More than 1,000 musicians have come together to release Is This What You Want?, an album protesting the UK government’s proposed changes to copyright law.
In late 2024, the UK government proposed changing copyright law to allow artificial intelligence companies to build their products using other people’s copyrighted work – music, artworks, text, and more – without a licence.
The musicians on this album came together to protest this. The album consists of recordings of empty studios and performance spaces, representing the impact we expect the government’s proposals would have on musicians’ livelihoods.
All profits from the album are being donated to the charity Help Musicians.
It’s becoming increasingly clear that the MLC has little to no oversight. The Copyright Office is tasked by Congress with oversight authority over this quasi-governmental organization under the Music Modernization Act. Yet there is nothing happening in the way of guardrails. The Copyright Office haven’t even concluded their mandated five-year review of the MLC that started a year ago. Not only has no one responded to Congressman Fitzgerald’s inquiries about the MLC’s oddball finances, the Copyright Office hasn’t responded to the many public comments demanding answers on the MLC’s sketchy finances as demonstrated on their tax returns.
The MLC’s 2023 tax return shows the quango is holding $1,212,282,220 invested in publicly traded securities–that’s $1.2 BILLION. That’s a fortune for an organization that makes no money–because as we were told ad nauseum the services pay it’s operating costs and bloated salaries-and has no profits because it is not an operating company. But it does hold several fortunes in unmatched royalties it does not seem to be in a hurry to match and pay out to songwriters.
The Supplement to the MLC’s 2023 tax return includes this language:
In our Form 990 for 2023, we provided information regarding funds we were holding in banks and investments as of the beginning of 2023 and the end of 2023. These included assessment funds that we subsequently use to fund our operations; royalty funds we were not yet able to distribute and on which we are required to earn interest in accordance with the Music Modernization Act (MMA) of 2018; and royalty funds we were holding pending distribution.
What the MMA actually says in the black box penalty language of 17 USC §115 (d)(3)(H)(ii) is:
Interest-bearing account.—Accrued royalties for unmatched works (and shares thereof) shall be maintained by the mechanical licensing collective in an interest-bearing account that earns monthly interest—
(I) at the Federal, short-term rate; and
(II) that accrues for the benefit of copyright owners entitled to payment of such accrued royalties.
The black box penalty in 17 USC §115 (d)(3)(H)(ii) is similar to the late fee charged to licensees. The code creates an incentive for the MLC to pay out unmatched funds quickly to avoid the market share distribution of black box which could happen any minute now (particularly since the Copyright Office hasn’t completed the five-year review it started over a year ago).
This language of 17 USC §115 (d)(3)(H)(ii) does not “require” the MLC to “earn interest”, it requires them to PAY interest. Because it is inextricably tied to job performance, it would not be a payment borne by the licensees as part of the administrative assessment as part of the “collective total costs.”
That’s why it’s a penalty. It is, in my view, absolutely false and misleading to state in a matter under the jurisdiction of the federal government that the MLC is in compliance with a code section that does not say what they say it says. And it’s not just this one time, the CEO has said almost these exact words in testimony to the House IP Subcommittee and in supplemental written testimony to answer questions for the record from the Subcommittee.
Even if you want to be generous and accept the MLC’s argument–and it’s just an argument–that the MMA “requires” the MLC to “earn” interest, an “interest bearing account” simply does not contemplate “investing” other people’s money–your money–in publicly traded securities by a stock broker. When asked direct questions about who bears the downside and who gets the ups on their stock trading, the MLC has never answered the question.
The closest to an answer we get from the plain statutory language is that the MLC is required to pay interest on unmatched funds at the “federal short term rate” which is approximately 4.23%. Does that mean that if the MLC makes more than a 4.23% return they keep the upside? Or if the stock brokers don’t achieve that return, does that mean the licensees cough up the difference in additional administrative assessment contributions? Unlikely, so would the MLC’s board members pass the hat? I’ll believe that when I see it.
While the MLC refuses to answer who participates in the benefits or downside of the investment policy, the amount invested in publicly traded securities over 12 months has radically increased from $804,555,579 at the beginning of 2023. As of the end of 2023, the MLC’s holdings in publicly traded securities alone increased to $1,212,282,220, approximately a 50% gain over 12 months. What we don’t know is if that gain is due to slick stock trading, monkey with a dartboard or the addition of new money, Madoff-style. (And of course if they do manage to “blow up the compulsory” which is the latest from the smart people, who knows who gets to keep the black box?)
The MLC offers this explanation:
At the beginning of 2023, we were holding $138.8 million in “Savings and temporary cash investments.” By the end of 2023, we had moved $131.1 million of these funds to “Investments – publicly traded securities,” leaving the remaining $7.7 million in “Savings and temporary cash investments.” At the beginning of 2023, we were holding $804.6 million in “Investments – publicly traded securities.” By the end of 2023, the amount of funds we were holding in this category increased to $1.2 billion. This year-end amount included the $131.1 million we had moved from “Savings and temporary cash investments” into this category during the year.
Realize that this language explains nothing. Not only do they round down by $12,282,220, they simply describe movements of cash without explaining why it happened.
So once again, we are presented with a document that avoids the key issue at best and is misleading at worst. But what is clear is that the MLC has more in holdings that approximately 130 regional banks that have substantial disclosure obligations. It’s looking more and more like a hedge fund.
In a rare treat, Abby North and Chris Castle got to speak with New Orleans attorney Tim Kappel about his client’s case Vetter v. Resnick. The landmark case stands for winning the long-fought principle that termination rights in copyright cause the transfer of the worldwide copyright not just US rights as had been the business practice. The case is a major victory for songwriters and their heirs.
Cyril Vetter and Don Smith co-wrote the song “Double Shot (Of My Baby’s Love)” in 1962. They assigned all their interests in the song to Windsong Music Publishers. Vetter later served a termination notice on Resnick to recapture his rights under the U.S. Copyright Act, arguing that this termination applied globally, not just in the U.S. Resnick rejected Vetter’s global termination and Vetter sued for declaratory relief in the Middle District of Louisiana.
In a major win for songwriters and their heirs, Chief District Judge Shelly D. Dick agreed with Vetter, granting him worldwide rights to the song, which contradicted established but inequitable business practices in the U.S. music publishing industry. In the podcast, Chris Castle and Abby North discuss the case with Vetter’s attorney, Tim Kappel. These documents are referenced in the podcast.
The Government has been defeated in the Lords over measures to protect creatives from having their copyrighted work used to train AI models without permission or remuneration. [The House of Lords is the “upper chamber” of the UK Parliament, similar to the US Senate.]
Peers [Members of the House of Lords] voted 145 to 126, majority 19, in favour of a package of amendments to the Data (Use and Access) Bill aiming to tackle the unauthorised use of intellectual property by big tech companies scraping data for AI.
Proposing the amendments, digital rights campaigner Baroness Kidron said they would help enforce existing property rights by improving transparency and laying out a redress procedure.
The measures would explicitly subject AI companies to UK copyright law, regardless of where they are based, reveal the names and owners of web crawlers that currently operate anonymously and allow copyright owners to know when, where and how their work is used.
The MLC, Inc. has to disclose its “highest compensated” employees on its nonprofit Form 990 tax return for 2023. The Copyright Office was supposed to be reviewing public comments on whether the MLC, Inc. should be renewed for another five years or if the party is over. That review has been going on for a year now, maybe they forgot? The party is obviously still going strong.
Let’s be honest–it may look like things are getting weird with TikTok and Bytedance, but let me suggest things are maybe even weirder than they appear. New information has come to light.
First of all, I think it’s clear that at least as of January 19, the Protecting Americans from Foreign Adversary Controlled Applications Act will make it unlawful for companies in the United States to provide services to distribute, maintain, or update the social media platform TikTok, unless U. S. operation of the platform is severed from Chinese control which basically means owned by Bytedance. It’s potentially clear–although the situation is changing daily in Trump time–that the statute may also ban a number of other data-scraping apps owned and distributed by Bytedance that have problems and addictive properties similar to TikTok.
After TikTok’s faux shut down, President Trump immediately got into the act to “Save TikTok”. His first move was to post on social media that he would issue an executive order today “delaying” the effectiveness of the Act. Mr. Trump’s statements may have seemed a bit disjointed because from a statutory point of view, the President does not have the authority to “delay” the effectiveness of the Act. In fact, that is exactly what the Supreme Court just refused to do.
But “Saving TikTok” may not mean saving TikTok if you catch my drift. Saving it for whom exactly?
This may all seem rather bizarre, but if you read President Trump’s “Friend of the Court” brief filed during the Supreme Court’s review of TikTok’s request for a delay in enforcing the Act, it would all be clear–maybe–because that is exactly what he asked the Supreme Court to do–delay the effective date so the could apply Art of the Deal principles to the situation. This is, of course, not what the Supreme Court really is about, but it does reveal what was on his mind. The President says:
In light of this Court’s well-placed concerns about the “highly expedited” resolution of novel, difficult, and “very significant” constitutional questions…the Court should consider staying the statutory deadline for divestment and taking time to consider the merits in the ordinary course. Such an approach would allow this Court more breathing space to consider the merits, and it would also allow President Trump’s Administration the opportunity to pursue a negotiated resolution that, if successful, would obviate the need for this Court to decide these questions.
When a statute has been duly passed by Congress and signed into law by the then-sitting President (Biden) and upheld by the Supreme Court, the next President as chief magistrate must likely enforce the law under the “Take Care” clause of the Constitution (“take care that the laws be faithfully executed” in Article II, Section 3 for those reading along at home).
Of late there has, of course, been an unfortunate reliance on what I think is a misinterpretation of “prosecutorial discretion” that I personally find loathsome and flat out wrong. Prosecutorial discretion historically has been decisions based on resources and the strength of the evidence in particular cases; doing otherwise often results in the prosecutor getting unelected (see, e.g., Chesa Boudin and George Gascon). We’ll see if this dubious practice will continue.
Without getting into the entire history of executive orders that exceed presidential authority, there isn’t a clear precedent for a presidential executive order actually limiting the enforcement of an act of Congress that has been upheld by the Supreme Court (like the TikTok divestment). One notable and frequently cited case is Youngstown Sheet & Tube Co. v. Sawyer (1952), where the Supreme Court struck down then-President Harry Truman’s executive order to seize control of steel mills during the Korean War. The Court ruled that President Truman lacked the constitutional or statutory authority to issue such an order in a somewhat but not entirely similar situation to TikTok. In general, executive orders are subject to judicial review, and it is pretty old news that the Supreme Court has the power to strike down executive actions that exceed presidential authority or violate the Constitution. That principle of US law was established in 1803 by our first Chief Justice of the Supreme Court.
Having said that, I do understand why President Trump is trolling TikTok, or at least I think I do today. As he said in a speech to his supporters regarding a solution for TikTok’s problem (and has repeated a number of times since his inauguration):
So I said very simply, a joint venture. So, if TikTok is worth nothing, zero without an approval, you know you don’t approve, they’re out of business, they’re worth nothing.
If you do approve, they’re worth like a trillion dollars, they’re worth some crazy number. So I said, I’ll approve, but let the United States of America own 50% of TikTok. I’m approving on behalf of the United States.
So they’ll have a partner, the United States, and they’ll have a lot of bidders and the United States will do what we call a joint venture. And there’s no risk, we’re not putting up any money. All we’re doing is giving them the approval without which they don’t have anything.
As I’ve said before, President Trump has all the leverage that anyone could have in a situation where the Chinese Communist Party has their eye fixed on an IPO on the New York Stock Exchange. Not to be conspiratorial, but I do find it interesting that shortly before the Supreme Court decision, Softbank’s CEO committed to investing $100 billion in the US–Softbank being a major investor in TikTok and a beneficiary of that IPO and the same CEO just committed a portion of $500 billion to the Stargate AI infrastructure investment alongside Oracle and OpenAI.
I do think that someone might challenge any executive order that is inconsistent with the Truman precedent in the Youngstown Supreme Court case. The Supreme Court could probably strike down such an executive order. In the meantime, President Trump will likely be trying to close a deal to sell TikTok and destroy the CCP’s connection to user data. At some point, Congress may have to get involved again to bless whatever the final deal is.
So could Trump pull this off? Oh, yes, he could. It would be unusual, but not impossible in my judgement. Murky, yes. But when the dust settles, it looks like TikTok doesn’t have much of a choice. They will either hand over 50% of its company to the US (either in the form of voting power (like “golden shares“), stock or a financial interest), or they can shut down. And it may not just be TikTok–it may be all of the Bytedance companies that have a TikTok problem. Even though giving up a 50% share would essentially cut in half any ownership stake of Softbank, there may be some tolerance given that the alternative is zero–not just for TikTok, by the way, but potentially all of the Bytedance companies.
Is giving up 50% of your company because your lawyers and lobbyists failed a happy thing? Do you think Xi Jinping is in the habit of giving a hug when someone he’s paid a fortune to fails miserably? Not really. I would not want to be the food taster for TikTok’s head lobbyists.
Of course, the US should not take on any of TikTok’s obligations or litigation, such as the Multidistrict Social Media Addiction Litigation which potentially has massive liabilities for TikTok. TikTok’s benefit from social media addiction should not be lost on anyone given the user reaction that TikTok has riled up. Social media addiction is a real thing.
Stay tuned, we’ll see what happens. Whatever happens, it won’t change the fact that TikTok pays garbage royalties if they pay at all.
The Trichordist 
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