Three Days in January that Made Copyright History

Three days in January 2012 witnessed some of the most important events in recent history in the world of copyright.

On January 18, the Supreme Court issued Golan v. Holder, which held that Congress is empowered remove works like the symphony classic Peter and the Wolf from the public domain in the United States, preventing orchestras, musicians and others from using these works unless they get permission and pay a license fee to the copyright holders.

On the same day, the technology community mobilized millions of people to voice their disagreement with SOPA and PIPA, two bills supported by the entertainment industry that were designed to fight online piracy. After blackouts by Wikipedia and protests encouraged by tech giants like Google, by January 19 most members of Congress had withdrawn their support for both bills.

On January 20, the United States arrested Kim Dotcom. He was arrested in Auckland, New Zealand for a file-sharing site called Megaupload.com that was based in Hong Kong. The site allegedly generated over $175 million by illegally copying and distributing music, movies and other copyrighted material without authorization.

What does all of this tell us? Three important things.

First, protection of our country’s intellectual property relies on international cooperation. For us to arrest Mr. Dotcom, who is alleged to have stolen millions from American content creators, we needed the help of authorities in Hong Kong and New Zealand. Which is where Golan v. Holder comes in: no one likes hearing that Peter and the Wolf and other classics have fallen out of the public domain and back into exclusive ownership, but for our country to benefit from international copyright treaties, we also must abide by them. International treaties are what prompted Congress to pull certain works out of the public domain, and what prompted the Supreme Court to reach the conclusion it reached in that lawsuit.

Second, if we didn’t recognize it before the rise and fall of SOPA and PIPA, there’s no denying the tension between content creators and content providers; between the entertainment industry and the technology industry. Our technology is intertwined with our entertainment and our content, so we need these camps to work together. Unfortunately for now, the tension is insurmountable: technology camps want free flow of information while content creators want protection for their original works. Ultimately, these two teams will have to reach a compromise, and Congress cannot ignore the need to protect American intellectual property from online international piracy, like the theft allegedly coordinated by Mr. Dotcom.

Finally, the online protests of SOPA and PIPA mobilized a new segment of concerned citizens. Google claims it gathered over seven million signatures in 24 hours in opposition to the bills. The implications of that statistic are at the same time impressive, intimidating and infinite.

Recent Interview on TV about Recapturing Copyrights

Recently my law partner, Stephanie Taylor, and I were interviewed by Jesse Goldberg, on his show, “Mind Your Own Music Business.”  Following up on an article that I wrote for The Tennessean, we discussed copyright recapture rights. 

This is a very important issue right now for any authors and heirs of original works who transferred rights in their copyrights in the past under the 1976 Copyright Act, which affects works first published on or after January 1, 1978.  Thirty-five years after the initial transfer, a five year window opens up during which the authors/heirs may provide notice of their desire to recapture the copyrights that they previously transferred.  To make it more complicated, authors and heirs must provide notice of their intent to recapture no earlier than ten, and no later than two, years prior to the notice being effective.   Thus, for those authors wishing to recapture copyrights that they transferred in 1978 (for which the five year window opens up in 2013 and runs through 2018), the minimum two-year notice prior to the five year window is right now in 2011. 

We discussed a variety of issues, many of which have not made their way to the courts yet, but surely which will require litigation.  These included whether sound recordings are considered works for hire, and thus not eligible for recapturing; whether session musicians, producers, sound engineers, and others might qualify as authors; and the gap grant problem for those authors who entered into contracts transferring their copyrights pre-1978, but who didn’t create or publish their works until after January 1, 1978.  We also discussed how Nashville courts likely will be called on to decide some of these significant legal issues in the coming years, given Nashville’s importance in the entertainment, publishing, and technology industries. 

As soon as the show airs on TV and is up on the web, I'll update this post and provide links.

Celebrating Two Years of WaterCooler: Young Entrepreneurs Networking in Nashville

Two years ago, I was talking with my friend Wade Munday about how I wanted to start a fun, informal, monthly event for young entrepreneurs in Nashville to meet each other.  The goal was to provide networking opportunities and to learn about interesting topics or hear from speakers within our own age range (20s through 40s).  He helped me come up with the name WaterCooler, which sounded a lot better than CornerOffice and other names that we considered.  Then he moved to Boston for a year before coming home and getting married.

My friend Renata Soto, who runs Conexión Americas, graciously agreed to co-chair and co-host these events with me.  Our first speaker was Kimberly Pace of Owen Management School at Vanderbilt University, who talked about personal brands:  how each of us creates a personal brand with every action or inaction that we take.  We hosted the first one at Cantina Laredo, which had awesome guacamole and margaritas, but didn’t have the best acoustics.  We later moved to 1808 Grille at The Hutton Hotel, which provided a rock star environment, but was too small for our growing crowds.  Then we moved to Miro District.  We decided it was time to take the show on the road. 

During that time, we hosted some amazing speakers, ranging from Becca Stevens, who talked about her work with former prostitutes at Magdalene and Thistle Farms, to Clint Smith of Emma, Laura Creekmore, who gave an overview of social media (which now seems like it was eons ago), and Alan Young of Armor Concepts, whose products I see on billboards all around the city.

Our first field trip was to Yazoo Tap Room, where Linus Hall and Neil McCormick gave everyone a tour of their brewery and free tastes of Yazoo.  That event turned out to be our most popular yet, and it showed us that WaterCooler was good not only for participants (who, in that case, reaped free beer) but also for the hosts whose businesses we showcased, because it gave them an opportunity to connect with their audience and further build brand loyalty.  I know, for myself, that I buy a lot more Yazoo beer now than I did before, because I heard Linus’ story and know how fresh it is, in addition to merely wishing to support the local economy.

From there, we realized that our niche was really in focusing on locally-owned businesses and entrepreneurs, and not just hearing from a variety of speakers in our age range.  We went to Oliver & Sinclair Chocolate Factory, which was so jam packed that we had to turn people away at the doors for fear of overcrowding/fire marshals.  We also visited Corsair Distillery and heard from Darek Bell and his partner.  More recently, we toured CentreSouce, then walked down the street to City House for drinks.

Our hope in doing this, in hosting and starting WaterCooler, was to build connections, for ourselves, and with each other.  We want folks to come whenever they’re inspired by the topic or have an interest in the location or the host or the product.  But we didn’t want to do anything that required people to sign up for one more commitment.  Everyone has enough of those already.  Because of that, we don’t have an official membership, and we don’t ask people to pay dues. 

We know that we are achieving our goal, because we have made connections with you resulting in new clients for our businesses/practices, new donors for our non-profits, new jobs, and more generally new friends.  And we know that you have done the same.  Emma has gotten new clients because one person who attended was impressed with Clint Smith's story.  And at least one person has gotten a new job because of a relationship she made while trying to attend our event at Olive & Sinclair.  These are the sorts of things we want to happen with WaterCooler.  If you have more examples of good connections that you’ve made, or if you have interesting locally-owned businesses based in Nashville that you want to highlight, please let us know.  These are the stories that we want to help you tell.

Using Technology to Tap into New Sources of Revenue: Highlights of Technology Panel at Bone McAllester Norton

Recently my law firm hosted a panel on technology.  It was a packed audience, and more guests showed up than rsvp’d, showing us that this was a topic that people really want to know more about.  Usually law firms invite clients and friends to hear about risks or changes in the law.  This event was all about business opportunity.

Since the beginning of 2011, I’ve given 1-2 speeches a month on the legal issues involved in using social media.  These talks typically have revolved around social media as a marketing tool, but not necessarily linked directly with creating new revenue.  At our tech panel, we wanted to focus instead on how companies and individuals can use technology to create new streams of revenue.  How can they tap into new revenue sources by creating their own apps, games and contests?  And what is on the horizon that none of us has even contemplated?

We invited an expert panel, comprised of David Owens of Vanderbilt University Owen Graduate School of Management, Nicholas Holland, CEO and Founder of CentreSource, and two of our clients, Parker Polidor, CEO and Co-Founder of Cell Journalist and Carter Hopkins, CEO and Co-Founder of City Streak, LLC.  Our audience was made up of leaders of financial institutions, educational institutions, technology companies, start-ups, developers, and venture capital firms.  We asked our panel and our audience to focus on three things:  (1) using technology to create new revenue streams, (2) tapping into the growing technology sector here in Nashville, rather than shipping assignments out of state to Silicon Valley or Texas, and (3) using our panelists’ stories as inspiration.

David Owens kicked off the discussion by talking about how companies that develop technology these days are recruiting high school students and high school graduates rather than college graduates, because young people are so connected with technology these days.  He talked about how younger people are physically developing stronger hands, fingers and forearms as a result of constantly using Smartphones, and how marketing firms are beginning to place signs and advertisements at foot level and knee level in stores, rather than overhead, because our bodies are getting used to looking down at a hand-held device all day, rather than looking up.  These are just some of the physiological and physical changes that are taking place from an evolutionary perspective, based on our recent adoption of certain technological devices.

Nick Holland did a great job providing an overview of how businesses can tap into technology from a variety of perspectives and in order to accomplish multiple goals.  His company is one of the fastest growing technology companies in America, and its based right here in Nashville.  Already as a result of our panel, members of the audience have hired CentreSource to help them with their needs.  This is great for them, for CentreSource, and for Nashville.

Parker Polidor shared his company’s amazing story, which deserves far greater recognition in Nashville than it currently has.  Cell Journalist is one of the biggest connectors and providers of user-generated content (UGC), such as videos of the floods captured from the Northeast over the past few weeks on individuals’ cell phones, which they then upload to various local and national news stations across the country.  As a direct result of the panel that we hosted, Cell Journalist was approached by one of the nation’s largest media conglomerates and is in the process of negotiating additional work.

Finally, Carter Hopkins, who was the youngest person in the room, and had just graduated from college at SMU in May 2010, captivated the audience by telling his story of how he and his business partner invested just over $10,000 to start this company, which already has thousands of fans and followers on Twitter and Facebook.  His company is similar to a combination of The Amazing Race and Groupon, which lets its target audience of individuals in college and recent graduates go on scavenger hunts in urban locations around the country.  They hunt for prizes and the game is based on speed and skill.  They also realize that they are in a unique position to help companies promote their products and services by incorporating them into the scavenger hunt as clues.  One of my take-aways from the morning was a conversation after the event with one of the older attendees, who said how inspired she was by Carter’s presentation.  She said it got her wheels spinning and that she is already thinking about new ways she can incorporate similar concepts into her own app.

Congress Should Take up Conyers' proposal to Clarify Copyright Law

Today's New York Times reports that Rep. Conyers is calling on Congress to revise the Copyright Act to clarify that recording artists are entitled to recapture ownership over their copyrights in sound recordings.  As the article explains, and as I referenced in my last blog post, questions exist whether transfers in copyrights in sound recordings (like other works) may be terminated, or whether they are "works made for hire," disqualifying them from being recaptured/terminated. 

The article indicates that the big four record labels and their allies in Congress may prefer to ignore the issue and let the courts decide it.  While such strategy would undoubtedly provide job security for us copyright litigators, it seems to make little sense for anyone else.  This is an issue that Congress can and should decide now, putting recording artists in the same camp as every other type of author, with all of the same rights. 

Regaining Ownership over Copyrights

The Tennessean recently published my article on recapturing copyrights.  You can see a copy of it here or read what I wrote here:

         

             If they’re not scrambling yet, Nashville songwriters, recording artists, publishing houses and labels soon will be as they jockey to control copyrights.  Starting this year, authors can begin to give notice to terminate the transfer of any copyright that was published on or after January 1, 1978. 

            Generally, whoever owns the copyright owns the right to distribute, sell and reproduce the work in question, whether it be lyrics or music to a song, sound recordings, motion pictures, manuscripts, software, architectural designs, or photographs.  When an author transfers ownership, he or she loses those rights.  But by terminating the transfer, authors redirect royalty streams away from the current owners (labels, publishers, and so forth) and back to the original authors.

            A five year window opens up 35 years after publication, allowing authors to terminate transfers they made in the past.  For those works published in 1978, the first opportunity to terminate the transfer will be in 2013.  (For works published or registered prior to 1978, different rules apply, but authors can still recapture their copyrights.)  The Act requires authors to provide at least two years notice, so those who want to terminate their 1978 transfers in 2013 must send notice in 2011.

            Historically, when working to get established, authors (be they poets, songwriters, filmmakers or sculptors) have had little leverage with their publisher or label.  In exchange for receiving financial advances and getting published, young authors often must transfer ownership of the copyright in the work to the publisher/label.  For example, Garth Brooks currently has a lot more negotiating power than newer artists because he has a track record of producing huge hits. 

            Recognizing the uneven bargaining power that authors possess when first trying to make it big, Congress leveled the playing field by giving them the ability to recapture the copyrights they transferred to the publisher/labels 35 years ago.  Whether an artist’s record contract says he has created a work made for hire, or whether she has signed a contract promising never to terminate the transfer, it doesn’t matter because the right to terminate transfer is irrevocable.

            Congress left open many unanswered questions that courts across the country will have to answer.  With Nashville’s stature in the music and publishing industries, as well as our growing technology community, this has the potential to wreak as much havoc on business as the switch from vinyl to digital.  Given the impact of this law on our own community, I feel certain that Nashville’s federal courts will be in the center of this storm.

            The rules in this area are complicated, even to many lawyers.  They are highly technical and require jumping through many hoops.  Once the window to recapture closes, it generally closes for good.  Authors who are interested in recapturing their copyrights should start working on this right away, take this into account when writing their wills, and enlist professional help from a lawyer in this field. 

Entertainment Industry's New Copyright Alert System May Create New Form of Evidence in Copyright Infringement Lawsuits & Lead to Higher Damages

It was big news earlier this month when many of the big entertainment companies entered into an agreement with Internet service providers (ISPs) regarding efforts they will take to self-regulate and self-police copyright infringement. The name of this plan is the "Copyright Alert System."

According to the Wall St. Journal and the Center for Copyright Information, the plan has six steps, from the mildest (in issuing warnings), to the intermediate (in requiring users to acknowledge that they received notice), to the most severe (in slowing down the speed at which alleged infringers may access the Internet).

As a copyright lawyer who goes to court to resolve disputes, I am most interested in the intermediate step. It strikes me that if users are forced to acknowledge that they have received a warning that their conduct may constitute infringement and yet they proceed forward anyway, the fact that they acknowledged such warning may be used against them in a copyright infringement action. The ISPs will not be releasing the identity of these users voluntarily. But a court can always grant permission to subpoena material showing that they took this intermediate step. This new policy may be opening up a whole new world of evidence of willfulness that can be used against people who knowingly infringe on others' copyrights. And willful infringement entitles copyright plaintiffs to increased money damages.