The point here is not that automated reporting sometimes, but rarely, returns errors. (And, as an aside, if errors such as this were common and if TorrentFreak constantly monitors Lumen for them as they apparently do, we’d hear about it all the time.)

Finally, I did a search on Google to watch “300” online for free. As will shock no one, least of all the oompa loompas, there were scores and scores of results that I would bet my peanut butter sandwich lead to infringing content.

There are two takeaways from this exercise.

First, a human being, even a department of human beings, cannot physically find all the infringing content even for an old movie that everyone has already seen, send takedown notices for that content, and monitor to see if it has been taken down or reposted. The man-hours in doing this, well, manually, are astronomical. For a company like Warner Brothers it’s bad enough. For an individual indie filmmaker, prohibitive and overwhelming. Automation is absolutely essential if there is any hope of protecting copyright at all.

Secondly, even automated systems barely make a dent in the infringing content that is out there. Google still returns links to infringing content. Of course mistakes will happen when the infringement is so pervasive.

After an hour finding infringement, you start to feel like King Leonidas facing Xerxes’s army. Tonight, we dine in (DMCA) hell.

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UPDATE 9/13/2016 6:00 EST – I heard from TorrentFreak’s Ernesto van der Saar, who seems like a professional and reasonable guy. He pointed me to Google’s Transparency Report, which clearly states the Warner Brothers link removal request is still pending. I did not know how to check that and I appreciate Ernesto taking valuable time to point it out to me. Also, clearly that is where TorrentFreak got the information I was questioning. Thank you, Ernesto!