Intellectual Property

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There’s a new top-level domain name ("TLD") on the block, and broadcasters and other media companies will want to protect URLs that include their call signs, unique slogans and positioning statements or other registered marks or names.  The new TLD will be ".tel."  Unlike .com, .net, .org, and other current TLDs that link to websites, the new .tel TLD is designed specifically for access by mobile devices such as the Blackberry and iPhone and will access to the contact information of the holder of the .tel URL without the need for a standard website.  The theory behind the .tel TLD is to allow instant access to contact information without having to access a registrant’s website.  When contact information is accessed via mobile devices, the telephone numbers will appear as "hot links" that will dial those numbers upon touch or selection.  Of course, links to websites may also be provided, but the primary purpose of the TLD is to provide a global contact directory without the need for the user to have Outlook or other address books or for the registrant to have a website.

Beginning December 3, 2008, anyone with a registered trademark or service mark can register a .tel domain name using that mark for a cost estimated to be in the $500 range.  This so-called "sunrise" period will last for two months.  Beginning February 3, 2009, there will be a so-called "landrush" period allowing anyone to register any unregistered .tel domain names, including generic or descriptive marks or names, such as radio.tel or cable.tel, on a first-come, first-served basis.  (Bad faith use of a third party’s trademark will be subject to cancellation under existing domain name dispute procedures.)  The "landrush" period will last until March 23, 2009, after which the .tel TLD will be generally available to anyone at a much reduced fee, currently estimated to be as low as $1.25 per month.Continue Reading “.tel” Domain Name To Become Available Soon

The Stephen Colbert Christmas Special begins with Colbert sitting at the piano, writing new Christmas songs.  Why?  He explains that, while he likes all of the old Christmas songs well enough, he’d only get royalties if he wrote the songs, so he’s writing his own.  In a few sentences, Colbert explains the system of broadcast royalties in the United States, and the source of the dispute over the broadcast performance royalty that took up much committee time in the last Congress, and is bound to return in the next Congress in 2009.  As Colbert explains, in the US, the composers get paid when their music is played on a broadcast station. These payments come from the the royalties that broadcast stations pay to ASCAP, BMI and SESAC, the performing rights organizations or "PROs" that represent the composers or the music publishing companies that hold the copyrights to those songs.   But, as Colbert points out, the performers do not get paid when they sing the song on the air.

We’ve written about the controversy about whether or not performers should get a royalty when a song that they perform but did not write, is played on the air.  But Colbert seems to have solved the problem about the performer not getting royalties when their songs are played on the air – simply by writing his own songs. And maybe we’ll be singing these songs at future Christmas parties, paying Colbert royalties, and at the same time explaining broadcast performance royalties to future generations.Continue Reading Stephen Colbert’s Christmas Special Explains Broadcast Performance Royalties

We’ve previously written about the value of music in connection with the royalties to be paid by Internet Radio and the performance royalty (or "performance tax" as it’s labeled by the NAB) proposed for broadcasters. One of the questions that has always been raised in any debate about royalties, and one often dismissed by the record industry, is to what extent is there a promotional value of having music played on the radio or streamed by a webcaster.  In discussions of the broadcast performance royalty, record company representatives have suggested that, whether or not there is promotional value of the broadcast of music, that should have no impact on whether the royalty is paid. Instead, argue the record companies, the creator of music deserves to be paid whether or not there is some promotional value. The analogy is often made to sports teams – that the teams get promotional value by having their games broadcast but are nevertheless paid by stations for the rights to such games. The argument is that music should be no different. That contention, that the artist deserves to be paid whether or not there is promotional value may be tested in connection with what was once thought to be an unlikely source of promotional value for music – the video game Guitar Hero.

Guitar Hero, in its various versions released over the last few years, has proven to be a very effective tool for the promotion of music – with various classic rock bands experiencing significant sales growth whenever their songs are featured on a new version of the game. The use of a sound recording in a video game is not subject to any sort of statutory royalty – the game maker must receive a license negotiated with the copyright holder of the recording – usually the record company.  In previous editions of the game, Guitar Hero has paid for music rights. However, now that the game has proved its value in promoting the sale of music, the head of Activision, the company that owns the game, has suggested in a Wall Street Journal interview that it should be the record companies that are paying him to include the music in the game – and no doubt many artists would gladly do so for the promotional value they realize from the game. Continue Reading Will Guitar Hero Show the Promotional Value of Music and Change the Music Royalty Outlook?

Today, the National Music Publishers Association ("NMPA"), DiMA, the RIAA and other music publishing groups issued a press release announcing a settlement of certain aspects of the current Copyright Royalty Board proceeding to determine the royalties due under Section 115 of the Copyright Act for the mechanical royalty for the reproduction and distribution…

The Copyright Office today issued an Order extending the dates for comments on the Notice of Proposed Rulemaking to determine if, in addition to royalties to ASCAP, BMI and SESAC for the public performance of a musical composition, a royalty is also be due for reproductions of the composition made by real-time webcasting such as…

Broadcasters and other digital media companies have recently been focused on the royalties that are to be charged by the record labels for public performance of a sound recording in a digital transmission (under the Section 114 compulsory license administered by SoundExchange).  In a Notice of Proposed Rulemaking issued this week, the Copyright Office tentatively concludes that there could be yet another royalty due for streaming – a royalty to be paid to music publishers for the reproductions of the musical compositions being made in the streaming process under Section 115 of the Copyright Act.  This notice was released just as the Copyright Royalty Board is concluding its proceeding to determine the rates that are to be paid for the Section 115 royalty.  While there have been reports of a settlement of some portions of that proceeding, the details of any settlement is not public, so whether it even contemplated noninteractive streaming as part of the agreement is unknown.

How did the Copyright Office reach its tentative conclusion?  First, some background.  The Office for years has been struggling with the question of just what the section 115 royalty covered.  Traditionally, the royalty was paid by record companies to the music publishers for rights to use the compositions in the pressing of records.  This was referred to as the "mechanical royalty" paid for the rights to reproduce and distribute the composition used in a making copies of a sound recording (a record, tape or CD).  These copies were referred to as "phonorecords."  However, in the digital world, things get more complicated, as there is not necessarily a tangible copy being made when there is a reproduction of a sound recording.  Thus, Congress came up with the concept of a Digital Phonorecord Delivery (a "DPD") as essentially the equivalent of the tangible phonorecord.  But just what is a DPD?Continue Reading Copyright Office Issues Notice of Proposed Rulemaking That Could Make Section 115 Royalty Applicable to Internet Radio

Once again, the extension of the sound recording performance royalty to broadcasters has become a hot topic in Washington. The subcommittee on Courts, the Internet and Intellectual Property of the  House Judiciary Committee yesterday approved the bill introduced by Congressman Berman (about which we first reported here).  That bill would include broadcasters in the Section 114 sound recoding royalty currently applicable to digital music users including Internet radio, satellite radio and cable radio. Under the bill, the Copyright Royalty Board would be charged with the responsibility of determining what a royalty would be using the "willing buyer, willing seller" standard. Following this subcommittee approval, the bill would next be considered by the full committee. To become law, the Committee and the full House of Representatives would have to approve it, and similar legislation would need to be enacted by the Senate. As the NAB has garnered the support of a majority of the members of the House on a non-binding resolution opposing the imposition of the royalty on broadcasters, and as there is not much time remaining in the legislative session before the election and the end of this Congress, the whole process may well have to start fresh in 2009 (bills have to be reintroduced after the end of each two-year Congressional session). Yet, with all of the controversy over the issue in recent weeks, it appears certain that the issue will arise again, so it is important to look at some of the recent action.

Two weeks ago, the House subcommittee held a hearing on the issue. Prior to the hearing, the MusicFirst Coalition (principally supported by the RIAA and the affiliated record companies as 50% of any royalty goes to the copyright holders who are usually the labels) had Nancy Sinatra and the Nitty Gritty Dirt Band making the rounds on Capitol Hill in support of the royalty. These appearances follow the precedent set in earlier Capitol Hill proceedings, where the Coalition has brought in niche or oldies artists to address Congress – not major popular current acts. The artists who have testified (who have included Judy Collins, Sam Moore, Lyle Lovett, and Alice Peacock) have argued that the additional income that they would receive from a performance royalty would supplement their incomes which, in some cases, has either never been great or has declined as the demand or ability to tour has declined. The argument is always made that the royalty will encourage musicians to produce their music – though it is rarely if ever claimed that music wouldn’t be made if the royalty is not adopted, as songs have been written and sung for time immemorial, well before any royalty existed, merely for the pleasure or to fulfill the need for self-expression. The question is not one of ensuring the availability of music, but instead it is one about who should get how much of whatever money is made, directly or indirectly, from the use of that music. Continue Reading Broadcast Performance Royalty Passes House Subcommittee – But It’s Not Done Yet

A decision by a US District Court in New York was just released, setting the rates to be paid to ASCAP for the use of their composers’ music by Yahoo!, AOL and Real Networks.  The decision set the ASCAP rates at 2.5% of the revenues that were received by these services in connection with the music portions of their websites.  These rates were set by the Court, acting as a rate court under the antitrust consent decree that was originally imposed on ASCAP in 1941.  Under the Consent Decree, if a new service and ASCAP cannot voluntarily agree to a rate for the use of the compositions represented by ASCAP, the rates will be set by the rate court.  The Court explained that they used a "willing buyer, willing seller" model to determine the rates that parties would have negotiated in a marketplace transaction  – essentially the same standard used by the Copyright Royalty Board in setting the rates to be paid to SoundExchange for the use of sound recordings by non-interactive webcasters (see our post here for details of the CRB decision).  The ASCAP decision, if nothing else, is interesting for the contrasts between many of the underlying assumptions of the Court in this rate-setting proceeding and the assumptions used by the Copyright Royalty Board in setting sound recording royalty rates.

First, some basics on this decision.  ASCAP represents the composers of music (as do BMI and SESAC) in connection with the public performance of any composition.  This decision covered all performances of music by these services – not just Internet radio type services.  Thus, on-demand streams (where a listener can pick the music that he or she wants to hear), music videos, music in user-generated content, karaoke type uses, and music in the background of news or other video programming, are all covered by the rate set in this decision.  Note that the decision does not cover downloads, presumably based on a prior court decision that concluded that downloads do not involve a public performance (see our post here).  In contrast, the CRB decision covered the use of the "sound recording" – the song as actually recorded by a particular artist – and covers only "non-interactive services," essentially Internet radio services where users cannot pick the music that they will be hearing.Continue Reading Rate Court Determines ASCAP Fees for Large Webcasters – Some Interesting Contrasts with The Copyright Royalty Board Decision

The Senate Commerce Committee held a hearing this week on the Future of the Internet, dealing principally with the issue of net neutrality – whether Internet Service Providers treat all content carried through their facilities equally.  This issue principally involves questions of whether ISPs can charge big bandwidth users for their content to be transmitted through the ISPs facilities, or to be transmitted at preferred speeds.  The testimony of Chairman Martin at the hearing raised several issues – issues both about what he said and what some reports perceived him to say.  Some reports had him saying that the FCC did not need to regulate indecency on the Internet – though I never heard that question asked. But he did say that he did not have trouble with ISPs blocking illegal content such as child pornography and illegal file-sharing, which raises the question of whether some might look to ISPs to become copyright police – blocking access to material that does not have copyright clearances.  And, with the hearing being held on the same day as a media company purchased a company that can identify copyrighted material by reviewing that content when transmitted on the Internet – is that possibility coming closer to being a reality?

In recent weeks, there have been several trade press reports about government regulation of indecency on the Internet.  I’ve seen at least two trade press reports on Chairman Martin’s testimony before the Commerce Committee, claiming that he said that no government regulation of indecency on the Internet was necessary.  I did not hear any reference to indecency regulation in his testimony (a written version of his statement is available here, and you can watch the entire testimony, here).  Instead, that testimony was about whether Congress needed to pass laws to allow the Commission to enforce its net neutrality principles.  Nonetheless, the press seems to believe that Internet indecency is an issue which might be targeted by regulation.  A recent study finding that the majority of Americans think that FCC regulation of indecency should be extended to the Internet has also been cited in several reports.  However, despite the seeming interest in regulation of the Internet, there are serious constitutional concerns about any such regulation.  In fact, as we wrote here, numerous attempts to regulate indecency on the Internet have been overturned by the Courts on constitutional grounds, as the government could make no showing that the regulations were the least restrictive means for restricting access to adult content.Continue Reading Indecency and Copyright Enforcement by ISPs? – Questions From the Net Neutrality Hearings

Last week, the Copyright Royalty Board published an order seeking comments on a proposed settlement establishing the royalties for "Business Establishment Services."  Essentially, this is the royalty paid by a service which digitally delivers music to businesses to be played in stores, restaurants, retail establishments, offices and similar establishments (sometimes referred to as "background" or "elevator" music, though it comes in many formats and flavors, and may sometime include the rebroadcast of programming produced for other digital services).  The proposed settlement would essentially carry the current rates forward for the period 2009-2013.  These rates require the payment of 10% of a services revenue (essentially what they are paid by the businesses for the delivery of the music) with a minimum annual payment of $10,000.

Some might wonder how a royalty of 10% royalty can be justified – and why it shouldn’t set some sort of precedent for the Internet radio services about which we have written so much here.  Once again, as we’ve written before, the Digital Millennium Copyright Act sets different standards for different kinds of music use.  For many consumer-oriented services (like satellite radio, digital cable radio and Internet radio), there are different standards used to determine the royalty rate.  For Business Establishment Services, it’s not the standard that is different – it’s the royalty itself.  Under the DMCA, there is no performance royalty paid either by the business or the service provider.  Instead, under the statute, the royalty is paid only for the "ephemeral copies" – those transitory copies made in the digital transmission process.  That is different than the royalty for all of the other digital services, where fees are paid for both the performance (under Section 114 of the Copyright Act) and the ephemeral copies (under Section 112).Continue Reading Copyright Royalty Board Requests Comments on Business Establishment Service Royalty Rate