Record industry faces liability over 'infringement'

By Michael Geist

Chet Baker was a leading jazz musician in the 1950s, playing trumpet and providing vocals. Baker died in 1988, yet he is about to add a new claim to fame as the lead plaintiff in possibly the largest copyright infringement case in Canadian history. His estate, which still owns the copyright in more than 50 of his works, is part of a massive class-action lawsuit that has been underway for the past year.

The infringer has effectively already admitted owing at least $50 million and the full claim could exceed $6 billion. If the dollars don't shock, the target of the lawsuit undoubtedly will: The defendants in the case are Warner Music Canada, Sony BMG Music Canada, EMI Music Canada, and Universal Music Canada, the four primary members of the Canadian Recording Industry Association.

The CRIA members were hit with the lawsuit in October 2008 after artists decided to turn to the courts following decades of frustration with the rampant infringement (I am adviser to the Canadian Internet Policy and Public Interest Clinic, which is co-counsel, but have had no involvement in the case).

The claims arise from a longstanding practice of the recording industry in Canada, described in the lawsuit as "exploit now, pay later if at all." It involves the use of works that are often included in compilation CDs (ie. the top dance tracks of 2009) or live recordings. The record labels create, press, distribute and sell the CDs, but do not obtain the necessary copyright licences.

Instead, the names of the songs on the CDs are placed on a "pending list," which signifies that approval and payment is pending. The pending list dates back to the late 1980s, when Canada changed its copyright law by replacing a compulsory licence with the need for specific authorization for each use. It is perhaps better characterized as a copyright infringement admission list, however, since for each use of the work, the record label openly admits that it has not obtained copyright permission and not paid any royalty or fee.

Over the years, the size of the pending list has grown dramatically, now containing more than 300,000 songs.

From Beyonce to Bruce Springsteen, the artists waiting for payment are far from obscure, as thousands of Canadian and foreign artists have seen their copyrights used without permission and payment.

It is difficult to understand why the industry has been so reluctant to pay its bills. Some works may be in the public domain or belong to a copyright owner difficult to ascertain or locate, yet the likes of Sarah McLachlan, Bruce Cockburn, Sloan, or the Watchmen are not hidden from view.

The more likely reason is that the record labels have had little motivation to pay up. As the balance has grown, David Basskin, the president and CEO of the Canadian Musical Reproduction Rights Agency Ltd., notes in his affidavit that "the record labels have devoted insufficient resources for identifying and paying the owners of musical works on the pending lists." The CRIA members now face the prospect of far greater liability.

The class action seeks the option of statutory damages for each infringement. At $20,000 per infringement, potential liability exceeds $6 billion.

These numbers may sound outrageous, yet they are based on the same rules that led the recording industry to claim a single file sharer is liable for millions in damages.

After years of claiming Canadian consumers disrespect copyright, the irony of having the recording industry face a massive lawsuit will not be lost on anyone, least of all the artists still waiting to be paid. Indeed, they are also seeking punitive damages, arguing "the conduct of the defendant record companies is aggravated by their strict and unremitting approach to the enforcement of their copyright interests against consumers."

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law.

Why Do Studios Think There’s So Much Value in Old Titles?

By: Claude Brodesser-Akner

This weekend sees the opening of two remakes of eighties cult hits that play off of name recognition: Conan the Barbarian and Fright Night. The first has been kept culturally relevant mostly from Arnold Schwarzenegger's constant references to it as governor, while at this point the second title strikes a chord mostly with those who spent insomniac evenings watching it rerun on USA before there were more options on cable. So what value do these nostalgic, more fuzzily remembered titles really have to today's audiences?

Let's start with Fright Night: Its target is young women, who are the historically predominant demo for horror, according to Geoffrey Ammer, a former president of marketing at Columbia Pictures, Revolution Studios, and Marvel Entertainment. But shouldn't its title also, in theory, appeal to older women who were screaming teens when the original came out in 1985?

However, according to NRG audience polling data leaked to us by a studio source, nearly three fourths (74 percent) of women under 25 were aware of the Colin Farrell movie (up from 69 percent on Sunday), with one in four of them expressing "definite interest" in seeing it. This augurs a modest opening, one made all the more modest because the number of older females with "definite interest" is actually decreasing, dropping from 22 percent to 20 percent since Sunday. Older women are less prone to go to horror movies anyway, and as the demo who would most recognize the title, they are getting less intrigued the more marketing money the studio pours on. (Still, its young female audience and a recent uptick in young males suggests it might make $17 million and finish in second place.)

On the other hand, the primary audience for action-adventure movies is, unsurprisingly, young men. So, once again, older males who saw the original Conan the Barbarian in 1982 are the ones who, based on the title, would seem most nostalgically driven to see another warrior crush his enemies, see them driven before him, and time permitting, hear the lamentations of their women. In this case, men over 25 are more aware of the new Conan than those under 25 (89 percent versus 80 percent), but there is no difference whatsoever in their level of definite interest (37 percent) in seeing the remake. (This suggests a $15 million opening and a fourth-place finish, but doesn't mean it can't be profitable regardless.)

“If you look at both films, neither [title] is meaningful to older audiences right now,” says Ammer. “It’s been too long." So why bother with resuscitating an old title when you could just as easily create a new one with the same basic premise, but different enough not to be sued over? After all, in these vampire-clogged times, it wouldn't be suspicious if a studio came up with its own bloodsucker-next-door concept. "Studios remake these movies because they often already own the title,” says Ammer. But it's more than that. After all, it wouldn’t cost a studio any more money to hire a writer to write an original screenplay than it would to have him or her write one based on an older film. The real appeal of an old title is more superstitious: The studios use them, says Ammer, because “they know it’s worked in the past.” Even though it's an entirely different movie made by different people for a different generation, the idea is, hey, the title worked before, why not give it another shot? For all of Hollywood’s supposed liberalism, studios, like their audiences, are quite conservative. Genre is the most predictive aspect of a film's future results, and then title, so why not double down? A remake of a successful genre film allows a studio the greatest possible risk reduction.

Of course, dismissing warmed-over art is an ancient pastime — one dating back to before the nineteenth century, when Italian poet Giacamo Leopardi lamented that “there are some centuries in which the art and other disciplines presume to remake everything because they know how to make nothing.” But in today’s Hollywood, the truth is just the reverse: They make nothing precisely because they know how to remake everything.