How to Clear a Song: A quick tutorial

One of the complaints I most often hear about copyright is that it is too hard to identify who owns the rights to a copyright protected work. The challenges are particularly great when trying to track down the owners of the copyrights in a song: the label on which a song originally had been released may be defunct; the band long ago may have retired and scattered to the four corners; or the songwriter may have vanished or died. People often use the difficulty they face to justify using a song without permission, or worse not using it at all.

While I agree that it can be difficult identifying who owns the rights to a song, it is not impossible. With a little bit, okay maybe a lot, of hard work I can generally find out who has the rights to any song under the sun. The resources available on the Internet, from fan sites to performing rights organizations, make the process significantly easier than it used to be.

In anticipation of a panel on which I am speaking during Licensing University at the Licensing Expo, I have prepared “The Who What When Where & Why of Music Clearance”. The brochure provides guidance on how to identify who owns the rights in a song, and what to expect during the clearance process. If nothing else it illustrates why clearing a song is an incredibly complicated, and nuanced, process!

Posted in copyright clearance, Fair Use, license, licensing, music clearance, music licensing, Music Resources | Tagged , , , | Leave a comment

Saferproducts.gov: Unsafe for Businesses at any Speed

The summer of 2007 saw a range of product recalls from jewelry for children to pine nuts. Most of the products involved had been manufactured in China and imported into the United States. The Consumer Products Safety Commission a relatively unknown government agency was thrust into the spotlight due to perceived regulatory failures. Congress responded to the so-called “Summer of Recalls” with a series of hearings that resulted in the adoption of the Consumer Product Safety Improvement Act.

Among the provisions of the Consumer Product Safety Improvement Act (the “CPSIA”) is a requirement that the Commission develop and implement an online database on which consumers may report unsafe and dangerous products. The database, according to the CPSIA, must be publicly available, searchable and accessible through the Commission’s website. Additionally, the data should be “sortable and accessible” by date, consumer product, model name, manufacturer or private labeler’s name, as well as any other element the Commission has deemed necessary in the public interest.

The resulting database is set to launch on March 11, 2011, barring government shut-down or legislative action to delay or stop implementation. The database is accessible through the Commission’s website and directly at www.saferproducts.gov. The Commission held hearings and industry meetings to discuss the database, its role and how it would be developed and implemented.

According to the Commission, however, government databases, already in use, where consumers are able to report safety issues had been used as a foundation for its database. Specifically, according to the Commission, the Food and Drug Administration’s MedWatch, a reporting system for drugs, medical devices and other regulated items, and the National Highway Transportation Safety Administration’s Safercars.gov, a system for reporting safety issues related to automobiles, had been used as guides.

However there are significant differences between the FDA and NHTSA databases and the one the CPSC has developed. On the CPSC database a consumer must input relatively little information to report a claim that a product has either actually caused harm or has the potential to do so. The consumer must define the product and provide a narrative that describes the actual or perceived danger, as well as providing contact information for the Commission’s use.

On the FDA and NHTSA databases, consumers are required to provide a significant amount of information about the products for which a claim has been filed. On the NHTSA database, a report may not be filed until the consumer has specified not just the manufacturer of the car but the make, model and year as well. The FDA requires that a consumer provide a variety of information including product name and lot number.

Unlike the FDA and NHTSA databases, the consumer is not required to provide information that specifically identifies the products about which the complaints are filed. The product/brand names, serial number, manufacturer and place of purchase are optional on the CPSC database.

Even though the Commission has not required that consumers provide information that specifically identifies a product, the CPSIA requires that the reports be made public within ten (10) days of having been filed. Prior to being published, the Commission must notify a named party (a manufacturer, importer or private labeler) that the report has been filed. Considering the consumer is not required to name a manufacturer, importer or private labeler, the Commission is either going to have to research the claim rather quickly to find one or fail to send the required notice.

Regardless, a manufacturer or other entity has limited options for a response to the complaint. It can provide a response to the complaint directly on the database, request redaction if confidential information is compromised or request removal due to “materially inaccurate” information. As of this writing, the Commission has not yet defined what qualifies as “materially inaccurate,” but has stated that the burden is on the manufacturer or importer of the product to prove that the information is not accurate.

Congress has required that the Commission provide notice to the general public that there is no guarantee of accuracy, completeness or adequacy of the complaints. Specifically, a product being included in the database does not mean it is actually defective or unsafe. However, the Commission’s representatives have made public claims that contradict the objective nature of the database. As recently as last week the chair of the Commission, Inez Tenenbaum, told those gathered (me included) at the International Consumer Product Health and Safety Conference that a mother should be able to search the database to find out if there are issues with a product that could harm her child.

Significantly the risks the database in its current incarnation poses to businesses are great:

•There are no safeguards to prevent individuals, competitors, or even investors who want to impact a stock price, from filing false or misleading reports that could result in negative publicity for a named manufacturer. While a manufacturer can take steps to prove a report is materially inaccurate, it will require time and money to do so and until the claim is established to be materially inaccurate it remains on the database.

• It is unclear what companies are entitled to register to receive notices of complaints. That is, consumers may state where the product in question was purchased but retailers are not allowed to register to receive notification of complaints.

•The claims are not verified, and consumers do not have to provide information that specifically identifies the products or the parties involved.

• There is no accounting for counterfeit goods which will be wrongly attributed to a manufacturer until they can prove the product is counterfeit.

However, the Commission could implement minor changes to the database to limit the negative impact on businesses of the public databases:

• Consumers should be required to identify the name of the product or brand, the manufacturer, where known, and provide a serial number, or other information, to sufficiently identify the product and prevent multiple reports.

• Consumers should have to acknowledge a formal notice that lying to the federal government is a crime punishable by imprisonment and civil fines.

• The Commission should collect IP addresses from complainants and flag repeat addresses to discourage competitors and others from filing multiple reports, whether or not false.

•Before accessing the database, consumers should have to acknowledge by checking a box that the database is provided for information purposes only and that the products included are not necessarily unsafe. A link to the recall database should be provided to note the difference between the databases.

The Commission has put a call out for all manufacturers, importers and private labelers to register with it so that they can provide timely notice if any claims are made involving their products. However, you should consult with a consumer product safety attorney before complying with the request to make sure it is in the best interest of your company to do so. Regardless, companies MUST monitor the database on a daily basis for reports involving their company or products.

A focus of President Barack Obama’s 2011 State of the Union, and of his current legislative strategy, is regulatory reform. He has emphasized that the government needs to consider the impact regulations have on small businesses while not sacrificing its duty to protect Americans. The impetus for the revisions to the Consumer Product Safety Act, including the database, were a number of situations where consumer products had been imported into the United States with unsafe lead levels or other issues. While the Commission has been directed to establish a database for consumers to report alleged unsafe products, the current incarnation of the database will have a profound negative impact on businesses, especially small ones.

Posted in Consumer Product Safety Commission, consumer protection, consumer safety, Recalls, regulations.gov, Regulatory Reform, saferproducts.gov | Tagged , , | Leave a comment

Regulatory Reform for the 21st Century: Small and Mid-Size Businesses Matter

On January 18, 2011, President Barack Obama penned an editorial, Toward a 21st-Century Regulatory System, for the Wall Street Journal in which he discussed the need for regulatory reform across the federal government.  The President addressed the importance “common sense rules” have had to protect the American people “without unduly interfering with the pursuit of progress and the growth of our economy.”

However, acknowledging that the the regulatory landscape had become unruly he announced that he had issued an Executive Order mandating an overhaul of federal regulations.  Among the issues he highlighted in the editorial was the toll regulations take on small businesses in America:

We’re also getting rid of absurd and unnecessary paperwork requirements that waste time and money.  We’re looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation.  And finally, today I am directing federal agencies to do more for- and reduce- the burdens regulations may place on small businesses.

The Executive Order – “Improving Regulation and Regulatory Review” – sets out the basis for the regulatory reform:

Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation. It must be based on the best available science.  It must allow for public participation and an open exchange of ideas.  It must promote predictability and reduce uncertainty.  It must identify and use the best, most innovative and least burdensome tools for achieving regulatory ends.  It must take into account benefits and costs, both quantitative and qualitative.  It must ensure that regulations are accessible, consistent, written in plain language, and easy to understand.  It must measure, and seek to improve, the actual results of regulatory requirements.

To reach the goals President Obama has to reform the regulatory system in the Federal government, the Executive Order provides that each agency (e.g. the Food and Drug Administration, the United States Patent and Trademark Office, and the Environmental Protection Agency) develop and submit a plan to the White House within 120 days of the date of the order that addresses how its regulations “should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective and less burdensome in achieving the regulatory objectives.”

The Executive Order also provides significant reform to the process Federal agencies currently follow to adopt and implement regulations.  The current process is fairly tedious and difficult to participate in unless you have regulatory counsel or lobbyists on retainer who spend significant time with the regulators and reviewing the Federal Register.  Moving forward Federal agencies will have to make the process more accessible to the general public to allow for an “open exchange of information” and a variety of perspectives.  To accomplish the goal, agencies will have to use the internet as a platform to communicate with the public on proposed regulations, and offer the public at least 60 days to comment through the website http://www.regulations.gov.

Finally, the Executive Order recognizes that the jurisdiction of agencies often overlap resulting in “redundant, inconsistent and overlapping” regulations.  Therefore, the Executive Order provides that agencies coordinate with one another to simplify and harmonize the regulations.  In his editorial in the Wall Street Journal, President Obama highlights the different treatment saccharine receives from regulators (the FDA has deemed it safe while the EPA treats it as a toxic material).

A more robust and accessible regulatory landscape will allow for more voices to be heard during the rulemaking process.  Additionally, trimming the unruly regulatory landscape that has developed over the past 75 years will allow small and mid-size businesses to innovate without concern that dormant regulations may have a negative impact.  Finally, the government will have the benefit of hearing from a variety of experts and not just big companies and special interests.

So small and mid-size companies, and individual experts too, keep an eye out for regulations that directly impact your businesses or issues.  There should be many opportunities for you to participate in the regulatory reform process.   Your voice is key to creating the 21st Century Regulatory System President Obama has announced.

Posted in lobbyists, Mid-Size Business, President Obama, regulations.gov, Regulatory Reform, Small Business | Tagged , , , | 2 Comments

That Piece of Paper, Those Terms of Use: Do They Really Matter?

May I share a secret with you?   I don’t always read the Terms of Service on the websites I visit, or the Terms & Conditions for services I use either.   When I open the boxes for new software or gadgets I don’t generally read the license agreements.

But, you know that old adage “do as I say, not as I do?”  There is some truth to it.  I don’t feel compelled to read Terms of Service, Terms & Conditions or License Agreements because I draft them on a regular basis for clients and have an idea of what I can, and cannot, do on websites, online services, with devices and software too.  I know there are limits on my use, things the companies can do with my data, and so on.

And I am generally okay with the rules.  When I am not I do not use the services, buy the software or visit the sites.  For example, I limit my use of Google products because I disagree with its privacy policy.

As thousands, upon thousands, of law students begin their careers let me share one of the first things they will learn in law school:    Contracts are generally enforceable and binding on the parties to them.  Even “contracts of adhesion,” a contract where one party has no bargaining authority,  like website terms and software licenses.  (When I was in law school the example professors used were the contracts auto repair shops used… oh how time flies.)

Contracts are enforceable whether or not I read them before using the product, website or service.  Similarly, contracts are enforceable even if you don’t “believe” that you are bound by their terms.

Whenever you buy software for your computer, or download an application for your smartphone, you are not buying the software.  If you read the terms and conditions (note to self: do that more often) you will likely see language similar to, or the same as:

“Subject to the terms of this Agreement, Skype hereby grants You a limited, personal, non-commercial, non-exclusive, non-sublicensable, non-assignable, free of charge license to download, install and use the Skype Software on Your computer, phone or PDA for the sole purpose of personally using the internet communication applications provided by Skype and any other applications that may be explicitly provided by Skype.”  Skype End User License Agreement, updated August 2010

In Vernor v. Autodesk, Inc., the plaintiff purchased used software which was subject to an End User’s License Agreement (a “EULA”).  The EULA imposed a variety of conditions on the licensees of the software including one that required that they destroy the original software when it has been upgraded.  The plaintiff decided that the provision did not apply to him because he had purchased the software from a company that had never installed it on a computer, because it upgraded before it could.   The plaintiff then tried to sell the software on eBay but having received cease & desists for similar actions in the past also brought an action against Autodesk to have a court declare that his actions did not violate the EULA.

Significantly, Mr. Vernor argued that the EULA did not apply to him, or any purchaser of software, under what is commonly called the “First Sale Doctrine.”  The First Sale Doctrine refers to a provision in the Copyright Act of 1976, as amended, that allows the “owner of a particular copy” of a copyright protected work to be able to sell that particular copy of the work without infringing on the exclusive rights of the underlying copyright owner.  Mr. Vernor and his lawyers argued that he owned the copies of the software, and could therefore sell it.

Relying on existing case law, the 9th Circuit considered the following three factors to determine whether Mr. Vernor had a license to the software or owned it outright:

  1. Did the copyright owner specifically grant the user a license?
  2. Did the copyright owner significantly restrict the user’s ability to transfer the software?
  3. Did the copyright owner impose notable use restrictions?

Here, Autodesk includes a EULA with every copy of software it sells that specifies that the user is a licensee not an owner, as well as restrictions on the user’s ability to transfer the software.  Additionally the EULA limited the user’s ability to use the software in a manner that violated the EULA (i.e., could be used only on a certain number of machines, had to be destroyed upon upgrade et al). Therefore, the 9th Circuit held that Mr. Vernor was a “licensee” and not an owner, so the First Sale Doctrine does not apply.

What is the Takeaway from Vernor v. Autodesk?   Contracts are enforceable even when they have not be negotiated between the parties so should be read with care.  If you do not agree with terms opt not to use the goods or services to which they attach.

Posted in contract, copyleft, copyright, copyright infringement, End User License Agreement, license, licensing, Vernor v. Autodesk | Leave a comment

Adventures in Privacy: Google Buzz

The Electronic Privacy Information Center has filed a complaint with the Federal Trade Commission requesting that the government agency investigate Google regarding privacy concerns with Google Buzz.   Google created and launched Google Buzz, a hybrid Twitter/Facebook type service, to complement GMail, its email service.  Like, Yahoo! Connect, the service is free. Though Google Buzz appears as an icon on Gmail, users have to elect to use the service.

Nicholas Carlson reported in the Business Insider that people noticed some privacy related issues shortly after the Google Buzz launch.  Basically, Google assumed who users wanted to follow, and who would want to follow them, from users’ email contact lists.  Significantly, unless users opted-out, Google made the list public.  According to Mr. Carlson, the option to opt-out was written in very fine print and easy to miss.

Google responded to the outcry fairly quickly:   Lists were no longer automatically generated nor made public by default.  They even offered an option to disable Google Buzz entirely.

Regardless, EPIC has filed a complaint with the FTC that claims Google is guilty of Unfair and Deceptive Trade Practices.   In response to the complaint, a Google spokesperson points out in this article that the service is optional and people choose to use it.

As I have previously reported, Google takes broad interests in the content and data its users transmit and upload on its services.  Its position on privacy is really no different.

People seem to have adopted Google products, like Gmail and Google Docs, because they are both good and free.  However, it is a misnomer that the services are free.  The consideration (i.e. cost) for the services is the information (i.e. data) that Google can convert to cash via advertising or other purposes.

Google claims that is transparent when it comes to privacy and the steps it takes to protect data.  It recently launched Google Dashboard, an application that allows users of its services to manage the data associated with their accounts.   Google has a privacy policy which applies to all of its services, and each service has a policy unique to the type of information transmitted and collected.

Many lawyers and other professionals who have a legal, or ethical, duty to maintain the confidences of their clients are using Google services from Gmail to Google Docs.    The Google Docs privacy policy states the company will use ” information internally to deliver the best possible service to you, such as improving the Google Docs user interface and maintaining a consistent and reliable user experience.”   However, the overall Google privacy policy, which also applies to Google Docs, provides that the company may use  user content in any manner  “including the display of customized content and advertising.”

Regardless of how Google collects the data it aggregates to sell advertising, or that it removes personally identifiable information like IP addresses, from the data it collects, Google’s services are not, and have never been, private.  But data is the price of admission for the use of Google’s free services. So, Google’s initial launch of Google Buzz as a public service with few concerns about privacy does not seem like either a deceptive or an unfair trade practice to me.

For more information about the importance of reading terms of service and privacy policies see:

Websites out of Tune with Musicians Rights

ETA:

Search Engine Land has an account of a conference call Google held to explain how they blew Google Buzz. Essentially, they learned that many people who use their services have a different perspective on privacy than they do.  That’s all good and well, but my question is why would people really concerned with privacy use Google services.

Posted in Electronic Privacy Information Clearinghouse, EPIC, Federal Trade Commission, FTC, Google, Google Buzz, privacy, privacy policy | Tagged , , , , , | Leave a comment

Observation: The Great Digital (customer service) Divide

Late last year, my mother made a simple request to her local telephone monopoly which they said would be easy to fulfill.  On the appointed day when the service switch was made, it was clear the Local Telephone Monopoly did not have a clue.  In fact they disconnected my mom’s phone in the process.

The day the Local Telephone Monopoly disconnected her phone, she did what she thought she should do:  she called customer service from her cell phone.  She was given assurances that the problem would be fixed immediately.  A week later, a Friday, the problem was still not fixed even though the Local Telephone Monopoly had promised it would be.

My mom called me, from her cell, frustrated and concerned that she would spend a second weekend without a phone.  See my mom was once an early adopter of technology, in fact she was a computer programmer earlier in life.  But things like Facebook and Twitter are not relevant to her.  Her social network relies not on the internet but on her telephone.

But when my mom called me that Saturday, I did what any good Digital Citizen would do:  I joined the Local Telephone Monopoly’s Facebook Fan Page and followed it’s Twitter feed.  Once linked in to the Local Telephone Monopoly, I started posting complaints to both sites.

Within 20 minutes I received emails from customer service with requests to speak.  I called.  They had investigated the problem, offered me some assistance and tried to resolve the matter.  Unable to, they gave me the phone number to the president’s office which I called on Monday and the problem eventually was resolved.

In all fairness, it took another week to get the problem the Local Telephone Monopoly created fixed.  However, it was the use of social media sites like Twitter and Facebook that escalated the problem to the President’s office.  Had I not utilized the services to voice concerns, my mom would have been stuck in the endless loop of customer service.

Kevin Smith, the great writer/director, used Twitter to broadcast an incredibly negative experience he had with Southwest Airlines when they informed him he was “too fat to fly.”   Kevin has more than 1.5 million Twitter followers to whom he broadcast the way he was treated.  At one point on Saturday evening the customer service person behind @SouthwestAir posted the following tweet:

Hey folks – trust me, I saw the tweets from @ThatKevinSmith I’ll get all the details and handle accordingly! Thanks for your concerns!

Kevin Smith has kept up a barrage of tweets about the situation because he does not seem to feel the airline’s response and apology has been adequate.  News outlets around the world have picked up the story.  I do not know what his objectives for a solution are but he will be closer to getting it as a result of the use of Twitter than had he just picked up the phone to call customer service.

And that’s the problem.

At least weekly Main Stream Media reports on someone who was able to get customer service to respond to complaints using social networks after unsuccessfully using traditional avenues.   The problem is that there are significant elements of the population who may neither be internet savvy nor have access to the internet.    The use of social media to bring attention to customer service problems should highlight the overall problem with customer service, not provide a select few the opportunity to jump to the front of the line.

Posted in Observations | Tagged , , , | Leave a comment

News You Can Use: The SBA on Economic Stimulus for Small Businesses

National Public Radio spoke with Karen Mills , administrator of the Small Business Administration, this morning on the pending economic stimulus programs for small businesses.  To listen to the interview CLICK HERE.

Posted in Economic Stimulus, News You Can Use, Small Business | Tagged , | Leave a comment

Economic Stimulus for Small Business 2010

In the midst of the bank and automobile bailout of 2009, the federal government implemented  policies to help small businesses obtain credit and relief from the recession.  Primarily the government offered tax relief and easier access to Small Business Administration administered loans.   The goal of the programs was to reignite the United States growth engine.

The stagnant economy and continued job loss seems to suggest that the efforts in 2009 did not meet their objectives.  First, small businesses around the country continue to report difficulty in obtaining financing when they need it.  Banks claim there is less demand for loans now because consumer spending is down.  However, small businesses report being unable to qualify for loans at large banks.  Additionally, the tax relief, including a decreased capital gain tax for investments in small business, did not encourage venture capital or other private equity investments.

So, President Obama and his economic team have decided to try again.  During his State of the Union speech, President Obama announced two major initiatives to encourage economic growth for small businesses:

  1. elimination of the capital gains tax on investments in small businesses; and
  2. a $30 Billion fund to make loans available through small and community banks to small businesses.

Over the past two years, venture capital investments in technology and other research and development intensive businesses has been difficult to obtain.  Venture capital has sought safer investments where a return on investment is, perhaps, more likely.  Therefore, the elimination of the capital gains tax on investments in small businesses could encourage venture capitalists to invest.

Similarly, it is unclear how much more effective the $30 Billion set aside for small businesses at small and community banks will be than those funds made available through the Small Business Administration last year.   Some claim small business’ demand for loans is down because of the economy.  Others report that small businesses struggle to qualify for loans because of the economy.  Ideally, if Congress approves the funds, the money will be made available to small businesses in a manner that will allow those businesses that have survived this far into the recession to thrive as we recover.

For more information please contact me.

Posted in Economic Stimulus, Small Business | Tagged , , , , | Leave a comment

A Primer on Music Performance Licenses (Musical Compositions)

Among the exclusive rights granted to the owners of most copyrights is the right of public performance. As discussed in the Primer on Music Performance Licenses (Sound Recording), the public performance right for a sound recording is only available for music transmitted digitally or by satellite.

But wait, a song is comprised of multiple elements which may each be entitled to separate and distinguishable copyrights. The sound recording that captures a performance of a song is entitled to relatively limited copyright protection since there is not a full performance right. However, the underlying musical composition including the lyrics are entitled to full copyright protection, including the full performance right.

So, the sound recording is only entitled to a limited performance right while the underlying musical composition is entitled to a complete performance right.

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Posted in ASCAP, BMI, Music Performance Licenses, performance royalty, Publisher, SESAC, Songwriters | Tagged , , , , , , , , , | 2 Comments

A Primer on Music Performance Licenses (Sound Recording)

The United States of America holds a special place in the hearts of the children of France. Not only does America export fabulous music, we subsidize the music education in French schools through funds collected on the performance of the music that is not able to be distributed to American performers and copyright owners.

In France, and most countries throughout the world, royalties are collected on the public performance of both the song and the sound recording. A public performance royalty is collected for the musical composition, that is the lyrics and notes. A neighboring right royalty for the sound recording is the performance of the song.

In the United States historically only the creators and owners of the copyright in the underlying musical composition (the lyrics and notes) have the right to collect a public performance royalty in the U.S. There is a much more limited right for the performers and owners of the copyright in the sound recording to collect a performance royalty.

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Posted in copyright, Copyright Policy, Neighboring Rights, performance royalty, SoundExchange, Webcasting | Tagged , , , , , , | 1 Comment