E-Commerce Times Interview With New York Media Attorney John J. Tormey III, Esq. - Massive Hammer Falls On Megaupload

E-Commerce Times Interview With

New YorkMedia Attorney John J. Tormey III, Esq. -

Massive Hammer Falls on Megaupload

http://www.ecommercetimes.com/story/74234.html

By Rachelle Dragani

E-Commerce Times
01/20/12 10:52 AM PT

Megaupload has been shut down by the U.S. Department of Justice, which also arrested several of the site's top executives. The Hong Kong-based file-hosting site was a haven for copyrighted material, according to authorities. The D.O.J. also seized millions of dollars in assets belonging to the business and its managers.

The U.S. Department of Justice on Thursday shuttered Megaupload, a popular file-sharing website, charging seven of its executives with engaging in an international criminal enterprise based on copyright infringement.

Federal authorities called it one of the largest criminal copyright cases in U.S. history. Megaupload, its movie streaming site Megavideo, and its various sister sites were down at the time of publication.

Four of the seven execs charged are now in federal custody, including the site's founder Kim Dotcom (formerly Kim Schmitz). He and Finn Batato, Mathias Ortmann and Bram van der Kolk were arrested in New Zealand Thursday after authorities obtained about 20 search warrants around the U.S., New Zealandand seven other countries. Each of the seven accused, including the three others that remain at large, are charged with five counts of copyright infringement and conspiracy. If convicted, they could face 20 years behind bars.

They will be held at least until Monday, when there is a second hearing scheduled.

Mega Indictment

Megaupload and its corresponding sites had generated US$175 million worth of illegal proceeds, according to the D.O.J., and the losses to copyright owners added up to more than $500 million. Kim Dotcom pulled in $42 million from the site in the past year, according to authorities.

The indictment, issued by a grand jury in Virginia, details some of the reasons the D.O.J. targeted Megaupload. It claims that the site facilitated the trading of some movies even before their theatrical releases, that the site ignored removal notices from rights holders, and that the site's executives were laundering money through a Megaupload rewards program that paid users to upload certain content.

In addition to the arrests, authorities also reportedly seized artwork, electronics, guns and millions in cash from the New Zealand home. Several luxury cars, including a Rolls-Royce Phantom Drophead Coupe and a pink 1959 Cadillac were also seized. As part of the other search warrants, servers, domain names and about $50 million in assets were seized.

The site will now be run by Kaseem Dean, also known as "Swizz Beatz", who is the CEO of the site but wasn't named in the case. His partnership with the site became more well-known last month when Megaupload released "The Mega Song", which featured heavy-hitting entertainment figures such as Kanye West, Will.i.am and Kim Kardashian voicing their support for the site despite its allegedly pirated material.

Some of Megaupload's fans appear to be retaliating. Late Thursday afternoon, websites for the D.O.J., Universal Music Group, the MPAA and the RIAA were down, with the hacker community Anonymous claiming credit.

Representatives from neither the D.O.J. nor Megaupload responded to our requests for comment.

What's Up Next?

The arrests could be the beginning of a lengthy legal battle will likely ensue.

"The New Zealand authorities who arrested the Megaupload folks yesterday have promised cooperation with extradition to the U.S.", [one commentator] told the E-Commerce Times. "There will be lots of legal wrangling and motions to dismiss, to exclude certain items of evidence. Then, probably many months from now, the trial will be held, unless the parties agree to a plea bargain. Whether the defendants will be released on bail is anyone's guess".

For most of that time, the site will probably remain shuttered, and the legal plausibility of re-opening under a different domain name, one that's untouchable by U.S.regulations, is slim.

"At least in the U.S., it's likely that the shutdown of access to the site will continue. I can't say what will happen in other countries, but I'd guess that some of those who are signatory to the Berne Convention [international copyright treaty] will honor the U.S.takedown. It is certainly possible that the site could re-emerge under another domain controlled by another country, but the U.S. Courts could order U.S.-based DNS Service providers to block access there too", said [one commentator].

Concerned over the international nature of the case, several privacy protection advocates, such as the Electronic Frontier Foundation, have condemned the arrest procedure that wound up placing German and Danish citizens residing in New Zealand in the custody of U.S.authorities.

Since the indictment was issued to protect the rights of U.S. copyright holders, however, authorities could obtain worldwide search warrants.

"We're in a world economy now", entertainment lawyer John J. Tormey III told the E-Commerce Times. "Our federal government knows how to pursue, and in some cases take possession of, off-shore assets and off-shore people. The feds may be thwarted trying to reach someone in North Korea, but my bet is that they can reach someone in New Zealand".

Another Privacy Battle

The arrests and seizures occurred in the midst of another federal copyright infringement battle: the fight over the Stop Online Piracy Act, or SOPA. The bill would strengthen the powers of authorities and rights holders to crack down on sites -- even foreign ones -- that are suspected of trafficking in copyrighted content. The bill's opponents say SOPA is too broad, however, and could hurt sites that aren't engaging in illegal activity at all.

The arrests came the day after some of the Web's most popular sites such as Wikipedia and Reddit blacked out to raise awareness of SOPA.

After the arrests on Thursday, the authorities involved said the two cases were not related.

"The timing is ironic, but the investigation has been going on for quite some time. Also, indictments don't usually happen on short notice. I suspect the FBI and U.S. Attorney's office have been planning this for months. But they may have timed the arrests and shutdown of the site to capitalize on the publicity connected to yesterday's site blackouts", said [one commentator].

In zeroing in on Megaupload, the D.O.J. targeted a site with more than 150 million registered users and about 50 million daily hits. In addition, the site has the support of some big names in the entertainment industry, somewhat of a rarity for such an enterprise.

"The infringers just had a real long drink at the trough. A real long swing on the pendulum - now, we're seeing the pendulum swing back", said Tormey. "It's OK to start a new business. It's not OK to start a new business and pretend that the federal law governing the business does not exist. Pretending that the U.S. Copyright Act does not exist will probably turn out to be an extensive and expensive strategic mistake for the Napsters of our day".

Brits Demand Pirate Bay Blockade - Interview With Entertainment Attorney John J. Tormey III, Esq.

BRITS DEMAND PIRATE BAY BLOCKADE -

INTERVIEW WITH ENTERTAINMENT ATTORNEY JOHN J. TORMEY III, ESQ.

Brits Demand Pirate BayBlockade
By Rachelle Dragani
E-Commerce Times
11/07/11 11:02 AM PT
http://www.ecommercetimes.com/story/73695.html

British lobby group BPI wants one of the UK's largest Internet service providers, BT, to ban its customers from accessing file-sharing website The Pirate Bay. The site's been blocked in a handful of countries before, yet it lives on as one of the Web's most popular destinations for those looking to share copyrighted material online.

http://n4g.com/news/883338/brits-demand-pirate-bay-blockade

A coalition of film studios, record labels and media entities led by the UKrecord industry lobby group BPI recently sent a letter to British Internet service provider (ISP) BT demanding that the company block access to The Pirate Bay website.

http://current.com/technology/93533031_brits-demand-pirate-bay-blockade.htm

The group said that if BT doesn't act within two weeks, the matter will proceed to court. BPI is banking on the recent UK court decision regarding Newzbin2, a British file-sharing website recently blocked by court order.

http://www.corkboard.it/posting/show/21302-brits-demand-pirate-bay-blockade

It was the first British website to be blocked for reasons besides carrying offensive material such as child abuse images, and BPI is hoping to capitalize on that decision and get the courts to again demand blocking The Pirate Bay, which provides visitors with files that can be used to share media and data online, including copyrighted works.

http://digg.com/news/entertainment/technology_news_piracy_brits_demand_pirate_bay_blockade

It's not the first time The Pirate Bay has faced such demands since its start eight years ago by a Swedish anti-copyright organization. Lawsuits and raids have led to brief downtimes for the website, as well as restrictions, fines and prison sentences for its creators. The site is blocked in Denmark, Finland, and Italy.

http://www.startaid.com/review/19279486/Brits-Demand-Pirate-Bay-Blockade.html

BT indicated to The Guardian that it would await a court order before blocking any Web content. The Pirate Bay, BPI and BP did not respond to the E-Commerce Times' requests for further comment.

http://sitemarks.in/technology/brits-demand-pirate-bay-blockade/

Copyright Battles

"The effects of illegal downloading and piracy have certainly trickled down to the ranks of the artists and creative community", New York entertainment lawyer John J. Tormey III told the E-Commerce Times. The music industry has been transformed, the TV industry has been transformed, the book publishing industry has been transformed, and the film industry has been transformed."

http://current.com/technology/93533031_brits-demand-pirate-bay-blockade.htm

The producers of copyrighted media whose works are freely traded online have for years said their businesses are directly hurt by piracy. However, as industries start to blend together -- for example, a computer company like Apple could make deals to become a content provider -- there are many more organizations with interests in protecting copyrights.

"If the courts don't support the business of copyright, then we're pulling the rug out from under the ones who are doing it to survive, and it dis-incentivizes creation. From a global perspective, it really puts you in a less competitive place", said Tormey.

http://jtormey.newsvine.com/_news/2011/11/09/8727325-brits-demand-pirate-bay-blockade

No Going Back

Illegal downloads, illicit BitTorrent activity, unauthorized streams and other pirating methods have become so rampant it may be practically impossible for the film, music and television industries to eliminate the phenomenon entirely. If the BPI can get The Pirate Bay blocked, as it has been in other countries, there will likely still be other sites and methods for freely obtaining and sharing copyrighted material.

Since the legal system has to straddle the line between protecting freedom of speech and protecting enterprise, coupled with a technological scene that's advancing quickly, legislation has had a difficult time keeping up.

In order for copyrights to maintain their importance, then, outdated legislation might not be the answer, though it's possible for protections to catch up to technology.
http://bx.businessweek.com/entertainment-industry/e-commerce-news-piracy-brits-demand-pirate-bay-blockade/13322907556411127837-611313eb4c2aa3e6d86d6786d8713c62/

"Carriers are essentially saying they can't control what goes through the door, but the technology exists. The U.S. government has the ability to pick up on certain key words as a weapon against terrorism, so the intelligent powers know that a macro can be set up to pick up material that is harmful - so the technology exists of common carriers to pick up certain file-sharing or illegal activity", said Tormey.

Some record labels or pro-copyright groups also focus on education campaigns to counter the inability of legislation to accomplish widespread bans on illegal file-sharing.

"I'm not sure if legislation can fix the system, but I think education can", [another commentator] told the E-Commerce Times. "We have to do a better job of educating everyone about the importance of copyright because the kind of legislation we see coming out ends up being clumsy and overreaching, putting us in a situation where we end up clamping down on free speech instead of keeping the lines open".

http://blog.mmoga.com/2011/11/brits-demand-pirate-bay-blockade/

Timid Exclusive's Interview With New York Entertainment Attorney John J. Tormey III, Esq.

Timid Exclusive's Interview With New YorkEntertainment Attorney John J. Tormey III, Esq.

http://timid-exclusive.blogspot.com/2012/03/boridom-man-of-law.html

John J. Tormey III, Esq. is a heavy-hitting entertainment attorney from New York City. His mix of experience and insight on the world of entertainment has brought him great success. He is old-school and has been around long enough to find ways to help artists despite the rise in illegal downloads. I was given the privilege and honor to interview John J. Tormey III. Enjoy the experience, read the interview, and visit John J. Tormey III's website for further information:

http://www.tormey.com

INTERVIEW

1. As a lawyer, how important is protecting intellectual properties?

Well, it may not be important to all lawyers in all parts of the practice and in all jurisdictions. Many other lawyers practice in such narrow areas of specialty, and/or in such unrelated fields, that intellectual property (I.P.) issues seldom, if ever, come up for them. Yet for a music and entertainment lawyer like myself, intellectual property protection is an everyday, life-time concern and a regular challenge.

In theory, every business-owner should have a working knowledge of I.P. After all, one's own business name is a property, usually claimable as a trademark or service mark. So, too, might be a band's name or an artist's name.

Clearly anyone in the field of entertainment needs to have a working knowledge of intellectual property - and, with respect to their own original material, they need to be vigilant in regards to protecting it. The primary areas that need to be mastered in these respects, are the I.P. areas of copyright and trademark. A good starting-point is the U.S. Copyright Office (USCO) website:

http://www.copyright.gov/

 

to the extent an artist may not already be familiar with it. I first learned about copyright by writing to the USCO and requesting their written materials by mail. This was in the days before the Internet happened.

2. What is it like working with TV actors and musicians?

I love doing it, but for me it is business as usual. My father is an actor who started his career as a child actor in the 1940's. I grew up on tour with my Dad and my Mom while one and sometimes both of them were working on summer-stock or other performances.

I played guitar in a rock-and-roll band in high school with a piano-player named John ("Jojo") Hermann:

http://www.widespreadpanic.com/bio

 

who then became Widespread Panic's keyboard player. I played guitar in a rock-and-roll band in college with Tom Morello:

http://www.nightwatchmanmusic.com/

 

who then became the guitar player for Rage Against The Machine, Audioslave, and Street Sweeper Social Club, not to mention his work as The Nightwatchman. I sometimes still play rock music with members of my college band, in what little free time I have these days.

The majority of my friends are in the arts or entertainment in some way. So, it's more than working with actors and musicians. I live with actors and musicians, and in some cases I'm related to them.

3. How does it feel to be the force behind so many forms of media?

I would never say that, because I'm not the talent in the performance or recording. Maybe my clients are, if their work gets heard or seen in any individual case. I think if there is a "force" behind all of it, it's something more akin to divine inspiration - that moment when the creativity runs right through the artist as template or conduit. Artists are original but are also a product of their life-experiences, and what they have already seen and heard. The "force" of artistic creativity is a lot bigger than any one of us.

That said, I think an entertainment lawyer has to have a respect of, and also a distance from, the art form. If you lose your objectivity you can't effectively represent someone. The Hippocratic Oath of doctors is something like, "First Rule, Do No Harm". Something like that is also true for an entertainment lawyer. While the first and foremost rule is to protect the client while following the law, one special corollary for entertainment lawyers should be "Don't Impair The Art Form". In other words, don't ever substitute your own notion of artistic judgment, for that of the artist - at least not when you're working, that is. Know that the art is bigger than you.

In this respect, my clients are the force. They teach me what art really is. Every day.

4. Can you tell us a little about your early life and what led up to being an entertainment lawyer?

 

I grew up in a show business family, as did many other kids I knew in 1960's Manhattan. I grew up in mid-town. I always ran into celebrities, and always recognized them when I saw them - from the newspaper or my old black-and-white television. My mid-town neighbors growing up were Walt "Clyde" Frazier:

http://www.waltclydefrazier.com/

 

Jack Dempsey:

http://www.cmgww.com/sports/dempsey/

 

Rusty Staub:

http://rustystaub.com/

 

Jake LaMotta:

http://officialjakelamotta.com/

 

Ken Boswell:

http://en.wikipedia.org/wiki/Ken_Boswell

 

Jim Fregosi:

http://en.wikipedia.org/wiki/Jim_Fregosi

 

and Dave Marshall:

http://en.wikipedia.org/wiki/Dave_Marshall_(baseball)

I played sports at an early age. I played music at an early age. Performances are what people did, and attended, in Manhattan, and still do. I've worked in other areas of commerce, with other forms of businesses, too, but I always considered entertainment the family business - much like a boy who grew up in his father's auto-shop might be more likely to become a mechanic later on, once grown up.

The main question to me was whether I was going to be a performer, as in a baseball player or rock musician - or alternatively, work in the businesses related to those performances. By the time I made that decision, I had already lived through life on the road, and life between casting calls - not to mention with a thrown-out pitching arm and fear of tinnitus. I didn't want to spend an unspecified amount of further time lifting P.A. stacks into and out of unmarked vans, or let the gigs take any more of a physical toll on me. I was thinking long-term. I was reasonably sure that as an entertainment lawyer I could stay as close as I wanted to, to the art forms that meant something to me. I was right.

5. What other lawyers inspire you?

Any lawyer that selflessly works on causes and gives back to the community. I have worked on environmental causes in the past, and that work is the most draining type of pursuit you can ever imagine. It's all-consuming.

My main inspirations are Phil Hoffman, Esq., who was my mentor when I started in the practice of law at Pryor Cashman in New York in 1987 - as well as my entertainment law professor from UCLA School Of Law, Gary Stiffelman, Esq. What they taught me, I take with me and use, every day of my working life.

6. What advice do you have for aspiring musicians?

Well, I wouldn't want my thoughts in an article misconstrued as legal advice for any specific person in any specific situation. That kind of advice should only be sought and obtained in a one-to-one and private dialogue with counsel.

However, I can summarize the things I might say to aspiring musicians who are friends of mine. The main thing now, is not to give up. Collectively, we have just turned the corner, in terms of the American economy, and in terms of the music industry specifically.

Many nay-sayers for the past few years doubted whether new artists could ever make money and support themselves on music ever again. Sure, in some respects it is more difficult to do, post-digital downloading. But the music industry has already re-invented itself. The center of gravity is now performance and touring revenue, and merchandise. Don't fight the new model. Embrace the new model.

Furthermore, there is so much more that artists can do now to promote sales and make themselves known, including social media. And the trend is towards eliminating the middlemen who used to interject themselves into every income-stream. Embrace the new model. Make it your own.

I used to have music friends who were afraid to use cell phones. Now, those same friends are managing their publishing businesses with secure lap-tops while on tour. The main bit of advice to music friends always is, "Empower yourself, control your own destiny, and make sure that you (or your counsel) generate all your own documents". I tend to see artists as in either of one or two groups - "Victims", and "Empowered". The fundamental distinction between the two groups, is that the "Victims" make themselves beholden to other people's documents, whereas the "Empowered" control the drafting of their own documents. With the availability of desktop-publishing since the 1980's, there is no excuse now for not controlling the drafting of the documents that affect your life or your career. There is no reason to ever blindly sign on to someone else's form. All that does is make more work for the litigators.

7. What is your opinion on the current state of the music industry?

I'm sanguine about it.

The best new feature is the ability of artists to self-distribute, either by sale of CD's on tour at retail, or over the Internet.

The worst new feature also relates to the Internet, though, too - the ability of pirates to poach material digitally, in a matter of milliseconds.

Personally, I am happy that a premium is now placed on artists doing live performances, and more of them. To me, that is what the art form is really about, anyway. There are bands re-grouping after 20 or 25 years of inactivity, and going back out on the road. In a way, it's a shame that current economic realities force them back out on the road when they earlier thought they could comfortably retire on royalties. But the fact of the matter is, it's a good thing that one or two whole new generations of music fans now have an opportunity to see and hear these bands and artists. After all, once these bands and artists are gone, all that may remain are the recordings - and the recordings just aren't the same thing as a live performance, or the meet-and-greet afterwards.

8. What's the hardest part of being involved in the entertainment industry?

Knowing that some talent remains undiscovered... and, these days, seeing a trend towards the replacement of union talent with non-union talent, which is a somewhat-related issue. The just-world-hypothesis tells us that talent and hard work should be rewarded. It often is. But it is not always rewarded. Unfortunately politics and luck sometimes play a part in the reward outcome, too.

That said, the trend towards artist self-distribution might be the panacea. The market, the public, should decide which art they want to pay to hear, see, and experience. The decision should not be force-fed to the public by the same 3 or 5 corporate conglomerates.

So I think generally, the hardest part about being involved in the entertainment industry, is knowing that the continued concentration of economic power therein, in the hands of a few rather than many, prevents a lot of good material from being heard or seen.

My hope is that this changes in my lifetime, and that I get to see it. I am going to continue to fight to make the change happen, too.

evolver.fm Interview With John J. Tormey III, Esq., New York Music Lawyer: Reversions Of Masters, Terminations Of Transfers, And Derivative Works Under The United States Copyright Act

EVOLVER.FM INTERVIEW WITH JOHN J. TORMEY III, ESQ., NEW YORKMUSIC LAWYER: REVERSIONS OF MASTERS, TERMINATIONS OF TRANSFERS, AND DERIVATIVE WORKS UNDER THE UNITED STATES COPYRIGHT ACT
http://evolver.fm/2012/02/29/why-mastered-for-itunes-wont-defuse-a-copyright-time-bomb/
http://www.evolver.fm/

Interview by Eliot Van Buskirk

Why ‘Mastered For iTunes’ Won’t Defuse A Copyright Time-Bomb

Next year, in 2013, a time-bomb embedded in the Copyright Act of 1976 starts to detonate, as valuable copyrights fall back into the hands of artists who decide that they would prefer to own their songs, rather than allowing their label and publisher to keep selling them.

Recordings released in 1978 will be up for copyright termination in 2013, even if artists legally sold those songs away decades ago. Recordings from 1979 fall into this category in 2014, and so on, over the years.

These are valuable copyrights, useful for licensing in movies, advertisements, and videogames in addition to being sold in iTunes and elsewhere.  Wouldn’t it be convenient if the labels could devise a way to hang on to those sound recordings? After all, everyone from the guy behind “Funkytown” (listen above) to The Eagles is lawyering up to take back songs sold to labels and publishers.

Indeed, Mitch Glazer, later hired as a lobbyist for the RIAA, gave the labels some grounds to keep these copyrights by adding a provision to the Copyright Act in 1999 that attempts to categorize sound recordings as “works for hire” made by musicians as employees of the labels. The U.S. Registrar of Copyrights objected strongly to the addition because it changed the law, rather than correcting an oversight. (Update: The provision was repealed [thanks, Eriq Gardner], although sources we’ve spoken with say the “works for hire” issue is still at play today). Our courts — possibly the Supreme Court — will likely have to untangle the whole mess after artists start trying to get their songs back next year, with notices already being filed.

One magical option for the labels would be to create a new sound recording copyright for these songs — say, by remastering them for iTunes. It did seem a bit odd that Apple, after listening to audiophiles complain for nearly nine years about the sound quality of songs sold in iTunes, would unveil its “Mastered for iTunes” program the very year before these old copyrights started reverting. Could the labels’ ace in the hole be a plan to sell newly-copyrighted remasters while allowing the old and busted ones to revert?

After hearing from multiple lawyers and other sources (some who would not comment on the record), we’re convinced that Mastered for iTunes cannot allow record labels to defuse this copyright time bomb — even though movie studios have been granted new copyrights for colorizing black-and-white movies. As it turns out, the difference between the regular version of the song and the “remastered for iTunes” version is too small, from a legal perspective, to justify a new copyright (and with it another 35 years of label control). For a new copyright, a band would have to go farther than that — say, by recording a new version.

[One source] summed things up by phone, putting our mind at ease that “Remastered for iTunes” cannot be a copyright land-grab disguised as an improvement in compressed sound quality. Casey Rae-Hunter, deputy director of the Future of Music Coalition agreed, saying that there’s not enough change in expression between the original and the remaster. (Apple and all four major labels declined to respond.) Then we heard back from New Yorkentertainment lawyer John Tormey III, Esq. (email) with a remarkably in-depth explanation of why Remastered for iTunes won’t stop copyrights from reverting to artists starting next year.

If you’re interested in the intricacies of this situation, buckle up:

[Said John J. Tormey III], "First of all, none of my comments are intended to speak to Apple’s specific situation, or the specific situation of Apple adversaries if any.

Second, the two parts to your question may be apples-to-oranges, to some degree. Though there will always be exceptions, those in your hypothetical question taking action to retrieve “revert[ed]” music-related copyrights under the Termination Of Transfer provisions of the U.S. Copyright Act – See 17 United States Code (U.S.C.) § 203

http://www.law.cornell.edu/uscode/text/17/203

and 17 U.S.C. § 304

http://www.law.cornell.edu/uscode/text/17/304

– would more typically be songwriters or their families seeking a “return home” of rights in the old songs (compositions), rather than in their corresponding masters (sound recordings). Those are two different rights, albeit corresponding to the same album material perhaps. In fact, the United States Copyright Office (USCO) has two different forms for these two different rights – USCO “Form PA” corresponds to songs (compositions):

http://www.copyright.gov/forms/formpa.pdf

whereas USCO “Form SR” corresponds to masters (sound recordings):

http://www.copyright.gov/forms/formsr.pdf

 

Traditionally in pop music record-deal history, songs have been exploited by and through publishing companies and performance rights societies:

http://www.ascap.com/

http://www.bmi.com/

http://www.sesac.com/

as agreed and permitted by the original songwriter (generally speaking and to simplify, “publishing”) – whereas rights to the masters traditionally originated with, and often stayed with, the record labels. So, the songwriter/musician signed to a traditional record deal may have retained his/her “publishing” and even received a per-unit record royalty (or been stiffed out of one, perhaps), but that doesn’t mean that the songwriter/musician ever had ownership in the master (sound recording).

But for the sake of your hypothetical, let’s assume that a songwriter/musician somehow originally held both sets of rights (1. Songs, 2. Masters) in the same initially-self-produced album. And now, there’s a later-occurring transferee or licensee, like an Internet distribution company, trying to stave off the songwriter/musician’s family’s pursuit of revert[ed] (or as I sometimes colloquially say, “recaptured”) rights under the Termination Of Transfer provisions of § 203:

http://www.law.cornell.edu/uscode/text/17/203

or § 304:

http://www.law.cornell.edu/uscode/text/17/304

 

Sure, your hypothetical Internet company can try to claim a “new copyright” in a newly-reworked master:

http://www.copyright.gov/circs/circ14.pdf

and can even try to file a new (or additional) Form SR with the United States Copyright Office (USCO) corresponding to it, but: (A) the USCO, federal courts, and jury might still disregard the Internet company’s claim and filing post facto, and adjudicate to same effect when the claimed “new” right is administratively-tested and/or forensically-tested; (B) the Internet company may be making the “new” claim and filing for “bluff” purposes alone and full well know how flimsy their theory is under their own fact-pattern, never having any intention to go to court or even to the USCO with the “new copyright” theory; and (C) the analysis could be affected by whether the copyright in and to the original, underlying sound recording has already fallen into the public domain (PD):

http://www.copyright.gov/help/faq/faq-definitions.html

at time of the remastering. If a party in the old chain-of-title for the original master failed to timely file a renewal when the statute required, for example, the copyright in the underlying original work could already be PD, and a new claim and filing won’t bring it back from the dead.

“Derivative work” is a term of art under the Copyright Act. Under the Copyright Act, a “derivative work” is defined as a work based upon one or more pre[-]existing works… such as a new musical arrangement – or, yes, a “transformed” “sound recording” – your very case. See 17 U.S.C. § 101:

http://www.law.cornell.edu/uscode/text/17/101

 

Depending upon factual circumstances, one could argue that a remaster based upon an original master, is a derivative work of the original master, yet I think that would pre-suppose audibly-detectible differences between the first and second master such that USCO, judge, and jury wouldn’t otherwise simply hear the two as identically the same. Jurors, particularly, aren’t always musicians.

Let’s assume, though, that your hypothetical new master is significantly audibly-distinct from, and even improved with respect to, the first master. Still, as stated by the Second Circuit, a derivative (work) copyright is a good copyright only with regards to the original embellishments and additions made [to] the underlying work. See, e.g., Harvey Cartoons v. Columbia Pictures, 645 F. Supp. 1564, 1570 (SDNY, 1986):

http://www.leagle.com/xmlResult.aspx?page=4&xmldoc=19862209645FSupp1564_11974.xml&docbase=CSLWAR2-1986-2006&SizeDisp=7

 

Copyright in a derivative… work merely protects against copying or otherwise infringing… the original contribution contained in the derivative work. HarveyCartoons v. ColumbiaPictures, 645 F. Supp. 1564 (SDNY, 1986):

http://www.leagle.com/xmlResult.aspx?page=4&xmldoc=19862209645FSupp1564_11974.xml&docbase=CSLWAR2-1986-2006&SizeDisp=7

See also Rohauer v. Killiam, 551 F.2d 484 (2nd Cir. 1977).

http://federal-circuits.vlex.com/vid/rohauer-killiam-shows-36847796

 

So, yes, the Internet company could try to claim a “new” copyright in the new master. But that claim is limited to the incrementally-added material, at best:

http://www.law.cornell.edu/uscode/text/17/103

 

And that “new” claim shouldn’t extend the old copyright term in the underlying master – else the limitations on the term of copyright under 17 U.S.C. § 302 would be rendered meaningless thereby:

http://www.law.cornell.edu/uscode/text/17/302

 

Imagine record labels re-registering new masters every few years, on into perpetuity perhaps, subverting the purpose and intent of the Copyright Act – which instead only intends to confer a limited but not perpetual lawful monopoly to rights-holders.

Rather, the best that the Internet company in your hypothetical can hope for, when claiming and registering a copyright in the new master, is to seek protection in the new additions made to the old work. That being said, if a USCO Examiner, federal judge, and/or jury can’t actually hear the changes between the old and new work, then the claimant is going to have a difficult if not impossible time as a practical matter alone, using federal law and the judicial process to enforce those “new” claimed rights. Also, if the original underlying sound recording has already fallen into the public domain, the claimant will likely not evoke much judicial sympathy under the hot lights of litigation, to say the least, as the claimant’s new action will look more like a ruse trying to resuscitate dead rights than anything else. In other words, under most scenarios, there won’t likely be much substance to the remasterer’s “new claim”.

As for whether or not the claimant could try to use the new claim or filing for the re-master as a shield against songwriter descendants proceeding under the Copyright Act’s Termination Of Transfer provisions (17 U.S.C. § 203, and 17 U.S.C. § 304):

http://www.law.cornell.edu/uscode/text/17/203

http://www.law.cornell.edu/uscode/text/17/304

 

I doubt that that approach would be effective under most circumstances, except maybe as a bluff perhaps. The statute and legislative intent are clear that the party acting pursuant to the Termination Of Transfer provisions of the Copyright Act, should be entitled to recapture (or as the statute says, “rever[sion]“) of the original rights as the statute provides. Most “recapturing” parties in your hypothetical would likely be pursuing recaptured rights to compositions rather than sound recordings. The majority of such Termination Of Transfer scenarios in music will be songwriter-families recapturing rights to songs and not masters. Their songwriter forebears often never maintained rights in the masters to begin with".

There you have it.

Publishing And Digital And Electronic Rights - Part I: Written By New York Entertainment Attorney And Publishing Lawyer John J. Tormey III, Esq.

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Law Office of John J. Tormey III, Esq. – Entertainment Lawyer, Entertainment Attorney

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Publishing And Digital And Electronic Rights - Part I: Written By New York Entertainment Attorney And Publishing Lawyer John J. Tormey III, Esq.

© John J. Tormey III, PLLC. All Rights Reserved.

This article is not intended to, and does not constitute, legal advice with respect to your particular situation and fact pattern. Do secure counsel promptly, if you see any legal issue looming on the horizon which may affect your career or your rights. What applies in one context, may not apply to the next one. Make sure that you seek individualized legal advice as to any important matter pertaining to your career or your rights generally.

The following publishing industry article addresses some of the legal issues arising for publishing lawyers, entertainment attorneys, authors, and others as a result of the prevalence of e-mail, the Internet, and so-called “digital” and “electronic publishing”. As usual, publishing law generally and the law of the digital right and electronic right specifically, governing these commercial activities, has been slow to catch up to the activity itself. Yet most of the publishing industry “gray areas” can be resolved by imposing old common-sense interpretations upon new publishing lawyer and entertainment lawyer industry constructs, including the digital right and electronic right, and others. And if after reviewing this article you believe you have a non-jargonized handle on the distinction between “digital right” and “electronic right” in the publishing context, then I look forward to hearing from you and reading your article, too.

1. “Electronic Right[s]” And “Digital Right[s]” Are Not Self-Defining.

All publishing lawyers, entertainment attorneys, authors, and others must be very careful about the use of jargon - publishing industry jargon, or otherwise. Electronic and digital publishing is a recent phenomenon. Although as a publishing lawyer and entertainment attorney and unlike some others, I tend to use the phrase “electronic right” or even “digital right” in the singular number, there probably tends to be no single consensus as to what constitutes and collectively comprises the singular “electronic right” or “digital right”. There has not been sufficient time for the publishing, media, or entertainment industries to fully crystallize accurate and complete definitions of phrases like “electronic publishing”, “web publishing”, “electronic right[s]”, “e-rights”, “digital rights”, or “first electronic rights”.

These phrases are therefore usually just assumed or, worse yet, just plain fudged. Anyone who suggests that these phrases alone are already self-defining, would be wrong.

Accordingly, anyone, including a publishing lawyer or paralegal representing a book publisher or entertainment lawyer representing a studio or producer, who says that an author should do - or not do – something in the realm of the “electronic right” or “digital right” because it is “industry-standard”, should automatically be treated with suspicion and skepticism.

The fact of the matter is, this is a great era for authors as well as author-side publishing lawyers and entertainment attorneys, and they should seize the moment. The fact that “industry-standard” definitions of the electronic right and digital right have yet to fully crystallize, (if indeed they ever do), means that authors and author-side publishing lawyers and entertainment attorneys can take advantage of this moment in history.

Of course, authors can also be taken advantage of, too – particularly those not represented by a publishing lawyer or entertainment attorney. There is a long and unfortunate history of that happening, well prior to the advent of the electronic right and digital right. It has probably happened since the days of the Gutenberg Press.

Every author should be represented by a publishing lawyer, entertainment attorney, or other counsel before signing any publishing or other agreement, provided that their own economic resources will allow it. (But I am admittedly biased in that regard). Part of the publishing lawyer and entertainment attorney’s function in representing the author, is to tease apart the different strands that collectively comprise the electronic right or digital right. This must be done with updated reference to current technology. If your advisor on this point is instead a family member with a Smith-Corona cartridge typewriter or a Commodore PET, rather than an entertainment attorney or publishing lawyer, then it may be time to seek a new advisor.

Even authors who cannot afford publishing lawyer or entertainment attorney counsel, however, should avoid agreeing in writing to give broad contractual grants to publishers of “electronic publishing” - or the “electronic right”, or “electronic rights” or “digital rights”, or the “digital right”. Rather, in the words of “Tears For Fears”, the author and author counsel had “better break it down again”. Before agreeing to grant anyone the author’s “digital right: or “electronic right”, or any elements thereof, the author and his or her publishing lawyer and entertainment attorney need to make a list of all the possible and manifold electronic ways that the written work could be disseminated, exploited, or digitally or electronically otherwise used. Notice that the author’s list will likely vary, month to month, given the fast pace of technological advancements. For example, these kinds of questions can be considered by the author and publishing lawyer and entertainment attorney alike:

Electronic Digital Right Question #1, Asked By The Publishing Lawyer/Entertainment Attorney To The Author: Can the work be published in whole or in part on the Internet? In the context of an “e-zine”? Otherwise? If so, how? For what purpose? Free to the reader? For a charge to the reader?

Electronic Digital Right Question #2, Asked By The Publishing Lawyer/Entertainment Attorney To The Author: Can the work be disseminated through private e-mail lists or “listservs”? Free to the reader? For a charge to the reader?

Electronic Digital Right Question #3, Asked By The Publishing Lawyer/Entertainment Attorney To The Author: Can the work be distributed on CD-Rom? By whom? In what manner and context?

Electronic Digital Right Question #4, Asked By The Publishing Lawyer/Entertainment Attorney To The Author: To what extent does the author, himself or herself, wish to self-publish this work, either before or after granting any electronic right or any individual “electronic publishing” rights therein to someone else? Will such self-publication occur on or through the author’s website? Otherwise?

Electronic Digital Right Question #5, Asked By The Publishing Lawyer/Entertainment Attorney To The Author: Even if the author does not self-publish, to what extent does the author wish to be able to use and disseminate this writing for his or her own portfolio, publicity, or self-marketing purposes, and perhaps disseminate that same writing (or excerpts thereof) electronically? Should that be deemed invasive of, or competitive with, the electronic right as otherwise contractually and collectively constituted?

The above list is illustrative but not exhaustive. Any author and any publishing lawyer and entertainment attorney will likely think of other elements of the electronic and digital right and other uses as well. The number of possible uses and complexities of the electronic right[s] and digital right[s] definitions will increase as technology advances. In addition, different authors will have different responses to the publishing lawyer and entertainment attorney, to each of the carefully-itemized questions. Moreover, the same author may be concerned with the electronic right in the context of one of his/her works, but may not care so much in the context of a second and different work not as susceptible to digital right exploitation. Therefore, the author must self-examine on these types of electronic and digital right questions before responding to the author’s publishing lawyer or entertainment attorney and then entering into each individual deal. Only by doing so can the author avoid the pitfalls and perils of relying upon lingo, and relying upon someone else to dictate to them what is the electronic right or digital right “industry standard”. As the publishing lawyer and entertainment attorney should opine, “There is no such thing as ‘industry standard’ in the context of a bilaterally-negotiated contract. The only standard that you the author should be worried about is the motivational ‘standard’ known as: ‘if you don’t ask, you don’t get’”.

Finally, the author should be aware that while the electronic right, digital right, and components thereof can be expressly granted, they can also be expressly reserved to the author, by a mere stroke of the pen or keystroke made by the publishing lawyer or entertainment attorney. For example, if an author wants to expressly reserve the “portfolio uses” mentioned in Electronic Digital Right Question #5 above, then the author should ask his or her publishing lawyer or entertainment attorney to clearly recite this reservation of the author portfolio electronic/digital right in the contract, and leave nothing to chance. In addition, if the author has some negotiating leverage, the author, through the publishing lawyer or entertainment attorney, may be able to negotiate the “safety net” of a “savings clause” which provides words to the effect that: “all rights not expressly granted to publisher, be it an electronic right or digital right or otherwise, are specifically reserved to author for his/her sole use and benefit”. That way, the “default provision” of the contract may automatically capture un-granted rights including any electronic or digital right for the author’s later use. This publishing lawyer and entertainment attorney drafting technique has likely saved empires in the past.

2. Publishers and Entertainment Companies Are Revising Their Boilerplate Agreements, As We Speak, In An Effort To Secure The Electronic Right[s].

It is well-known and should come as no surprise that right now, as we speak, publishers and their in-house and outside counsel publishing lawyers and entertainment attorneys are furiously re-drafting their boilerplate contracts to more thoroughly capture the digital and electronic right – that is, all of an author’s digital and electronic rights. The typical publishing agreement drafted by a company-side publishing lawyer or entertainment attorney will recite a broad grant of rights, then followed by a whole laundry-list of “including but not limited to” examples. If the author receives such an onerous-looking rights passage from a publisher or the publisher’s publishing lawyer or entertainment attorney, the author should not be intimidated. Rather, the author should look at it as an opportunity to make some money and have some fun. The author can first compare the list suggested in Electronic Digital Right Questions #1 through #5 above, to the publisher’s own laundry-list and the author’s own imagination. Then, the author can decide which if any of the separate digital or electronic rights the author wants to fight to keep for himself or herself.

If the publisher tells the author to blindly subscribe to their entire digital or electronic right[s] clause (or clauses), then the author still has the ultimate leverage, which is to walk away from the proposed deal prior to signature. Of course, this strategic approach wouldn’t be advisable in most cases - unless perhaps if the author has other written offers from other publishers already on the table. However, an author shouldn’t be forced by any publisher or any company-side publishing lawyer or entertainment attorney to sign away the electronic right, digital right, or any other rights that the author would rather keep - particularly rights which the author never specifically intended to shop to the publisher in the first instance.

The author should keep in mind the psychology and motivations of the publishers and their publishing lawyer and entertainment attorney counsel when doing all of this. A Vice-President (or above) at the publishing company probably woke up one recent morning, and realized that his/her company lost a great deal of money on a particular project by not taking a prospective license or assignment of an electronic right or digital right from another author. The VP probably then blamed the company’s in-house legal department publishing lawyers or entertainment attorneys, who in turn started frantically re-drafting the company boilerplate to assuage the angry publishing executive and thereby keep their jobs. When in-house publishing lawyers, entertainment attorneys, or others engage in this type of practice (some may call it “drafting from fear”), they tend to go overboard.

Accordingly, what you will probably see is a proverbial “kitchen sink” electronic right clause which has been newly-drafted and perhaps even insufficiently reviewed by the company-side publishing lawyers and entertainment attorneys, internally and themselves - wherein the publisher will ask the author for every possible electronic and digital right and every other thing, including (without limitation) the kitchen sink. The only response to such a broad-band electronic right or digital right clause is a careful, deliberate, and methodical reply.

Using the approach outlined in Section #1 above, the author and the author’s publishing lawyer or entertainment attorney counsel must separately tease apart each use and component of the electronic right and digital right that the publisher’s broad-band clause might otherwise capture, and then opine to the publisher a “yes” or a “no” on each line-item. In other words, the author, through his or her publishing lawyer or entertainment attorney, should exercise his or her line-item veto. It’s the author’s writing that we are talking about, after all. The author should be the one to convert the singular “electronic right” or “digital right” into the laundry-list of electronic rights. That’s why I use the singular number when referring to “electronic right” or “digital right” – I like to let the technologically-advanced author have all the fun making the list. That way, too, the author can tell me what he or she thinks the phrases actually mean, and what the difference between the two meanings really is, if anything.

The next installment of this article, Part II, will - believe it or not - have a few words in defense of the publishers and the publishing lawyers that work for them!

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My law practice as a publishing lawyer and entertainment attorney includes the drafting, editing, negotiation, and closure of agreements including digital and electronic rights matters as they may arise therein, as well as in the fields of music, film, television, Internet, and other media and art forms. If you have questions about legal issues which affect your career, and require representation, please contact me:

Law Office of John J. Tormey III, Esq.

John J. Tormey III, PLLC

1324 Lexington Avenue, PMB 188

New York, NY  10128  USA

(212) 410-4142 (phone)

(212) 410-2380 (fax)

brightline@att.net

http://www.tormey.org/

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