Copyright

On September 28, 2021, a District Court denied a motion to dismiss a lawsuit based on one of music composers pet peeves: use of their music in political campaigns. Many times, this occurs when songs are used at campaign rallies. The composers feel that this is an implied endorsement. The campaigns usually rely on a license from the performing rights organizations. However, sometimes the use is in a campaign video, and since this is a "synchronization" use, it absolutely requires a license and absolutely requires permission, even in the internet age. The song in question is "Electric Avenue" by Barbados based musician Eddy Grant.[ref]Wikipedia - Electric Avenue (song)[/ref] Released in 1983, it was a huge international hit, going top 5 in Australia, Belgium, Canada, Ireland, the UK and the United States, where it went to number 2 on the Billboard Hot 100.[ref]Id.[/ref] Enter the campaign of Donald Trump. According to the opinion: "On August 12, 2020, at or about 9:35 p.m., former President Trump published a Tweet from his personal Twitter account containing a fifty-five-second animated video… The video begins with a depiction of a high-speed red train bearing the words ‘Trump Pence KAG [Keep America Great] 2020.' After the red train passes, the beginning of Electric Avenue can be heard clearly, along with an excerpt of a speech by President Biden. Around the same time, a slow-moving handcar, operated by an animated likeness of President Biden, comes into view... Grant's song can be heard beginning at around the fifteen-second mark of the video, and continues through the duration of the fifty-five second video… As of September 1, 2020, the video had been viewed more than 13.7 million times; the Tweet containing the video had been ‘liked' more than 350,000 times, re-Tweeted more than 139,000 times, and had received nearly 50,000 comments."[ref]Grant v. Trump 2021 WL 4435442 SDNY 2021 at 1 (Page References are to WestLaw paging.[/ref] And of course, no permission or license was obtained. Grant sued and Trump moved to dismiss on the grounds (all together now) "fair use." At the motion to dismiss stage, the Court could have taken the position (as have other Courts) that as a mixed question of fact and law, a defense of fair use is not really ripe for discussion or decision at the time the motion is heard. Instead, the Court makes a detailed examination of the defense, and while leaving the door open for Trump to reassert the defense on summary judgement, puts the Trump team on notice that their position is not likely to carry the day. The Trump team of course asserts that the use of "Electric Avenue" is fair because it is (all together now) "transformative." The problem with this assertion is that "Electric Avenue" and the context of the "Trump Train" video have nothing in common. "Electric Avenue" does not add any context, commentary or allusion to the Trump Train video, and vice versa. As the Supreme Court previously held: "If ... the commentary has no critical bearing on the substance or style of the original composition, which the alleged infringer merely uses to get attention or to avoid the drudgery in working up something fresh, the claim to fairness in borrowing from another's work diminishes accordingly (if it does not vanish) .... Parody needs to mimic an original to make its point, and so has some claim to use the creation of its victim's ... imagination, whereas satire can stand on its own two feet and so requires justification for the very act of borrowing."[ref]Acuff-Rose v. Campbell 510 US 569 at 580-581 (1994)[/ref] In the mind of the District Court: "The defendants argue that the video's use of Electric Avenue was transformative as a matter of law because the video and the song serve different purposes. But the defendants' argument misapprehends the focus of the transformative use inquiry. While it is true that the animation is partisan political commentary and the song apparently is not, the inquiry does not focus exclusively on the character of the animation; rather, it focuses on the character of the animation's use of Grant's song. As the Second Circuit Court of Appeals recently stated: ‘where a secondary work does not obviously comment on or relate back to the original or use the original for a purpose other than that for which it was created, the bare assertion of a ‘higher or different artistic use' is insufficient to render a work transformative.'"[ref]Grant v. Trump 2021 WL 4435442 SDNY 2021 at 3[/ref] "In this case, the video's creator did not edit the song's lyrics, vocals, or instrumentals at all, and the song is immediately recognizable when it begins playing around the fifteen-second mark of the video, notwithstanding that audio of President Biden's speech can be heard simultaneously. Moreover, the animation does not use Electric Avenue as a vehicle to deliver its satirical message, and it makes no effort to poke fun at the song or Grant."[ref]Id. at 4[/ref] "The defendants concede that the video here is clearly satire, not a parody of Electric Avenue or Grant, and the defendants have offered no justification for their extensive borrowing. The fact that the video on the whole constitutes political messaging…does not, by itself, support a finding of transformative use."[ref]Id.[/ref] Next up, the Trump Team argues that "political uses are by definition, not commercial uses."[ref]Id.at 5[/ref] But again, the Court notes that the Supreme Court has already ruled on this point. "The crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price."[ref]Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, at 562 (1985).[/ref] The District Court writes: "Nothing about the song was integral to the video's political message, which is conveyed by the animation and the unflattering excerpts of President Biden's speech. Indeed, the defendants explicitly disclaim any overlap between the purposes of the song and the video. Thus the video does not rely on the song to express its political message; rather, the video incorporates music–like many videos do–to make the video more entertaining and memorable. In no sense does the video parody the copyrighted song or use the song for purposes of commentary. Moreover, there is a well-established market for music licensing, but the defendants sought to gain an advantage by using Grant's popular song without paying Grant the customary licensing fee. Accordingly, the video's use of Electric Avenue appears to be commercial, notwithstanding the video's political purpose. At the very least, the defendants have failed to show that the use was noncommercial as a matter of law."[ref]Grant v. Trump 2021 WL 4435442 SDNY 2021 at 5. All citations omitted.[/ref] After ruling that the second factor, the "nature of the copyrighted work," was neutral, the Court turned to the third fair use factor "the amount and substantiality of the use." The Court rules: "The introductory portion of the song that is used in the animation is immediately recognizable. The excerpted portion of the song also includes the chorus, which repeats six times during the song, comprises the majority of the song's lyrics, and is of central importance to the original work. Moreover, while the excerpted forty seconds of the song make up only 17.5% of the song's total length, the song plays for 72.7% of the animation's duration. ‘The ultimate question under this factor is whether ‘the quantity and value of the materials used are reasonable in relation to the purpose of the copying.' (citation omitted). That is plainly not the case here. The song plays for the majority of the animation; the excerpt is of central importance to the original work; and the defendants have not articulated any purpose for the copying. Accordingly, this factor favors Grant."[ref]Id. at 6[/ref] As to the fourth factor, the "market effect," the Trump Train finally goes off the rails by forgetting, or ignoring, that "fair use" is an affirmative defense, one for which Trump, not Grant, has the burden of proof. "[Defendants] argue that Grant has failed to offer evidence that he has entered, or intends to enter, the market for licensing music to promotional videos. But Grant bears no such burden, particularly in response to a motion to dismiss. The plaintiffs have satisfied any initial burden of identifying the relevant market–licensing for promotional videos–as a market that the defendants' copying would harm. It is the defendants who bear the ultimate burden of showing a lack of market harm, and they cannot do so based simply on the allegations in the Complaint."[ref]Id. at 7[/ref] "The creator of the video here made a wholesale copy of a substantial portion of Grant's music in order to make the animation more entertaining. The video did not parody the music or transform it in any way. The video's overarching political purpose does not automatically make this use transformative, and the other fair use factors also favor the plaintiffs at this stage. Accordingly, the defendants have failed to demonstrate fair use as a matter of law. The defendants may reassert their fair use defense at the summary judgment stage when there is a more developed factual record."[ref]Id. at 8[/ref] "Certainly political speech, and in particular ‘[t]he act of ridiculing and lampooning public figures is a rich part of our First Amendment tradition'… However, denying the defendants' fair use defense in this case–especially at this early stage in the litigation–will not chill legitimate political satire. Creators of satirical videos like the one at issue here must simply conform any use of copyrighted music with copyright law by, for example: paying for a license; obtaining the copyright owner's permission; or ‘transforming' the chosen song by altering it with ‘new expression, meaning, or message.' The creator of the video here did none of that."[ref]Id. at 7[/ref] Perhaps a generous settlement offer to Mr. Grant is in order.

On September 17, 2021, Bloomberg News reported that Taylor Swift had released a re-recorded version of the 2014 hit "Wildest Dreams."[ref]Taylor Swift Rerecords 'Wildest Dreams' in Fresh Copyright Salvo[/ref] She has been doing this to her old recordings since 2020,[ref]Look what you made her do: why is Taylor Swift re-recording her albums?[/ref] and all indications point towards her continuing to do so. Many articles written about the subject have focused on why Taylor Swift is "shaking off" her old record company. This post will instead focus on the how. The how includes a mixture of copyright law and the law of contracts. When an artist signs a recording contract, there will be two types of copyrightable material generated as a result of the contract: the songs and the sound recordings, the latter sometimes referred to as "masters." If the artist generates their own songs, as Taylor Swift does (though sometimes with collaborators), the copyright in the songs can either be retained by the composer(s) or assigned to a music publishing company. Oftentimes this music publishing company is one affiliated with the record company. However, the "masters" or sound recordings are always owned by the record company. This is because they pay to the recording artist a sum of money, called an "advance," out of which the artist uses to finance the recording. The recording agreement will provide that the sound recordings created by the artist belong to the record company either by "work made for hire," or by copyright assignment. The dual language is required because there is considerable doubt in the legal community that sound recordings can be works made for hire, since the artist is not an "employee" of the record company (the contract will say this explicitly) and under the copyright law, independent contractor works made for hire, by definition, do not include sound recordings.[ref]17 USC Section 101 "work made for hire"[/ref] This is where the "why" begins to take center stage. The payment by the record company is called an "advance" because this sum must be paid back to the record company. The artist will receive no royalties on the sale or streams of the sound recordings until such time that all of this money is paid back. This is true for all copyrighted material that is delivered during the course of the contract. So if the artist makes two poor selling albums, but one hit album, "the hits pay for the misses" and nothing will be paid on the hit album until such time as the two flops are paid off. In full. And even when the artist pays back all the money, the record company still keeps the copyrights in the sound recordings. Sort of like paying off the mortgage and the bank still owns your house. Occasionally, artists do recapture their masters,[ref]10 Artists and Bands Who Own Their Masters Amid Taylor Swift and Scooter Braun Drama[/ref] but this is far from the norm and beyond the scope of this post. Where artists begin to chafe under this arrangement is that the money paid back to the record company is paid back at the artist's royalty rate, not what the record company actually earns on the songs. The record company will earn several times the amount paid to the artist on each individual sale. This often times leads to a situation where the artist still owes money, but the record company has earned back more than the money that has been paid as an advance to the artist. Thus, the record company and the artist will have two different "finish lines" as to what constitutes a successful album. The record company finds that the artist produces profitable material. The artist finds that they are earning nothing because they still owe money to the record company, and in the terms of the industry are "un-recouped." Surely an artist as successful as Taylor Swift has paid off all of her advances. But if you're not Taylor Swift, and you find your contract over, but you still owe money, the prospect of re-recording your hits for someone else (preferably for your own company) starts to become an attractive option. But don't think for a second that the record company has not already thought of this. Somewhere in the contract will be what is known as the "re-recording restriction," preventing the artist from re-recording songs delivered during the term of the contract. This limitation will be not be forever (at least I have never seen this) but it will last for a term of years after the contract is over. Just how long this period is, and when it starts to be calculated, can be subjects of rather pointed negotiations. In the case of Taylor Swift, this re-recording restriction seems to have been two years from the end of the contract, which ended in 2018.[ref]Look what you made her do: why is Taylor Swift re-recording her albums?[/ref] "Her contract allowed her to begin re-recordings in November 2020 and on April 9th [2021] Fearless (Taylor's Version) was released. It topped the UK chart and broke The Beatles' long-held record for the fastest run of three number one albums. Swift had Folklore, Evermore and Fearless (Taylor's Version) all hit the top of the charts in just 259 days, beating The Beatles' 364. If the release of her first re-recording suggests anything, all of the Taylor's Version releases will be loved by fans and may just continue to keep breaking records while Swift reclaims her own music."[ref]Id.[/ref] But how is this possible? If the record company still owns the copyrights in the sound recordings, how are Taylor's re-recordings not infringements of the originals? Because the copyright law allows her to make a slavish re-creation of a previous sound recording, as longs she makes a new recording in order to do it. For this, we look to section 114 (b) of the Copyright Act, titled "Scope of Exclusive Rights in Sound Recordings," where it states: "The exclusive rights of the owner of copyright in a sound recording under clauses (1) [making copies] and (2) [making derivative works] of section 106 do not extend to the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording." So it's not an infringement, no matter how close she comes to sounding like the original. And make no mistake, here is the original version of "Wildest Dreams": [embed]https://youtu.be/IdneKLhsWOQ[/embed] And here is the re-recorded version: [embed]https://youtu.be/CUr_UwUUXzU[/embed] To my ears, they are mostly indistinguishable from each other. Note that these re-recordings all add to the title "Taylor's Version," so as to differentiate them from the old recordings which serves to avoid the confusion that might create trademark problems (you can't have a copyright on a title) and also point the way for her fans to find the version that supports her the best financially.[ref]Taylor Swift Store[/ref] And on the music copyright side, she has the absolute right to re-record songs that she is a writer, or co-writer of, because co-writers cannot infringe their own copyrights. They just must account to their other co-writers from the profits realized. So Taylor Swift, "shake it off," "shake it up" and "shake it to the bank."

In the case of Allen v. Cooper,[ref]140 S. Ct. 994 (2021)[/ref] the Supreme Court of the United States ruled that the State of North Carolina had sovereign immunity from liability for copyright infringement lawsuits, and that Congress' attempt to remove that immunity was unconstitutional.[ref]Supreme Court Rules States Have Sovereign Immunity From Copyright Infringement Suits: Is Your State Government the Next "Pirate Bay"?[/ref] There, the Court stated that the evidence of copyright infringement by State actors was fairly underwhelming, calling it "scarcely more impressive than what the Florida Prepaid Court saw…only a dozen possible examples of state infringement."[ref]140 S.Ct. at 1006[/ref] However, the Court did suggest that Congress could fashion a remedy based upon a legislative record which supported such an action.[ref]Id. at 1007 (quoting Florida Prepaid, 527 U.S. at 646–47)[/ref] It suggested that Congress may validly abrogate sovereign immunity if it has a sufficient record of unconstitutional infringement by states.[ref]Id.[/ref] To this end, the Copyright Office filed a Notice of Inquiry (NOI) inviting public comments in an attempt to determine whether such a legislative record was possible.[ref]Copyright and State Sovereign Immunity A Report of the Register of Copyrights August 2021 located at https://www.copyright.gov/policy/state-sovereign-immunity/?loclr=eanco [/ref] According to the full report, published August 31, 2021: "On June 3, 2020, the Office issued a notice of inquiry inviting written comments and empirical research on (1) specific instances of infringing conduct committed by a state government entity, officer, or employee; (2) the extent to which state sovereign immunity affects the licensing or sale of copies of copyrighted works to state entities; (3) the remedies available for copyright owners when states infringe their works; (4) the metrics Congress should use to determine whether infringement by state entities is common or infrequent; (5) whether the prevalence of infringement by state entities has increased in recent years; (6) how different state entities handle claims of infringement; and (7) any other pertinent issues the Office should consider when conducting the study. On June 24, 2020, the Office invited a second round of written comments and any additional empirical research. In response, the Office received forty-eight responsive comments from individuals, copyright practitioners, organizations, and state entities."[ref]Id. at 5[/ref] In addition, public roundtables were held (via Zoom) on December 11, 2020.[ref]Id.[/ref] Unsurprisingly, the majority of State actors most often cited for committing copyright infringement were State run universities and educational institutions, accounting for 58% of all cases.[ref]Id. at 28[/ref] Literary works were the most often type of work infringed (58%), followed by pictorial graphic or sculptural works (30%). Also unsurprisingly, the States were unsympathetic to the claims of copyright owners. As the report recounts: "State representatives raised concerns that these lists ‘are not entirely probative for the Copyright Office's inquiry.' They identified three potential deficiencies. First, they observed that the lists are not accompanied by ‘any proof, or evidence, or a determination that, setting aside 11th Amendment sovereign immunity, the state defendants did not have meritorious, or at least plausible, defenses that, had they been fully litigated, . . . may have prevailed.' They noted that, although a case may be dismissed based on sovereign immunity, ‘there are typically many meritorious defenses that are raised . . . aside from sovereign immunity,' which ‘need to be carefully looked at to adequately probe whether there is a pervasive pattern or practice of infringement. To that point, the University of Michigan Library highlighted that ‘several of the cases were dismissed on grounds other than sovereign immunity, such as statute of limitations.'"[ref]Id. at 26-27[/ref] The problem with this line of reasoning is that many of the grounds that a case might get dismissed, such as failure to register or statute of limitations, have nothing to do with whether actionable or intentional infringement occurred. They are simply bars to the suit proceeding. Such is the case with sovereign immunity. You never get to try the merits of the case. Sovereign immunity stops the case in its tracks. If you've got sovereign immunity, you don't need a "meritorious defense." Consider that of all the cases cited in the report that were filed and a written opinion was issued, a full 60% of those cases were dismissed on sovereign immunity grounds.[ref]Id. at 28[/ref] Only one of those decisions mentioned fair use.[ref]Id. at 30[/ref] Or consider the filings of the major newspapers. In 2017, they discovered that the California Public Employee's Retirement System ("CalPERS") was massively reproducing their news articles for some time. They found that CalPERS "‘was copying, republishing, and distributing thousands of protected news articles without having acquired a license or authorization from the publishers.' These commenters alleged that CalPERS maintained a publicly accessible website where it reproduced, without authorization, full-text news articles, and that CalPERS sent daily emails to its senior officials and stakeholders with curated links to full-text articles reproduced on the CalPERS website."[ref]Id. at 38[/ref] "‘In total, during the eight-year period, CalPERS republished approximately 53,000 news articles from roughly 4,500 news organizations,' including ‘over 9,000 full-text articles from The Wall Street Journal, almost 6,900 from The New York Times, over 5,500 from The Los Angeles Times, almost 3,900 from The Sacramento Bee, and almost 2,000 from The Washington Post.'"[ref]Id. at 38-39[/ref] It is worth noting that the Wall Street Journal, Washington Post and New York Times all operate behind paywalls. The response of CalPERS? They took down the website and asserted sovereign immunity.[ref]Id. at 39[/ref] No suits were filed. However, three news outlets did reach settlement agreements with CalPERS, receiving far less than the "tens of Millions of dollars" in licensing fees owed to Dow Jones for the over 9,000 articles it infringed on.[ref]Id.[/ref] In the wake of the SCOTUS ruling in Allen, that number is now probably zero. Despite all of this, the Copyright Office dances around on the ultimate question. "In light of these precedents, we are unable to conclude with certainty that the evidence provided in this study would be held sufficient to establish a pattern of unconstitutional conduct. Although the record includes more examples of potential infringement than in Florida Prepaid and Allen, it falls short of the evidence of pervasive unconstitutional conduct by state entities in Lane and Hibbs."[ref]Id. at 73[/ref] But then states: "Given that the evidence gathered here far exceeds that underlying the CRCA, Congress may still choose to proceed with adopting new abrogation legislation. In light of the foregoing concerns, however, there is a material risk that a court could find even this more robust record insufficient to meet the constitutional abrogation standard. The Office nevertheless continues to believe that infringement by state entities is an issue worthy of congressional action."[ref]Id.[/ref] And finally this: "The Office appreciates the concerns of the universities, libraries, and other state entities represented in this study, and their implementation of policies and educational programs to ensure respect for copyright. We note that these entities will generally be able to invoke protection from non-meritorious infringement suits under the Copyright Act's exceptions and limitations, including fair use, exceptions for reproduction by libraries and archives, and limitations on remedies. State users of copyrighted works, however, are not limited to these institutions. Other state entities, ranging from athletic departments to tourism offices to radio stations, may make use of copyrighted works for a variety of purposes, including some that affect the works' markets. While the Office received little evidence relating to these types of entities, there would seem to be little justification for immunizing them from damages if they intentionally engage in the same conduct for which a private party could be held liable."[ref]Id. at 74[/ref] Like CalPERS.