Music Industry Litigators Busy In Early November

For the music industry, copyright and royalty litigation is like an endless war fought on many fronts. During early November, as four of the industry's "Big Five" continued their pursuit of the file-sharing service Napster, a parallel trial in US Federal Court in New York against music archiving-and-accessing site MP3.com by Universal Music Group entered its penalty phase, that segment of the proceeding in which aggrieved plaintiffs seek to extract money from guilty defendants. Other plaintiffs in the trial—Sony Music Entertainment, BMG, Warner Music, and EMI—have all settled with the San Diego-based Internet service for an average of $20 million each.

A surprise "friend of the court" brief was submitted in the trial by the Recording Artists Coalition (RAC), a group founded by singer/songwriter Sheryl Crow and vocalist/percussionist/songwriter Don Henley, an original member of the rock group The Eagles. Henley stated that if he is called to testify, he will claim that he, rather than the record label, is "solely responsible" for the creative content and process of the albums he releases to the public. He will also claim that he is the "author" of the recordings, and that they are works "assigned" to the record labels who distribute them, rather than being "works for hire."

The Recording Artists Coalition's strategy is to establish legal precedent of authorship under a new law, signed in October by President Clinton, that repealed a previous law classifying recordings as "works for hire." The new law paves the way for the recordings' eventual reclamation by the artists who wrote and/or performed the music. RAC has recommended that as many as 4000 of the 6700 infringed copyright certificates that UMG has presented as works for hire in the trial be reclassified as "assigned" to the company's various labels. MP3.com has beefed up its legal team, hoping to use the argument to its advantage.

Henley's testimony could have a substantial effect on the outcome of the trial if the disputed recordings are excluded from damage calculations, and could also have long-term ramifications for RAC members (and other artists not participating in the brief) wishing to renegotiate their distribution deals and/or reissue their music independently. (Perhaps not coincidentally, as Henley was preparing to testify, the Recording Industry Association of America reported that The Eagles' album Their Greatest Hits 1971-1975 had become the best-selling album of all time, having sold 27 million units in the US alone.) US District Judge Jed Rakoff had previously refused to make a ruling as to whether the infringed copyrighted properties were "assigned" or "works for hire." MP3.com could be forced to pay UMG as much as $25,000 for each infringement.

MP3.com has also been hit with a new class-action copyright-infringement lawsuit brought by independent record label Unity Entertainment Corporation. The suit was filed Tuesday, November 7 in the US District Court for the Central District of California, seeking $150,000 per infringement for what it claims are thousands of violations of copyrights. Unity's roster includes jazz artists Keiko Matsui and Paul Taylor, and it also wants to bring unrepresented artists under its legal umbrella. "We're going to try to find the others left out of the suit brought by the majors, those who could not afford this type of litigation," Unity's attorney Adam Miller told Billboard.

On November 7, in an unrelated case, San Francisco Superior Court Judge Stuart Pollak dismissed a class action suit against Internet auction site eBay.com, brought by Grateful Dead fan Randall Stoner, who was seeking to stop sales of bootleg recordings. Pollak acknowledged that illegal items may change hands through eBay, but ruled that the company cannot be held liable for the transactions. He based his decision on his interpretation of the Communications Decency Act, which prevents Internet service providers from being punished for the speech of others. Pollak ruled that the claim against eBay's service "is no different from the unsuccessful attempts that have been made to hold computer service providers liable as distributors rather than publishers of defamatory or pornographic materials." The company polices its site regularly and removes questionable items, said eBay attorney Jay Monahan. Pollak's ruling will allow eBay "to continue to operate our business and not fear facing liability at every turn," he said.

Last, a symbolic victory for some music stars of the 1950s. On November 2, US District Court Judge Charles Norgel awarded a $5.2 million default judgment to the estates of Louis Jordan, Big Joe Turner, Leadbelly, Screamin' Jay Hawkins, and to singer Betty Everett and surviving members of the Chi-Lites and the Eldorados. The awards are for royalties owed by and damages assessed against Parlin, NJ-based San Juan Music Group for the unauthorized use of the artists' music. The year-long trial brought by the artists and heirs claimed that San Juan had sold albums featuring 140 of their songs without obtaining permission. The victorious plaintiffs may never collect, however, because San Juan Music Group declared bankruptcy prior to the judgement. On November 10, company president Michael Chernow said that his company would appeal the decision.

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