More Bizarre Goings On At the Copyright Royalty Board, this time with additional Google, fava beans and a fine Chianti

[This post first appeared on MusicTechPolicy]

by Chris Castle

One of the main beefs I’ve had with the Copyright Royalty Board is the secrecy in plain sight. Very few people follow what’s going on there, yet every time you move a rock, another toad hops out. Now that we are turning our attention to the streaming mechanical proceeding–which as we were told ad nauseam is the important one, don’t you know–the first thing we find is the shameful antics of Google on full display.

Remember–the Copyright Royalty Board split the rate proceedings in two. One was for the physical and download mechanical (paid by record companies) and one for the streaming mechanical (paid by digital music services), all under the compulsory license which was adopted for the huge benefit of each music user. And of course if it’s compulsory it takes (there’s that word again) away the rights of songwriters to bargain and set their own price without government intervention. (There are alternative ways to do this such as the Nordic model of extended collective licensing that David Lowery discussed in an important blog post a few years ago.)

The Copyright Royalty Judges are given the unenviable task of divining what a willing buyer would pay a willing seller in the open market. Of course that willing/willing rate is a complete legal fiction because in the novella of statutory rates there hasn’t been an open market for over 100 years which for rate setting purposes means there has never been an open market for songwriters. Why? Not sure, really, but there must have been an original sin, the novella tells us so. We can only assume that when that writer room door closes, those pesky songwriters just naturally start colluding, unlike Facebook, Amazon, Apple, Spotify and especially Google. Google who have never been prosecuted for violating the Controlled Substances Act for which they paid a $500,000,000 fine and who we let take over our children like they were a trustworthy television network or something.

So since there’s never been an open market because the government took the songwriters’ rights back in 1909 in this case (and 1941 in the case of the ASCAP consent decree), you can well imagine that a cottage industry of executives, lawyers and lobbyists have grown up to service the bizarre rate setting process that has totally lost their way in my view. It’s hard to believe when we read the shenanigans going on in front of the Judges that this is all designed to determine the value of songs. There are 38 lawyers billing time in the streaming proceeding which will raise the transaction cost of the proceeding to an absurd and Kafka-esque level, but it does help you understand why the lobbyists think that proceeding is so important–it’s definitely more important to them.

Which leads us to the extremely Googley discovery request that Google has filed and the Judges appear to have approved. In a nutshell, Google has said that they only way that the rates can be set is if the Judges force the National Music Publishers Association and the Nashville Songwriters Association International to turn over all to Google of your accounting statements and licenses so Google can determine if the past earnings back up the NMPA and NSAI royalty claims made by their many Lecterian lawyers.

But don’t feel bad–it’s not like they will be turning over the data to the public, just to Google. What a relief, right?

Here’s what the order actually says:

That’s right–Google wants “Music Publishers” to produce all the royalty statements for the most successful songwriters in the world to “test” whether songwriters are struggling financially. Given that this will involve many, many statements which probably have to have personally identifiable information redacted, it’s going to take many hours which is great for those who get paid by the hour but not so great for those who get paid by the song.

Is there no other way to determine whether mechanical royalties have declined to subsistence levels? Surely there must be, and you know what else? There’s also a way to test whether mechanical royalties have declined to below subsistence levels which is really the point here, right?

Yes, I got your test right here, soulless Google lawyers.

But wait, there’s more. Google also wants to raise transaction costs on songwriters by forcing the production of all “free market” licenses. (“Free market” benchmarks are themselves a laughable concept in a hugely distorted market that still suffers from the governments negligent wage and price control of a 2¢ rate from 1909 to 1978).

And given the parameters of the Copyright Royalty Board, the Judges seem to have granted Google’s request in part for the statements and entirely for the licenses.

You do have to ask whether there’s anything songwriters can do to keep their confidential royalty statements and license agreements out of the hands of the Leviathan of Mountain View. It does seem that there could be a process to intervene in the Phonorecords IV case to stop this from happening. Just because Google is trying to prove that songwriter income has not been decimated when we all know it has been does not seem to require the humiliation of having your royalty statements put on display. This is definitely something to speak about to your lawyer and your publisher.

This entire exchange is exceptionally bizarre because the “Copyright Owners” are the NMPA and NSAI, neither of whom own copyrights, send statements or enter licenses. And yet there seems to be an assumption that some group of publishers are bound by the order. I can only assume that the publishers who are on the receiving end of this order are the music publisher affiliates of the CRB participants at the group level of Sony, Universal and Warner, although the order doesn’t really demonstrate that connective tissue because…well, it doesn’t. Publisher affiliates are not participating and if the principle and policy is that every stand alone affiliate of a corporate parent is participating and subject to discovery because the corporate parent is…well, that’s an interesting proposition.

Before you heave a sigh of relieve that only the songwriters signed to a major will have their privacy invaded by the greatest privacy invader of all time, that would be Google hands down, just realize the cost of what can happen if you were to have the temerity to think you could participate in the Copyright Royalty Board. 

You can have one of the biggest corporations in commercial history that rips you off every minute of every day and essentially prints money in the public market that they use to destroy your rights and creations sick their army of soul-crushing lawyers on you to prove that songwriters are dying penniless because of Google’s income transfer. And still pay you a number that starts many decimal places to the right and laugh about it over steaks at The Palm with fava beans and a fine Chianti.

All Economic Indicators Are Flashing Red at the Copyright Royalty Board on Frozen Mechanicals–MusicTech.Solutions

by Chris Castle

All of the economic indicators are telling us that inflation is going to be around for a while–so songwriters should expect some cost of living adjustment based on the Consumer Price Index when the Copyright Royalty Board sets mechanical royalty rates, especially for the frozen mechanical rate on physical phonorecords. Why do I say that?

The U.S. Consumer Price Index closed 2021 at 7%. That is the highest inflation level since 1982–and remember in 1982 the U.S. had already had a solid two to three years of Federal Reserve Chairman Paul Volker’s anti-inflationary surge after the malaise of the 1970s.

The Producer Price Index for 2021 was measured at 9.7% by the Bureau of Labor Statistics, the largest calendar year increase since 2010. The PPI is a leading indicator of inflation as measured by the CPI because it measures a large basket of raw inputs and future price increases that will affect the CPI in weeks or months.

The University of Michigan survey of consumer sentiment fell to 68.8%, its second lowest level in a decade (the lowest being in November 2021). The survey also measured “confidence in government economic policies is at its lowest level since 2014.” The consumer sentiment survey indicates that consumers expect bad times ahead, or at least expensive times. This can have a pronounced effect on consumer inflation expectations.

Consumer inflation expectations remained unchanged after rising strongly over the last year, particularly the one-year outlook. Inflation expectations can be a self-fulfilling driver of inflation for a number of reasons such as FOMO pricing on homes and cars as well as wages–if you expect inflation to rise x% in the next 12 months, today you will seek wage increases of at least x% (if not more).

All of this tells us that the entire idea of extending the freeze on statutory mechanical royalties gets more absurd by the day. It’s entirely reasonable to “index” statutory mechanical royalties during the current rate setting period of 2023-2027 as we’ll all be very lucky to get through that period without suffering crippling inflation that will further erode the 2006 rates the CRB has used for the past 15 years.

[Why this wasn’t fixed in Music Modernization Act is anyone’s guess. This post first appeared on MusicTech.Solutions]

Justice, Thy Name is Kathy: NY @GovKathyHochul Vetoes the Metashills’ Illegal Library Compulsory License

By Chris Castle

[This post originally appeared on MusicTechPolicy.]

Yesterday (Dec. 29), the Big Tech tetrarchy got dealt some bad cards: New York Governor Kathy Hochul vetoed their unconstitutional land grab for a compulsory license for books that would have had a crippling effect on New York authors. Authors everywhere should appreciate Governor Hochul’s clear-eyed rejection of the Big Tech metashills at “Library Futures” and their mean-spirited end run around centuries of US copyright law. The wheels of justice turn slowly, but they do turn.

How did this veto happen? First, I want to thank all of the Trichordist readers who signed the petition calling on Governor Hochul to veto NY Assembly bill 5827B. (Read the backgrounder here.) There is no substitute for direct grass roots action on these efforts, particularly when you are on the side of righteousness in the season of hope. But it must also be said that authors should thank the Authors Guild, the Association of American Publishers and the Copyright Alliance for standing in the breach against the horrendous injustice of the vile legislation. I know our readers are not always joiners and are often skeptical of these groups, but it’s a round world and they did a fabulous job in marshaling resources and focus.

But most of all, we have to be grateful to Governor Hochul who realized that she was being jammed by a bunch of low down grifters pushing hateful legislation and gave them what they deserved.  In the words of Maria Pallante, head of the American Association of Publishers, a long-time defender of copyright:

We thank Governor Hochul for taking decisive action to protect the legal framework that has long incentivized the American private sector to invest in, publish, and distribute original works of authorship to the public, in service to society. The bill that she vetoed was rushed through the state legislature in response to a coordinated, misinformation campaign supported by Big Tech interests and lobbying groups that are notorious for wanting to weaken copyright protections for their own gain.

What she said.

So let’s give a cheer for the team and then get back up on the wall. The price of liberty is eternal vigilance. The metashills are not going away and the fight goes on.

The Revenge of the Internet Archive: Google and the Metashills Lead the Long March Through State Houses to Weaken Copyright for the Metaverse

By Chris Castle [This post first appeared on MusicTechPolicy]

[Trichordist readers will not be surprised to know that Artist Enemy No. 1 Senator Ron Wyden (aka Senator Data Center) is leading the charge of the insane bagmen to impose a compulsory license on any content that gets in the way of Facebook, Google and the metaverse.]

Google has led a long march through the institutions to weaken copyright by propping up proxy warriors who mean to take us in a rush. That effort has now come to a head in Maryland with a bizarre statute that got through the Maryland legislature Tommy Carcetti-style–a state law compulsory license for ebooks. (Maryland Education Code §§ 23-701, 23-702).

The Maryland law is wrong for so many reasons, but is also an unconstitutional usurpation of the federal government’s exclusive domain over copyright. This is a solution in search of a problem–ebooks are already routinely licensed to libraries under voluntary agreements at a market rate. The legislation would allow the State of Maryland to force the authors to license but the state would set the rates. Songwriters can tell you this is a nightmarish process at the federal level–and by the way songwriters, you’re next, just see the fever dream of compulsory licenses for sync (see Here Comes the New Dark Age: Blanket Licenses for Everything Based on the MMA). Just because a library is a non-profit doesn’t mean they get everything free or get to dictate the price. The librarians certainly don’t work for free so how can they expect the authors to do so?

There has never been a compulsory license for books and you have to believe that the Maryland law is a probing operation by Big Tech to see whether their land grab works at the state level. Do you think the oligarchs could jam a compulsory license for books through Congress if their true invisible hand was seen? Unlikely. If they couldn’t do it with wind in their sales from a noxious disease that devastated those pesky small businesses but enriched Big Tech beyond comprehension, it seems unlikely that they could get it through Congress during the nadir of Big Tech popularity.

This machine-state strategy is also an in-your-face rebuke to Senator Thom Tillis’ opposition to the Internet Archive’s pandemic rights-gouging practices, a rebuke that is supported by the “Library Futures” front group (which bears a striking strategic similarity to Engine Advocacy). Needless to say these “metashills” include all the usual suspects among their members including the Internet Archive next to the panoply of anti-artist groups.

The way shills become metashills is that they get grouped togther–economical for the donors and makes them look bigger than they are like a self-inflating animal.

Why does an obviously unconstitutional bill become law? Unhinged, you say? Blatantly unconstitutional from another looneyverse? True, and yet there it is, a monument to bagmen and shills. There is no other explanation for how this legislation got through that paragon of high-minded public policy, that epitoma suprema of the virtuous life and good government where corruption fears to tread also known as the Maryland General Assembly. (Followed closely in Annapolis’s sister city Albany, another hotbed of honesty.)

What about Google’s long march through the institutions? You may have neutral to fond memories of librarians from school days but I encourage you to look deeper. Is that librarian a helpful smart person? Or someone else. Is that librarian someone who grew up feeling ignored and overlooked like the one who never got asked to do the fun things? Is that librarian the one who really wrote the Great American Novel but had that Creative Writing Masters Thesis go–gasp–unpublished? Is that librarian someone who is ripe for manipulation and grooming by unfathomably rich people in the addiction business who claim to understand their problems and want to be their allies to Alinsky those who dared to commercialize their beloved books, those helpful tech moguls who want to build the Digital Library of Alexandria for the greater good and promise to not be evil? You know, for all mankind?

Whatever actually happened, Google has weaponized libraries starting at least with their mass digitization project that ultimately became the kloogy Google Books that one academic described as a “disaster for scholars” and that was the subject of criticism as culturally biased by no less than Jean-Noël Jeanneney, a former president of France’s Bibliothèque nationale in a scathing critique.

So not all librarians sip the Kool-Aid imported from the Googleplex or aspire to heated bidets. And not all state houses are as welcoming to Google and the other Tech Oligarchs as they were even a year ago or so when Senator Tillis recognized that the Internet Archive was being weaponized by its honcho Brewster Kahle (pronounced “kale”) against the world’s authors. Why do I think this? Because an anonymous whistleblower librarian gave us some insight into what is really going on in the faculty dining room in an open letter to Brewster Kahle during his pandemic-induced land grab he called the “National Emergency Library”:

You claim [the Archive is a] charitable organization. Charitable organizations provide money from their own funds to those in need or they collect donations of money or property, voluntarily offered by the original owners, to distribute to those in need. Taking from others despite their objections and offering the stolen material to those in need does not fall into the description of a charitable organization. It is, as has been pointed out, looting.

Your activity undermines the copyright system for your own benefit and in the financial interests of some of the wealthiest corporations in history. As has been said, the Internet Archive is not a public service but a pirate website. You are not here to help others- you are helping yourself to others’ property. It’s unfortunate that your supporters can’t admit this, or don’t realize it.

Well said. And let’s understand that what the Silicon Valley oligarchs really want is a true compulsory license for all works of copyright–which I think is exactly what the eponymous Mr. Kahle was actually after with his National Emergency Library, what Google wanted with Google Books, what YouTube wanted with the DMCA, and what Grokster and Morpheus wanted with file sharing. (Note that Napster was always trying to get a license, however hamhandedly, and shut down when they couldn’t get one.)

The Anonymous Librarian goes on to offer a lifeboat, which, unfortunately, will be summarily ignored by the metashills. While she was speaking of the pandemic effort at a compulsory license, these are words that will ring through the history of all these misguided efforts at undermining copyright:

It is a tragedy within a tragedy that anyone supports you in this effort to steal livelihoods away from authors who struggle to create the works that we love to read, as is evidenced by the glowing praise for the books you have taken and given away.

Brewster, you claim that the Internet Archive is a library- but do you want to know what real libraries do? They pay license fees for e-books and then allow their users to access the books. To be decent and truly human, you will apologize to the world and discontinue your grotesquely unfair challenge to authors. You will transform into something resembling a real library and provide funds to license access to these books for the benefit of the public. You have enough financial assets to pay for licenses to use these works. It has been pointed out that you have more than 100 million dollars in your Kahle-Austin Foundation [Now where might that $100 million have come from?]. You could provide the books to the public by paying license fees to authors and publishers- that is what real libraries do.

You could do this, Brewster, and then you would get real praise, and you would be worthy of it.

Pitch perfect summary of what is going on in Maryland and what may be going on in New York. In order to stop the Maryland bill from going into effect in 2022, authors are going to have to dip into their pockets to litigate against states with unlimited litigation budgets backstopped by the biggest corporations in commercial history. This is a familiar role to anyone trying to protect artist rights which is a group that clearly doesn’t include the Maryland General Assembly or Maryland Governor Larry Hogan who should all be ashamed of themselves. If you want to tell the Governor what you think of his unconstitutional travesty, you can contact him here.

Worse yet, it appears that New York has passed similar legislation that may be sitting on the Governor’s desk. I guess the real question is whether New York Attorney General Leticia James would like to come by the Algonquin Hotel to explain why New York has a compelling interest in crushing New York authors.

Isn’t this a crime? @silvermanjacob: Inside Jedi Blue, Facebook’s Shady Deal With Google–ArtistRightsWatch

As a torrent of bad press consumes Facebook — or whatever the company may soon be renamed — it’s worth remembering that to become an industry-dominating social-media Goliath, sometimes you need a little help from your friends. Perhaps they’re better described as co-conspirators.

Over the past year, a series of court filings by 15 state attorneys general have exposed what amounts to secret collusion between Google and Facebook to rig the online ad market in their favor and to keep out competitors. Details keep percolating up — last week, a New York judge unsealed yet more documents shining light on the arrangement — but we’ve already learned a great deal, revealing just how far two tech giants will go to preserve their lucrative hold over online advertising. (A Google spokesperson said the claims in the suit are “baseless” and riddled with inaccuracies.”)

Read the post on New York Magazine

YouTube Using Market Power to Rip Off Artists–Again

Who Are These Law Clerks, Anyway?

[This post first appeared on Artist Rights Watch]

By Chris Castle

If you’re not a lawyer, you may not be that familiar with law clerks. The title sounds very…well, clerical. But make no mistake, they are very powerful people who are largely unknown to clients but who are in the room with their judges, often every step of the way. As Wikipedia tells us:

law clerk or a judicial clerk is an individual—generally an attorney—who provides direct assistance and counsel to a judge in making legal determinations and in writing opinions by researching issues before the court. Judicial clerks often play significant roles in the formation of case law through their influence upon judges’ decisions.

Yet, we know virtually nothing about them from the outside. If your case is heard, wouldn’t you want to know about everyone who was influencing the outcome of your case?

There are ethical rules that cover judicial clerks, such as Maintaining the Public Trust: Ethics For Federal Judicial Law Clerks issued by the Judicial Conference Committee on Codes of Conduct which admonishes clerks that the rules apply to them, too:

During your clerkship, you will provide valuable assistance as your judge resolves disputes that are of great importance to the parties, and often to the public. The parties and the public accept judges’ rulings because they trust the system to be fair and impartial. Maintaining this trust is crucial to the continued success of our courts. That’s why, although you have many responsibilities that demand your attention, you must never lose sight of your ethical obligations.

While that all sounds good, how would anyone ever know exactly what the story is with the clerks who are writing opinions with their judge or justice that directly affect the outcome of your case. As the ethical rules clearly state:

Although many of your obligations are the same as those of other federal judicial employees, certain restrictions are more stringent because of your special position in relation to the judge. Some obligations continue after your service to the court concludes.

But again–how would you ever know? If you go to the bible of the revolving door, Open Secrets, you’ll notice someone is missing…the entire judicial branch of our government.

Let’s take the easy one: Conflicts of interest. When does a law clerk have a conflict of interest? The rulebook tells us:

Canon 3F(1) of the Code of Conduct advises judicial employees, including law clerks, to avoid conflicts of interest. Conflicts arise when you—or your spouse or other close relative—might be so personally or financially affected by a matter that a reasonable person would question your impartiality. 

Note the disjunct: “personally or financially affected.” Either can give rise to a conflict or a question as to the clerk’s impartiality.

Conflicts come in several flavors, but two biggies are actual conflicts and potential conflicts, very routine inquiries in any conflict check. The ethical rules for clerks give examples of each: For example, an actual conflict is “The firm where you plan to work after your clerkship serves as counsel in a matter before your judge”. “Firm” in this case presumably applies to the situation where a company where the clerk plans to work appears before the judge.

A potential conflict includes “An attorney you met and talked with at a social function appears to argue a motion before your judge.” It’s not a far reach to think that the example would include a former professor, amicus, or author of an amicus brief filed or to be filed in a case before your judge.

But the point is, how would the litigants ever know any of these situations were an issue. Who keeps track of who knows whom among the clerks cloistered away in the ivory tower?

Let’s take a concrete example from the Above the Law Supreme Court Watch blog which handicaps U.S. Supreme Court clerk hires:

Joshua Revesz (Yale 2017/Garland) will be clerking for Justice Kagan in OT 2020. If his distinctive surname rings a bell, perhaps you’ve heard of his famous father: Professor Richard “Ricky” Revesz, former Dean of NYU Law School, and a former Supreme Court clerk (OT 1984/Marshall).

Readers of ARW may also recognize the name from a different place: The deep and abiding controversy over the American Law Institute’s failing Restatement of Copyright project. Professor Revesz joined the ALI in 2014 right after the noted Lowery insulter, Spotify lawyer, Lessig mentee and all round anti-copyright advocate Christopher Jon Sprigman joined the NYU faculty in 2013, presumably under then-Dean Richard Revesz.

Somehow–we don’t know exactly how–of all the lawyers in all the world, how ALI Director Revesz chose Professor Sprigman to run the Restatement of Copyright project, an undertaking that by all reports is devoted to weakening copyright and expanding loopholes for Big Tech. How do we know this? Because Sprigman pitched Revesz on the idea very soon after Revesz took over at ALI.

And the rest is history with everyone from authors to the Congress criticizing the very idea of a Restatement of Copyright; indeed, Professor Peter Menell of the UC Berkeley law school and Professor Shyamkrishna Balganesh of Columbia law school wrote an extensive critique that “explains why perfunctory extension of the common law Restatement model to copyright law produces incoherent, misleading and seemingly biased results that risks undermining the legitimacy of the eventual product.”  (“The Curious Case of the Restatement of Copyright“).  In other words–it’s bad.

It will come as no surprise that I would go further–I think that is exactly the purpose of the Restatement (and Professor Samuelson’s Copyright Principles Project it descends from).

Hold on, you say–what does this have to do with Clerk Revesz and his judge, Supreme Court Justice Elena Kagan, the former Dean of Harvard Law School (whose remarks at the 10 year anniversary celebration of the Berkman Center are illuminating (home to both Lessig and poker aficionado and alleged counsel to copyright infringer Mr. Tennenbaum, Charles Nesson)).  Maybe nothing.

But isn’t it the kind of thing you might want to know about someone who was in close contact with someone who was deciding the outcome of your case?  Or was in close contact with other clerks who were deciding the outcome of your case?  How would you ever know what contacts the clerks had with anyone who might be influencing their case or who had donated money to an institution that benefited the family member of someone who had influence over your case?  Either directly, over cocktail party conversation or the dinner table?  I am not implying any skulduggery here, it could all have been very innocent or appear so as conflicts often do.  

Did it happen?  We don’t know, because when we go to Open Secrets there’s no judicial branch disclosure.  Now certainly judges have to file public financial disclosures.  (That’s how we knew about Judge Ware’s employment by Santa Clara Law School when he presided over the Google Buzz cy pres and ordered $500,000 be given to that university–“now-retired federal district judge James Ware rewrote the settlement to direct $500,000 to Santa Clara Law School, where he taught. The money went to fund a center for ethics.”)

While their judges are obligated to public financial disclosures, clerks do not have such obligations to litigants, much less to the public.  Disposition of conflicts disclosed by clerks seem to be handled in chambers without consulting the litigants.

Given the number of clerks in chambers across the country, the possibility for conflicts are significant.  When a lawyer has a conflict of interest that is waivable, she must give the client the option to waive the conflict with informed consent.  But if the conflict is not waivable or the client refuses to waive, the lawyer must decline the representation.  

Is there a corollary for law clerks?  There definitely are rules and there definitely are processes.  But are the litigants ever asked if they consent to a conflicted clerk working on their case?

I’ve never heard of it.  Maybe there should be such a process.

Guest Post: Honesty In Our Favor: HFA Loses Attempt To Exit Eight Mile Style Case–What Implications For MLC?

Guest post by Chris Castle

The Uniform Commercial Code defines “good faith” as “honesty in fact and the observance of reasonable commercial standards of fair dealing.”

Spotify was sued by Eight Mile Style and Martin Affiliated, two publishers that control rights in some of the early Eminem repertoire, including Lose Yourself. Remember that earlier this year, Spotify announced with great fanfare that Lose Yourself was streamed over 1 billion times on the platform. That’s just one measurement of Eminem’s dominance on Spotify. Turns out that Spotify had failed to license a good chunk of Eminem’s catalog.

The publishers eventually joined the Harry Fox Agency to the lawsuit as participating in the situation, adding claims of vicarious and contributory copyright infringement against the long-time publishing administrator to the industry. In fact, the Harry Fox Agency gave some people the impression that when it came to Section 115 of the Copyright Act, HFA thought they were the government. What ever is this venerable organization doing getting sued for copyright infringement instead of leading the charge against the infringer?

At one point a few years ago, quite a few years ago now, HFA decided to jump up on top of the wall. They started working for tech companies like Spotify and also administering publishing rights. That’s right–both sides. What could possibly go wrong?

Let me illustrate with an anecdote (one that does not involve HFA, or MRI for that matter). A highly ethical licensing administrator interviewed for a job handling music licensing for a big tech company. After several rounds of interviews, the administrator was told they weren’t getting the job. Asking for a reason, the tech company told the administrator that the company thought the administrator were likely going to flag and at least try to fix any problems they found in the tech company’s reporting. The administrator didn’t find this remarkable as this was the honest thing to do. The company said, we don’t want honesty when it’s not in our favor. The company hired someone else because they did not want “honesty in fact”.

There are serious allegations against the Harry Fox Agency in the Eight Mile Case. Remember, this is a defense motion to dismiss, so the plaintiff largely gets the benefit of the doubt in their favor. You may ask yourself what possible motivation could Spotify have for engaging in such risky behavior. In her order denying in part and granting in part HFA’s motion to dismiss, Judge Trauger puts her finger right on the most plausible explanation:

[I]t is undisputed that [Eminem, aka Marshall] Mathers is an artist who has enjoyed extraordinary commercial success and has built a large, dedicated fanbase, such that his omission from a major streaming platform might discourage some meaningful number of potential users from subscribing

In other words, they did it for the subscribers, they did it for the growth and they did it for the money.

While Eight Mile alleged both vicarious and contributory infringement, Judge Trauger dismissed the claim for vicarious infringement on technical grounds (with leave to amend). Not so with the claim for contributory infringement, however:

HFA objects that it was under no obligation to police Spotify’s in-house decisions regarding infringement. Whether that is true or not, the plaintiffs have not merely alleged that HFA failed to affirmatively police Spotify’s conduct; they have alleged both that HFA knew and, through the ordinary fulfillment of its duties, should have known that the infringement was occurring and that HFA was helping to conceal it.…There is little doubt, moreover, that those allegations of knowledge were pleaded sufficiently. Even when a claim is governed by the heightened pleading requirements of Rule 9(b), “[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). The Supreme Court, moreover, has recognized a party’s “aiming to satisfy a known source of demand for copyright infringement” as evidence of an improper purpose in the contributory infringement analysis. Grokster, 545 U.S. at 939. That circumstantial evidence is only heightened when the defendant, knowing of the capacity for infringement, fails to take steps to avoid it. See id. (citing Groskter’s lack of “attempt[s] to develop filtering tools or other mechanisms to diminish the infringing activity using their software”).

The plaintiffs have plausibly alleged that HFA became aware of Spotify’s licensing predicament and offered services that directly filled its need to maintain an illusion of lawfulness while continuing to infringe. 

If these allegations turn out to be proven true, songwriters (and the Copyright Office for that matter) may well ask themselves if there are implications for HFA’s continued role as a vendor for The MLC, if not why they were selected in the first place.

This post first appeared in MusicTechPolicy

Thank You @irvingazoff!

“These people, when they start out — whether it’s Facebook, Snapchat, TikTok, whatever — they resist paying for music until you go beat the f— out of them. And then of course, none of them pay fair market value and they get away with it. Your company’s worth $30 billion and you can’t spend 20 grand for a song that becomes a phenomenon on your channel? Even when they pay, artists don’t get enough. Writers don’t get enough

Thank God for Irving Azoff! (Although how about $1 trillion?) In a must-read profile interview with the LA Times, The Great One lays down the only strategy that works with Big Tech–not unity dinners, not lobbyist sell-outs, not sucking up to monopolists like Daniel Ek. And you know why he’s right? Because they do it to us and weakness in the face of bullies is not an option.

Yes, Dr. Azoff has identified the Tech Gene that turns entrepreneurship into a kleptocracy faster than you can say disrupt. But what should we expect in the coming years given the Tech Gene pandemic? The Big Tech kleptocracy goes way beyond stealing from creators.

Moonalice band member and venture capital investor Roger McNamee recently wrote a good description of policy expectations in Wired:

One of the policy areas that demands a new approach is technology. New technologies like facial recognition and artificial intelligence have been plagued by racial and gender bias, with particular harm in areas like law enforcement, job hiring, and mortgage applications. Internet platforms like Facebook, YouTube, Instagram, and Twitter have amplified hate speech, disinformation, and conspiracy theories, undermining our politics, our pandemic response, and the safety of our citizens. More than 1,000 marketers have joined the #StopHateForProfit campaign, agreeing to pause their advertising on Facebook for a month or more to protest the amplification of hate. In addition, many companies in Silicon Valley have been accused of racial and gender bias relative to employees, most recently Facebook, where an employee and two applicants filed a complaint of alleged racial bias. For all its past contributions to our nation, Silicon Valley now has issues with culture, business models, and business practices that require government intervention.

Imagine my disappointment last week when The New York Times reported that President Obama had suggested that you work with two members of the Silicon Valley establishment, former Google CEO Eric Schmidt and LinkedIn founder Reid Hoffman. I know both men well. They are brilliant and very successful. Their money and expertise may be valuable to your campaign, but I hope you will not turn to them for policy guidance. They were architects of the culture and values that produced the problems I described above.

I hope you will take to heart the words of Albert Einstein, who said, “We cannot solve our problems with the same thinking we used when we created them.” This is particularly true in tech.

And the New York times story said:

Mr. Biden’s campaign and transition team include advisers with ties to tech companies and other industries that worry liberals. Avril Haines, a former Obama national security and intelligenceofficial who is helping to lead Mr. Biden’s transition team, was a consultant for the data-mining company Palantir and WestExec Advisors, a firm that represented a major tech company it hasn’t identified.

A WestExec co-founder and Obama State Department official, Antony J. Blinken, is running the Biden campaign’s foreign policy operation. WestExec has worked with the philanthropy started by Eric Schmidt, the former Google chairman, and with Google’s in-house incubation unit, Jigsaw. But Mr. Blinken and Ms. Haines did not participate in that work, according to the Biden campaign, which said both advisers stepped away from WestExec this month.

Cynthia C. Hogan, a former White House lawyer for Mr. Biden who is helping to lead his vice-presidential selection process, was a lobbyist and government affairs executive at Apple. She tendered her resignation from the company in April, according to the Biden campaign.

If you’ve never heard about these advisory network, don’t be surprised. As the Times tells us:

list of rules provided to members of the policy groups, a copy of which was obtained by The Times, instructs participants not to disclose their participation “on social media such as Facebook or LinkedIn or in your professional bio.” It also warns them not to discuss or distribute names of other committee members, contents of committee conversations, emails from the committee or to talk to the news media.

“Simply put, do not talk to the press,” the document reads, emphasizing “do not talk to the press” in boldface.

Biden Press

And what is Eric Schmidt doing?  According to Recode:

Google Cypress

Yes, to paraphrase former government official Susan Crawford, it looks like “Uncle Sugar” Eric is trying to “geek around the nation state.” Why? It’s very odd but it’s exactly the kind of thing that Roger McNamee warned of. As Recode tells us, it could be a COVID play to allow Uncle Sugar to travel to raves in Europe more easily (as Cyprus citizenship gets him an EU passport), but:

[I]t is still uncommon to see Americans apply to the Cyprus program, according to published data and citizenship advisers who work with the country. The program is far more popular with oligarchs from the former Soviet Union and the Middle East, and it has become mired in so many scandals that the Cypriot government announced last month that it was to be shut down.

But not for Uncle Sugar. So there goes the confirmation hearing. Why did Uncle leave Google again? We never got an answer to that or why his NY pad is soundproofed–from the inside.

Yes, they’re psycho kleptocrats just like Irving says, and it looks like they’re back. But thankfully we have Irving Azoff and we’re not waiting for the cavalry to save us–which they never have.