Microsoft, Yahoo And Real Sued For Failing To Get All Necessary Licenses For Music Stores

from the oops dept

Want to know just how incredibly confusing and impossible copyright law has become? Just take a look at this lawsuit, filed yesterday by some music publishing companies against Microsoft, Yahoo and Real Networks, claiming that the online music stores each of them runs (the Zune store, Yahoo Music and Rhapsody) infringe their copyrights (thanks Eric Goldman for sending this over). How can that be, you ask? Surely these companies properly licensed the music they offer in their streaming/download offerings, right? Well, the lawsuit doesn’t provide that much in the way of detail (and I’ve spoken to a few copyright lawyers — none of whom seem to agree with each other!), it sure looks like the claim is that Microsoft, Yahoo and Real may have licensed the copyrights on the recordings, but did not license the copyright on the compositions. It sounds like (though, again, the details are fuzzy) that the record labels did licensing deals with these music services, but publishers and labels are separate entities (even if the labels own many publishers), and the rights are separate.

It’s pure speculation until more details come out, but one imagines that the licensing deals with the record labels included some sort of assurances that the publishing rights were covered as well — and for songs whose publishing rights were covered by the major record labels, that’s probably the case. But for songs where the publishing rights were owned by independent companies — such as MCS Music America, the claim appears to be that the publishing rights were never cleared — and thus, Microsoft, Yahoo and Real were streaming/downloading music to which they only held some of the rights. Yikes.

Most of the complaint details which songs were offered without (allegedly) having secured all the rights. And, of course, the publishers are claiming that every time a song was streamed or downloaded, it counts as a separate act of infringement. If the court agrees, this could represent a massive liability for Microsoft, Yahoo and Real, given the fines we all know can be issued over a single instance of infringement.

That said, this is yet another example of the convoluted house of cards that copyright has become. The idea that you can license a recording, but then need to get a separate license from a totally different party for the rights to the “underlying composition” (and don’t get us started on the need to make sure you’re covered for reproduction, distribution and performance rights — three separate issues under copyright law), and you begin to get a sense of the problem. Basically, every time some new technology or innovation comes along, the copyright holders run to Congress to slap on another right, rather than actually innovating on the business model side. And on top of it, when new technologies like the internet come along, it’s not at all clear which rights really apply and who controls/owns what rights. Suddenly, you have a massive mess for a company trying to do something as simple as let people listen to music. Just for that, you get a massive lawsuit like the following:

It’s the sort of system only a greedy copyright lawyer could love: it’s designed not to incentivize creation (copyright’s stated purpose) or to facilitate the distribution of content — but instead designed for the exact opposite: to confuse and hinder (but to keep copyright lawyers quite busy and gainfully employed).

Filed Under: composers, copyright, music, publishing rights
Companies: mcs music america, microsoft, real networks, yahoo