Audio Technology from
a Legal Perspective
Updates in 2014/2015 – IP Law
Kevin D. Jablonski
Overview of Discussion
Topics
 Proposed legislation regarding music licensing recently
embraced by the US Copyright Office
 Alice Corp. v. CLS Bank – Is software still patentable?
 Marvin Gaye or Robin Thicke/Pharrell Williams/T.I. – the
Blurred Lines of copyright infringement.
 Additional mind-numbingly boring cases before the
Supreme Court
Overview of Intellectual
Property
 Patent
 Copyright
 Trademark
 Trade Secret
 Publicity
Rights Conveyed by
Copyright
 The right to reproduce the work
 The right to prepare derivative works based on the
original
 The right to distribute copies to the public
 The right to perform the work publicly
 The right to display the work publicly.
 The right to digitally stream a work.
Copyright and the Music
Marketplace
 On February 5 2015, US Copyright Office
“embraces” proposed legislative rules
changes.
 Regulate Musical works and Sound
Recordings in a Consistent Manner
 Extend Public Performance Rights in Sound
Recordings to Terrestrial Radio
 Federalize pre-1972 Sound Recordings
 Establish Government enforced Fair-Market
rate setting.
Regulation of Musical Works
vs. Sound Recordings
 Sound Recordings are distinguished from
underlying musical works in terms of rights
reserved by a creator
 17 USC 112 exempts terrestrial radio from paying
royalties on performances of sound recordings
but not underlying musical works
 17 USC 114 makes licensing of a digital
performance of a sound recording mandatory
but not the underlying musical work
Terrestrial Radio and PRO
 Currently, sound recordings are exempt from requiring
a public performance license on terrestrial radio
 But, internet radio stations, satellite radio, and
generally anything else (other than AM and FM) does
require a public performance license from a PRO
 Proposal would eliminate the terrestrial radio
exemption
Federalize Pre-1972 Sound
Recordings
 Currently, record labels and artists (sound
recording owners) are not paid for digital
performances of the sound recordings that are
prior to 1972
 Proposed legislation would fold pre-1972 sound
recordings into Sound Exchange (or whatever
new government-controlled “free-market” entity
is established).
Rate Setting
 Currently, mechanical rights are set to 9.1 cents
per copy (per CD or download)
 Department of Justice oversees royalty rates at
PROs (ASCAP and BMI)
 Proposal would enable Copyright Royalty Board
and set market rates for public performances
 Proposal would offer bundled rights that include
synchronization rights
 Proposal would also provide for opt-out rights
Fair Play Fair Pay Act of 2015
 Jerrold Nadler, John Conyers, Jr., John Deutch
and Marsha Blackburn introduced this legislation
in the House on April 13, 2015.
 Addresses the terrestrial radio issue and the pre1972 issue
 Has been tried before.
Songwriter Equity Act of 2015
 Introduced to the House by Hakeem Jeffries and Doug
Collins on March 4, 2015
 Addresses the Rate Setting issues
Alice Vs. CLS
 Decided by The Supreme Court on June 19, 2014
by unanimous decision
 The issue – Is a computer-implemented,
electronic escrow service for facilitating financial
transactions simply an “abstract idea” ineligible
for patent protection?
 Established a two-part “Alice” test as to whether
claims are eligible subject matter for patents
The Alice effect
 USPTO is now rejecting claims having any manner of
software
 Courts have been invalidating existing patents at a
four to one rate when any manner of software is
involved
 Likely to have crippling effect on economies reliant
upon software innovation
 Patent Bar pushing back and USPTO and Courts are
running amok
Blurred Lines of Copyright
Infringement
 Marvin Gaye is famous
 Robin Thicke/Pharrell Williams/T.I. are less famous but
want to be more famous
 When young less-than-famous artists want to become
more famous, artist do well to emulate famous artists
 E.g., who are your influences?
Historical Perspective of
Copyright Infringement by
Substantial Similarity
 Bright Tunes Music v. Harrisongs Music – aka George
Harrison and The Chiffons
 The Chiffons recorded “He’s So fine” in 1962
 George Harrison recorded “My Sweet Lord” in 1970
 Case established the “substantial similarity” test
 George Harrison ordered to surrender a majority of
royalties for his song
 The Chiffons later covered “My Sweet Lord”
 George Harrison later purchased “He’s So Fine”
HORRIBLE JURY DECISION
 Jury awarded 7.4 million dollars to the estate of Marvin
Gaye on March 10, 2015
 Jury based in decision on the sheet music – was
barred from actually hearing Marvin Gaye’s recording
of Got to Give it Up
 Thicke et al. plan to appeal
Interesting Case:
Garcia V. Google
 Cindy Lee Garcia appeared for five seconds in the 12minute You Tube video “The Innocence of Muslims”
 Sued You Tube (Google) for copyright infringement
claiming that she did not perform as a work for hire
because she was tricked
 Ninth Circuit agreed with Garcia and held that she
has copyright in her performance
 Now before the Ninth Circuit en banc (all the judges)
 Copyright Office denied the registration and also
stated “[her claim] runs contrary to basic tenets of
copyright and First Amendment law”
Interesting Case:
American Broadcasting v. Aereo
 Aereo is (was) a company that records broadcast
television and provides time-shifted viewings to paying
customers or customers who are subject to
advertisements (as directed by Aereo) while watching
 Supreme Court held (6-3 decision) that the
transmission of the recorded show is a public
performance and is not licensed
 Justices Scalia, Thomas and Alito dissented “The Court
manages to [conclude public performance]only by
disregarding widely accepted rules for serviceprovider liability and adopting in their place an
improvised standard (“looks-like-cable-TV”) that will
sow confusion for years to come.