EXTENDING the TERM: Should the UK Recording Industry Have New Obligations As Well As New Rights If the Copyright Term for Sound Recordings Is Extended?
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1 EXTENDING THE TERM: Should the UK recording industry have new obligations as well as new rights if the copyright term for sound recordings is extended? Ben Challis, LLB MA MA(law) FRSA Barrister-at-law In this article Ben looks at the current moves by the UK’s recording industry to push for a Europe wide extension in the term of copyright for sound recordings - from fifty years to ninety five years. But Ben asks if this is the time for a complete overhaul in the way copyrights are owned and suggests that any change in term should only be made with additional provisions to protect both the customers and the creators of recorded music. Front page news in the UK trade magazine Music Week on the 4 th March 2006 was the headline ‘Timefor Action’ launching a major campaign under the „Extend The Term!‟ banner, calling on the UK Government to take action over extending the term of copyright for sound recordings. Currently the term of copyright protection for original literary, dramatic, musical and artistic works along with Films is seventy (70) years from the death of the author or last surviving author pursuant to the provisions of the Copyright Designs and Patents Act 1988s12 and s13B. However S13A of the same Act provides that the copyright in sound recordings in the UK lasts for only fifty (50) years from the end of the calendar year in which the recording is made or released. And this is what is agitating the British Phonographic Industry as its members being to see some very valuable copyrights (such as early sound recordings from Elvis Presley and Cliff Richard) enter the public domain. But this is not just a UK issue as copyright protection is, in general terms, harmonised across the European Community and the recording industry is seeking extension in copyright term in sound recordings on a European wide basis. The UK Government has already responded to industry calls by appointing Andrew Gowers, formerly editor of the Financial Times, to review issues in intellectual Property. Mr Gowers has now issued a call for evidence relevant to his review. At the top of his list of the twelve areas of IP he wishes to address in his review is the current term of protection for sound recordings including raising the issue of whether or not an extension to ninety five (95) years, to mirror protection in the US, is appropriate; Gowers has asked for: evidence that a change in term would impact on investment, creativity and consumer interest evidence that extended terms in other markets has had an impact on investment, creativity and consumer interest whether any alternative arrangements could accompany any extension of term whether any change should be retrospective or just cover new works The first two points may not quite result in evidence that members of the BPI (British Phonographic Industry) and the IFPI (International Federation of Phonographic Industries) wish to hear. The obvious similar subject market to compare (rather than different UK IP markets such as patents and trade marks) is the US. So what of the US? Well, the major record labels in the USA are presently embroiled in a „payola‟ scandal after being investigated by New York attorney general Eliot Spizer: Both SonyBMG and Warners have already settled in this matter (paying over $10 million and $5 million respectively) for illegal „pay for play‟ activities. Here it seems that the financial muscle gained by the major record labels in the US has done anything but enhance investment and creativity or 2 protect the consumer interest as the majors „pay‟ to have their records „played‟ at the cost of smaller labels, independent bands and less mainstream genres. A2IM (the trade body representing the US indies) has joined the payola debate and has called on the Federal Communications Commission to 'level the playing field' for small record companies. It feels that alleged payola practices between the majors and the broadcasters are locking the indies out. When looking at the consumer interest it really should be noted that the very same labels who are lobbying in Europe for term extension and other copyright protections have simultaneously been indulging in some very dubious practices in the USA. In 2002 it was discovered that then five majors, EMI, Sony, BMG, Universal and Warner Music along with three major US retailers had been fixing the price of CDs. The defendants were penalised when US District Judge D Brock Hornby approved the settlement of a lawsuit filed on behalf of millions of record club members who alleged they had been overcharged in a price-fixing conspiracy. The sum $143 million was agreed by the majors and retailers in settlement of anti-trust claims that they had conspiring to set minimum music prices. This from the companies whose trade body, the Recording Industry Association of America (RIAA) warns Americans about the illegality of downloading without permission – and bangs the drum about copyright theft! To add to major labels woes, there is now a new US investigation looming about the pricing of downloads. Following the lead of the New York Attorney General, The US Attorney General, Alberto Gonzales, has launched a widescale investigation into allegations that record labels are fixing the price of downloaded music. The department of justice inquiry centres on the activities of the majors and it is believed that federal witness subpoenas have already been issued. A law suit has also been filed in the federal courts in the US alleging that the major labels have fixed download prices and the suit, from leading class law firm Lerach Coughlin Stoia Geller Rudman and Robbins, also alleges that the record labels sought to shut down online music pioneer Napster at the same time they were introducing their own joint ventures to sell online music. The suit goes further and alleges that the labels own download services, MusicNet and Pressplay, "were not serious commercial ventures, but rather attempts to occupy the market with frustrating and ineffectual services in order to head off viable online music competitors from forming and gaining popularity after Napster's demise". A European investigation into download pricing is also expected soon. In a separate matter, the majors are still suffering from the ongoing fall out from the SonyBMG „rootkit‟ fiasco (see Music Law Updates Archive February 2006) and other consumer resistance into heavy handed and sometimes plain daft digital rights management (DRM) initiatives from major labels. To cap it all there is the ongoing battle over the major label‟s (and indeed film industry) continual lobbying in the US for technology restricting laws such as the new Audio Broadcast Flag Licensing Act 2006. Comment from the Electronic Frontiers Foundation o this can be found at at http://eff.org/IP/Video/HDTV/fergus_bill.pdf ). With this and the bad news resulting from OAPs, single mums and teenagers being sued for illegal downloading, it has all got so bad that some independent labels (Canada‟s Nettwerk being one example) have distanced themselves from the actions of the major labels and the RIAA. Record company practices have recently been scrutinized to a far greater extent than previously: Prince‟s action in famously painting the word „slave‟ across his face in reaction to his contract terms with Warners and George Michael‟s withering comments on his 90s relationship with Sony give some indication of the contractual and financial imbalances created by record deals. Having heard the complaints of artists, California State Senator Kevin Murray says this about US recording industry practices: “Much like the public generally dislikes politicians, but love their individual representatives, Artists have respect for their record company handlers, but distrust the companies themselves and the system they operate under. They see themselves as victims of an indentured servitude system designed to keep them perpetually indebted to the companies who also own the product of their labor. Some artists expressed gratitude for the initial investments made by the record companies in their talent, but feel cheated by their meager share of the proceeds when the gamble pays off. One artist's representative went so far as to accuse the record companies of running a continuing criminal enterprise ” although Senator Murray accepts that the labels often make substantial investments in promoting Artist‟s careers. Senator Murray went as far as to launch a bill (SB1034) in the Californian Senate to force labels to account properly to their artists under a „fiduciary duty‟. This was strongly resisted by the Recording Industry Association of America (RIAA) and the major labels. 3 In the UK it has been the decisions of the law courts starting with A Schroeder Music Publishing v Macaulay in 1974 through to ZTT Records Ltd & Perfect Songs Ltd v Johnson (1988) and Silvertone v Mountfield (1993) that have unscrambled unfair and often iniquitous contracts between artists and labels, using the common law doctrine of unreasonable restraint of trade and concepts such as undue influence and inequality in bargaining power to try level the playing field. In the US the Recording Artists Coalition are actively campaigning to improve the lot of artists and this is an area in the UK where perhaps new copyright legislation might even the imbalance between majors (labels) and artists by giving statutory protection to artists and statutory guarantees of a fair share of revenues from the exploitation of sound recordings. There is also a move to force record labels to account on a far more frequent basis and account transparently. Some of the accounting periods used by labels are based on a time when parchment and a quill pen were the normal tools of accountancy and take little account of the fact the labels (surely!) now have computerised systems running from point of sale right through to record label head office.