While patent law has hogged the headlines in the last year, copyright law is making a splash this week with two cases at the Supreme Court and a third in California that could shake up the content industry. Here is a guide to what’s happening.
A Stream is a Performance But A Download is Not
Yahoo! (NSDQ: YHOO) came up a winner yesterday when the Supreme Court confirmed that internet companies do not have to pay performance rights when they distribute music. ASCAP, a group that licenses almost half of all online music, had argued that Yahoo and others should pay a 2.5% royalty rate for each song because a download is a performance.
A lower court had disagreed and ruled last year that downloads are not a performance in any sense because they “are simply transfers of electronic files containing digital copies from an online server to a local hard drive.” The court did distinguish downloads from streaming, however, and said that a consumer is indeed listening to a performance when a computer streams a song.
By denying ASCAP’s appeal, the Supreme Court effectively confirmed that ASCAP does not get another bite of the apple for downloads. As is its custom when it refuses to hear a case, the court did not provide any reasons.
Should “Peter and the Wolf” Be Free?
Tomorrow, the Supreme Court hears from a musician who says it was unconstitutional for Congress to remove Prokofiev’s beloved children’s work from the public domain. The case will determine whether millions of foreign books, musical scores and movies can keep their copyright.
The issue arose when Congress decided to restore protection in the 1990’s to foreign works that had lost their copyright protection in the U.S. for technical reasons like failing to register. The law was intended to help ensure that the copyrights of American authors were respected overseas.
The musician, however, says he lost out when Congress restored protection to “Peter and the Wolf” because he is now unable to perform the work or distribute his recordings of it — even though he was freely able to do so in the past. He says schools and small orchestras have been especially hurt by what he sees as an “illegal taking” and is also arguing that the renewed copyright protection violates the First Amendment.
The musician is being joined in the case by a strange bedfellow group of supporters including Google (NSDQ: GOOG), the ACLU and the Cato Institute. Authors groups and intellectual property lawyers are lining up on the other side.
Termination Rights Fight Heats Up in California
As copyright watchers turn their attention to the Supreme Court, the real action may be occurring in California where a federal court last week heard one of the opening salvos in the fight over “termination rights” which pose a looming disaster for the music industry.
Under the terms of a 1977 law, termination rights permit musicians to take back control of their work after 35 years. The law received little attention until the New York Times (NYSE: NYT) reported earlier this year that a host of famous names, including Billy Joel and Bruce Springsteen, are entitled to reclaim their iconic albums starting in 2013.
In the unfolding legal tussle, the frontman for the Village People looks to be the leading protaganist for the musicians, according to the Hollywood Reporter. The California court hearing last week also gave a preview of the music industry’s legal strategy to push back. The industry is saying the copyrights belong the studios under “work for hire” laws, and is pushing a technical argument to argue that everyone in a band must file to reclaim a work — not just one member, as occurred in the Village People case.
The termination rights litigation is still in its early stages but, given the enormous amount of money at play, look for it to explode in the near future.