So if  digital music service or broadcaster  has a license with some random third party they get to limit my rights?   How is this even constitutional?

The recently proposed “Transparency in Music Licensing and Ownership Act” (Sensenbrenner R-WI)  or as we prefer “The Shiv Act” looks to me like an unconstitutional “taking” under the fifth amendment. I am not a lawyer, but I don’t see how the letter and spirit of the law are not violated.  Of all the problems with this bill, this one is the most egregious.   Whether it is poorly written or intentionally designed this way is irrelevant.  The bill has nothing to do with “transparency” as we explained earlier this week.   The bill is simply a series of conditions (impossible to fulfill) that would take away a songwriters rights to receive statutory penalties and legal fees when a service fails to license and pay royalties. The only recourse songwriters have to mass infringement from digital services  is to sue the service in  Federal Court.  My experience suggests it’s a minimum of $250,000 to mount such a case.  Without legal fees and statutory penalties as currently required under the copyright act, services will simply use songwriters songs without license and payment.  There will be no effective recourse for songwriters.

The way in which this bill achieves this result is highly questionable.  First the bill forces songwriters to submit specific information to a mandatory federal database that songwriters cannot know in advance.  If the songwriter fails to do this, the songwriter loses their rights.  This is the Catch-22 flaw.   The second flaw is what I call the “Mandatory Airbnb” loophole.

The paragraph in the screenshot above is a paragraph of the bill.  It is a “sufficient” condition that activates the previous limitation on songwriters rights.  In layman’s terms this paragraph says, if a service has one license with ANY composition or recording owner, then all other songwriters are bound by this third party contract.  Whether a songwriter has a contract or license with the service or not they can never sue for damages or receive legal fees.  Even if the songwriter wins.  Further the royalty rate the third party has agreed to is now your royalty rate.  How is this even constitutional?

So let’s put it in terms of Airbnb.  Suppose your neighbor rents their house under a contract with Airbnb. Then one day Airbnb negligently (or willfully) rents out your house.  You have no contract with Airbnb.  This is a clear violation of your exclusive property rights so you sue Airbnb.   If the rules of this bill were applied to the house rental market, you would not be entitled to penalties or legal fees,  instead Airbnb would simply have to pay you the nightly rate your neighbor received, that’s it. In effect the government is taking your property and making it part of the Airbnb service to rent out under the terms of your neighbor’s contract.  This takes away a valuable right of millions of property owners to write their own contracts to rent their houses.

And what if the homeowner already has an exclusive contract with someone other than AirBnB?  Suppose that you have a contract with GMR Vacation House Rentals (a fictional company).   GMRVHR rents your home for a significantly higher amount than the maximum Airbnb is required to pay under this law.   But because Airbnb keeps renting out your house and you have no effective recourse to stop them, the government is effectively “taking” the difference between the two rates without compensation or due process.  Further the government is making a previous legal contract between GMRVHR and you invalid without compensation or due process.

I could go with example after example but I think most readers will grasp the insanity of the bill from this.  The whole thing is particularly unbelievable when you consider that it is a mass transfer of wealth from rank and file songwriters, to Google, Amazon, Apple, Spotify, Clear Channel and the Silicon Valley and Wall Street billionaires that back these companies.