Canada's Heritage Committee proposes swift changes to copyright law

By Emmanuel Legrand

The Standing Committee on Canadian Heritage at Canada's House of Commons has made a series of wide recommendations that would address some of the issues faced by rights holders in the country.

  The 22 recommendation were part of a report on the Copyright Act titled 'Shifting Paradigms', which followed a wide consultation with stakeholders that lasted over a year (in total the Committee held 19 meetings, heard testimony from 115 witnesses, and received 75 briefs).  

  Recommendations include reviewing safe harbour laws, as well as other subsidies and exemptions in the Act "that siphon value away from creative and artistic works," as well as strengthening the enforcement of Canada's copyright laws.

Common issues to creators

  The Committee noted that while many of the issues raised by witnesses were specific to their creative industry, some issues were common to all creative industries: the creation of Canadian content; copyright literacy and the promotion of copyright; combating piracy and enforcing existing rules; Copyright Board reform; and copyright term extension.

  Recommendation specific to certain repertoires include the proposal to introduce a artist re-sale right for visual artists, or a reversion clause of copyright after 25 year for sound recordings, advocated by Canadian artist Bryan Adams.

  "The changes recommended by the Heritage Committee in this report are the first step in ensuring artists receive fair remuneration for their work," said performer and songwriter Miranda Mulholland, who testified before the Committee.

A leadership role

  The report only reflects the views of the Committee, but stakeholders hope that it will motivate the government to make changes to copyright law. For Graham Henderson, President and CEO of music industry trade body Music Canada, the report "moves Canada into a leadership role in the international effort to close the Value Gap and address the harm being done to creators everywhere by overly broad safe harbour laws."

  He added that for these recommendations to make an impact on the music community, "they must become law." His organisation plans to work with the Government "to reform the Copyright Act as soon as possible to reflect the Committee's recommendations."

  The 22 recommendations are the following:

1 - That the Government of Canada increase its support for creators and creative industriesin adapting to new digital markets.
2 - That the Government of Canada develop mechanisms by which streaming services will develop and promote Canadian content.
3- That the Government of Canada create educational materials to raise awareness of copyright provisions and artist remuneration for consumers.
4 - That the Government of Canada create educational materials to raise awareness of copyright provisions as well as artists’ rights and responsibilities under the Copyright Act for artists and creators.
5 - That the Government of Canada review the safe harbour exceptions and laws to ensure that Internet service providers are accountable for their role in the distribution of content.
6 - That the Government of Canada increase its efforts to combat piracy and enforce copyright.
7 - That the Government of Canada pursue its commitment to implement the extension of copyrightf rom 50 to 70 years after the author’s death.
8- That music streaming services be regulated like other Canadian music services.
9 - That tariffs for online music services be reviewed by the Copyright Board to ensure royalty payments provide fair compensation for artists.
10 - That the Government of Canada amend the radio royalty exemption found at section 68.1(1) of the Copyright Act so that it applies only to independent and/or community-based radio stations.
11 - That the Government of Canada amend the definition of sound recording found in section 2 of the Copyright Act to allow sound recordings used in television and film to be eligible for public performance remuneration.
12 - That the Government of Canada review, clarify and/or remove exceptions contained in the Copyright Act, ensuring that any exception respects section 9 of the Berne Convention for the Protection of Literary and Artistic Works, to which Canada is a signatory.
13 - That the Government of Canada meet international treaty obligations (including Berne Convention for the Protection of Literary and Artistic Works, the Trade-Related Aspects of Intellectual Property Rights Agreement, and World Intellectual Property Organization Copyright Treaty).
14 - That the Government of Canada amend subsection 14(1) of the Copyright Act so that it reads “from 25 years after assignment.”
15 - That the exception for charitable organizations in subsection 32.2(3) of the Copyright Act be clarified to apply strictly to activities where no commercial monetary gain is intended.
16 - That the Government of Canada extend moral and economic rights to audiovisual performers.
17 - That the Government of Canada amend section 34.1 of the Copyright Act to deem the screenwriter and director the co-owners of copyright and co-authors of a television or cinematographic work.
18 - That Government of Canada amend the Act to clarify that fair dealing should not apply to educational institutions when the work is commercially available.
19 - That the Government of Canada promote a return to licensing through collective societies.
20 - That the Government of Canada review, harmonize and improve the enforcement of the statutory damages for infringement for non-commercial use in section 38.1(1) of the Copyright Act.
21 - That the Government of Canada harmonize remedies for collective societies under the Copyright Act.
22 - That the Government of Canada establish an artist’s resale right.

Revelator unveils its Artist Wallet mobile app to process real-time royalty payments

By Emmanuel Legrand

Israel-based rights administration company Revelatoris launching what it claims to be "the music industry’s first Artist Wallet," which consists in a mobile copyright application powered by smart contracts technology that enables "faster, more efficient payment advances to artists and music makers."

  The app turns future receivables into instant royalty payments, so that when a song is streamed online or played on the radio, rights holders get a direct notification on their mobile device. In parallel, royalties related to the performance of the song can be safely accessed and cashed out via the Wallet.

Pioneering royalty payments

  The project is currently being tested by Revelator, data monitoring specialists BMAT and Finland's rights society TEOSTO. The partners are working together to introduce near real time monitoring and processing of radio performance data.

  “We are pioneering the way the performance royalties are paid, where our authors and publishers would get money in a matter of minutes, after a song was played on a radio, directly to a digital Wallet," said TEOSTO Chief Digital Officer AnoSirppiniemi.

  For Revelator, the smart contract architecture is "designed to enable accurate real-time splits of rights holder’s royalty positions, providing enhanced visibility for clearance and settlement of royalty transactions." As a result, payments are automatically distributed to all the stakeholders at the same time.

Secure access to earnings

  “Recording artists as well as publishers have the unique struggle of income disparity and lack of transparency,” explained Revelator CEO BrunoGuez. “Our job as a global copyright platform is to help modernise the costly and time-consuming business processes in entertainment rights and royalties. This will ultimately ensure that music makers have quick, efficient, and secure access to their earnings, whenever and wherever they need them.”

  The Wallet's infrastructure is powered by Revelator Pro, a cloud-based full-stack copyright administration platform serving more than 90,000 rights holders in over 25 countries. Revelator will demo its Wallet solution at MIDEM 2019in Cannes.

PledgeMusic goes into administration amid calls for the crowdfunding platform to be fully investigated

By Emmanuel Legrand

Artists and music industry executives are asking for ​British-based ​company ​PledgeMusic ​to be investigated as the ​crowdfunding platform ​goes into administration​, leaving dozens artists without the funds that they had raised for their projects. ​Industry estimates put the unpaid pledges in the region of $1-3 million.

  Michael Dughe​r​​, CEO of pan-industry body UK Music, has sent a letter to Small Business and ConsumerMinister Kelly Tolhurst ​in which he demands that PledgeMusic be referred to the UK's Competition and Markets Authority. 

  "Many musicians across the UK relied on crowdfunding website PledgeMusic to deliver payments from patrons, to pay for album recordings and other costs. These artists were already enduring long delays in receiving payments. As a consequence, creators who used PledgeMusic’s services are likely to lose money if it goes into administration without resolving its outstanding debts," wrote Dugher.

  He added: "Musicians should be able to trust crowdfunding platforms to fulfill their obligation of delivering money pledged by fans and supporters. I would therefore ask that you refer PledgeMusic to the CMA to ensure this matter is properly investigated."

Fraud on a massive scale

  Several artists have also been outspoken about PledgeMusic lack of accountability. "As artists, It's now time we demand action from the industry bodies who support us," Ian Baker from US band Jesus Jones told Hypebot. "It's time for them to forcefully pursue Pledge, to ensure that criminal actions can not go unpunished, and that those responsible for malicious, damaging, and heartless fraud on a massive scale are never allowed to do it again."

  British corporate advisory company FRP has been tasked with the mission to find a buyer for PledgeMusic's assets. The proceeds of the sale, if any, would help pay artists and creditors. The company stopped taking on pledges on February 4. Before going into administration, PledgeMusic sold its affiliate Noisetrade to Paste Media for an undisclosed amount, and there were hints that there could be an interested buyer, but the purchase did not materialise.

  Pledge co-founder and former CEO Benji Rogers, who was no longer involved in the running of the company these past two years, went back to Pledge just over three months ago. In a blogpost, he said he went "as a volunteer to try and help the board and team turn around and sell the company." He apologised in a blogpost for not having been able to rescue the company and said he would have "given anything to have been able to fix Pledge."

Failure in execution

  "I am sad to report that this effort has not met with success and that PledgeMusic will shortly be heading into administration," he wrote. "I cannot begin to appreciate how all of you affected artists are feeling about this and I am deeply sorry for what you have been through. I ask all of the fans to please understand the awful and near impossible situation that this has put the artists that you love and supported in, and as such I ask you to bear with them as they do their best to make any obligations to you right. I am also sorry for all of the labels, fulfillment companies and other vendors affected."

  For Rogers, the demise of PledgeMusic should not reflect negatively on the crowdfunding process. "I have seen recent media articles criticising the business model of crowdfunding and I feel that these are unfair," he elaborated. "A failure in execution does not mean that the model is fundamentally flawed. I still believe that there is a great future for fan-funded projects in this industry and I hope that someone builds a new version of, or resurrects what we started. I would gladly help in this effort."

Opinion:

All the signs point to, at best, some serious mismanagement at PledgeMusic. The model of crowdfunding itself does not seem to be the problem, but the execution was certainly faulty in this case, as co-founder Benji Rogers wrote in his apology.

  The pledges, rather than being preserved into an escrow account, were emerged into the overall P&L of the company, with new pledges serving to pay old pledges, while funds were used to finance PledgeMusic's expenses and other projects. Looks very similar to a Ponzi scheme.

  So what happened to the internal mechanisms that could have prevented this fiasco? In other words, as succinctly put by US lawyer Chris Castle: Where was the board?

  The silence of PledgeMusic's management, save for Rogers who was desperately trying to save his creation, spoke volumes. Their inability to address artists' demands was beyond unprofessional and showed contempt for the class of musicians and pledgers who had trusted PledgeMusic with their projects and their money.

  The company needs now to be fully investigated. Its management must be held accountable. And if there have been illegal actions then justice needs to be served. In addition, all the other crowdfunding platforms should be revising their own internal processes to make sure that such an unfortunate situation never gets repeated.

  This is the only way to maintain trust in the crowdfunding process.

Emmanuel Legrand

DDEX and EIDR partner to streamline data in the music and film/TV industri

By Emmanuel Legrand

Data standards-setting organisation ​DDEX and the Entertainment Identifier Registry(EIDR), the source of identifiers for digital distribution of movies and television assets, have agreed to a partnership that will result in the streamlining of the use of metadata standards in the music and film/TV industries. 

  The organisations said they would "will work together to help increase supply chain efficiencies and enable value added services in the film and TV industries." 

  "It may seem trivial to agree on standard IDs and common wording," explained  EIDR Executive Director Will Kret,"but you can’t effectively measure or monetise what you can’t easily identify -- and the truth is, even small inconsistencies can hold up payments of sync rights. We are excited to work with DDEX to make the whole process more efficient on all sides.” 

Finding common language

  DDEX and EIDR seek to align on a variety of universal identification and tracking issues such as cue sheet standards. They will also attempt to "finding common language" to express relationships between visual media and sound recordings, as well as "ensuring that metadata about music in films and TV programs is sufficiently robust for the various business interactions between the two industries."

  “The ultimate goal is always to get rights-holders paid fairly in the most efficient way possible. This partnership with EIDR will go a long way toward ensuring exactly that," said Mark Isherwood, of DDEX's Secretariat. 

“Music synchronisation is an inseparable part of film and TV production. This partnership will have a truly significant impact on all rights-holders,” added Kret. 

The UK's MMF asks for "greater transparency" in $ong royalty management

By Emmanuel Legrand

The UK's Music Managers Forum has asked for "greater transparency" in the administration and processing of royalties in a new report titled 'Dissecting The Digital Dollar – The $ong Royalty Guide', produced by CMU Insights.  

  The British organisation said that data around royalty chains, rights ownership, admin fees and payment schedules "must be made available" to improve transparency.

  "Given the complexities of the global digital licensing landscape, it has become too onerous and expensive for all but the most successful songwriters to track and trace their royalties," reads the report. 

"This needs to change. Collecting societies and music publishers must embrace transparency and move towards making crucial data freely available as standard practice – and especially information relating to the ownership of rights, the royalty chains being employed, and any deductions and delays that occur as money moves along those chains."

Fit for purpose

  Other recommendations from the report include:

> Reveal the disputes: Collecting societies and music publishers "should proactively alert songwriters when disputes occur with their rights that could halt payments."

> Global licensing: The MMF calls for a reduction of the number of links in the royalty chains. "New services and new markets should not be licensed locally, and license renewals should be global wherever possible," said the MMF.

> Quicker payments: Songwriters should be paid within nine months of a track being streamed "as an absolute minimum."

> Black Box reform: The MMF requires that attributable or uncollected streaming revenues "should never be redistributed by market share" and called for consultation within the songwriting community "to find alternative distribution processes."

> Campaign for change: The MMF asked for songwriters, managers and accountants to "push their publishers and collecting society partners to actively and urgently address licensing inefficiencies."

  “Streaming should be boosting songwriters’ incomes, instead MMF research reveals much of their money is subject to unnecessary data disputes, deductions and delays," commented MMF CEO Annabella Coldrick. "Long and complex royalty chains need to be simplified and shortened so more of the money gets back to the creator of the music. Digital licensing needs to be fit for purpose.”

Congress makes a case for a small-claims tribunal on copyright infringement

By Emmanuel Legrand

The Copyright Alternative in Small-Claims Enforcement Act of 2019 or CASE Act, that will establish a new Copyright Claim Board within the United States Copyright Office, has been introduced simultaneously in both the House (HR 2426) and Senate (S. 1273) on May 1 by a group of bi-partisan Representatives and Senators.

  The House bill is sponsored by by Hakeem Jeffries (D-NY) and Doug Collins (R-GA) with Representatives Hank Johnson (D-GA), Martha Roby (R-AL), Judy Chu (D-CA), Ben Cline (R-VA), Ted Lieu (D-CA), and Brian Fitzpatrick (R-PA) as co-sponsors. The Senate bill (S. 1273) had the backing of John Kennedy (R-LA), Thom Tillis (R-NC), Dick Durbin (D-IL), and Mazie Hirono (D-HI). 

 

  The CASE Act was previously introduced in 2017 as the Copyright Alternative in Small-Claims Enforcement Act of 2017, but it did not get passed. The bill will introduce for the first time a small-claim tribunal that will allow rights holders to find resolution to low value copyright infringement cases without having to go through the expensive and time-consuming Federal Court process.

 

A legislative priority

 

  Keith Kupferschmid, CEO of Washington, DC-based creators advocacy group Copyright Alliance, said the CASE Act has been and is "a legislative priority" for hundreds of thousands of photographers, illustrators, graphic artists, songwriters, and authors, as well as "a new generation of creators," including bloggers and YouTubers across the country. "Today, they have rights but no remedies," he said. "The CASE Act will go a long way to restoring their faith in the copyright system."

 

  "There is established in the Copyright Office the Copyright Claims Board, which shall serve as an alternative forum in which parties may voluntarily seek to resolve certain copyright claims regarding any category of copyrighted work, as provided in this chapter," reads the bill. The Copyright Claims Board will consist of three  full-time Copyright Claims Officers recommended by the Register of Copyrights and appointed by the Librarian of Congress after consultation with the Register of Copyrights. The Copyright Claims Officers will be attorneys with at least seven years of legal experience and will serve for a renewable term of six years.

 

  The bill specifies that statutory damages may not exceed $15,000 for each work infringed. The CASE Act contains an opt-out procedure, which allows a respondent to opt out of the proceeding  during a 60-day period. In such case, the proceeding be dismissed without prejudice.

 

  "For more than a decade, individual creators and small businesses have been advocating for a change in the copyright law to address an inequity that has routinely provided them with rights but no remedies," said Keith Kupferschmid, CEO of Washington, DC-based creators advocacy group Copyright Alliance. "The CASE Act would make very targeted, very modest changes to the copyright law to address this inequity and give America’s creators the tools to protect the fruits of their creativity."

 

Provide a solution for photographers

 

  The legislation was mainly supported industry organisations such as the American Photographic Artists, American Society of Media Photographers, National Press Photographers Association, North American Nature Photography Association, and Professional Photographers of America. “Copyright infringement is a pernicious problem for our members,” explained NPPA President Michael P. King. “Visual journalism is incredibly valuable work that is regularly stolen and circulated on the internet in a matter of minutes. Yet visual journalists currently face a long, expensive process to be compensated for the theft of their work.” 

 

  King added, “The manner in which infringement persists without a workable remedy is economically devastating for photographers, their clients and their employers. It is our hope that the balanced nature of the CASE Act provides a real solution for photographers and other authors.”

 

  The bill received a cold welcome by internet advocacy groups. Washington, DC-based Public Knowledge said it opposed the bill as written "due to grave concerns with its contents." Meredith Rose, Policy Counsel at PK, said the CASE Act does not offer "a meaningful solution" for creators but instead is "flatly untenable, and unlikely to solve the problems it claims to address." 

 

  She elaborated: “The Act further entrenches an already-toxic culture of secrecy within major entertainment industries; undermines recent Supreme Court precedent on the importance of copyright registration; and creates a body that can grant un-appealable, enormous judgments that stretch the definitions of ‘small claims,’ while empowering the Copyright Office to further increase those judgment amounts in the future."

 

  Another pro-open internet group, the Electronic Frontier Foundation, called for Congress "to reject the CASE Act." EFF Senior Staff Attorney Mitch Stoltz wrote in a blogpost a year ago that the CASE Act "would give copyright trolls a faster, cheaper way of coercing Internet users to fork over cash 'settlements', bypassing the safeguards against abuse that federal judges have labored to create."

Panel highlights the value of copyright for sports during World IP Day in DC

By Emmanuel Legrand

Protecting content against infringement and the need to be remunerated for the use of copyrighted content are the two conditions to maintain a healthy sports environment, according to a group of sports professionals and broadcasters gathered on Capitol Hill in Washington, DC on World IP Day.

  During a session on Sports and Copyright, Keith Kupferschmid, CEO of Copyright Alliance, co-organiser of the event with the Creative Rights Caucus, noted that "most people don't know how IP and sports are linked" but the sports world in the USA is a $300 billion business, between the different leagues, sports events, broadcasters and sponsors. "This highlights the importance of copyright in the sports world," he said.

  In video comments, the co-chairs of the Creative Caucus, Rep. Judy Chu and Rep. Doug Collins, both expressed support to the creative sector, which contributes $1.2 trillion to the US economy, and for the need to protect these industries from piracy and infringement. "All [sports leagues] are concerned with piracy," said Collins who added that these businesses needed to be protected from "bad actors."

Protecting the value chain

  Curtis LeGeyt, Executive Vice President of Government Relations at the National Association of Broadcasters, which represents the vast majority of commercial TV and radio stations in the USA, stated that IP rights were "the bedrock" that allowed broadcasters to deliver sports events to wide audiences. He said broadcasters and leagues needed to be able to be compensated for putting together events and broadcasting them. If piracy proliferates, sports league and programmers' contribution to the value chain will be affected, he warned.

  Ray Warren, President of media group Telemundo Deportes, picked up on a similar topic. "When we talk about IP, it's not simply licensing rights, it's all the investment around," he said. "Production costs are enormous." Warren added that there was also a human factor to take into consideration. "When we are protecting copyright and IP, we are protecting people and livelihoods," he said, explaining that in the case of the World Cup in Russia last year, Telemundo sent over 300 people to cover the event and their safety and well-being was paramount.

  For Warren, action against "bad folks" who pirate signals, or live off the work and investment made by the leagues and broadcasters, is necessary. He advocated for swift penalties for infringers. "You have to make examples and make noise about it," he said.

A global problem

  Dolores DiBella, Vice President, Legal Affairs for the National Football League, explained that leagues like the NFL face a challenge in that they "need to get content out there, and we are always looking at getting more content out there, especially with the explosion of digital distribution. But we also need to protect our rights because we are making a lot of investment in making things happen."

  DiBella added that the NFL, like many other content owners "face a lot of challenges" due to the proliferation of infringing content, including fake tickets. "As content delivery gets more sophisticated, so does infringement," she said, adding it was a global problem which required content owners to work with governments to address these issues.

  The development of eSports is also the source of of new forms of infringement. Delara Derakhshani, Counsel, Tech Policy at the Entertainment Software Association, explained that the $23.4bn game industry is experiencing "phenomenal growth" in the eSport space, but also had to deal with enforcement issues. "We have unauthorised and counterfeited sales online," she explained. "ESA members use traditional measures, including DMCA takedown, but we also work with platforms that provide tools for us."

  ESA members also have to deal with cheating practices specific to video games that need to be policed. "One of the biggest issues we are facing is software that uses source code to access source code of a game," she said. "The integrity of games is important, we cannot let people cheat."

USTR Special 301 Report lists stream-ripping as 'a dominant method' of piracy

By Emmanuel Legrand

Stream-ripping sites have been singled out as a threat to US intellectual property rights' interests in the 2019  Special 301 Report, published each year by the Office of the United States Trade Representative (USTR).

  The report is the result of an annual review of the state of IP protection and enforcement in US trading partners around the world. The report covers a wide range of IP-related sectors, from pharmaceuticals to broadcasting and creative industries.

  The report states that stream-ripping is now "a dominant method of music piracy, causing substantial economic harm to music creators and undermining legitimate online services." The report lists Canada, Mexico, the Netherlands, Saudi Arabia, Sweden, and Switzerland as countries where stream-ripping is popular.

  Mitch Glazier​, ​Chairman & CEO​ of the ​Recording Industry Association of America (RIAA)​, said the report ​was "​shining a spotlight on two of the biggest threats to the American creative community – stream-ripping and proxy services that allow criminals to hide on the dark web.​" He added that the music community was "especially gratified that a specific focus of the reports is the substantial harm caused by stream-ripping piracy​​."​

  In addition, USTR noted that online and broadcast piracy "remains a challenging copyright enforcement issue" in many countries (Argentina, Bulgaria, Canada, Chile, China, Colombia, Greece, India, Mexico, the Netherlands, Romania, Russia, Saudi Arabia, Switzerland, Ukraine).

Significant concern

  Trading partners that currently present "the most significant concerns regarding IP rights" are placed on the Priority Watch List or Watch List. USTR listed 11 countries on the Priority Watch List, including Chile, China, India and Indonesia, and 25 countries on the Watch List (see table below). Canada and Columbia were moved from the Priority to the Watch List while Saudi Arabia was moved to the Priority List. Paraguay was added to the Watch List, and Tajikistan removed from it.

  Stakeholders welcomed the release of the 301 Report. The International Intellectual Property Alliance (IIPA) noted that the report also highlights "the important role that collective management organisations (CMOs) for copyright can play in ensuring compensation for right holders and seeks to ensure that CMO practices are fair, efficient, transparent and accountable."

  IIPA Counsel Eric J. Schwartz commented, “Ridding marketplaces of blatant infringers allows greater access to legal content, including literary works, music, movies and TV programming, video games, software, and other products and services, all of which are available now for consumers, in more formats than at any time in history."