The Auditrix

February 2011 Events in Southern California

2011-01-28T07:55:00.000-08:00

February 4-5, 2011 - Pollstar Live! conference which returns to the JW Marriott Los Angeles at L.A. Live hotel
February 5, 2011 - The 22nd Annual Pollstar Concert Industry Awards will be held February 5 at Club Nokia in Los Angeles. Ticket included with Pollstar Live! 2011 registration.
February 8, 2011 - 6PM - The California Copyright Conference (CCC) presents at the Courtyard by Marriott in Sherman Oaks: Music en Espanol - Current and future opportunities in the Latin Music Market
February 11, 2011 - 11AM - The Grammy Foundation presents at the Beverly Hills Hotel its annual Entertainment Law Initiative Luncheon with Keynote Speaker will.i.am and a presentation of Legal Writing Contest Winners and scholarship award. Call Loren Fishbein at 310.392.3777 for reservations.
February 13, 2011 - 8PM - CBS broadcasts the 53rd Annual Grammy Awards
February 17, 2011 – 11:30 AM – 2 PM - Association of Independent Music Publishers (AIMP) luncheon at the House of Blues in West Hollywood: A View From The Top
February 22, 2011 – 4PM – 9 PM - MUSIC INDUSTRY TOOLBOX hosted by The Association of Independent Music Publishers (AIMP) and The California Copyright Conference (CCC) at the Gibson Guitar Showroom. The afternoon into evening event will be free of charge to attendees and will include a hosted bar. Music publishers, production music companies, music service companies, record labels and independent self-published writers and artists are welcome to attend.
February 28, 2011 - Deadline to give audit notice if your objection period ends two months (60 days) following the period ended December 31, 2011. Don't lose your rights - contact me for help (310-882-6381).

January 2011 Events

2010-12-17T13:54:00.000-08:00

January 11, 6PM-10PM - California Copyright Conference: Film and Television Music Panel
January 20, 7PM-12AM - Association of Independent Music Publishers: Artist Showcase at Molly Malone's
January 22-26 - MIDEM & MidemNet in Cannes, France
January 27, 12PM-2PM - Beverly Hills Bar Association: Back by popular demand to give the 3rd annual State of Evolving Media address is leading IP and new media lawyer James D. Nguyen, a partner in the Beverly Hills office of Wildman, Harrold, Allen & Dixon LLP. Jimmy will discuss the latest technology and business trends with evolving media and key legal issues in the evolving media landscape.
January 30 - Deadline to give audit notice if your objection period ends 30 days following the period ended December 31. Don't lose your rights - call or e-mail me for help (310-882-6381).

Copyright Protection for Pre-1972 Sound Recordings - US Copyright Office Requests Your Comments by December 20, 2010

2010-11-08T14:47:00.000-08:00

The US Copyright Office last week published in the Federal Register this notice that it will study granting federal protection to pre-1972 sound recordings. As part of the study, it is requesting your comments regarding the economic impact on rights holders and how best to achieve copyright protection for pre-1972 sound recordings.

What would this mean to you or your clients?

First, consider some background: Copyrights to sound recordings secured after February 1972 are covered by federal copyright law, but prior sound recording copyrights are covered by state law or common law only (so protection varies from state to state). Some of my music clients and their heirs have been or may in the future be able to terminate or revoke copyright grants for pre-1972 compositions, but they cannot do so for pre-1972 sound recordings, partly because the copyright laws that allow authors to terminate grants relate only to federally protected copyrights.

If federal copyright protection is granted to such pre-1972 sound recordings, it will make it easier for artists to get "a second bite of the apple" as some say; artists who authored pre-1972 recordings can make a much stronger case for getting their copyrights back. Thus, increased copyright protection may be good news for recording artists and their heirs, bad news for digital music services who do not pay royalties for pre-1972 sound recordings (see David Oxenford, Esq.'s blog post here), and mixed news for record companies.

As a royalty auditor on behalf of many recording artists, I support copyright protection for pre-1972 sound recordings. Whether or not you agree with me, I implore you to send your comments - due by December 20, 2010 - to the Copyright Office in accordance with the instructions set forth in its notice. Thank you.

November 2010 Music Business Events in Southern California

2010-10-29T00:23:00.000-07:00

Below are November 2010 music business that you may wish to attend:

November 4, Online: NARM – “Market Overview: Current Trends and Sales Data, Part III” presented by Nielsen SoundScan
November 7, West Los Angeles: Songwriters' Law Seminar
Webinar for Artists: Maximizing Your Digital Performance Royalties
November 9, Sherman Oaks: The California Copyright Conference (The CCC) - Digital Recognition Technologies - How Do they Work and How Are They Being Used
November 16, Online: NARM – “Know Your Consumer, Part 2: High Schoolers”
November 18, West Hollywood, California: The Association of Independent Music Publishers (The AIMP) - "Hitchin' Your Music to a Trailer" luncheon panel discussion
November 19, Downtown LA: American Music Conference
November 29 - Deadline for publishers to participate in 2007-2008 Group II NMPA Late Fee Program (pending and unmatched royalties settlement)
November 29 - Deadline to give audit notice if your objection period ends 60 days following the quarter end. Don't lose your rights - call me for help (310-882-6381).

I will update the list with additional events that come to my attention. Hope to see you in November!

How to Recover Your Client’s Fair Share - Part II: Enforce Contract Compliance

2010-10-04T16:39:00.000-07:00

California's top legal recruiting firm, Swan Legal Search, just published my second guest post on its SwanLegal.com blog. The posts are written for IP attorneys and are loaded with detailed tips from an auditor's perspective on "How to Recover Your Client's Fair Share:"

Part I: Negotiate a Better Contract

Part II: Enforce Contract Compliance

Whether you practice law or not, I invite you to share your thoughts on the above guest blogs.

Attorneys: stay tuned for a guest post from Delia Swan, Esq., who can change your legal career!

Austin Lucas touring UK

2010-09-22T01:28:00.001-07:00

Oct 12 @ Prince Albert Brighton, UK
Oct 13 @ The Croft, Bristol, UK
Oct 14 @ The academy 3 Leicester, UK
Oct 15 @ The 13th note Glasgow, UK
Oct 16 @ Brudenell Social Club Leeds, UK

October 2010 California Music Business Events

2010-09-20T15:31:00.000-07:00

Below are October 2010 music business that you may wish to attend:

October 4, San Francisco, California: Digital Music San Francisco business networking event, in association with Billboard's Mobile Entertainment Live event (see below)
October 5, San Francisco, California: Billboard Mobile Entertainment Live! The Music App Summit
October 12, Sherman Oaks: The California Copyright Conference (The CCC) - The Future of the Music Industry: An Economic Update
October 19, Beverly Hills, California: National Music Publishers' Association (NMPA) West Coast Receiption (RSVP deadline passed)
October 21, West Hollywood, California: The Association of Independent Music Publishers (The AIMP) - Mock Negotiation with Donald Passman, Esq.
October 23, Downtown Los Angeles: USC and the BHBA's 2010 Institute on Entertainment Law and Business
October 27-28, Century City, California: The Hollywood Reporter, Billboard Film and TV Music Conference
October 30 - Deadline to give audit notice if your objection period ends 30 days following the quarter end. Don't lose your rights - call me for help (310-882-6381).

I will update the list with additional events that come to my attention. Hope to see you in October!

STIM Invites American Indie Music Publishers to Non-Exclusive "WOI" Pan-European Licensing Platform

2010-09-17T00:48:00.000-07:00

Sweden's music rights society STIM is launching a pan-European licensing platform for American independent music publishers. STIM's Scott Farrant yesterday in Los Angeles called on the Association of Independent Music Publishers to join its "WOI" initiative and collect more download and streaming publishing royalties from Europe's 27 countries.

Farrant explained that WOI needs at least five percent independent Anglo-American publisher participation in order to achieve the efficiency and negotiating leverage comparable to the majors' pan-Euro licensing partnerships:

To form "PEDL," Warner/Chappell allied with many societies, including:

STIM (Sweden)
PRS (UK)
SACEM (France)
BUMA/STEMRA (The Netherlands)
SABAM (Belgium)
SGAE (Spain)

Update: Farrant explained on October 11, 2010 that "Stim was also amongst the first societies to sign with Warners for their 'Anglo-US' PEDL rights and are in fact one of only two societies currently issuing licences for the PEDL rights."

EMI allied with PRS (UK) and GEMA (Germany) to create "CELAS"
UMG allied with SACEM (France) for "DEAL"
SONY engaged GEMA's "PAECOL" (Germany)
SONY, EMI and independent publisher Peermusic allied with SGAE (Spain) for licensing of Latin American repertoire

Independent music publishers may wish to join a pan-Euro licensing initiative in order to enjoy deal-making leverage and royalty recoveries that are on par with those of the major publishers in connection with music services that operate across multiple territories in Europe (e.g., Apple iTunes and Nokia Comes with Music).

However, many independent publishers are bound to exclusive subpublishing agreements in Europe that will not allow for affiliation directly with a society. In order to participate in WOI, such publishers must "rearrange" their subpublishing deals to make them non-exclusive, advised Farrant. He argued that subpublishers should not object because WOI focuses on multinational exploitations, while subpublishers will retain administration rights on a country-by-country basis.

Still, it seems like a virtual landgrab is happening now in Europe's multinational music publishing rights marketplace, and not every subpublisher thinks the new role of rights societies is for the best. This may be because pan European license alliances cut out the subpublisher as middleman. As Farrant pointed out, WOI is as close to "at source" as publishers can get. Provided enough publishers join, STIM thinks it can limit collection fees to ten percent 10% and US publishers will receive quarterly accountings directly from STIM, without having to wait for a subpublisher to process the royalties (and take a share).

Farrant outlined how the WOI initiative will work:

"With detailed information on licensing terms made available via the STIM/WOI website, the US independent publisher has the flexibility to suggest changes (that will be put forward in the negotiations process), or opt out of the license altogether. When you sign up with WOI you are under no obligation to license your content until and unless you are satisfied with the terms of the license agreement. You are under no obligation to license your content via WOI because your relationship with WOI is strictly non-exclusive."

If you are an independent music publisher in the United States or Canada, what is your strategy for collecting European royalties derived from digital exploitations? Have you looked into joining one or more pan-European licensing initiatives? If not, why not?

Either way, Scott Farrant would like to hear from you. His email address is: scott.farrant@stim.se and I will give you his telephone number upon request. It will take STIM some time to review your repertoire before you can sign up, so do not delay in contacting him soon to discuss the details if you are looking to start collecting digital music publishing royalties from multinational European music services.

I encourage you to explore WOI as well as other options, such as IMPEL, PRS' pan-Euro licensing initiative for independent music publishers, and talk to your subpublishers to learn their views on the subject.

How To Recover Your Client’s Fair Share – Part I: Negotiate a Better Contract

2010-09-08T09:46:00.000-07:00

California's top legal recruiting firm, Swan Legal Search, invited me to guest blog at SwanLegal.com. Below is a link to my first post:

How To Recover Your Client’s Fair Share – Part I: Negotiate a Better Contract

Attorneys: stay tuned for guest blog entries from Delia Swan, Esq., who can change your legal career!

September 2010 Music Business Events in Los Angeles

2010-09-07T10:50:00.000-07:00

Mark your calendars for these important Los Angeles music business events:

September 14 @ 6:30 PM - The California Copyright Conference (CCC): 2010 Legal Eagles: Legal Developments Affecting the Music Industry
September 16 @ 6:30 PM - The Association of Independent Music Publishers (AIMP): STIM Presentation - Pan European Digital Rights Licensing
September 20 @ 7PM - Steve Winogradsky's UCLA Music Publishing Class Begins
September 23

@ 11:30 AM - The Association of Independent Music Publishers (AIMP): MOBILE APPS - Is There Money In Them Thar Apps?
@ 12 PM - Beverly Hills Bar Association (BHBA): IP Strategies to Protect Website Look and Feel

September 30 - Deadline to object to royalty statements and/or give audit notice in cases where you have three months following the period ended June 30 to object. Don't lose your rights - call me for help (310-882-6381).

Hope to see you at one or more of the above events!

Gain a Working Knowledge of Music Publishing - Steve Winogradsky's UCLA Music Publishing Class Begins 9/20/2010

2010-09-06T11:27:00.000-07:00

For years, Steven Winogradsky, Esq. has taught music publishing at UCLA Extension. If you need to brush-up on the music publishing business, sign up now for Winogradsky's Fall 2010 class, which starts Sept. 20, 2010. Here are the details per Mr. Winogradsky:

4-Unit Course: Music Publishing: Law and Business (Course # X 448.17; Reg. # V8824)
Day/Time: Monday, 7-10pm
Dates: September 20 - December 6
Location: UCLA Dodd Hall, room 161
Instructor contact: steve@winogradskysobel.com
Course Description: This overview is designed for those interested in a career in music publishing as well as for business and personal managers and attorneys who desire a working knowledge of the music publishing industry. Topics include copyright basics; songwriter agreements; setting up domestic licensing for records, motion pictures, television, print, commercials, and other areas; and dealing with ASCAP, BMI, and SESAC. Discussion also includes aspects of foreign subpublishing, including negotiating agreements, and collection societies. Additional topics also include, new media, social networking, digital royalty collection, and progressive internet search engine tools and techniques to promote band and grow royalties. Guest speakers include music industry executives and attorneys. Prerequisite: Practical experience in music publishing or music business; CPAs and Bar Association members automatically qualify.
Cost of the class is $550, plus $40 for the course reader. For attorneys, there is 34 hours of MCLE credit available.
If you or your staff is interested in signing up for this class, please go to: https://www.uclaextension.edu/r/default.aspx for further instructions.

If you aren't in Los Angeles, check out the music publishing book by Winogradsky's business partner, attorney Ron Sobel, who knows much more about performance royalties than the average music lawyer:

A Well Kept Secret of Powerful Attorneys

2010-08-25T23:52:00.000-07:00

Attention attorneys:

Are you regarded as one of the most powerful attorneys in your field? For example, did the Hollywood Reporter feature you in its 2010 Power Lawyers list?

If you answered “no,” consider a well-kept-secret from many of the Hollywood Reporter’s 2010 Power Lawyers:

What do so many powerful attorneys have in common? They know that:

1. It isn’t enough to know everything about intellectual property law, or the be a suave litigator

2. To be a power attorney, you must build a reputation of getting your clients a bigger piece of the pie

3. The most powerful attorneys seek the most help - getting lots of clients a bigger piece of the pie is not something you can do alone

To whom do powerful attorneys turn to gain leverage? The well-kept secret is a trusted auditor.

I know, since I am the auditor trusted by attorneys on many a “Power" list, including The Hollywood Reporter's:

However, few attorneys besides the upper echelon understand the power of knowledge that an auditor can provide. Those attorneys who appreciate the value of a compliance inspection typically have no idea that the decision to advise a client to audit rests squarely on their shoulders. (Often, if an attorney does not suggest an audit, nobody will - not even a business manager, unless the business manager happens to do audits... which presents a conflict of interest, incidentally.) Finally, when an attorney does realize that the decision to audit is largely hers, she may hesitate to advise a client to audit due to a fear of the unknown – unknown costs, unknown impact on business relationships and unknown recoveries.

This is why, if you represent someone who receives contingent compensation, it is crucial that you find at least one auditor you trust, who will:

· Help you figure out which cases require audits and which do not
· Advise you during negotiations of accounting clauses and definitions
· Take the stand and testify in the event of a royalty dispute that enters a litigation phase
· Perform due diligence and valuations of intellectual property
· Consult on bankruptcy and divorce cases that involve intellectual property
· Prepare royalty statements
· Conduct audits to:

o Recover your client's unpaid royalties or profits

o Ascertain compliance with marketing restrictions

o Identify breaches of contract

o Gain leverage for negotiation purposes

Building your team of experts now will give you the power to secure your clients royalty and profit entitlements and lay the foundation for your rise to powerful deal making and victories. Don't delay!

Join me 6/24/10 for Lunch with Google and Disney @ The BHBA: Targeted Marketing and Privacy

2010-06-19T01:39:00.000-07:00

Are your actions tracked by digital media companies? Who accesses this information and how is it used? Will legislation in the pipeline change our experience of the Internet? Is your company or client compliant?

Join me next Thursday for a very special "Targeted Internet Marketing and Privacy" panel discussion at the Beverly Hills Bar Association's June 24 luncheon at Lawry's. Please reserve your meal at bhba.org if you would like to attend in-person, or sign up for the webcast here.

Speakers:

Halimah DeLaine Prado, Esq., Sr. Product Counsel, Google Inc.
Jonathan Avila, Esq., Chief Privacy Officer, The Walt Disney Co.
David D. Johnson, Esq., Sr. Attorney, Epstein Becker & Green, P.C.

Moderator:
Cedar Boschan, Compliance Auditor, Hurewitz, Boschan & Co. LLP

Date:
Thursday, June 24, 2010
Registration & Lunch: 12:00 p.m.
Program: 12:30 - 2:00 p.m.

Place:
LAWRY’S
100 N. La Cienega Blvd.
Beverly Hills, CA
(1/2 block North of Wilshire)
Free underground parking

Price:
$65.00 for BHBA Intellectual Property Section members who pay in advance*
$85.00 for BHBA members who pay in advance*
$40.00 for Law Students who pay in advance*
$105.00 for non BHBA members who pay in advance*
(Additional $20.00 more at door for all)
This event is FREE for members of The Order of Distinguished Attorneys
*Refund with 48 hours notice, raincheck with 24 hours notice

MCLE Credit: This activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1.5 hours and the Beverly Hills Bar Association certifies that this activity conforms to the standards for approved education activities prescribed by the rules and regulations of the State Bar of California governing minimum continuing legal education.

Musicians: Claim Your Unpaid AFTRA and AFM Royalties

2010-05-12T22:27:00.000-07:00

Non-featured vocalists & musicians -

Check now to see if a musicians' union fund owes you a payment: http://www.raroyalties.org/unclaimedchecks_all.html

The AFM & AFTRA Intellectual Property Rights Distribution Fund distrbutes the following sound recording royalties:

Japan - Rental & private copying
Netherlands - Private copying & broadcast
USA - Private copying & digital performance

Tell me what you find!

Music Rights: A Global View - April 20, 2010 Panel Discussion at The California Copyright Conference

2010-04-14T11:17:00.000-07:00

Teri Nelson Carpenter and I will co-moderate on April 20, 2010 a panel of top music executives from France, The Netherlands and Canada. We will discuss:

Pan-European Licensing
Legislation
Neighboring Rights
Emerging Markets

The panel of your international music business partners will feature:

Claude Gaillard - Deputy Director, Member Relations - SACEM
Christian Sarrazin - Vice President - Industry Relations and Strategic Intelligence - SOCAN
Wim van Limpt - International Account Manager Member Services BUMA/STEMRA
Gino Olivieri - President, Premier Muzik International Corporation NEIGHBORING RIGHTS / ROYALTY RECOVERY

DETAILS:

Tuesday, April 20, 2010
6:15 PM Check-In * 6:30 PM Cocktails * 7:00 PM Dinner

COURTYARD BY MARRIOTT, 15433 Ventura Blvd, Sherman Oaks, CA 91403 (Near Sepulveda & Ventura Blvd., just west of the 405 freeway)
Parking entrance on Orion Avenue
Free parking with validation. For map and directions, Click Here

Appetizer: California Mixed Green Salad
Entrée: Chicken Marsala, Beef Stroganoff or Vegetarian Pasta
Dessert: Chef's Choice

CCC Members $40 per person / Non-members $50 per person

RESERVE YOUR SEAT NOW - RESERVATIONS ACCEPTED UNTIL
10:00 AM FRIDAY, April 16, 2010

Please help us make this an enjoyable experience for everyone by using the reservation system. A failure to reserve by the deadline may result in not receiving your preferred choice of dinner entree.

Register online with your credit card at www.theccc.org

Or use our voicemail system (818-379-3312)
Dinners payable at the door by cash or check only. No credit cards.

Cedar Boschan to Give Royalty Rate Update at California Copyright Conference - October 13

2009-09-28T23:50:00.000-07:00

I will discuss on October 13, 2009 Copyright Royalty Board actions and potential legislation at the California Copyright Conference's annual "Legal Update" panel.

My fellow panelists are some of the best in the West, so don't miss it:

KENNETH D. FREUNDLICH, ESQ., Freundlich Law
DINA LAPOLT, ESQ., LaPolt Law
MICHAEL PERLSTEIN, ESQ., Fishbach, Perlstein, Lieberman & Almond
PATRICK ROSS, Copyright Alliance

Moderator:
STEVEN WINOGRADSKY, ESQ., Winogradsky/Sobel

This event is usually a very well attended meeting, so please make your reservations early. One (1) hour of MCLE credit is available to California attorneys.

Register at the California Copyright Conference Web site or see more details pasted below:

_____________________________________________

Annual "LEGAL UPDATE" Panel
Tuesday, October 13, 2009
6:15 PM Check-In * 6:30 PM Cocktails * 7:00 PM Dinner
COURTYARD BY MARRIOTT, 15433 Ventura Blvd, Sherman Oaks, CA 91403 (Near Sepulveda & Ventura Blvd., just west of the 405 freeway)
Parking entrance on Orion Avenue
Free parking with validation.

Appetizer: California Mixed Green Salad Salad
Entrée: Chicken Marsala, Beef Stir-fry or Vegetarian Pasta
Dessert: Chef's Choice

CCC Members $40 per person / Non-members $50 per person

RESERVE YOUR SEAT NOW - RESERVATIONS ACCEPTED UNTIL
10:00 AM FRIDAY, Oct 9, 2009

Please help us make this an enjoyable experience for everyone by using the reservation system. A failure to reserve by the deadline may result in not receiving your preferred choice of dinner entree.

Register online with your credit card at www.theccc.org
Or use our voicemail system (818-379-3312)
Dinners payable at the door by cash or check only. No credit cards.

To join the California Copyright Conference or to renew your membership, please visit the website for more info: http://www.theccc.org/join.php

Film, TV and Music Audit Rights Discussion at the Beverly Hills Bar Association

2009-09-28T10:52:00.000-07:00

My business partner Matthew A. Hurewitz, CPA appeared September 16, 2009 at The Beverly Hills Bar Association's Entertainment Section luncheon. Hurewitz told "The Truth About Net Profits and Audits" with other auditors and litigators Neville L. Johnson, Esq. and Miles J. Feldman, Esq.

Author Moses Avalon covered some aspects of the discussion on his blog here, and I will post below some video footage of Hurewitz's comments, when we shorten it to less than ten minutes.

You may still be able to earn 1.5 MCLE credits if you pay $105 to view the complete panel discussion at West LegalEdCenter.

The posts on this blog confer no rights or warranties. The opinions expressed on this site are my own and may not represent those of my firm. © 2009, Cedar Boschan. To request permission to reproduce, please contact boschan@royaltyauditors.com.

Is China Ready to Hold Accountable Infringers of Foreign Copyrights?

2009-09-07T13:44:00.000-07:00

China's Ministry of Culture ("MoC") implemented on August 26, 2009 new regulations for online music. In what might be the first in a series of MoC rule changes, online music ventures are now required to obtain MoC approval in order to legally distribute imported online music products in China, including audiovisual files and mobile distributions.

Such new regulations may impact China's 338 million Internet users, as well as search engine and music services in China, including Sohu's SoGou, Alibaba/Yahoo! China, Google and Baidu, which was described in IFPI's 2009 Digital Music Report as "the biggest single violator of music copyrights and by far the greatest obstacle to legitimate digital commerce in China."

Barron's Tech Trader Daily blogger Eric Savitz says analysts disagree on the impact of China's new set of rules on "deep-linking" search engines such as Baidu. Savitz and other bloggers such as Caitlin Cimpanu of Softpedia cite Pali Research analyst Tian Hou's blog report that music searches represent 80% of Baidu’s traffic. Therefore, the new regulations may obligate Baidu to drastically change its business practices by linking only to licensed music services.

On the other hand, Savitz observed:

"UBS analyst Wenlin Ly... says Baidu believes the worst case scenario would be to remove the MP3 search button from its main page ... [and] MP3 search is now under 10% of query traffic."

The true Baidu music search traffic figures may fall between Hou and Ly's estimates. Leena Rao of Tech Crunch reported:

"According to comScore, Baidu had 145 million unique visitors in July of 2009 worldwide (with more than 95 percent of those coming from Asia), while its MP3 search engine attracted 47 million uniques, which is only 32 percent but still significant. For July, Baidu was ranking fifth amongst most visited search engines worldwide, behind Google, Yahoo, Bing and Ask.com."

Whatever the figures, music search and "deep links" compelled Baidu to become a licensed online music service when it obtained from the MoC a newly required "Internet culture license," according to spolkspeople for both the MOC (see the JLM Pacific Epoch blog) and Baidu (see the Wall Street Journal).

We must wait to see whether search engines such as Baidu comply voluntarily with other new MoC regulations, and whether China enforces such regulations in 2010. As The Wall Street Journal pointed out, the MoC is not responsible for enforcing copyright protection.

In the meantime, I endeavored to analyze Google's English translation of the MoC's Chinese language document dated September 4, 2009. [Is there an English language statement from the MoC of which I have failed to locate a copy?] According to my haphazard analysis of the Google-translated MoC document, online music services - including Baidu's deep linking service - must:

(a) Subject content to MoC "Internet Literary Review" with the goal of "purifying the online music market in China" by "strengthening the ban on obscenity, pornography, violence, superstition, and undermining national customs and other harmful social morality music"

(b) Submit "signed import contracts (agreements)" for MoC verification of compliance with "strict requirements" (e.g., "the authorization period of imported network music should be more than one year"). Such contracts which are not directly signed by Mainland China businesses are invalid.

(d) Submit for MOC review by December 31, 2009 imported music that was previously distributed online in China

The MoC is now ambitiously obliged to review during the next four months untold multitudes of content including lyric translations for hundreds of thousands of songs, as well as license agreements and other documents. Is this possible? As one who analyzes music licenses professionally, I suspect China may underestimate the tasks at hand: censoring content and vetting worldwide copyright ownership and license agreements. Therefore, the process will continue well beyond 2010 and/or it will be unthorough.

In addition to announcing the new regulations described above, the MoC saught to:

Further clarify the definition of "online music" as:
(a) "music products" that are "not material entities..." and are "...digitally transmitted through the information network..." which includes "...the Internet, mobile communications network, the fixed communications network can be achieved via a variety of interactive, real-time communication, sharing of common information network."

(b) including "not only the usual sense of the songs, music and other forms of digital music products, but also ... the content of the performance of music accompanied by images of the MV [music videos], Flash and so on."

Set forth innovative and clear review procedures and requirements
(a) The MoC introduced an online music registration system through which online music ventures may request MoC approvals

(b) The MoC offers a "rapid 'review of access' system" to provide expedited 3-day approvals in certain cases

(c) The MoC has adopted certain procedures to eliminate duplicate reviews of music content
Clarify the responsibilities of online music ventures:
(a) "The enterprise must establish a system of self-examination"

[As an auditor, I caution the MoC against relying solely on music service ventures like Baidu to comply voluntarily with MoC regulations.]

(b) "Users [who]... upload their own innovations of the network and performing music is not" subject to content review... "Domestic online music business units, especially in providing Internet users create their own compilation and performing services such as online music upload business units should be strictly in accordance with 'Interim Provisions on Administration of Internet Culture,' the provisions of Article XVII of the online music content to enhance the review, ensure that the provision of the legality of online music content." [sic]

This leaves me with dozens of questions, such as:

How do you think China's new rules will change the music market?
Will reportedly legal Chinese music services like Orca Digital and Google's Top100.cn become profitable?
Will Google China increase its search market share dramatically?
Will foreign territorries such as Hong Kong, Taiwan and the USA collect billions of dollars in copyright royalty payments from China?
Will Baidu and other reported purveyors of unlicensed music find a way around the new regulations?
If you are a music copyright holder, have you any deals directly with China?
Does anyone disagree with this on grounds of censorship?
Is this a "tax" or "disincentive" for music services to import music?
Will fewer regulations stimulate demand for domestic Chinese music?
What is popular in China's music markets?

The posts on this blog confer no rights or warranties. The opinions expressed on this site are my own and may not represent those of my firm. © 2009, Cedar Boschan. To request permission to reproduce, please contact boschan@royaltyauditors.com.

LAUNCHcast Wins - Service Deemed Noninteractive by US 2nd Circuit Court of Appeals

2009-08-23T14:41:00.000-07:00

Those who are calculating CRB royalties may be interested to read this decision published August 21, 2009 in the Federal Register.

The US Court of Appeals' Second Circuit upheld a 1997 jury decision that Yahoo's LAUNCHcast - a webcasting service now operated by CBS that provides Internet radio stations customized for individual users – is not an "interactive service" as defined in 17 U.S.C. §114(j)(7):

An “interactive service” is one that enables a member of the public to receive a transmission of a program specially created for the recipient, or on request, a transmission of a particular sound recording, whether or not as part of a program, which is selected by or on behalf of the recipient. The ability of individuals to request that particular sound recordings be performed for reception by the public at large, or in the case of a subscription service, by all subscribers of the service, does not make a service interactive, if the programming on each channel of the service does not substantially consist of sound recordings that are performed within 1 hour of the request or at a time designated by either the transmitting entity or the individual making such request. If an entity offers both interactive and noninteractive services (either concurrently or at different times), the noninteractive component shall not be treated as part of an interactive service.

Specifically, the US Court of Appeals found that LAUNCHcast's

Users could not request specific musical works through LAUNCHcast
Transmissions were not specially created for the user within the meaning of §114(j)(7)

Nobody disputes point #1 above, but point #2 is debatable. At least I found BMG's argument that "...Any service that reflects user input is specially created for and by the user and therefore qualifies as an interactive service" to be compelling. But the court did not "read the statute so broadly." Ultimately, the intent of §114(j)(7), as revised, guided the court to its decision.

The decision means that LAUNCHcast may pay statutory master performance royalties to SoundExchange instead of negotiating fees for each master with various record companies. The designation of a music service as "non-interactive" impacts royalties reportable to music publishers as well.

According to The Broadcast Law Blog:

"Other cases in other circuits would not be bound by this decision, though they will no doubt find it to be instructive."

Do you agree with the Second Circuit?

NYT on Google Class Action Settlement

2009-08-20T22:37:00.001-07:00

Microsoft, Yahoo and Amazon are now funding the fight against a pending settlement between Google, publishers and authors according to this week's New York Times article by Miguel Helft.

Authors: Do you support the Google class-action settlement with publisher and author groups? Why?

Publishers: Have you sent takedown notices to Google? How long did it take Google to remove your work(s) from its library?

Transparency Initiatives

2009-08-12T23:34:00.000-07:00

A transparency initiative in Nigeria disclosed questionable oil and gas transactions (see link here). If only the USA Interior Department and the states were as proactive in auditing our natural resource contracts!

CRB Retroactove Rates for Limited Downloads Prior to 2008

2009-08-03T14:07:00.000-07:00

I recently began an analysis of the publishing royalty rates adopted by the United States Copyright Royalty Judges in November 2008 pursuant to an agreement reached by all of the participants in the proceeding (e.g., the RIAA, NMPA and DiMA) with respect to interactive streaming, limited downloads and incidental digital phonorecord deliveries.

Among other things, my analysis has so far caused me to question which rates apply to limited downloads prior to 2008. Interestingly, I have not heard this topic reported in the media or discussed by my colleagues in the music industry.

Section 385.11 of the Copyright Royalty Judges' Final Determination of Rates and Terms (page 77) states that:

"A limited download is a general digital phonorecord delivery under 17 U.S.C. 115(c)(3)(C) and (D)."

As published in the February 9, 1999 Federal Register, 37 CFR part 255.5 was revised in 1999 to set rates for digital phonorecord deliveries in general. As a result, US Register of Copyrights Marybeth Peters wrote in the January 26, 2009 Federal Register:

"With respect to limited downloads, the previous rate-setting proceeding established royalty fees that clearly applied to limited downloads, whether such downloads were promotional or not."

The Copyright Royalty Judges must have mostly concurred because they responded by amending their Final Determination of Rates and Terms to strike provisions including one that allowed licensees to report no royalties for certain limited downloads deemed to be promotional, including limited downloads that occurred prior to 2008.

Setting aside the issue of promotional units, according to the logic of the Register of Copyrights, it seems that the statutory mechanical royalty rates for all limited downloads through December 31, 2007 are equal to unit rates applicable to permanent downloads and physical records:

Playing time 0:00 - 5:00 minutes:

1996-1997 = $0.0695

1998-1999 = $0.071

2000-2001 = $0.0755

2002-2003 = $0.08

2004-2005 = $0.085

2006-2007 = $0.091

However, the participants' agreement and the Copyright Royalty Judges Final Determination of Rates and Terms (as amended) set forth contrary rates for limited downloads prior to 2008.

Is the Register of Copyrights correct that "the previous rate-setting proceeding established royalty fees that clearly applied to limited downloads"? Which rates do you think apply and for which time periods?

Based on the summary of reportable rates that the Harry Fox Agency published, it represents that the rates for limited downloads prior to 2008 are set forth in the participants' agreement, not the rates applicable to all digital phonorecord deliveries in general.

While I think this may have been the intent of the participants (and the 1999 rate setting panel), perhaps the Register of Copyrights is technically correct that this would be impermissible retroactive rulemaking because when the participants and the CRJs deemed limited downloads to be general digital phonorecord deliveries, they subjected licensees to the same statutory royalty rates that were applicable to other general digital phonorecord deliveries (i.e., permanent downloads) through 2007. Attention attorneys: Please feel free to post comments or email me at boschan@royaltyauditors.com to tell me what you think.

Regardless of what the answer is, that the Copyright Royalty Judges did not clarify rates applicable to limited downloads during the period from inception to December 31, 2007 is troubling to those of us who must compute and audit royalties therefor.

Regrettably, this point is but one example of the confusion arising from the labyrinthine rates that the US music industry took over a decade to issue. The challenge of complying with such royalty rate calculations is great for my business, which reports, certifies and audits such royalties, but bad news for the music business as a whole. I think the Copyright Royalty Judges and the participants cost the music industry much needed profit in choosing to adopt such complex rates.

US Interior Department Must Account to Native Americans

2009-07-24T21:52:00.000-07:00

The Blog of Legal Times is the first report I have found on this important news:

D.C. Circuit Rules Interior Department Must Account for Indian Royalties

Spoken Word Sound Recordings of Literary Works - USA

2009-07-19T17:28:00.000-07:00

Tom wants to release a CD of spoken word poetry sound recordings. He asks:

"What is my duty to the poets whose works we present...?"

Tom will need to address the following:

1 - When was each work published?
Incidentally, Tom recorded a poem that was translated to English. A translated work is a "derivative work," so Tom will need to consider the publication date of such derivative work.

2 - Is the work in the public domain?
Tom may wish to consult an attorney or at least see Cornell's useful web page to determine based on publication date whether a poem is in the public domain. (Also see the US Copyright Office's guide to researching whether a work is in the public domain.) Tom may freely use creative works in the public domain.

3 - Obtain licenses from copyright holders.
For poetry that is not yet in the public domain, Tom must obtain permission from the copyright holder, which is typically the publisher of the book in which the poem was initially printed. Alternately, Tom can hire copyright "clearance" specialists including attorneys and services such as www.copyright.com.

If Tom cannot locate the copyright owner, he should document his efforts and look into whether his use could be considered "fair use."

Note that if Tom's spoken word recordings feature background music, he may also be obligated to pay mechanical reproduction copyright royalties ("mechanicals") to the publishers of the songs embodied on the CD.

By the way, sound recordings are subject to US copyright protection and Tom may register his sound recording copyrights with the Library of Congress.

Sound Exchange Monopoly Preserved... For Now

2009-07-10T14:11:00.000-07:00

Billboard reports today that D.C.'s US Appeals Court Declined To Rule On CRB due to a missed deadline.

Some background: Royalty Logic had filed a motion questioning the constitutionality of the US Copyright Royalty Board (CRB). If the courts agreed with Royalty Logic's arguments, rates previously set by the CRB may have been invalidated, which is why many groups, including the NMPA, opposed the motion.

The good news about the US Appeals Court's choice is that the rate setting process will not have to restart at square one. However, I think it is bad news that left intact is the CRB's effective decision to grant Sound Exchange a limited monopoly as the sole designee entitled to collect master performance royalties in the United States.

Royalty Logic had originally filed its motion because it too wanted to be an master performance royalty collection agent.

I do not support Royalty Logic's positions on all matters, but ultimately I am concerned that recording artists and record labels will have no choice of collection agents for the master performance royalties contemplated by the Digital Milennium Copyright Act (unlike songwriters and publishers, which may choose to affiliate with one of three major performance rights societies: ASCAP, BMI or SESAC).

Sound Exchange may have won this battle, but perhaps there will soon be another opportunity to introduce competition in the master performance royalty collection marketplace. After all, one thing that set the US music industry apart from the rest of the world is that it allowed competition amongst collection agents.

How to Copyright a Song

2009-07-08T10:00:00.000-07:00

James in Indiana asks:

"What is the best way to copyright your songs? My band is going to do a live streaming web show and I'm leery of playing original material over the web without it being copyrighted."

James, your composition is already "copyrighted" if you have recorded it. According to US copyright law, a song (i.e., a "work") is created when it is "fixed." That means, when you transcribe your song on paper or record it for playback, you automatically own the copyright to that work. You may print the circle-c copyright symbol on any copies of your compositon at this point.

However, in order to protect your copyright, I recommend that you register your copyright with the Library of Congress ("LOC") using one of the following methods:

Electronic registration ($35 per work): Register and upload a copy of your work electronically at https://eco.copyright.gov/eService_enu/ (see a list of acceptable file formats here)
Complete Form CO on your personal computer, print it out, and mail it along with a $45 check or money order and your deposit (i.e., one copy of your unpublished work or two copies of your published work). (Form CO is here, instructions are here, and a FAQ is here)
Complete the old hardcopy Form PA, and mail it along with a $45 check or money order and your deposit. The LOC is phasing out these paper forms, so Form PA not accessible on the Copyright Office website; however, you may request that the LOC send you a copy of Form PA by postal mail here.

By the way, you can register your sound recordings too (use Form SR instead of Form PA and a circle-P symbol), the copyright to which is separate from the underlying composition, which is an important distinction to understand.

Certain attorneys have suggested as a money-saving strategy collective registeration of multiple works as a single work. Any registration is better than nothing, but I advise against it for a number of reasons. Most importantly, databases of works and ownership information are key. If you do not register each individual work with the Library of Congress, I am concerned that in the future, users of your song may not be able to find it in the LOC databases if it is listed under the title of a collection of works. If a user cannot find the work, it won't find its owner and your work may be deemed an "orphan work," which may entitle such users to make and distribute copies of your work without a license and not pay you until you can prove that the work is yours. Further, you may not be entitled to damages. Therefore, for maximum copyright protection, I suggest you register each work individually. However, this is just my opinion.

There is an easier and cheaper method to protect your copyright than LOC registration, but it won't offer you the same level of protection that a LOC registration offers: The so-called "Poor Man's Copyright," whereby you mail yourself a copy of your song and save the unopened envelope with the post office's date stamp intact to prove the date of the copyright. The Poor Man's Copyright is better than doing nothing (it can help prove you are innocent if someone accuses you of plagiarism), but there are at least two big problems with this method:

If you have not properly registered your copyright with the Library of Congress, you will not be entitled to damages.
As I mentioned above, I believe detailed databases of works and ownership information will be used in the future more than ever. If you do not register your work with the Library of Congress, users of your work may not be able to find its owner and your work may be deemed an "orphan work," which may entitle such users to make and distribute copies of your work without a license and not pay you until you can prove that the work is yours. Therefore, register your copyrights with the Library of Congress!

That said, even if you do everything right, it costs a lot of money to go after an infringer. The best thing musicians have going for them is their prolific creativity and the knowledge that individuals and entities may infringe on your copyright, but that won't stop you from creating something better in the future. Don't let the reality of infringement and scam artists keep you from making - and sharing - great music!

Next time maybe I will post about streaming royalties, since a lot of independent musicians like James are making their music publicly available this way.

Will your audit damage your business relationship?

2009-06-23T21:57:00.000-07:00

Australians fear that audits may damage their business relationships. Do you?

In this case, answer the following question: "Why is my licensee reluctant to allow me to verify its calculations?"

Remember, it's business as usual for big licensees to submit to audits. Transparency, power to renegotiate and recovery of cash are the most common outcomes.

Consider what you and your business partners can learn by reviewing past production, design, distribution, quality control and cost information, etc.

Techdirt asks: Why Can't Major Record Labels Provide Accurate Accounting To Bands?

2009-06-19T21:21:00.000-07:00

It's not every day that I agree with Mike Masnick on Techdirt:

http://www.techdirt.com/articles/20090619/0323015288.shtml

What is "Bad Faith?" Plus, Lindt's 3D Trademark on Chocolate Bunny

2009-06-11T16:46:00.000-07:00

Swiss chocolate maker Lindt is trying to enforce in Europe a 3D trademark it registered for a foil-wrapped hollow chocolate Easter bunny with a bell tied around its neck. The competitors it has sued for infringement argue:

Lindt acted in "bad faith" by registering a trademark for something (hollow chocolate bunnies) that had been produced since the 1930s (tomorrow a court in Austria will rule on the definition of "bad faith")
Hollow chocolate bunnies must be manufactured in the same shape as Lindt's because of function - most other designs will collapse

Regardless of the chocolate, does not the foil, ribbon and bell give the Lindt bunny a distinctive 3D appearance that is not merely "functional?"

Read the Wall Street Journal article and Techdirt's comments, with which I tend to disagree.

Also, how should "bad faith" be defined? Considering an altogether different example, do you think memory IC chip designer Rambus acted properly or in "bad faith" when it registered patents for industry standards while such standards were being set by an industry committee?

Station Tacticts Re: Artist Performance Royalty

2009-06-10T19:55:00.001-07:00

I support performance royalties for both composition and sound recording works. Meanwhile, radio stations face obsolescence.

Stations Boycott Artists Supporting Performance Royalty?

Does Settlement with Publishers Grant Google a Monopoly?

2009-06-10T17:05:00.000-07:00

I am familiar with the issue of orphan works as it relates to the music industry, but writers and book publishers have been strangely silent.

Should Uncle Sam approve Google's settlement with book publishers?
See http://www.nytimes.com/2009/06/10/technology/companies/10book.html.

What do you think?