US Copyright Agenda Stalling In Congress

NEW YORK — The music community in the United States has a wide copyright agenda covering various business issues and stakeholders. While it had entertained the notion that a new President with its new administration and Congress would be more sympathetic to the complex needs of the industry, it is still waiting for the Trump administration to act on copyright issues, judging from comments made by various stakeholders in the legislative process during an industry panel in New York this week.

The 19 September panel was titled, “Music Policies In The New Administration,” held as part of the Music Biz Entertainment & Technology Law Conference Series in New York.

On copyright issues, the White House is not necessarily the centre of gravity of the executive apparatus, as proven by the Obama administration and so far by Trump’s.

“I do not expect any consistent policy from the president. He jumps from one policy to another,” said Congressman Jerrold Nadler, a Democrat from the 10th District of New York, and ranking member of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet.

The only important change at the White House was the appointment in April of Vishal J. Amin, former senior counsel on the House Judiciary Committee, as the White House Intellectual Property Enforcement Coordinator, a new role created in 2008, and initially occupied by Victoria Espinel, now an industry lobbyist.

“It’s a White House job, and its goal is to coordinate enforcement of IP rights,” explained Jacqueline Charlesworth, the former general counsel and associate register of copyrights at the US Copyright Office, now counsel with New York law firm Covington & Burling, LLP. “We heard that he could play more active role, and may want to sit at the table. We may see that the job and function will expand and that he will take a more active role as he gets into that job.”

In Washington, DC, the forces for copyright change are rather vested in Congress, especially the House Judiciary Committee, chaired by Congressman Bob Goodlatte, and with the Copyright Office. So rather than focusing on President Donald Trump himself, who has so far given little indication that he was interested in copyright issues, the panel focused on the heavy legislative agenda.

The speakers outlined the long list of legislation that have been introduced in the past 12 months that are still waiting to get to a vote. These include: the Register of Copyrights Selection and Accountability Act (HR 1695), requiring the Register of Copyrights to be nominated by the President of the United States and subject to confirmation by the US Senate; the Fair Play Fair Pay Act (FPFPA), which calls for performance rights on sound recordings for terrestrial radio stations; the Songwriters’ Equity Act, that would simplify the way music is licensed by performance rights organisations; the PROMOTE Act of 2017 (HR 1914), which would allow performing artists to opt out of having their music played on the radio if the performing artist is not being paid an agreed-upon performance royalty.

Rep. Nadler – who is one of the one of the sponsors of the Fair Play Fair Pay Act (FPFPA) with Rep. Marsha Blackburn (Republican, Tennessee), chair of the Energy and Commerce Subcommittee on Communications and Technology – said that there was a lot of “inertia” at the Judiciary Committee, despite the fact that Chairman Goodlatte had “orchestrated 20 hearing on copyright law in a way I had never seen before. He did it pretty systematically, and we had lots of opinions.”

But so far nothing has happened, aside from the Register of Copyrights Selection and Accountability Act, which was voted 27-1 by the Committee, to be then sent to the Senate where it is stalling.

Nadler added that Goodlatte will stay in his position for less than two more years so something has to happen this year, if anything. “Time is the enemy,” said Nadler. “Someone has to be pushing and a lot of this stuff is not going through the Judiciary.” However, Nadler wondered whether Goodlatte would go for a comprehensive Copyright Bill that would become his legacy or opt for a selective number of individual bills.

Nadler, of course, as one of the co-sponsors of the bill, would like to see the FPFPA go through because, as he said, the USA is the only country alongside Iran and North Korea not to grant performance rights on sound recordings for music played on terrestrial radio. It also deprives US performers and labels of royalties collected abroad as countries with neighbouring rights refuse to pay US rights holders due to a lack of reciprocity.

Julia Massimino, vice president of global public policy for neighbouring rights society SoundExchange, which collects royalties for the use of sound recordings by non-interactive online or satellite services, estimated that performers and record labels lose about $200 million a year because of the lack of reciprocal rights. She said the FPFPA would “make everyone pay and pay market value rates. It fixes it all.”

To explain the situation owners of sound recordings are facing at the moment, Nadler used the following image: “In a car you can hit three buttons. If you hit FM, music performers do not get royalties. If you then hit satellite radio, performers get a royalty, and if you then hit streaming, performers get a different royalty. It does not make sense.”

Todd Dupler, senior director of advocacy & public policy at The Recording Academy, which organises the Grammys, said the industry is getting “faster support for the Fair Play Act than with the previous Congress. We do a lot of education in the constituencies. We are advancing the ball.”

Nadler concurred that the bill is getting increasing support but lamented that the tempo and timing was in the hands of Goodlatte. Nadler said that Goodlatte “has expressed support for the Fair Play Fair Pay Act and we are waiting to hear from him.”

He also provided an interesting insight into the inner workings of Congress. “The Judiciary is one of the most divided committees in the House,” he said. “We deal with a lot of contentious issues but on [copyright] issues the divides are irrelevant. You cannot predict how one can be on these issues just by being a Republican or a Democrat, so we can have strange combinations and get things done.”

The panel also alluded to the situation affecting the country’s two largest performing rights organisations (PROs), ASCAP and BMI, that collect royalties on behalf of songwriters, composers and music publishers. Both ASCAP and BMI are non-profit organisations subject to two separate consent decree signed in 1941 with the Department of Justice as they were facing investigation by the DOJ’s antitrust division. A consent decree is an agreement that settles a dispute without admission of guilt, but the terms of which are binding. ASCAP and BMI have been trying to obtain changes to the decrees from the DOJ especially with the view to facilitate licensing and obtain a more market-based way to set royalty rates.

“We engaged for two years with the DOJ and they also engaged with interested parties,” said Ann Sweeney, senior vice president of global policy at BMI. ASCAP and BMI were hoping that the DOJ would acquiesce to some of their demands, such as having more flexibility to fix rates, but instead, not only did the DOJ refuse to change the decrees, but it also came with a new understanding of the decree that would require BMI or ASCAP to grants a licence for the entirety of a music work even if the PRO only controlled a fractional share in that work.

“It really undermines basic copyright principles,” Charlesworth said of the DOJ’s new interpretation of the consent decrees, adding that it would force songwriters into a system where they have no say in case of songs co-written with songwriters from a different PRO.

It also creates international copyright issues with non-US songwriters. “It was a pretty disruptive thing to do,” said Charlesworth. As a result, said Sweeney, BMI decided to sue the government and won in first instance (the DOJ appealed) and ASCAP is pursuing a legislative agenda. “We might have a possible resolution in 2018,” Sweeney said.

The event was organised by the Music Business Organization (or Music Biz) at the offices of law firm Greenberg Traurig, LLP as part of the trade body’s educational and outreach programme with the goal to merge entertainment law issues with insight on new technology and media concerns that are at the forefront of the entertainment industry. The rest of the day included sessions on reclaiming copyright, the Digital Millennium Copyright Act (DMCA) and YouTube, and the issues related to musicians’ estates and copyright.

 

Image Credits: William New