RIAA Archives

Hey, what’s the big idea? Protecting your ideas when submitting them to a third party.

One question clients often asked me is whether an idea can be protected. The question frequently arises when a client has an idea for a screenplay, or an outline for a story, or a unique title for a song or book, and wishes to submit or “pitching” that idea to a major movie house, publisher or record company. While it is fairly common knowledge that an “idea” cannot be copyrighted, it is important to know that there may be certain types of protection be available for the intellectual properties contained in such a proposal pursuant to current laws, specifically trademark and copyright laws. This article analyzes and summarizes your rights under each of these two areas of law and offers suggestions for protecting your legal rights when “pitching” ideas.

Protection Under Trademark Law

Titles and names may be entitled to trademark protection at both the state and federal levels by anyone claiming a right to use such a title or name in connection with certain specified trades or services. These types of marks are commonly designated by use of the “™” and “®” symbols, indicating respectively that registration of the mark has been applied for and registered on the Primary Register. To be entitled to use these symbols in respect to a mark, a person must apply for and receive a federal or state trademark.

In most states, a state trademark can be applied for in the Secretary of State’s office. The application is a simple form and payment of a nominal fee is required. Protection at the state level is, however, somewhat more geographically limited than that of a federal mark. The application process for a federal mark is much more tedious, complicated and costly than that of the state trademark process. In addition to legal fees which will, most likely, be incurred, the application fee for each international classification of goods and services is $325.

Protection Under Copyright

As stated earlier, with regard to copyright law, and speaking very generally, an idea, in and of itself, is not entitled to copyright protection. Rather, it is the expression of an idea that can be copyrighted.[1]

It is not always clear from the case precedents, however, when an idea becomes developed enough to rise to the level of an “expression.” Some examples of expressions of ideas that have been protected are a screenplay similar to the old television series A-Team,[2] an employee survey regarding employee satisfaction,[3] and a particular section of categories appearing on a form for collecting baseball pitcher statistics.[4] On the other end of the spectrum, courts found that (1) a manual of operation for patented leaching system. [5] and (2) the addition and arrangement of facts to legal opinions [6] were not protectible expressions of ideas. The only general rule that can seemingly be extracted from this convoluted line of cases is that the more an expression diverges from the mere recitation of raw facts, the closer it gets to expression, as that the courts legally recognize that term.

Is your Idea Literary or Business in Nature

There is another, albeit tangential issue which is relevant and should be briefly discussed here, i.e., whether an idea is literary or business in nature:

Literary ideas are those that, upon development, would become literary property and hence clearly eligible for copyright protection. Literary ideas include ideas for motion pictures,[7] radio programs,[8] and television programs.,[9]

Business ideas, on the other hand, even when fully developed, may not be copyrightable. ,[10] Business ideas are those that relate to methods of conducting businesses, such as bank night in theaters,[11]contests, [12]and credit rating systems.[13] Here again, however, the more an idea, even a business idea, departs from mere factual recitation, the more it is likely to be considered literary, and therefore entitled to protection under copyright law.

When does an idea rise to the level of expression?

So, let’s now return to the primary issue of when an idea rises to the level of an expression entitled to copyright protection?

In their attempts to deal with the dilemma, courts have created a body of case law which attempts to strike a middle ground between the comprehensive protection of copyright on the one hand, and the complete denial of any legal protection for ideas on the other. I will attempt to delineate and evaluate some of the legal theories on which a person may be able to rely to render an idea legally protectible, the underlying tort theory of which is known in legal circles as “idea misappropriation.”

In brief, the elements for a claim of idea misappropriation are, first, the idea must be novel and concrete, and, second, there must be a legal relationship between the parties, whether by an express contract, a contract implied-in-fact, a quasi-contract, or a fiduciary relationship.[14]

Novel & Concrete Element

In instances where they have dealt with the protectibility of an idea, the courts hold the plaintiff to a greater burden of proving not merely that the idea is original (as in copyright protection) but that it is actually novel,[15] i.e., “not formerly known; of a new kind.”[16] This standard is, for most courts, a great standard to meet than that required by copyright, i.e., that a work be original – although some courts do confusingly use the terms interchangably.

The second component of the first prong, “concreteness,” in essence requires that an idea be sufficiently developed so as to constitute “property.” By its very nature, this requirement is intentionally vague, allowing the courts great flexability in applying it. One court described the concept as follows

while we recognize that an abstract idea as such may not be the subject of a property right, yet when it takes upon itself the concrete form which we find in the instant case, it is our opinion that it then becomes a property right subject to sale.[17]

This is, as pointed out, a rather vague element. This is sort of like how U.S. Justice Potter Stewart described hard-core pornography in Jacobellis v. Ohio, i.e., it’s difficult to define, but “I know it when I see it.” So, in short, the more developed an idea becomes, the further it goes toward dispelling any doubt as to whether the idea is “concrete.”

Legal Relationship Requirement

The second prong of the test, i.e., the legal relations prong, can complicate matters when it comes to submitting an idea to a third party. Whether a legal relationship exists between the parties depends, as does everything in law, on countless fact scenarios to the degree that one small change in a fact pattern can affect the outcome of interpretation.

Most often, clients “pitch” their ideas to a third parties for consideration in hopes that they will take the idea and “run with it.” But in such instances, it is important to be aware that the method by which an idea is submitted can directly impact whether or not there is a legal relationship.

A non-disclosure and confidentiality agreement with a publisher, for example, would create such a relationship beyond any doubt. This is one end of the spectrum. This method can easily be dispensed with since it is difficult enough to get a publisher’s attention, for example, much less without the added complexity of having to get their legal department involved. Most people will likely submit the idea directly to a publisher, either with or without permission, without any such NDA, or they will submit the idea through an agent of some sort. Each of these variations result in different treatment.

For example, courts have held that if an idea is submitted without solicitation and without advance warning, the idea is not protectible, even if it later turns out to be valuable.[18] There is one variation of this fact pattern, however, where one might successfully argue that an implied contract results because of an implied solicitation by the idea recipient. This occurs where the recipient is engaged in a trade or industry (such as the entertainment or publishing industry) that, by custom, purchases ideas of the type submitted. A book or music publisher, as an idea recipient, makes a continuing offer to pay for any submitted ideas that it elects to use. Thus, an unsolicited submission is not an offer that necessarily requires further conduct by the publisher to establish an acceptance, but rather can be viewed as an acceptance of the publisher’s implied continuing offer. Although no court has expressly recognized this theory, courts have implicitly adopted it by recognizing an implied agreement based upon custom where such a factual pattern can be established.[20] I caution in advance, however, that this is a minority opinion, not expressed by the majority of courts.

Some courts, particularly but not exclusively those in California, imply an affirmative duty on the part of a publisher to reject an unsolicited submission or else the legal relationship is created – hence the practice of most publishers to advertise “no unsolicited submissions.” Under this so-called “failure to reject” theory, any means of notice that gives the publisher some sort of advance warning of, and an opportunity to prevent, a proposed idea submission is sufficient to establish an implied contract if the recipient then permits the submission to be made.

Thus, the following examples may create such an affirmative obligation on the part of the publisher: (1) enclosing the proposed idea in a sealed envelope accompanying an unsolicited transmittal letter that explains that the contents of the sealed envelope contains such a submission, or (2) a series of two unsolicited letters, the first explaining the intended submission and the second in fact containing the idea to be submitted. [20]

If a publisher specifically requests the submission of an idea, a legal relationship is clearly established creating an obligation to pay the creator if the idea submitted is used. [21] So finding a creative way to solicit a request from a publisher is also a very good means of securing protection for you idea.

Finally, it may come as no surprise that utilizing the services of a agent will help protect your ideas. It may be inferred that the recipient of an idea submission has knowledge of an expectation of payment for the idea when the submission is arranged by a person whose known occupation is that of representing idea purveyors, such as a book or movie agent. “This fact alone must have indicated to [the recipient of an idea submission] that the persons whom the agent brought together with him were not social callers.” Donahue v. Ziv Television Programs, Inc. 54 Cal. Rptr. 130, 138 (Cal. App. 1966).

Conclusion

As you can clearly see, the question of whether an idea can be protected is not an easy one to answer in any specific situation because the answer depends so heavily on the individual fact pattern of each case. Although it may not be apparent from its length, this article in no way exhausts the body of legal information and case law that exists with regard to the protectible nature of an idea. Therefore, if you have questions concerning this issue, please contact a respected entertainment attorney.

Having stated this, with regard to submission of ideas in general, the following are recommendations that can be followed:

(1) First, trademark all slogans, titles or name, at the very least your state level, but preferably at the federal level;

(2) Make sure the idea is as fleshed out as it can be, i.e. as “concrete” as possible. Rather than a mere outline, insert summaries of each bullet point. Then, flesh out selected points, e.g., create a summary of each chapter of a particular example book, or maybe even two or more examples of each. Then, create a few complete chapters of a books, for example;

(3) Mark everything confidential and, in addition to the copyright notice generally included, add the phrase “All rights reserved” after it. The copyright notice and your intent to be the owner of the copyright should be clearly indicated in the beginning of the correspondence;

(4) Attempt to procure an agent, and ask if the agent is willing to enter into a non-compete and confidentiality agreement;

(5) As an alternative to paragraph (4), solicit the publishers by telephone or in some other general fashion, preferably with written followup, to encourage them to “solicit” the work in advance; and

(6) As an alternative to paragraphs (4) and (5), place your idea submission in an envelope, draft a summary cover letter explaining that this is the submission of a copyrighted idea and that by opening the envelope, they are agreeing to the confidentiality and non-disclosure of the submission and further, agree to pay for it if they decide to use it.

While these ideas may not be “iron-clad,” they will go a long way toward establishing the necessary elements of an idea misappropriation claim.

[1] 17 U.S.C. § 102(b) . See e.g., Holmes v. Hurst, 174 U.S. 82 (1899); Kalem Co. v. Harper Bros., 222 U.S. 55 (1911) ; Dymow v. Bolton, 11 F.2d 690 (2d Cir. 1926) ; Nichols v. Universal Pictures Corp., 45 F.2d 119 (2d Cir. 1930) ; Dellar v. Samuel Goldwyn, Inc., 150 F.2d 612 (2d Cir. 1945) ; Gaye v. Gillis, 167 F. Supp. 416 (D.C. Mass. 1958 ). This was also the rule under common law copyright. Fendler v. Morosco, 253 N.Y. 281, 171 N.E. 56 (1930) ; Weitzenkorn v. Lesser, 40 Cal.2d 778, 256 P.2d 947 (1953) ; Desny v. Wilder, 46 Cal.2d 715, 299 P.2d 257 (1956) ; Ware v. Columbia Broadcasting Sys., Inc., 61 Cal. Rptr. 590, 155 U.S.P.Q. 413 (Cal. App. 1967).[Back]

[2]Ernest Olson, V. National Broadcasting Company, Inc., 855 F.2d 1446 (9th Cir. 1988).[Back]

[3]Gallup, Inc. V. Talentpoint, Inc., 2001 U.S. Dist. LEXIS 18560; 61 U.S.P.Q.2D (BNA) 1394 (M.D. PA. 2001).[Back]

[4]George L. Kregos v. Associated Press and Sports Features Syndicate, Inc., 937 F.2d 700; 1991 U.S. App. Lexis 12113; 19 USPQ2d (BNA) 1161; Copy. L. Rep. (Cch) P26,744 (Ct. App. 2nd Cir. 1991).[Back]

[5]Presby Construction, Inc., v. Normand Clavet, et al, 2001 DNH 210; 2001 U.S. Dist. LEXIS 20951; 61 U.S.P.Q.2D (BNA) 1184 (Dist. NH 2001).[Back]

[6]Matthew Bender & Company, Inc., et al v. West Publishing Co. et al, 158 F.3d 674; 1998 U.S. App. LEXIS 30790; 48 U.S.P.Q.2D (BNA) 1560 (App. Ct. 2nd Cir 1998). [Back]

[7]Desny v. Wilder, 46 Cal.2d 715, 299 P.2d 257 (1956).[Back]

[8]Stanley v. Columbia Broadcasting Sys., 35 Cal.2d 653, 221 P.2d 73 (1950).[Back]

[9]Stone v. Goodson, 8 N.Y.2d 8,200 N.Y.S.2d 627 (1960).[Back]

[10]This exclusion also applies to scientific ideas.[Back]

[11]Affiliated Enterprises, Inc. v. Gruber, 86 F.2d 958 (1st Cir. 1936).[Back]

[12]Lewis v. Kroger, 109 F. Supp. 484 (S.D. W.Va. 1952).[Back]

[13]Burnell v. Chown, 69 Fed. 993 (N.D. Ohio 1895).[Back]

[14]See Kienzle v. Capital Cities/American Broadcasting Co., Inc. , 774 F. Supp. 432, 436 n.8, 438 n.13 (E.D. Mich. 1991) (Treatise cited). McGhan v. Ebersol, 608 F. Supp. 277, 284 (S.D.N.Y. 1985) (New York law). [Back]

[15] Noble v. Columbia Broadcasting Sys., 270 F.2d 938 (D.C. Cir. 1959) ; Santilli v. Philip Morris & Co., 283 F.2d 6 (2d Cir. 1960) ; Stevens v. Continental Can Co., Inc., 308 F.2d 100 (6th Cir. 1962) ; Pittman v. American Greeting Corp., 619 F. Supp. 939 (W. D. Ky. 1985) ; Downey v. General Foods Corp., 31 N.Y.2d 56, 286 N.E.2d 257 (1972) (no promise to pay for an idea will be implied or enforced if the idea is not both novel and original).[Back]

[16]Webster’s New Int’l Dictionary (2d ed.) 1670.[Back]

[17]Williamson v. N.Y. Central R.R., 16 N.Y.S.2d 217, 258 App. Div. 226 (1939) ; Bailey v. Haberle-Congress Brewing Co., 193 Misc. 723, 85 N.Y.S.2d 51 (1948 ) ; Masline v. New York, New Haven and Hartford R.R., 95 Conn. 702, 112 Atl. 639 (1921) ; contra Brunner v. Stix, 352 Mo. 1225, 181 S.W.2d 643 (1944).

[18] Giangrasso v. CBS, Inc., 534 F. Supp. 472 (E.D.N.Y. 1982) ; Curtis v. United States, 168 F. Supp. 213 (Ct. Cl. 1958), cert. denied, 361 U.S. 843 (1959) ; see Borden & Barton Enters. v. Warner Bros., 99 Cal. App. 2d 760, 222 P.2d 463 (1950) ; Donahue v. Ziv Television Programs, Inc., 54 Cal. Rptr. 130 (Cal. App. 1966) ; Official Airlines Schedule Info. Serv., Inc. v. Eastern Air Lines, Inc., 333 F.2d 672, 674 (5th Cir. 1964) (concurring opinion); Sterner v. Hearst Corp., 144 U.S.P.Q. 237 (N.Y. Sup. Ct. 1964) .[Back]

[19]Desny v. Wilder, 46 Cal. 2d 715, 739, 299 P.2d 257, 270 (1956) ; Aliotti v. R. Dakin & Co., 831 F.2d 898, 903 (9th Cir. 1987).[Back]

[20] Cole v. Lord, 262 A.D. 116, 28 N.Y.S.2d 404 (1st Dep’t 1941) ; Kurlan v. Columbia Broadcasting Sys., 40 Cal. 2d 799, 256 P.2d 962 (1953) ; Vantage Point, Inc. v. Parker Bros., Inc., 529 F. Supp. 1204 (E.D.N.Y. 1981) (Treatise cited), aff’d mem., 697 F.2d 301 (2d Cir. 1982); Bevan v. Columbia Broadcasting Sys., Inc., 329 F. Supp. 601 (S.D.N.Y. 1971) (Treatise cited); cf. McGhan v. Ebersol, 608 F. Supp. 277, 285 (S.D.N.Y. 1985) (New York law); Bailey v. Haberle Congress Brewing Co., 193 Misc. 723, 85 N.Y.S.2d 51 (Mun. Ct. 1948).[Back]

[21] See, e.g., Whitfield v. Lear, 751 F.2d 90 (2d Cir.) , where in advance of submission, plaintiff sent a mailgram to defendants advising that a submission was being sent.[Back]

Technorati Tags: Copyright Infringement,Ideas,Copyright Law,Music Law,Entertainment Law,Intellectual Property,Tradmark,Copyright,Trademark Law,Music Row Attorney,Music Row Lawyer,Entertainment Attorney

Fair is not always “Fair Use”

The concept of “fair use” is a very misunderstood concept. The first common misunderstanding that people espouse is that the concept of “fair use” is a right or privilege granted by copyright law. It is not. Secondly, many people mistakenly believe that so long as they do not make any money from an infringing use of copyrighted material, then the use is a fair use. This is also an incorrect assumption.

Fair use is not a right or a privilege to be exercised at one’s whim. Rather, the doctrine is an “equitable rule of reason” that may be used as an affirmative d

efense in a copyright infringement action. The purpose of the rule is to balance the equities between the desire to protect and therefore encourage the creation of new ideas and the desire to encourage the free exchange of speech in the marketplace of ideas. The tension was described by Justice Souter as “simultaneously protect[ing] copyrighted material and allow[ing] others to build upon it.” Nonetheless, the thing to remember is that application of the fair use defense is declared by judicial fiat in the context of a copyright infringement action. It is applied on a case-by-case analysis of the factual situation. Thus, fair use is not a presumptive right or privilege that may be exercised by the infringing party.

There are four factors weighed by the Supreme Court in making a determination of whether a derivative work constitutes a “fair use.” These factors are (1) the nature of the work itself; (2) whether or not the work is commercial in nature; (3) the amount of the copyright work that is used; and (4) the effect of the use on the potential market or value of the copyright at issue. Folsom v. Marsh, 9 F. Cas. 342 (C.C.D. Mass. 1841), codified at §107 of the 1976 Copyright Act.

The nature of the work refers to the “nature” of the unauthorized derivative work, not the original copyright work. In order for such an unauthorized use of copyrighted material to be entitled to the“fair use” defense, the new creation must transform the original copyrighted material. A “transformative work” is defined by the U.S. Supreme Court as one that “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.” See, Campbell v. Acuff Rose Music, Inc., 510 U.S. 569 (1994). While all factors must be considered, this is perhaps one of the more critical factors in the analysis. Merely modulating the pitch of a song or inverting the sequence of a chord progression would probably not be considered transformative. A very good example of a derivative work that is transformative in nature is Alice Randall’s The Wind Done Gone, the same story as Margaret Mitchell’s Gone with the Wind, but told from the perspective of a mulatto slave who is the half-sister of Scarlet O’Hara, the main character in the original work. See Suntrust v. Houghton Mifflin Co., 252 F.3d 1165 (11th Cir 2001) per curiam, opinion at 268 F.3d 1257. In that case, the Eleventh Circuit extended the protection of a musical parody in Acuff Rose to the novel.

With regard to the second factor as to whether a use is commercial in nature, it should be noted that this does not necessarily mean that the new creation has to generate profits. If the new work create a significant fan, donor and/or advertiser base, those factors tend to lead to a conclusion that it is commercial in nature. A person simply does not have the “right” to use copyrighted works in any manner as long as no profit is generated from the use. It is also evident that this factor does not mean that simply because a derivative use does in fact generate profits, that it is by default not a fair use. In Acuff Rose, 2 Live Crew’s parody version of Roy Orbison’s Oh Pretty Woman had sold over 250,000 copies, yet was still considered a “fair use.” The thing to be remembered is that this is but one of the factors.

The third factor is fairly easy to evaluate: the more material “borrowed” from the copyrighted source, the less likely the infringer is to have a “fair use” defense. Again, another misconception is that there is a bright line test for fair use: that a few measures of a song, a couple of lines from a poem, a few hundred words of a paragraph, or a few paragraphs from a book, are considered fair use. This misconception has no basis in either the Copyright Act or the case law interpreting it. It is merely folklore. The factor, as used by the courts, is more of a sliding scale based, again, on the quantity of the material used from the copyrighted work as compared to the total material.

Finally, the last factor weighs the impact on the infringing use on the potential market and value of the copyright. This was an integral part of the Supreme Court’s ruling in Acuff Rose that 2 Live Crew’s parody of Roy Orbison’s Oh Pretty Woman did not impact the potential market for the original. The more a derivative work negatively impacts the potential market for and value of the copyright, the less likely it will a “fair use.”

In summary, as you may have noticed, the fair use doctrine is by no means a bright line test. Each “fair use” defense is, by its very nature, evaluated on a case by case analysis in the context of a copyright infringement action. Fair use is not something to be relied on as a presumptive right.

Technorati Tags: Fair Use,Copyright Infringement,Parody,Music Lawyer,Entertainment Lawyer,Music Law,Entertainment Law,Campell v. Acuff Rose

“More than a Feeling” – Momma, look what they’ve done to my song!

I received a call from one of my readers to address the topic of whether a songwriter has the ability to restrict the use of his or her composition in the instance it is being used in advancing a cause opposite to that espoused by the songwriter. This was spawned, of course, by the recent allegations of Tom Scholz, lead member of the group Boston, that his 1970’s mega-smash “More than a Feeling” was being used by Mike Huckabee, whose views were opposite those held by Scholz. It is an interesting inquiry, and one that has simple solutions, mostly based in contract law.

There are two contract concepts that are usually incorporated into standard music publishing agreements which impact this issue: one is the concept of droit or moral rights and two is the restrictions on exploitation. I’ll address them in reverse order.

Grant of Rights

Typically, when a songwriter assigns his copyright in a song to a music publisher, there is grant language contained in the agreement expressly establishing the rights he or she is granting to the music publisher. In that contract language, there is typically a clause that reads something like this:

The Publisher shall have the right to administer, use and exploit all interests in the Compositions . . . provided, however, that the approval of Writer shall be required for the use of any Composition:

(i)    in any motion picture which Publisher has actual knowledge of an “X” or equivalent rating;

(ii)    in any advertisement or other promotion for tobacco, firearms or personal hygiene products; or

(iii)    in connection with religious or political purposes.

As you can plainly see, in this instance at least, the music publisher would be contractually required to obtain the approval of the writer prior to authorizing the use of the composition in a political rally, among other things.

If this type of language is not included in the songwriter agreement, or if the grant language included in the songwriter’s agreement is, in general, more broadly worded, then the rights of the songwriter to restrict the use of the song would be greatly impaired.

Droit or Moral Rights

The other legal concept which comes in to play, both from an historic perspective and contractually, is the concept of droit or “moral” rights, although it is important to realize up front that this concept is most often applied, in the U.S. at least, to works of visual art, not musical compositions.

First, in connection to the copyright concept, don’t infuse the the word “moral” with the ethical connotations generally associated with in in the United States. The use in this concept is much more in the sense of an embodiment of a type of something, i.e., the Monet painting is the moral equivalent of impressionist art. As used in this sense, it refers to the ability of the creator of a copyright to control the “embodiment” of his work, or its “integrity.” The French-derived word “Droit” is, perhaps, more to the point when discussing copyright: it means “a legal right.”

So, in the United States at least, the phrase “droit” or “moral rights” generally refers to the right of the copyright creator to prevent third parties from taking credit for, revising, altering, or distorting his or her creation, regardless of who owns the work, i.e., regardless of whether the copyright has been assigned or transferred.

In contrast, the concept has generally received much broader application in European states. France, for example, recognizes four moral rights:

the right of disclosure;
the right to correct or withdraw works previously disclosed to the public;
the right of attribution; and
the right of integrity (the right to “respect” the work).

When the U.S. joined the Berne Convention, Congress attempted to bring its copyright laws into line with those of the other signatory companies by passing Visual Artists Rights Act of 1990 (VARA) codified generally at 17 U.S.C. §§106, 106A, and 113. As implied earlier, however, this statute applies solely to visual arts and not musical compositions. Nonetheless, the concept of droit or moral rights may be invoked when dealing with the misappropriation of a songwriter’s musical composition.

In addition to copyright law, there a several other legal concepts which may be implicated in this situation. For example, if a person is somehow giving false attribution to a creative work, e.g., attempting to pass off an creator’s work as his or her own, that person may be liable under the concept of “unfair competition,” which is barred by the Lanham Act (15 U.S.C. §1051). Or, if the creation is widely recognized as a work of the creator, any distortion or alteration of the creation may constitute trademark “dilution” under trade dress laws and statutes. More generally, if authorship of a work is somehow falsely attributed, the creator may have a state action for defamation against the person responsible for the false attribution. If a person uses the identity of an songwriter, or the compositions, for his or her own benefit without permission, a violation the songwriter’s right of publicity may have occurred. Thus, there may be several remedies available in this type of situation.

In the US, however, it is accepted practice that if a person can waive a right, such a waiver will be in a contract. This is no exception. Again, there is language in most songwriting agreements which “waives all droit or moral rights” in the copyright. Such a waiver would likely nullify any of these general legal remedies available to the songwriter.

As always, I highly recommend that any songwriter contemplating a deal with a music publisher contact a reputable entertainment attorney.

Technorati Tags: More than a Feeling,Tom Schulz,Boston,70’s Rock,Copyright Infringement,Music Publishing,Songwriters,Songwriting,Music Lawyer,Copyright law,Droit Rights, “http://technorati.com/tags/Moral%20Rights” rel=”tag”>Moral Rights

Digital Downloads, Entertainment Law, Life on the Row, Music Law, RIAA

The Magic Bubble Bursts: Did the Record Labels make their own grave?

For almost a decade now, the major labels (at the beginning there were five of them, now only four, EMI, Sony BMG, Vivendi Universal and Warner) have declared that illegal downloading is ravaging their business by destroying the sales of physical product. One may question this declaration, however, in few of the fact that ever since the RIAA filed its 1998 litigation again the manufacturer of the Diamond Rio MP3 player and extending to its most recent lawsuits against individuals across the country, the music industry has committed more public image faux pas than Dan Quayle and George W combined, making it one of the most hated industries among high school and college students. It should be apparent to everyone now that it is not illegal downloads that is causing the downturn in music sales, as there are many other contributing factors, including the negative image the RIAA is generating.

This marred image is evident in the facts. According to an article in Rolling Stone magaine entitled The Record Industry’s Decline:

About 2,700 record stores have closed across the country since 2003, according to the research group Almighty Institute of Music Retail. Last year the eighty-nine-store Tower Records chain, which represented 2.5 percent of overall retail sales, went out of business, and Musicland, which operated more than 800 stores under the Sam Goody brand, among others, filed for bankruptcy. Around sixty-five percent of all music sales now take place in big-box stores such as Wal-Mart and Best Buy, which carry fewer titles than specialty stores and put less effort behind promoting new artists.

Nonetheless, a new research study on the issue, commissioned by the Canadian government to explore issues related to copyright reform, was recently released. The study is entitled The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study for Industry Canada, and was written by Birgitte Andersen and Marion Frenz, of the Department of Management at the University of London in England. A PDF version of the study is published here.

The results of the new study affirm many of the conclusions found in an earlier study entitled, The Effect of File Sharing on Record Sales: An Empirical Analysis. This paper was published in the February 2007 issue of The Journal of Political Studies, and was written by Koleman Strumpf, professor of business economics at the University of Kansas Business School and Felix Oberholzer of the Harvard University Business School. Both studies directly contradict the claims of the music industry that file sharing is related to revenue losses.

In fact, the new study supports an opposite assertion, i.e., that distribution of music files on P2P networks actually promotes the sale of physical product. Andersen and Frenz found, among people who actually participate in P2P file sharing, downloading actually increases the sale of physical product by a ration of 2 to 1, in other words, on average when a P2P file sharer downloaded the equivalent of two CDs in files, he or she would purchase of one physical CD (Note: I have extrapolated here, as the numbers set forth in the study actually say that for every 12 P2P songs downloaded, physical purchases increased by 0.44 CDs). It is important to note that the study concluded that, when incorporating the Canadian population as a whole (i.e., including the group who participate in P2P file sharing along with those who do not), file sharing on P2P networks has neither a positive nor a negative impact on CD sales.

One fact in the report I found very intriguing is its conclusion that the owners of MP3 players are less likely to purchase physical product. This is interesting, in my mind, because I believe it is connected to the popularity of the iPod and iTunes. If a person purchases the iPod and uses iTunes, there is really no need to buy physical product, whereas when a person uses a different brand of MP3 player, he or she is, in my humble opinion, more likely to go out in search of alternative means of finding music, including purchasing CD’s. I would like to see a study which compares iPod owners with owners of third party MP3 players. It may turn out that the biggest culprit in the demise of the record industry is Apple!

One story I found really revealing is the Rolling Stones article on The Record Industry’s Decline. In it, the author tells the story about how the major labels were unable to come to a settlement with Napster which would have given them immediate access to Napster’s 38 million users. I don’t know the details of that meeting, but it seems to me that when the industry burst that bubble, those 38 million users disbursed into millions of subgroups on P2P networks so varied that it become virtually impossible to get the magic back. Hindsight is, of course, always better than foresight, but this event certainly seems to me to one of the biggest turning points in our industry’s history.

Is the music industry going to survive. Of course! It will certainly not be in the form many traditionalists in the industry wish it to be. CD’s eventually be ancient relics of the past, sought after by collectors much as jazz lovers currently seek out old vinyls and record players. The radio industry will not have control over marketing and thus the role of radio consultants on the industry will be diminished. Marketing efforst will shift to television outlets and Internet marketing. Search engines and online communities will continue to surface new music and expose the long tail. Major labels will no be the sole repository of the major talent, as independents will rise to fill the void, fueled by venture capital from investors. Whatever happens, it going to be an interesting ride!

Some further reading:

The Freakonomics of Music

File Sharing: Zero Effect on Downloads

The Record Industry’s Decline

Technorati Tags: Record Labels,Recording Industry,Entertainment Industry,CD,Digital Downloads,Diamond Rio,Major Labels,File Sharing,P2P Networks,P2P,Music Lawyer,Entertainment Lawyer

Last Man Standing – collaborating with other songwriters

See Jane.

See Jane write lyrics.

See Dick.

See Dick write melodies.

See Dick meet Jane.

See Dick and Jane combine their efforts and collaborate together to write a song.

This is one frequent story among Nashville’s songwriting community. On any given afternoon in Nashville, there will be innumerable co-writing sessions occurring at any given moment. Those collaborative efforts certainly produce most of the top hits on the country charts. The odds are, however, that at least 9 out of 10 of those songwriters will not know the implications of collaborating with another songwriter on the creation of a copyright.

Rarely do songwriters consult an attorney or enter into any form of collaboration agreement prior to co-writing. Rarer still is the songwriter that fully understands the important consequences that flow from co-writing with another songwriter.

If a songwriter does happen to consult about this issue, the first thing I tell them is that it is very much like entering into a marriage relationship. When two songwriters get together and collaborate on the creation of musical composition, each songwriter is a co-owner of and equal and undivided interest in the whole copyright, i.e. each songwriter co-owns 100% of the copyright – regardless of the relative extent of their respective contributions. Ownership is not equally divided, as is commonly thought — i.e. split 50/50 (that confusion comes from the fact that the royalties derived from the copyright are usually divided equally).

In the Dick and Jane analogy above, for example, Jane does not separately own the lyrics and Dick separately own the melodies. Dick effectively owns 100% of the song, including both the lyrics and music and Jane effectively owns 100% of the song, including both the lyrics and the music. The concept is very similar to the legal principle of tenancy in common. Unless they agree to the contrary in writing, each songwriter has the right to administer the entire copyright without consulting with the other songwriter, i.e., each songwriter may issue nonexclusive licenses to the entire copyright or issue first use licenses. The only obligation each co-owner has to the other is to account for any profits earned by the exploitation. A co-owner may not, however, without the permission of the other co-owner, transfer exclusive rights to use the work or transfer the entire copyright to a third party.

To be absolutely clear, the Copyright Act does not really define “joint authors,” but rather defines a “joint work” as a “work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.” 17 U.S.C. 101. The key here is intention — i.e., the parties must intend that their work be integrated or merged to form a united whole at the time the work is created. The legislative history that accompanied the act specifically states that a work is “joint” if the authors collaborated on its creation. See H.R. Rep. No. 1476, 94th Cong., 2d Sess. 120 (1976); S. Rep. No. 473, 94th Cong., 1st Sess. 103-104 (1975).

Take for example the circumstance that arises when a person creates a poem, which is registered as a copyright. Then, later on, a second person takes the poem and modifies the words, adding music to create a song. The situation described is different from the collaborative effort in that there was no intent, at the time the poem was created, to merge it with the second creative effort. The second work, the song, is a derivative work, and its writer needs permission from the creator of the poem to create the derivative work.

While we’re on the subject of derivative works, each co-owner of a joint work may create derivative works independently of each other and without the permission of the other, and, without any obligation to share the royalties derived from the exploitation of the derivative work.

Now, not to further confuse the issue but, in the eyes of the law, there is a difference between co-ownership in the copyright and split of the royalties. To get back to the Dick and Jane analysis, the typical understanding is that Dick and Jane would split any royalties received from the exploitation of the copyright on a 50/50 basis. It is important to understand once again, however, that this understanding can be modified with a written agreement between the co-writers. A songwriter whose reputation is strong enough can certainly request that he or she receive a greater percentage from the royalties, and even ask for a greater percentage ownership interest in the copyright. These types of exceptions, however, must be expressed in writing between the parties in order to be enforceable.

Another complication arises in circumstances where a party merely contributes an “idea” to the collaborative effort. Is that person entitled to be a co-owner? I’ve had this issue arise in litigation. Two parties are collaborating on a song and have most of the song written. In walks a friend who is also a songwriter. He listens to the song and contributes an idea that is incorporated into one line of the song. He leaves, the song is finished, and becomes a hit. Does the third songwriter have an interest in the song? The answer to the question is inevitably determined by the particular facts and hinges on whether the third party merely contributed an idea, or actually contributed the expression of an idea.

As a final observation, let’s overlay the life of the copyright over the co-ownership of a collaborative work to give our brains a final flash fry if you will. Assuming the work to have been created after January 1, 1976, the life of the copyright is life of the author plus 70 years. In the event of a joint work, however, it is the life of the surviving author plus 70 years. What this means in realty is that one of the co-writers in a successful hit song, i.e., the last man standing, will eventually become co-owners with the heirs of the deceased songwriter, either in the form of a wife or a child.

Most songwriters, of course, are not thinking this far down the road when they make their daily co-writing appointments. But that’s the real thrust of this article. If you’re a songwriter, you should consider the possibility of a collaboration agreement. Most songwriters, I admit, do not think about this sort of thing because it cramps the creative vibe that needs to be created in a collaborative effort. This, in my opinion, is not a wise idea. At the very least — and this is not my recommendation — the writers should have some conversation about the consequences of their efforts. Considering the consequences, the best course of action would be to consult with qualified legal counsel and get a collaborative agreement drawn up and signed — or at least have a written statement of intent signed by both writers — at some agreeable point before the co-writing session begins, so as not to interfere with the creative efforts.

Technorati Tags: Songwriting , Music Lawyer , Music Row , Collaboration , Nashville , Music City , Copyright Law , Copyright Act of 1976 , Music Law , Entertainment Law , Entertainment Lawyer

:: :: :: :: :: :: :: :: :: ::