Archive by Author | charleswelcome

Prince Regains Ownership of Catalog in Deal with Warner Bros.

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Few people that remember the nasty split between Prince and Warner Bros. Records in the mid-1990s would have thought any reconciliation would be possible. However, a new contract announced Friday, April 18th reunites the superstar recording artist with his former record label.

 

Prince famously spoke out against the recording industry in the 1990s, calling himself a “slave” to Warner Bros., and decrying the way the music industry operated. He ultimately split from the label in 1996 and changed his name to a symbol, subsequently being referred to as “The Artist Formerly Known as Prince.”

 

Now, 18 years later, the two sides have struck a landmark deal that has major impact on the future of copyright ownership. As part of the deal, the albums “Dirty Mind,” “Controversy,” and “1999” that were released by Warner Bros. will continue to be licensed through the record label worldwide. Additionally, “Purple Rain” will be re-mastered and re-released in a deluxe version for the 30th anniversary of the original release of the classic album and movie. Other Prince material will also be re-issued as part of the deal. Since the inception of Nielsen SoundScan in 1991, Prince albums have scanned 18.5 million units in the United States, with his Warner Bros. catalog accounting for 14.3 million units sold. In addition to the re-release of old Prince material, the artist also announced that he will be releasing a new studio album, although it is not clear if the new album is part of the new deal with Warners.

 

The deal takes on special significance because of the potential copyright issues it appears to solve. The Copyright Revision Act of 1976, which became effective in 1978, provided for the ability to terminate the master recording copyright 35 years after it was initially granted. Under standard recording contracts, artists are bound by “work-for-hire” clauses, which means that the work created under these contracts are not eligible for copyright reversion. Previously, industry insiders expected artists to challenge these clauses in court, and were unsure how the issue would be decided until a judge ruled on the matter. An alternative to potentially lengthy and expensive court cases would be for artists and labels to negotiate the reversions and ownership of catalogs.

 

Prince has elected to go with the latter option. Prince’s deal sees him not only re-sign with Warner Bros., but also regain ownership of his catalog, while licensing the music to the label. Neither the financial terms of the contract, nor other specific terms were disclosed at the time of the announcement, so it remains unclear whether Prince will regain ownership of his music immediately or as the music becomes eligible for copyright termination. His first album, released in 1978, is already eligible for copyright termination under the Copyright Revision Act, with subsequent releases becoming eligible in the near future.

Freedom Tower BASE Jumping: Victimless Crimes and the Deterrence Factor

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The Manhattan District Attorney’s office has announced plans to charge four men with burglary, and possible other charges, after a September 30, 2013 BASE jumping stunt.  BASE jumping is an extreme sport that involves jumping off one of four things: buildings, antennas, spans or Earth (i.e. cliffs).  The four men, Andrew Rossig, James Brady, Kyle Hartwell and Marco Markovich, were involved in a jump from the roof of One World Trade Center – i.e. the Freedom Tower.  Mr. Hartwell kept lookout on the ground, while the other three men jumped off of the building before deploying parachutes and landing on the street.  The men videotaped the jump and posted it online, causing a stir among the online community.  While it is unclear how the police initially identified the men, after obtaining search warrants law enforcement recovered the cameras used to film the stunt.  The men are supposed to surrender to the police at New York’s First Precinct on Thursday, March 27.

The news of the pending arrests comes on the heels of a March 16 stunt perpetrated by New Jersey teen, Justin Casquejo.  Mr. Casquejo, a 16 year old, crawled through a hole in the fence surrounding the Freedom Tower, climbed construction scaffolding, and eventually caught an elevator to the roof.  He remained on the roof, 1,368 feet above street level, for two hours before being apprehended by Port Authority Police.  While details of the BASE jumping incident remain unclear, there is speculation that Mr. Casquejo crawled through the same hole that the daredevils had made six months prior.  To that end, Mr. Rossig’s attorney, Timothy Parlatore, said, “Certainly it should be embarrassing to the city that after six months they’ve been investigating this and yet they’ve made no efforts to fix the hole in the fence to the number one terror target in the world.”  Such a comment leads to the strong assumption that the four men initially made the breach in the fence in furtherance of their stunt.

Although the police and DA are declining comment on the situation, it is clear that by investigating it for so long and pressing charges, they are trying to send a message to future daredevils.  Andrew Mancilla, the attorney for Mr. Brady, calls the jump “harmless,” and says that Mr. Brady just wants the incident put behind him.  Such a perspective raises important questions about the nature of law and the potential goals that it tries to accomplish.  While it is true that no one was hurt, and it seems as though the BASE jumping stunt was a victimless crime, that is not the only consideration in this situation.  Firstly, if it was indeed the jumpers who cut the hole in the fence surrounding One World Trade, that is property damage, trespassing, and possibly vandalism or breaking and entering.  So even though nothing else went wrong, the fence must be repaired and it has already led to other security breaches at the property.  These are serious concerns, and while some may take issue with Mr. Parlatore’s characterization of the Freedom Tower as the “number one terror target in the world,” it is a high profile building where security is a top priority.  Secondly, while the four men were able to pull off this stunt successfully, their actions were extremely dangerous.  A stunt like this has several consequences.  It can inspire copycat stunts that may not turn out successfully.  Many things can go wrong when jumping from such a height, especially in a city landscape.  A parachute could fail to open, a jumper may not be able to control his fall and crash into a building, or a jumper could be hit by a car when landing in a street, to name a few.  Additionally, this stunt shows just how easy is it to break into the Freedom Tower, which could inspire others with more nefarious purposes.

Thus, while from a distance this seems like a victimless crime that does not require any punishment, the DA has several motives to make an example of these daredevils.  A major concern of law is to deter dangerous or undesirable behavior, so while these four men pulled off a breathtaking stunt that is quite entertaining to watch, the lack of direct consequences is not dispositive in determining the correct response from the law.  The indirect consequences of this stunt would potentially be greatly exacerbated if it went without punishment.  It is in the government’s interest to deter future stunts like this by imposing at least a nominal punishment on these four men, otherwise future accident victims would basically have been given tacit permission to attempt similar stunts.  Thus, we should not be surprised by the city’s pursuit and ultimate arrest of these men, as there are very compelling reasons for doing so.

File-Sharing Sites v. Government: The Pirate Bay’s Attempt to Limit Liability Through Magnet Links

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Two years ago, the file-sharing giant, The Pirate Bay, made the switch from hosting torrent files on its website to exclusively hosting magnet links. Magnet links are a tool whereby users are able to find torrents that they want to download. The Pirate Bay recently transitioned from using traditional torrent files to using magnet links. By using this newer feature, The Pirate Bay believes it will limit potential criminal liability. This is achieved by linking clients directly with the addresses of peers and allows for them to download both the torrent file and the content. A second tactic that The Pirate Bay has used is changing its domain name from “.org” to “.se”, a move to prevent the seizure of the domain by U.S. authorities. By changing its domain name to “.se,” which means the server is now based in Sweden (.se = Sweden much like, e.g. .co.uk = United Kingdom), The Pirate Bay hopes to evade U.S. authorities, as they would theoretically no longer have jurisdiction over the site.

These moves were ostensibly a reaction to a number of moves by governments around the world that signaled the beginning of a crackdown on file-sharing websites, known as “The Piracy Wars.” In January 2012, the U.S. government took down Megaupload, a website that allowed users to upload and share files with other users, and froze the company’s assets worth more than $300 million. The Department of Justice claimed that Megaupload executives were willfully infringing copyrights. This means that Megaupload either had actual knowledge that the materials on their systems was infringing, or, alternatively, knew facts or circumstances that would make infringing material apparent. Furthermore, to be liable, Megaupload must have received a financial benefit directly attributable to copyright-infringing activity. Finally, Megaupload had to control the copyright-infringing activity, and had not removed, or disabled access to, known copyright infringing material from servers they controlled. Megaupload was visited by millions of users every month, and its outspoken founder, Kim Dotcom, is currently in New Zealand fighting extradition to the U.S. The shutdown was immediately preceded by a massive online protest of the Internet censorship bill, the Stop Online Piracy Act (SOPA), which eventually succumbed to the protests. The Pirate Bay, itself, was the target of a 2009 criminal prosecution in Sweden that resulted in jail time for the website’s founders. The charge in Sweden was “promoting other people’s infringement of copyright laws,” so it is possible that even after switching to magnet links, The Pirate Bay’s operators would still be liable in Sweden. One of the founders, Gottfrid Svartholm, has been transferred from Sweden to Denmark, where he is being kept in solitary confinement while awaiting trial for hacking charges. While these moves are seen by the online community as intimidation tactics from a power structure trying desperately to control how media is distributed, there is no question that the proprietors of file-sharing sites have been scrambling to insulate themselves from liability.

Magnet links look like they will do just that for the founders of The Pirate Bay. Torrents essentially enable a user to download a unique “hash code” that finds files that have been uploaded to the site, which the user can then download. With magnet links, however, instead of having torrent files that contain copyrighted media on a website that users can share between each other, magnet links remove the files and simply allow users to link with one other in order to share media. Furthermore, the encryption of the magnet links makes it virtually impossible for anyone to tell whether a user has actually downloaded any material. Thus, websites that follow this example will be little more than a space for users to covertly interact with each other and share media. It is important to note that there has been no subsequent legal action against The Pirate Bay in any country, and thus there is no definitive answer as to whether converting to magnet links is a legitimate way to limit liability. The US Digital Millennium Copyright Act provides safe harbor for websites that remove infringing content, but safe harbor is not extended to a site that has actual knowledge of infringement and does nothing about it. Thus, this exemption might not work for a website like The Pirate Bay, as The Pirate Bay actively knows and provides peer-to-peer connections for downloading infringing content.

It is likely that the U.S. government is waiting to pass new Internet censorship legislation before once again attempting to bring down sites such as The Pirate Bay. The Obama Administration, at the behest of lobbying giants such as the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA), is trying to resurrect Internet censorship in an attempt to crack down on citizens who prefer not to pay for media. Torrents are a threat to the business enterprise of copyright holders, such as large music and media companies, by making entire music records, movies and videos available to Internet users free of charge. These companies are adamant in their pursuit of piracy and in their lobbying of lawmakers to implement stricter policies to protect copyright holders. A good example of the intermingling of Congress and the lobbyists is Chris Dodd, a former senator and proponent of SOPA who is now the head of the MPAA. With such cushy jobs waiting for elected officials when they leave office, it is imperative that the online community remains as vigilant in its opposition to future Internet censorship bills as it was with SOPA.

While copyright protection is an important part of creative industries, it is clear that the cartels running the movie and music industries are not realistic in the pricing of their products. The market is indicating that the prices for online copies of media such as songs and movies are far too high; otherwise there would not be a massive black market for these things. The cost of production of one additional unit, such as a song, is close to zero, and by charging $1 per song they are eliminating demand for their product. The record labels and movie studios are able to charge such a high price because they operate in industries dominated by cartels, and thus there is not really any competition that would drive the price down. The competition, in this case, comes in the form of a black market with websites like Megaupload and The Pirate Bay being at the forefront. Instead of adapting their business models to what the market is telling them, these cartels are trying to get the U.S. government to drastically increase Internet censorship and penalties for engaging in even the most innocuous copyright infringement, such as posting a video on YouTube of a karaoke rendition of a copyrighted song. While it is clear from a market perspective that these cartels are trying to influence legislators to help outlaw competition in order to keep charging extremely high prices for their products, it is important to note that many famous artists have come out in support of sites such as Megaupload. Thus, we can see the driving force behind these drastic censorship laws is not the creators of the media, but rather the cartels themselves trying to ensure an artificial marketplace devoid of competition.