Small business people dealing with big business people always have the same fear–what if they just stiff me. You know going in that there are some big businesses that simply factor into their financials that the businesses will get away with stiffing a percentage of their contractors with claims of unsatisfactory work daring the small business to sue. Claims that may be trumped up, so to speak.
Some–not all surely, but some–Silicon Valley companies have taken this “pay them when they sue” mentality to it’s logical conclusion under the guise of the faux “DMCA license” based on sheer bargaining power. At least the real estate developer stiffing contractors on trumped up claims did actually hire the contractor with a promise to pay.
The Silicon Valley version of “pay them if they sue” is wrapped in the cant of Valley Boy catechism and the leap of faith to “the machines made me do it” or “disruption” resulting in the gospel of “permissionless innovation”. That’s the trumped up theory that allows the “disruptor” to just take the contractor’s labor and materials without negotiating a contract or paying a dime and then saying “so sue me” and my $20 billion valuation.
UK artist Kate Nash recently called out Snapchat in a viral tweet for profiting themselves from a trumped up license
David Lowery called out Facebook for essentially doing the same thing starting the “#F*CKTHEZUCK” hashtag.
Remember–Snapchat and Facebook, two massive Silicon Valley darlings, have NO licenses and REFUSE to negotiate. (Google does get licenses for some of its platforms like YouTube but is also busily serving millions of NOIs on the Copyright Office to use songs without paying royalties and also gaslighting the UK music industry with yet another meaningless “voluntary” code of conduct for the billions of takedown notices Google receives for search that Google refuses to fix.)
Kate Nash has put her finger on the key factor in the greatest income transfer of all time–it’s not that the music is free because it is without value, it is free because it is stolen using a trumped up legal theory based on loophole seeking behavior in a legacy statutory construct. Nobody ever intended for the “safe harbors” to be used to trump up a nonexistent “license held in place by unequal bargaining power.
[An] imbalance I want to talk about is the safe harbour provisions, and similar terms in other countries. They were introduced, with some foresight, by the legislators in the USA framing the DMCA, to provide a notice and take down procedure for unlicensed content. But the legislation has been distorted into a protective wall behind which cyberlockers and torrent sites, and companies such as YouTube and Grooveshark, operate.
The original intent was to protect reasonable people acting reasonably from falling foul of the law, to enable the digital economy to grow without “ gotcha “ law suits against ISP’s who had no idea that their networks were being used for infringement. They were not intended to provide fortress walls behind which companies could build billion dollar businesses on content that had not been cleared. They were never intended to become a de facto “ licence “.
Kate Nash said it best: “But where’s my paycheck?”
We’re going to assume that readers know the general background on the millions of “address unknown” NOIs filed with the Copyright Office under a loophole in the Copyright Act (Sec. 115(c)(1)).
The nutshell summary: Starting April of last year, Google, Amazon, Pandora and other on-demand digital services using compulsory licenses began filing very large numbers of “address unknown NOIs” for compulsory mechanical licenses with the Copyright Office. These filings were implemented through a taxpayer funded customized electronic filing process that allows services to exploit songs for free–no royalty is payable. The Copyright Office created this customized platform for these services about the time that the Copyright Office announced a reduced fee structure for this customized electronic filing process that increases the burden on songwriters. (Even though Pandora has yet to launch its on-demand music service, Pandora appears to have served the Copyright Office with well over 1,000,000 address unknown NOIs. Since it’s early days, we can probably expect that number to increase, perhaps dramatically.)
There are no reciprocal countermeasures provided by either the Library of Congress or the Copyright Office. We’ve posted about this process before and Billboard reported on Music Reports, Inc.’s involvement in supporting the entire filing but has yet to report on the scope of the problem.
The two key differences between serving an “address unknown” NOI and serving a “regular” NOI is that the “address unknown” NOI is served on the Copyright Office instead of the copyright owner and the digital music service never sends an accounting or a royalty payment.
At such time-if ever-that the song copyright owner identifies themselves in the Copyright Office, which the copyright owner is not obligated to do under US law or the Berne Convention, statutory royalties will be payable thereafter–not retroactively. That mess is unlikely to ever get sorted.
I’d sum it up by saying that in my view anyone who participates in this mass NOI filing is manipulating a loophole in the law as a way of forcing copyright owners to let their songs be used for free.
Rightscorp has developed a proprietary database to assist songwriters with sorting out this mess and we interviewed Rightscorp CEO Christopher Sabec about the process for Music Tech Solutions.
Chris Castle: Thanks for participating in our interview today on the “mass NOI” filing. Why don’t you start by telling readers the 10,000 foot view of your resume and what Rightscorp does, especially in the landmark BMG v. Cox case, currently on appeal.
Christopher Sabec: I am the co-founder and CEO of Rightscorp, Inc, which is a leading provider of data and analytic services to support artists, songwriters and owners of intellectual property. We assist rights holders by monitoring and monetizing their copyrights on peer-to-peer networks such as BitTorrent. We also provide data and support for DMCA litigation, most recently supporting BMG with gathering evidence, assisting with e-discovery and providing testimony in their groundbreaking litigation against Cox Communications. [BMG won a $25 million damages award against Cox that is currently on appeal.] I am an attorney by training and in the past, I have served as CEO of the Jerry Garcia Estate LLC, discovered and managed the rock band Hanson, and represented Dave Matthews in the early years.
Castle: So you’re coming at this from the artist/songwriter/copyright owner side of the desk?
Sabec: Correct. We are dedicated to the vision that creative works should be protected economically on the Internet so that the next generation of great music, movies, and other content can be made and creators can prosper.
Castle: You’ve had a chance to look at some of these mass NOI filings and that’s what we’re going to focus on today. Let’s start by giving readers an idea of the scope of these filings.
How many songs have you identified so far that have been filed with “address unknown” NOIs?
Sabec: As of January 18, we have identified more than 25.6 million address unknown NOIs that have been filed with the Copyright Office.
Castle: That is a mind-numbing number. How easy is it for any songwriter to search for themselves in these “address unknown” filings to see if the NOIs were even filed correctly since the Copyright Office does nothing?
Sabec: It would be a huge manual process. It would require downloading all the individual mass filings, sorting through them to look for particular copyrights, and creating reports that would makes sense of the volume of data. We don’t see this as an easily achieved manual process.
Castle: So the Copyright Office has not set up a searchable database for these filings?
Sabec: No. The Copyright Office just publishes the filings as they are received, placing the burden of sorting the information on the songwriters and rights holders.
Castle: That sounds like the songwriter is effectively not able to find themselves in the Copyright Office filings?
Sabec: It’s a true needle-in-a-haystack situation.
Castle: When I looked through these filings, I found a number of songs that I recognized that were clearly identifiable and were registered for copyright long ago. Did you find any songs like that when you sampled the NOI filings?
Sabec: Yes, we found songs by top artists and songwriters, and verified there are copyrights on-file with the Copyright Office for these works. Examples would be Taylor Swift, Alan Jackson, The Eagles, Disney musicals, many other recognizable and–more importantly–findable song copyright owners.
Castle: Which means that those copyrights should not be subject to “address unknown” NOI filings because their address is known.
From what I understand, Google is taking the position that if a song copyright owner is not identifiable in the public records of the Copyright Office Public Catalog, they treat it as address unknown. I’ve also heard that Google is refusing to accept address changes directly from copyright owners for whom they already have a “regular” NOI relationship (or direct agreement) and are telling those copyright owners that they will only deal with them through the Copyright Office Public Search Catalog:
We now receive our data from the United States Copyright Office Public Catalog, as required by Section 115 of the US Copyright Act. If any of the information in the Notice is out of date, then please update your registration with the United States Library of Congress (http://copyright.gov). For more information on compulsory licenses, please visit: http://www.copyright.gov/circs/circ73.pdf.
The most immediate problem with this approach is that the Copyright Office Public Catalog clearly states that it only covers titles that were registered after 1978. Pre-78 titles are on paper records at the Copyright Office.
Did you find any pre-78 songs in your sampling of the “address unknown” data?
Sabec: Yes, we found very well known songs from well known artists from the pre-1978 period. We also found songs from the pre-1978 period that have filed renewal registrations available in the Copyright Office Public Search Catalog.
Castle: That’s odd because the Copyright Office puts users of their catalog search on notice that it only covers post-78 titles, as does the Library of Congress which sells this information out the back door for big fees.
Have you been able to afford the tens of thousands of dollars to purchase the Library of Congress database of copyright registrations and recordation to compare what’s been registered to what’s in the “address unknown” filings?
Sabec: No, we have not purchased the database.
Castle: So it doesn’t appear that Google, Amazon or Pandora are doing anything in the way of searching the card catalog or using the many other resources available to it to find, say, The Beatles, The Rolling Stones, Garth Brooks, or Alan Jackson, not to mention songs from the pre-78 period?
Sabec: No, it does not. And it makes no sense. We are cross referencing the NOIs and using the available Public Search Catalog to determine that many of these “address unknown” NOIs should not have been filed in the first place. Many owners are known and easily identifiable in the Public Records.
Castle: What can the average songwriter do to find out if they’ve been forced into getting involved in this entire debacle?
Sabec: This is a daunting task. It takes a lot of time and energy, and is a very expensive undertaking. Rightscorp are investing the time, energy, and money to solve this debacle and we intend to offer songwriters and rights-holders appropriate solutions.
Castle: It sounds like you’re collecting the data that would allow you to be in the same position as whoever is filing all these “address unknown” NOIs.
Given that you have that data, what’s the next move for Rightscorp on these mass NOIs?
Sabec: We intend to create a technological solution to this technological problem. We have already created a searchable database and can assist rights holders in determining the extent of their exposure. If a rights-holder would like to know more about our solution, I can be contacted at email@example.com
Castle: Thanks for participating today, Christopher, please keep us informed of your next moves.
As we saw in parts 1 and 2 of this post, New Boss companies like Google are playing on a loophole in the Copyright Act’s compulsory license for songs to shirk responsibility for song licensing from the songwriters or other copyright owners, get out of paying royalties and stop songwriters from auditing.
Not only have Google targeted long tail titles, but also new releases and songs by ex-US songwriters who are protected by international treaties. This is exactly the kind of rent seeking behavior by crony capitalists that gives Big Tech a bad name in the music community.
Google are doing this on a grand scale and at great expense, reportedly using “millions” of “address unknown” NOI filings with the Copyright Office that are supposed to be reserved for bona fide situations where the copyright owner cannot be found after a reasonably diligent search. Amazon is doing the same.
Through a quirk in the law (which needs to be fixed pronto) Google and Amazon are paying astonishing sums in filing fees to send the “address unknown” NOIs to the Copyright Office for songs that have not been registered for U.S. copyright or otherwise recorded with the Copyright Office. “Address unknown” NOIs are intended to be used when you really can’t find the address of the copyright owner after a diligent search of relevant records, although the Copyright Act limits the search to the public records of the Copyright Office. That limitation on records to be searched is a legacy echo from the 1909 revision of the Copyright Act which required registration and renewal for copyright to attach in the U.S.
So far, the overwhelming majority of “address unknown” NOIs are filed by Google. Spot checking the Amazon filings shows that Amazon filed a handful of titles.
Google apparently accomplishes this by manipulating a data dump from the Library of Congress that was never designed for filing mass NOIs and comparing the metadata in the data dump song title to their own list of sound recording titles that they want to exploit on their services.
Moral Hazard Revisited, DMCA Style
If you have a recording you want to use, you need to clear the song. You take that song title from the recording and look it up in the Library of Congress data dump. If it’s not there, you file the “address unknown” NOI. Wash, rinse, repeat 1,000,000 times or more. See how that works?
As if by magic, you don’t have to pay mechanical royalties until the songwriter figures out what you have done by checking the NOI submissions page at the Copyright Office (assuming anyone knows it’s there or knows their song might be listed) and then…does what?
This approach is fraught with moral hazard for largely the same reasons that plague the DMCA safe harbor–the party who benefits from avoiding both royalties and copyright infringement liability by sending the “address unknown” NOI is also the party who decides whether they qualify for the “address unknown” NOI. The Copyright Office clearly lacks the resources to cross check. Sounds kind of like DMCA notices, right?
The excuse the services give for this approach is that they can’t find the copyright owner for “long tail” and new releases.
The long tail part you can understand, but of course you have to ask yourself if a title is so obscure that you can’t find the song copyright owner, then why use it at all? Holding a track off of a service is far more likely to get the songwriter to come forward than sneaking around through the back door.
The New Release Scam Illustrated
It’s with new releases that Google runs the true arbitrage play. This is the part that makes no sense, particularly for songs written or owned by people with whom Google does repeat business. By relying on the “address unknown” NOI filings for new releases, even for songs that may be subject to a direct license, Google is using a loophole to appropriate value to themselves that should rightly go to the songwriters.
Let’s take another Sting example.
Sting released the song “50,000”, apparently as a single from his new 57th & 9th LP. “50,000” is an introspective Sting-style tribute to David Bowie and Prince. The album release date was September 23, 2016 and the single debuted around September 17. Google must have gotten the track around the same time as it is listed in Google’s September 16, 2016 mass NOI filing on line 626.
“50,000” is a particularly good example of how bogus Google’s approach is to “address unknown” NOIs. Google’s basis for filing the NOI on “50,000” apparently is that “50,000” is not included in either a copyright registration or other recording in the public records of the Copyright Office at the moment that Google looked for it. What this evidently means is that “50,000” wasn’t in the Library of Congress data dump sometime prior to September 16 when Google filed its mass NOI.
It is important to remember that there is no requirement for anyone to register their works or otherwise record their works in order to enjoy the rights of a copyright owner–such as mechanical royalties. This is true under international copyright law, not just in the U.S., so this quirk in U.S. copyright law is probably illegal and possibly unenforceable (which is why the “address unknown” NOI filing needs to be amended or eliminated–more about that below).
So simply put–how can you take away rights from a copyright owner based on a registration requirement that the copyright owner is not required to comply with because it is a formality that is actually prohibited by law? Sound Kafka-esque to you? It does to me.
In Sting’s case, Google knows who Sting is. They have other songs by Sting for which they probably sent an NOI. They may even have a direct license with Sting’s publisher that may actually supersede or be in lieu of a statutory license. In other words–they very well may have actual knowledge of Sting’s publisher. Wouldn’t that be a good place to start?
Yet because a new release has not yet shown up in the Copyright Office records, Google sends an NOI and will not be required to pay royalties until–if ever–the song is included in the Library of Congress data dump. Even though Sting is not required to register the song, Sting’s publisher may decide to register the copyright in order to take advantage of statutory damages and attorneys fees for infringement actions.
Getting a conformed copy of a copyright registration can take months–so for a single or an album, any mechanical royalties from Google under a statutory license during the new release window will never be paid. And if any direct license does not expressly prohibit including titles in mass NOIs, there’s a good chance no new release will get mechanical royalties from Google.
What Is To Be Done?
So now we know what the problem is, how to stop it? Not so easy to do.
1. Anticompetitive: It should not be lost on anyone that the government has created an opportunity for companies with market power to use their leverage to the disadvantage of their competitors as well as songwriters. It takes considerable capital to pay the filing fees to the Copyright Office and purchase data from the Library of Congress in order to arbitrage this loophole.
2. Take Down the Recordings: There are any one of a number of ways that the terms of a typical interactive music service license can be interpreted to allow the sound recording owner to pull recordings by at least current roster artists, especially new releases written by artist/songwriters (including co-writes) who complain to their labels.
3. Take Down the Songs: Direct licenses from music publishers presumably have some clause that will allow the publishers to stop mass NOI filings for their catalog, particularly of the type that creates a nonexistent distinction between versions of a song that have been retititled–not by the songwriter or publisher but by the artist or record company because the versions of the recording are different even though the song remains the same.
4. Counterfeits or Bootlegs (including stream rips): Statutory licenses are only available for sound recordings distributed under the authority of the copyright owner. There are a number of NOIs that look suspiciously like bootlegs or counterfeits, some of which may have been stream ripped. As Google is presumably sending NOIs for YouTube Red or other on-demand service.
5. Congressional Investigation to Stop the Library of Congress Selling Data for NOIs: The LOC has no business selling what is obviously incomplete data or misleading data to a user who so obviously is using it for a harmful purpose. The LOC could stop that immediately if they were so instructed by the Congress, and in any event the Congress should investigate.
6. Use Webform to Update or File Your Address Including Excel File Link: The Copyright Office has a webform for email contact by the public available here. You can use this to file your address and link to your catalog in an Excel file (hosted on your website or blog). Such correspondence is likely subject to FOIA (and therefore part of the public records of the Copyright Office), but you can also state in your webform that you are submitting the information with the intention that it become public and demand that your information be provided to anyone submitting a mass NOI as part of the LOC data dump.
The point that seems to have escaped Google and Amazon is that this loophole will surely be stopped, but what won’t be stopped is the complete lack of moral compass that would drive megacorporations to run roughshod over songwriters that they so aptly demonstrate.