Nimmer and Distribution

For those of us who first studied Copyright Law in the 1980s there is no more venerable name than Melville Nimmer.  Professor Nimmer's treatise Nimmer on Copyright is the most comprehensive guide to all questions of copyright law, large and small. I still refer to my 10 volume set of the treatise religiously.

 What is perhaps even more significant about Nimmer is that even though Melville Nimmer himself died in 1985, his work has been continued by his son David Nimmer since that time. .  The collective oracle is always simply referred to as "Nimmer".

 According to a recent article by Devlin Hartline on the web site Copy Hype, David  Nimmer has recently changed his position on what the exclusive right "distribution" means under the Copyright Act.  Apparently, up until this year, Nimmer took the position that distribution required an "actual dissemination of works to the public" but now he defines "distribution" as simply  as "making available" the copyrighted work to the public.

Nimmer's original interpretation was important because it was this interpretation the Court of Appeals relied on to give Jammie Thomas‑Rasset a new trial in her well-known copyright infringement case with the RIAA (i.e. since the plaintiff record companies could not prove that anyone actually downloaded the songs she had posted, the court did not believe that actual distribution could be shown).  Although the ruling ultimately did not help Thomas‑Rasset it did give encouragement to others who are fighting similar cases. Somehow though, it did not seem right. 

However a law professor named Peter S. Menell apparently convinced Nimmer that the legislative history of the 1976 Copyright Act clearly demonstrated that Congress meant to make "making available" identical to "distribution". I am pleased to hear this on several levels. First, from a practical standpoint, it always seemed to me that “distribution” should be defined as ‘making available’. This made sense in the brick and mortar world and it makes more sense in the internet world.

Perhaps more importantly, I am comforted to see anybody, be they an academic or a politician change their position based upon the facts, especially those facts contained in legislative history. It is a sign that intelligent and thoughtful analysis has not been completely replaced by blind adherence to dogma. It is also a sign that our Copyright Act remains flexible and adaptable to the constant march of technological change. This is a good thing.

Random Thoughts on Celebrity Estate Planning

                I have been thinking about death lately; not in any kind of a morbid way but simply because I have had a few friends pass away unexpectedly and because I have been helping clients deal with their loved one's estates.

                A number of things that I had thought about only theoretically have become really important.  For example, the whole concept of managing so‑called digital assets (which I wrote about here : http://tripaldredgelaw.blogspot.com/2012/06/digital-estate-planning.html)  took on new meaning in a case I recently looked into.  Without going into any of the details, I see how an awful lot of angst could have been spared if the decedent had left some instructions as to how he wanted his digital afterlife to be handled.

                I've also been thinking about Michael Jackson and Whitney Houston.  There is a really sad article in the new Vanity Fair which details how Michael Jackson's family has been fighting over his estate.  The key thing that I take away from both Michael Jackson's and Whitney Houston's estate planning is that while both of them are to be commended for providing trusts and guardianships for their minor children, neither appeared to have undertaken any significant tax planning which could have saved their estates millions of dollars.  This is not a reflection on their advisors because clearly these were not the most stable clients in the world but still the lack of any type of sophisticated planning for estates of this nature is kind of shocking. 

                Finally, I have to say how impressed I am with Adam Yauch's will.  The late Beastie Boy left a will which included the phrase "notwithstanding anything to the contrary, in no event may my image or name or any music or any artistic property created by me be used for advertising purposes".  Thus although Yauch amply provided for his surviving wife and daughter , he made his wish clear that to the extent he could control it, he did not want the Beastie Boys' music to be used to peddle merchandise.  Such dead hand control raises many questions, especially as to enforceability but the intent is devastatingly clear.

                I am of two minds concerning the use of music in commercials, I see positives and negatives (and ultimately my opinion really doesn't matter) but I have to admire Mr. Yauch's willingness to take a stand on something he obviously believed in.  It's a good example of how an artist can use estate planning to preserve their principles as well as his or her  assets. 

The James Taylor lawsuit

Digital Music News recently reported on the lawsuit filed by James Taylor against Warner Bros Records, arising out of a 2007 audit.  When it comes to a dispute between artists and labels, I am not shocked by much.  But being a child of the 70’s, a period when Warner Bros represented the gold standard of artist-friendly record companies, I am still a little saddened to see that an artist like James Taylor could be treated this way.

                The audit in question covered the period between 2004 and 2007 and included sales of such records as “Sweet Baby James,” “Mud Slide Slim and the Blue Horizon,” “Walking Man” and several greatest hits compilations.  The amount of underpayment alleged by Taylor is $1,692,726.  The  number of damage claims in the lawsuit total 52 in all and they comprise such elements as:

                1.             Over calculating the amount of “non‑royalty bearing units”

                2.             Underreported sales

                3.             Excess free goods

                4.             Improperly applying a mid‑line reduction

                5.             Violating the contractual restrictions on compilations

                6.             Charging manufacturing costs as “recording costs”

                7.             The current hot button issue of treating downloads as sales rather than licenses

                8.             Not paying for record club sales

                9.             Not paying for master use licenses

                10.          Missed interest payments

                11.          Misapplying royalty rates

                What surprises me further is that though these claims total over $1,000,000.00 they are in fact comprised of some relatively small dollar amounts (e.g. misallocated returns: $800.00 charging manufacturing costs as recording costs $3,700.00) as well as the big ticket digital claims.

                All in all this is a reminder that underneath the mystique of classic records, this is a still a penny business and one that is becoming more difficult to navigate  as the pennies get smaller.  .  I hope this is not a sign of things to come.

Bill Monroe and Selling of the Right of Publicity

The time I spent on the periphery of the music business from the late 1970s through the 1990s really now seems like a different world.  I crossed paths with so many legends who are gone now.  I had several friends who worked with Bill Monroe and I was around him many times – to the point that I just kind of assumed that he would always be there.  I was thus somewhat surprised when Bill Monroe died in 1996.  He was truly a legend. What happened to that legacy after the fact is strange and fascinating.  Apparently Bill’s son James Monroe sold the rights to Bill’s name, image and likeness to the Ohio County Kentucky Industrial Foundation in 1999.  Those interested in this obscure area of the law know that celebrities have an economic right to exploit their name and likeness (this is called the right of publicity) and that, at least since the death of Elvis Presley (and years before in New York and California) a celebrity’s estate has the right to exploit that right after his or her death.

            I had never heard of an estate selling this right to a governmental entity but I suppose that in some circumstances it makes sense.

            All of this came to light recently because a former employee of the county-run Bill Monroe Bluegrass Foundation is involved in litigation with the county after it stopped him from using Monroe’s name to promote a Bluegrass Festival in Monroe’s hometown of Jerusalem Ridge, Kentucky.  Apparently the former employee, Campbell Mercer claimed to have an oral license to use the Monroe name based upon previous negotiations with the county. After a 2011 trial, 100 years after Bill Monroe’s birth, the case is now set for arguments before the Kentucky Court of Appeals next month.

            The real point to all of this, besides the fact that it makes me miss Bill Monroe, is that it illustrates the ever-evolving law of the right of publicity.  When I wrote a thesis on the topic in law school there were only a handful of reported cases in the area. I remember one concerning Bela Lugosi and interestingly enough, one concerning Flatt & Scruggs.  Today, there seems to be an interesting case reported in every circuit and nearly every state.  It seems only right that we now might be about to have a major case reported from Kentucky.

Radio Radio

Life and work have gotten in the way of my blogging recently and I have not had the opportunity to review some of the topics that I am really interested in. I resolve to do better. In the interim, NPR’s Morning Edition has run three fascinating reports this week on some current controversial topics in the music industry.

On Tuesday of this week, they ran a long  study of the pros and cons of crowd funding vehicles such as Kickstarter. The story was important because it showed that for everyone who raises a million bucks on Kickstarter, there’s another artist who couldn’t even meet half her goal. This is also the first story that I recall that brings up the important point that not all artists want to shill for themselves on the internet. It was a fascinating piece and I recommend it to anyone who is interested in trying to start a Kickstater (or similar) campaign. Here’s the link: http://www.npr.org/blogs/therecord/2012/09/25/161702900/crowd-funding-for-musicians-isnt-the-future-its-the-present

The next day they ran a story on Spotify and how record labels, publishers and artists actually receive money from the service.  Although I am not sure that the reporter did a great job explaining the economics, the piece did show the current state of Spotify’s royalty payments in all the grim reality. I found this fascinating. Here’s the link: http://www.npr.org/blogs/therecord/2012/09/26/161758720/how-musicians-make-money-by-the-fraction-of-a-cent-on-spotify

Finally, today’s story focused on You Tube and how it has rapidly become the music on demand spot for new music listeners (and I thought it was just a place for watching old Rolling Stones videos…) Again, fascinating/controversial stuff. Listen especially to the comments made by the guitarist from the Dead Kennedys.: http://www.npr.org/blogs/therecord/2012/09/27/161837316/youtube-shares-ad-revenue-with-musicians-but-does-it-add-up

All in all, three really important stories from NPR.