Copyright and the protection of intellectual property in the digital age are priorities for Local 802 and the AFM. Over the last three months in these pages, copyright expert David Newhoff has contributed this guest column, which has discussed the history and importance of copyright law in America, as well as introduced readers to the stakeholders who are involved in amending and reforming it. – Political Director Christopher Carroll

The public performance payment for songwriters and composers was added to the Copyright Act of 1909, and the first performing rights organization ASCAP was established in 1914 to set and collect licensing fees for its members. With the expansion of radio as a public performance venue, disputes over rates between the broadcasters and ASCAP came to a head in the 1940s, which led to the Department of Justice suing both parties for anti-trust violations. The outcome of this litigation was a system of compulsory licensing with rates set by a federal court in New York.

This WWII-era regime is still in force, and as many songwriters and composers are painfully aware, it is part of the reason why millions of plays on a digital streaming service like Spotify is worth about enough to buy a large pizza. But, as copyright attorney and music rights activist Chris Castle points out in a recent article in the Huffington Post, the compulsory license is now serving as the foundation for a particularly aggressive form of license-avoidance by Amazon, Google and Pandora.  Each of these players in the digital music streaming market can potentially avoid paying songwriter royalties forever and shield themselves from infringement litigation with what Castle describes as a “hack” that only Big Data companies could pull off.

These giant corporations are exploiting a loophole in Section 115(c)(1) of the Copyright Act, which states, “… if the registration or other public records of the Copyright Office do not identify the copyright owner and include an address at which notice can be served, it shall be sufficient to file a notice of intention in the Copyright Office.” [Emphasis added].

Written long before the era of Big Data, this exception anticipated a good faith effort by a single party seeking to use a song or two at a time and allowing that party to file a notice of intention in order to obtain the government-granted, compulsory license. What this exception did not anticipate, of course, is that corporations with the computing power and financial resources to topple small nations would flood the Copyright Office with millions of notices of intent in order to shield themselves against liability for copyright infringement for vast catalogs of songs.  To date, Amazon has served about 19 million notices, Google about 4 million, and Pandora 1 million.  Castle notes the irony that Google, of all companies, is exploiting this loophole on the basis that they “cannot find” the relevant information.  He writes:

Google is supposed to search. Think about that. This 1976 rule was never intended to apply to a music user with Google’s search monopoly. Yet, if Google “can’t” find the song owner after a search, then Google can serve an “address unknown” notice of intention to the Copyright Office and then exploit the song for free until the songwriter can be “identified” in the Copyright Office records – which may be never.

Part of the reason it may be never is that the Copyright Office is in desperate need of modernization. It shouldn’t surprise anyone that a government agency like this is not as high-tech as private enterprise. But in this case, the state of copyright records and the turnaround time between registration and public record update leaves potentially millions of song titles ripe for picking by the biggest of Big Data companies on the planet. Once the notice of intent is served, these companies can potentially avoid paying royalties indefinitely.

And it’s not just older works whose authors may have passed away decades ago. Castle’s research shows that even newly-released works are the targets of these notice of intentions. So, if Google can get away with claiming they “can’t find” Sting or his publisher, what chance does a songwriter or composer who isn’t a mega-star really stand? Of course, finding the song’s owner doesn’t appear to be the goal. As Castle states, “… the point for the services is not to find out who actually owns the songs, the point is to find out if the Copyright Office has a record of who owns the songs based on the Library of Congress data.” Because that’s what the statute in the Copyright Act literally says. It doesn’t say anything about making a reasonable, good-faith effort to find the copyright owner – like maybe the biggest data company in the world can probably find Sting – it simply says that if the record in the Copyright Office is incomplete or unavailable, a notice of intention is sufficient to obtain a license.

Offended? You should be. The compulsory license for songwriters and composers is beyond antiquated for the digital market, and this latest notice of intention scheme Castle describes is proof that these vast corporations will exploit every gap in the copyright system to prey on the creative works of authors. Musical artists should spend  their political capital on ending the outdated compulsory license regime, on updating copyright law to better reflect the digital market, and on supporting efforts to create an independent and more modern Copyright Office.

David Newhoff is a writer, copyright advocate and blogger for The Illusion of More, a blog that is part original editorial, part investigation into the world of copyright protection and the digital ecosystem. The blog is essential reading for people particularly interested in copyright and intellectual property, and can be found at
www.IllusionOfMore.com.