Legal Stuff

“the Internet’s Not Written in Pencil, It’s Written in Ink” … yet Content Removal Can Be Done on a Worldwide Basis, Says Ag Szpunar

5 June 2019

From IP Kat:

When it comes to content removal in the context of an injunction, how is this to be done in order to comply with the prohibition of a general monitoring obligation, as per Article 15 of the E-commerce Directive?

This, in a nutshell, is the issue at stake in Facebook, C-18/18, a referral for a preliminary ruling from the Austrian Supreme Court made in the context of national proceedings concerning defamatory comments published on Facebook.

Yesterday, Advocate General (AG) Szpunar delivered his Opinion, which opens with a quote from The Social Network (the film about the beginning of Facebook): “The internet’s not written in pencil, it’s written in ink”. Indeed, as the AG effectively summed up, this case concerns:
whether a host which operates an online social network platform may be required to delete, with the help of a metaphorical ink eraser, certain content placed online by users of that platform.

. . . .

In his Opinion, AG Szpunar advised the Court of Justice of the European Union (CJEU) to rule that Article 15 of the E-commerce Directive does not preclude a host provider from being ordered – by means of an injunction – to seek and identify, among all the information disseminated by users of its service, the information identical to the information that has been found to be illegal by a court that issued that injunction. With regard to equivalent information, the duty the host provider to search and identify such information is only in relation to the information disseminated by the user that disseminated that illegal information. To this end, the effects of the relevant injunction must be clear, precise and foreseeable, and the authority that issues such injunction must also take into account and balance different fundamental rights, as well as complying with the principle of proportionality.

In relation to the territorial scope of an injunction, the AG noted that the E-commerce Directive is silent on this point. Hence, an injunction can also impose removal of information on a worldwide basis.

. . . .

The background national proceedings relate to an application for an injunction that an Austrian politician sought against Facebook, following failure by the latter to remove information posted by a user and containing disparaging comments relating the politician. The Vienna Commercial Court issued the requested injunction, and ordered Facebook to remove the relevant content. Facebook complied with the injunction, but only disabled access to the content in Austria.

On appeal, the Vienna Higher Regional Court upheld the order made at first instance as regards identical allegations, and dismissed Facebook’s request that the injunction be limited to Austria. However, that court ordered the removal of equivalent content should be only done in relation to content notified by the applicant to Facebook.

. . . .

These are the questions referred to the highest EU court:
(1) Does Article 15(1) of Directive [2000/31] generally preclude any of the obligations listed below of a host provider which has not expeditiously removed illegal information, specifically not just this illegal information within the meaning of Article 14(1)(a) of [that] directive, but also other identically worded items of information:

(a) worldwide?
(b) in the relevant Member State?
(c) of the relevant user worldwide?
(d) of the relevant user in the relevant Member State?

(2) In so far as Question 1 is answered in the negative: Does this also apply in each case for information with an equivalent meaning?
(3) Does this also apply for information with an equivalent meaning as soon as the operator has become aware of this circumstance?

. . . .

Facebook may be ordered to:

  • Seek and remove information identical to the information characterized as illegal when this is also disseminated by other users of the platform;
  • Seek and remove information equivalent to the information characterized as illegal only when this is disseminated by the user who disseminated said information. Holding otherwise, and extending Facebook’s obligation to information disseminated by other users, would entail a general monitoring on the side of the provider (that could no longer be considered neutral), and would also fail to achieve a fair balance of different rights and interests.

Link to the rest at IP Kat

PG says this matter illustrates the substantial tension between freedom of speech and defamation online. It also illustrates the substantial difficulty of providing a means of returning an individual’s reputation to a state which it enjoyed (rightly or wrongly) prior to the publication of defamatory information.

PG is not an expert on EU laws relating to freedom of speech either on or offline.

In the US, however, speaking generally, in the first instance, an individual is free to say anything she/he desires about another individual. That’s basic First Amendment stuff.

Most speech is protected by the First Amendment to the United States Constitution:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Defamatory speech is, however, an exception to this protected status of speech. “Speech” doesn’t mean only vocal statements to others, but also applies to writings, including writings that are widely disseminated.

Nolo.com provides a good high-level summary:

“Defamation of character” is a catch-all term for any statement that hurts someone’s reputation. Written defamation is called “libel,” while spoken defamation is called “slander.” Defamation is not a crime, but it is a “tort” (a civil wrong, rather than a criminal wrong). A person who has been defamed can sue the person who did the defaming for damages.

Defamation law tries to balance competing interests: On the one hand, people should not ruin others’ lives by telling lies about them; but on the other hand, people should be able to speak freely without fear of litigation over every insult, disagreement, or mistake. Political and social disagreement is important in a free society, and we obviously don’t all share the same opinions or beliefs. For instance, political opponents often reach opposite conclusions from the same facts, and editorial cartoonists often exaggerate facts to make their point.

Link to the rest at Nolo

Facebook certainly has the ability to remove a specific posting that is found to be defamatory and removes postings that violate its terms of service or Community Standards on a regular basis (although PG understands FB is more likely to deactivate a Facebook account rather than removing only a handful of messages).

However, in the US, there are different defamation standards for a “public figure” (elected officials, movie and sports stars, etc) vs. a private citizen.

Generally speaking, a public figure has to prove actual malice by the speaker/writer knowing their statements were false or by the speaker/writer demonstrating a reckless disregard for the truth of the defamatory statement.

A private citizen need not prove any particular malicious intention or reckless disregard of the truth, but rather negligence in considering or confirming that a statement is false prior to publication.

Here’s a portion of Facebook’s Community Standards:

We distinguish between public figures and private individuals because we want to allow discussion, which often includes critical commentary of people who are featured in the news or who have a large public audience. For public figures, we remove attacks that are severe as well as certain attacks where the public figure is directly tagged in the post or comment. For private individuals, our protection goes further: we remove content that’s meant to degrade or shame, including, for example, claims about someone’s sexual activity. We recognize that bullying and harassment can have more of an emotional impact on minors, which is why our policies provide heightened protection for users between the ages of 13 and 18.

PG isn’t certain whether Facebook has the ability to search all messages or other parts of its content on a world-wide basis to locate and remove specific words about an individual, however.

According to some quick and dirty online research, there are about 3.5 billion social media users around the world.

If each of these users posted on Facebook an average of once per week, Facebook would have to screen 182 billion posts per year.

If Facebook ran its search for defamatory information once per week, objectionable posts might be publicly available on Facebook for up to 7 days.

PG doesn’t know if Facebook can screen its posts by the date the posts were created or not. Additionally, PG doesn’t know if Facebook can screen new posts only or if Facebook can scan new and modified posts in a single or related operation.

In any case, performing a phrase search on a large database consisting of all Facebook postings is a very large job and would require a lot of computing power.

If 100 politicians complained and Facebook was required to search for defamatory language for each one, you can see how giant this task would become.

If online defamers posted a new defamation or a version of a prior defamation that was slightly modified so it would avoid Facebooks identical language searches and the politicians wanted Facebook to also search for all the modified versions of the defamatory language, PG says you could begin to take up a larger and larger portion of the world’s computing capacity.

PG thinks it wouldn’t be very difficult for someone to create a defamation message assembly program that would allow a user to enter the name of the politician or another person they wished to defame and would thereatfer generate a wide range of defamatory messages that were different enough from one another to evade an identical word search Facebook was obligated to undertake.

For example:

Joe Blow is a crook.
Joe Blow is a racketeer.
Joe Blow is a rogue.
Joe Blow is a swindler.
Joe Blow is a villain.
Joe Blow is a shyster.

Congressman Joe Blow is a crook.
Congressman Joe Blow is a racketeer.
Congressman Joe Blow is a rogue.
Congressman Joe Blow is a swindler.
Congressman Joe Blow is a villain.
Congressman Joe Blow is a shyster.

Illinois Congressman Joe Blow is a crook.
Illinois Congressman Joe Blow is a racketeer.
Illinois Congressman Joe Blow is a rogue.
Illinois Congressman Joe Blow is a swindler.
Illinois Congressman Joe Blow is a villain.
Illinois Congressman Joe Blow is a shyster.

Illinois Congressman Joe Blow is a big crook.
Illinois Congressman Joe Blow is a big racketeer.
Illinois Congressman Joe Blow is a big rogue.
Illinois Congressman Joe Blow is a big swindler.
Illinois Congressman Joe Blow is a big villain.
Illinois Congressman Joe Blow is a big shyster.

On the other hand, the victim of defamation would not want Facebook deleting posts like the following:

Joe Blow is not a crook.

 

Google in Australia: Sudden Conversion or Tactical Manoeuvre?

4 June 2019

From Hugh Stephens Blog:

In news coming out of Australia, it has been reported that Google has voluntarily agreed to de-index several hundred websites that distribute pirated audio-visual content. This will make it more difficult although not impossible for Australian consumers to access these sites. Village Roadshow Chairman Graham Burke, Australia’s most prominent anti-piracy crusader, has been reported as saying, with regard to Google, “We’ve gone from being enemies to being allies”. That’s quite a transformation.

Google has apparently agreed to voluntarily remove from its search engine results any sites that ISPs in Australia are required to block as a result of court orders under relatively new provisions of Australian law.

. . . .

These amendments require internet providers to block websites identified by content owners (and ratified by a court order) that infringe, facilitate infringement or whose primary purpose or effect is infringement. In addition to an expanded requirement for action by internet providers (referred to as Carriage Service Providers in Australia), and new measures to prevent “site-hopping” by pirate sites, the 2018 copyright amendments also required search engines to block or de-index search results for sites subject a court order. Google fought long and hard against that particular amendment, without success.

. . . .

Google . . .  argued that the there was no evidence that the existing law was deficient and claimed its own voluntary takedown process in response to complaints from rights owners was sufficient. This prompted Graham Burke to describe Google’s efforts as a “sham”. Burke’s submission to the legislative review process claimed that; “Their sole interest is using a treasure trove of stolen movies as part of attracting people to a business model that is strengthened by theft…Google auto complete and search are used to steal movies”. Despite opposition from Google and some others, the amendment passed in the Australian Parliament last autumn, with broad bipartisan support.

. . . .

At the same time, in the aftermath to the tragic shootings in Christchurch, New Zealand, in April the Australian Parliament passed (again with bipartisan support) robust legislation holding the executives of social media platforms, including Google-owned YouTube, criminally responsible (and the companies corporately responsible), if violent material is not removed expeditiously after notification by authorities.

. . . .

The ubiquity of the Google and Facebook platforms and the lack of transparency of the operation of these platforms, have had adverse effects on news publishers and their opportunities to monetise their content”.

. . . .

This is relevant given Google’s experience in Canada in the landmark Google v. Equustek case. In that case . . . Google was required by the British Columbia Supreme Court to de-index search results for a competitor of Equustek (a Canadian company manufacturing internet routers) found to have stolen Equustek’s intellectual property in order to market online clones of Equustek’s products. Google agreed to de-index results for its Canadian site, Google.ca, but refused a blanket delisting on Google.com and its other national sites as ordered by the court, and appealed. The BC Court of Appeal upheld the global de-indexing order. Google then appealed to the Supreme Court of Canada and lost. It then resorted to a series of legal actions in the US designed to invalidate the order and then have it varied in Canada pursuant to a California court order. These tactics failed (although Google was able to get an unopposed order in California that the Canadian Supreme Court order could not be enforced in the US), but they demonstrate the lengths that Google will go to in order to retain its ability to do what it wants in the way that it wants.

Link to the rest at Hugh Stephens Blog

Google and Oracle’s $9 Billion ‘Copyright Case of the Decade’ Could Be Headed for the Supreme Court

31 May 2019

From Newsweek:

Google calls it the “copyright case of the decade.”

“It” is the $9 billion copyright infringement suit Oracle filed against the search giant nearly 10 years ago. Oracle brought the case in 2010 after Google incorporated 11,500 lines of Oracle’s Java code into Google’s Android platform for smartphones and tablets. Android has since become the world’s most popular operating system, running on more than 2.5 billion devices.

Google won twice at the U.S. District Court level. But each time, a federal appeals court overturned the verdict, ruling for Oracle. Now, Google is begging the Supreme Court to hear the case, and so are the 175 companies, nonprofits and individuals who have signed 15 friend-of-the-court briefs supporting Google’s plea.

. . . .

Here’s the pressing issue: How much protection do copyright laws give to application program interfaces, or APIs? That might sound arcane, but these interfaces are omnipresent in software today. They form the junctions between all the different software applications developed by various companies and independent developers that must seamlessly interact to work right.

All the apps that sit on our smartphones—like Pandora or Uber—use interfaces to communicate with our phones’ operating systems (Apple iOS for iPhones, for example). If the owner of a platform can claim, through copyright, to own those interfaces, it can limit innovation and competition, Google contends. Not only can it determine who gets to write software on its own platform, but, as we’ll see, it may even be able to prevent rival platforms from ever being written. The Harvard Journal of Law and Technology considers the case so consequential that it devoted an entire 360-page “special issue” to it last year.

“If the appeals court’s rulings stand, it’s likely to lead to entrenching dominant firms in software industries,” says Randy Stutz, an attorney with the American Antitrust Institute, which supports Google in the dispute.

Oracle, on the other hand, says the case is cut-and-dried. Its basic argument: Google negotiated to take a license for the Java code, it wasn’t able to reach terms, and then it used portions of the code anyway. (And that’s all true.) Now, it’s time to pay the piper.

. . . .

“Before Android,” Oracle’s lawyers write in their brief to the Supreme Court, “every company that wanted to use the Java platform took a commercial license…including smartphone manufacturers BlackBerry, Nokia and Danger.”

Oracle claims that, if not for Android, Oracle’s own Java software could have become a major smartphone platform. (Although Java was written by Sun Microsystems, Oracle acquired Sun in 2010, shortly before bringing this suit.) Oracle’s lawyers mock the notion that the rulings in its favor will spawn any dire consequences. Despite Google’s “sky-is-falling” arguments, they write, the software industry did not crash in the wake of May 2014 or March 2018, when the U.S. Court of Appeals for the Federal Circuit issued the two key rulings that Google seeks to reverse.

In fact, Oracle has enjoyed fervent support from its own friend-of-the-court briefs, including one from BSA, the Software Alliance, which counts companies like Adobe, Apple and IBM among its members.

Remarkably, for a case about software interfaces, the key Supreme Court precedent was decided in 1879. Obviously, that suit didn’t involve a smartphone platform, but it did define the limits of copyright and explain how a copyright differs from a patent. In that dispute, Charles Selden had authored and copyrighted a book laying out a method of bookkeeping. The book included some blank forms that could be used to implement the system. Later, W.C.M. Baker began marketing his own set of forms to implement Selden’s method that were very similar to those in Selden’s book.

Selden’s widow sued Baker for copyright infringement—and lost. Basically, Justice Joseph Bradley explained in the opinion, she was trying to use copyright to protect the ideas contained in Selden’s book. He explained that, while a patent can protect an idea, a copyright protects only expression—in this case, the particular words Selden used to describe his bookkeeping method. “The copyright…cannot give to the author an exclusive right to the methods of operation which he propounds,” the Supreme Court’s decision said. (Selden had not patented his bookkeeping method.) Since Selden had no monopoly on his method, he had no monopoly on the forms needed to carry out that method.

Congress later wrote the Court’s Baker v. Selden ruling into the federal copyright statute, specifying that a copyright cannot “extend to any idea, procedure, process, system, [or] method of operation,” even if that idea is “described” in copyrighted work.

Link to the rest at Newsweek

Moral Rights

25 May 2019

In PG’s experience, most authors in the U.S. aren’t familiar with moral rights. In part, this is because the federal government did not do much about moral rights until 1989.

When the country joined the Berne Convention in 1989, it amended its Copyright Act to include moral rights. However, while the moral rights set out in Berne are intended to apply to all types of copyright-protected works, the U.S. took a narrower interpretation of the moral rights requirements, stipulating that the Convention’s “moral rights” provisions were addressed sufficiently by other statutes, such as laws covering slander and libel. Some international copyright experts contend that the U.S. is not, in fact, complying with its Berne obligations.

Some state legislatures have enacted state moral rights laws, but there is more than a little doubt about whether such laws can be enforced because federal IP laws preempt state IP legislation.

However, in the ever-so-slow manner in which intellectual property laws are changed in the United States, moral rights may be on the path to more structured protection.

From a recently-released study of moral rights by the U.S. Register of Copyrights (footnotes omitted):

Taken from the French phrase droit moral, the term “moral rights” generally refers to
certain non-economic rights that are considered personal to an author. Central to the idea of
moral rights is the idea that a creative work, such as a song or book, actually expresses the
personality of the author.

Society has long recognized the importance of such a bond between a creative work and its author: as far back as the early 1500s, courts in France recognized that only the author has a right to publish their work. Over the course of the last two centuries, countries have increasingly codified this close connection between the author and their work, first through judicial doctrines and limited statutory protections for certain aspects of moral rights, such as a right of first publication, and later through formalized statutory moral rights schemes. While countries have come to recognize a variety of different moral rights, the two most commonly recognized moral rights are the right of an author to be credited as the author of their work (the right of attribution), and the right of an author to prevent prejudicial distortions of their work (the right of integrity), both of which were codified at the international level in the 1928 Rome revision of the Berne Convention.It was not until 1989, however, that the United States became subject to an obligation to provide moral rights protections for authors by joining the Berne Convention.

. . . .

[T]he growth of the internet as the primary locus for buying, selling, and licensing works of authorship has meant that original works in digital form have become more accessible to more people. On the one hand, this has meant that the attribution and integrity of works have been more susceptible to mishandling and manipulation. For example, the metadata containing attribution and other information for creative works is very simple to remove (or “strip”) or replace with erroneous information. A work stripped of proper identifying information then can be disseminated widely to the detriment of both the author’s reputation and ability to profit from the work. Similarly, the increasingly accessible video editing technology behind “deepfake” software can not only fundamentally alter the content of an author’s work, but can also lead to social and moral harm for the artists and the subject of the video through malicious use. On the other hand, digital technologies such as fingerprinting and visual recognition software that allow photographers to identify and track metadata related to their works on the internet have enabled authors to combat some of these threats to their attribution and integrity interests. Whether considered as a useful tool or a threat to protection of integrity and attribution interests, there is no question that technology has transformed the moral rights landscape in the United States.

As the foregoing indicates, there is a significant amount of variation in how moral rights are recognized around the world, as well as the manner in which they are protected. For example, in addition to the rights of attribution and integrity, other countries have recognized a number of additional moral rights, some of which are counterparts to economic rights, including:

  • the right of withdrawal, or droit de repentir, which allows authors to retract works from public circulation that they feel no longer represent them or their views;
  • the right of divulgation, through which an author can control the public disclosure of their work, and which supports the economic right of first publication;
  • the right of the author to have access to the original copy of a work in order to “exercise his author’s rights”;
  • the right to prevent others from associating one’s work with an undesirable “product, service, cause or institution”;
  • the right to pseudonymity; and
  • the right of an author to compel the completion of a commissioned work of art.

Additionally, not all countries protect the rights of attribution and integrity in the same manner, and many countries have laws protecting discrete aspects of those rights using different terminology. As many scholars have noted, civil law and common law countries historically took different approaches to the protection of authors’ moral rights: while many civil law countries conceived of moral rights as separate and distinct from an author’s economic rights, common law countries tended to conceive of moral rights as part and parcel of the general copyright protections afforded to an author. Although the Berne Convention largely adopted the civil law approach, conceptualizing moral rights as separate from economic rights, member states have wide discretion in how they chose to implement the moral rights protections of Article 6. For this reason, the contours of the rights of attribution and integrity look quite different, depending upon the country.

One area in which there is significant variance among countries is in how they approach the concepts of waivability and alienability of moral rights. While moral rights are often described as “inalienable,” “nonwaivable,” or in other terms that express the inherent relationship between author and work, moral rights are in fact often waivable and sometimes also alienable under many countries’ moral rights schemes. In some countries like Canada, waivability is explicitly spelled out in the statute. Elsewhere, it is inferred by the ability of authors to authorize certain uses of their works, such as in Nigeria, Germany, France, China, and Switzerland. This ability to waive moral rights is generally tempered by limits designed to protect authors from unwittingly or unwillingly waiving their rights.

Another area of variation in international approaches to moral rights has to do with how the country’s laws treat situations where a work is “authored” by a corporation or has many “authors” that all contribute a small piece to a larger whole  In some countries that have adopted copyright ownership rules similar to the work-for-hire doctrine in the United States, corporations are allowed to hold and assert moral rights in such works. For example, South Korea, Japan, and China all designate employers as the default legal author of works created by employees, including for some moral rights purposes, although they allow the parties to contract around this default.  Indian courts have also recognized moral rights for corporations. In contrast, under both Swiss and French law, moral rights can attach only to natural authors and not corporate entities; employees may maintain or waive their rights, but employing companies cannot hold them. Several countries, including France and Israel, require that moral rights remain with the natural author even when the law or a contract transfers economic rights away. Countries have also adopted different approaches regarding how to address potential conflicts that may arise resulting from the grant of moral rights to different contributors. For example, Guatemalan authors contributing to newspapers do not have control of their contributions when combined in a newspaper, but they do have rights in their works when those works stand alone.

The question of moral rights protection for multi-author works has been particularly acute in the area of audiovisual works. Some countries have adopted special rules for moral rights in these works, attempting to balance the interests of the producer, the director, individual performers, and the authors of incorporated works such as musical scores. For example, while China recognizes motion pictures as collaborative works with several individual authors, the various authors are only granted the right of authorship while all other copyrights belong to the producer.  While Guatemala grants moral rights to the producer (who is also holder of the economic rights), this right includes mandatory attribution for the director, the script author, the author of any underlying work, and the authors of the musical compositions in the audiovisual work. In Nigeria, which also grants moral rights to the producer, the law is designed to encourage performers and others involved in films to execute contracts with the producer in order to preserve any of their rights. Performers in audiovisual works in France are considered employees, and thus their rights of attribution and integrity are governed not only by the moral rights regime, but also by employment law regulations and collective bargaining agreements. In Germany, although moral rights attach to both filmmakers and performers, a rightsholder may only prohibit gross distortions of their work and their interests must be balanced with the legitimate interests of the other film creators and the producer.

Link to the rest at Copyright.gov

PG says if you have gotten this far, you know more about moral rights than 99.99% of the authors in the United States. He cannot confidently provide any sort of estimate for authors outside of the United States.

Are You Self-Publishing Audio Books?

21 May 2019

From Just Publishing Advice:

It takes total concentration to read a book or an ebook. But with an audio book, a listener can multitask.

This is the key attraction for so many younger readers in particular, as it allows for the consumption of a book while driving, commuting and playing a game on a smartphone, knitting or even while grinding out the hours at work.

The popularity is on the move and according to recent statistics, audiobooks are now a multi-billion dollar industry in the US alone.

. . . .

In another report, it estimates that one in ten readers are now listening to audiobooks.

While the data helps to gain a small insight into the market, it is still easy to draw an assumption that it is the next logical step for self-publishing authors and small press.

Ebook publishing is now the number one form of self-publishing. Many Indie authors then take the next step and publish a paperback version.

. . . .

An audio version offers an opportunity for self-publishing authors to extend their sales potential, and at the same time, diversify revenue streams.

Well, only a little at present as it is really an Amazon Audible and Apple iTunes dominated retail market. However, in the future, this may change.

. . . .

If you live in the US, you are in luck.

Amazon offers production and publishing through Audio Creation Exchange, ACX.

For authors outside of the US, things are not quite so easy.

. . . .

If you live in the US, you are in luck.

Amazon offers production and publishing through Audio Creation Exchange, ACX.

For authors outside of the US, things are not quite so easy.

This is a very common complaint about Amazon and its US-centric approach, which creates so many hurdles for non-US self-publishers.

The following quote is taken from Amazon’s help topic regarding ACX.

At this time, ACX is open only to residents of the United States and United Kingdom who have a US or UK mailing address, and a valid US or UK Taxpayer Identification Number (TIN). For more information on Taxpayer Identification Numbers (TIN), please visit the IRS website. We hope to increase our availability to a more global audience in the future.

If you live in the UK, Amazon can help you, but you will need to have a TIN. If you are already publishing with KDP, you probably have one.

For the rest of the world, well, Amazon, as it so often does, leaves you out of the cold.

. . . .

There are a growing number of small press and independent publishers who offer to produce and publish audio books.

Distribution is most often on Amazon Audible and iTunes.

Do your research and look for publishers who accept submissions or offer a production service using professional narrators and producers.

As with any decision to use a small publisher, be careful, do your background research and don’t rush into signing a contract until you are totally convinced it is a fair arrangement concerning your audio rights.

While some may charge you for the service, it is worth looking for a publisher that offers a revenue split. This is usually 50-50 of net audio royalty earnings.

It might seem a bit steep, but Amazon ACX offers between 20 and 40% net royalties, so 50-50 is not too bad.

Link to the rest at Just Publishing Advice

As with any publishing contract, PG suggests you check out the contract terms carefully before you enter into a publishing agreement for audiobooks.

Speaking generally (and, yes, there are a few exceptions), the traditional publishing industry has fallen into a bad habit (in PG’s persistently humble opinion) of using standard agreements that last longer than any other business contracts with which PG is familiar (and he has seen a lot).

He refers, of course to publishing contracts that continue “for the full term of the copyright.”

Regular visitors to TPV will know that, in the United States, for works created after January 1, 1978, the full term of the copyright is the rest of the author’s life plus 70 years. Due to their participation in The Berne Convention (an international copyright treaty), the copyright laws of many other nations provide for copyright protections of similar durations — the author’s life plus 50 years is common.

PG can’t think of any other types of business agreements involving individuals that last for the life of one of the parties without any obvious exit opportunities. The long period of copyright protection was sold to the US Congress as a great boon to creators. However, under the terms of typical publishing contracts, the chief beneficiaries are corporate publishers.

While it is important for authors to read their publishing agreements thoroughly (Yes, PG knows it’s not fun. He has read far more publishing agreements than you have or ever will and understands what it is like.), if you are looking for a method of performing a quick, preliminary check for provisions that means you will die before your publishing agreement does, search for phrases like:

  • “full term of the copyright”
  • “term”
  • “copyright”
  • “continue”

Those searches may help you immediately locate objectionable provisions that allow you to put the publisher into the reject pile without looking for other nasties. However, if the searches don’t disclose anything, you will most definitely have to read the whole thing. The quoted terms are not magic incantations which must be used. Other language can accomplish the same thing.

Until the advent of ebooks, book publishing contracts used Out of Print clauses to give the author the ability to retrieve rights to his/her book if the publisher wasn’t doing anything with it.

With printed books, even dribs and drabs of sales would eventually deplete the publisher’s stock of physical books. At this point, the publisher would likely consider whether the cost it would pay for another printing of an author’s book was economically justified or not. If the publisher was concerned about ending up with a pile of unsold printed books in its warehouse for a long time, the publisher might decide not to print any more.

Once the publisher’s existing stock was sold, the book was out of print – it was not for sale in any normal trade channels. The author (or the author’s heirs) could then retrieve her/his rights to the book and do something else with them.

Of course, once an electronic file is created, an ebook costs the publisher nothing to offer for sale on Amazon or any other online bookstore with which PG is familiar.

The disk space necessary to store an individual epub or mobi file is essentially free for Amazon and it doesn’t charge anything to maintain the listing almost forever. (There may be a giant digital housecleaning in Seattle at some time in the distant future, but don’t count on it happening during your lifetime.) Print on demand hardcopy books are just another kind of file that’s stored on disk.

So, in 2019 and into the foreseeable future, an infinite number of an author’s ebooks are for sale and not “out of print”.

So, the traditional exit provision for an author – the out of print clause – remains in existence in almost all publishing contracts PG has reviewed, but it provides no opportunity for the author to exercise it to get out of a publishing agreement that has not paid more than $5.00 in annual royalties in over ten years.

 

Amazon’s Antitrust Paradox

12 May 2019

From The Yale Law Journal (footnotes omitted):

In Amazon’s early years, a running joke among Wall Street analysts was that CEO Jeff Bezos was building a house of cards. Entering its sixth year in 2000, the company had yet to crack a profit and was mounting millions of dollars in continuous losses, each quarter’s larger than the last. Nevertheless, a segment of shareholders believed that by dumping money into advertising and steep discounts, Amazon was making a sound investment that would yield returns once e-commerce took off. Each quarter the company would report losses, and its stock price would rise. One news site captured the split sentiment by asking, “Amazon: Ponzi Scheme or Wal-Mart of the Web?”3

Sixteen years on, nobody seriously doubts that Amazon is anything but the titan of twenty-firstcentury commerce. In 2015, it earned $107 billion in revenue,4 and, as of 2013, it sold more than its next twelve online competitors combined.5 By some estimates, Amazon now captures 46% of online shopping, with its share growing faster than the sector as a whole.6 In addition to being a retailer, it is a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading provider of cloud server space and computing power. Although Amazon has clocked staggering growth—reporting double-digit increases in net sales yearly—it reports meager profits, choosing to invest aggressively instead. The company listed consistent losses for the first seven years it was in business, with debts of $2 billion.7 While it exits the red more regularly now,8 negative returns are still common. The company reported losses in two of the last five years, for example, and its highest yearly net income was still less than 1% of its net sales.9

Despite the company’s history of thin returns, investors have zealously backed it: Amazon’s shares trade at over 900 times diluted earnings, making it the most expensive stock in the Standard & Poor’s 500.10 As one reporter marveled, “The company barely ekes out a profit, spends a fortune on expansion and free shipping and is famously opaque about its business operations. Yet investors . . . pour into the stock.”11 Another commented that Amazon is in “a class of its own when it comes to valuation.”12

Reporters and financial analysts continue to speculate about when and how Amazon’s deep investments and steep losses will pay off.13 Customers, meanwhile, universally seem to love the company. Close to half of all online buyers go directly to Amazon first to search for products,14 and in 2016, the Reputation Institute named the firm the “most reputable company in America” for the third year running.15 In recent years, journalists have exposed the aggressive business tactics Amazon employs. For instance Amazon named one campaign “The Gazelle Project,” a strategy whereby Amazon would approach small publishers “the way a cheetah would a sickly gazelle.”16 This, as well as other reporting,17 drew widespread attention,18 perhaps because it offered a glimpse at the potential social costs of Amazon’s dominance. The firm’s highly public dispute with Hachette in 2014—in which Amazon delisted the publisher’s books from its website during business negotiations—similarly generated extensive press scrutiny and dialogue.19 More generally, there is growing public awareness that Amazon has established itself as an essential part of the internet economy,20 and a gnawing sense that its dominance—its sheer scale and breadth—may pose hazards.21 But when pressed on why, critics often fumble to explain how a company that has so clearly delivered enormous benefits to consumers—not to mention revolutionized e-commerce in general—could, at the end of the day, threaten our markets. Trying to make sense of the contradiction, one journalist noted that the critics’ argument seems to be that “even though Amazon’s activities tend to reduce book prices, which is considered good for consumers, they ultimately hurt consumers.”22

In some ways, the story of Amazon’s sustained and growing dominance is also the story of changes in our antitrust laws. Due to a change in legal thinking and practice in the 1970s and 1980s, antitrust law now assesses competition largely with an eye to the short-term interests of consumers, not producers or the health of the market as a whole; antitrust doctrine views low consumer prices, alone, to be evidence of sound competition. By this measure, Amazon has excelled; it has evaded government scrutiny in part through fervently devoting its business strategy and rhetoric to reducing prices for consumers. Amazon’s closest encounter with antitrust authorities was when the Justice Department sued other companies for teaming up against Amazon.23 It is as if Bezos charted the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them. With its missionary zeal for consumers, Amazon has marched toward monopoly by singing the tune of contemporary antitrust.

. . . .

This analysis reveals that the current framework in antitrust—specifically its equating competition with “consumer welfare,” typically measured through short-term effects on price and output24—fails to capture the architecture of market power in the twenty-first century marketplace. In other words, the potential harms to competition posed by Amazon’s dominance are not cognizable if we assess competition primarily through price and output. Focusing on these metrics instead blinds us to the potential hazards.

My argument is that gauging real competition in the twenty-first century marketplace—especially in the case of online platforms—requires analyzing the underlying structure and dynamics of markets. Rather than pegging competition to a narrow set of outcomes, this approach would examine the competitive process itself. Animating this framework is the idea that a company’s power and the potential anticompetitive nature of that power cannot be fully understood without looking to the structure of a business and the structural role it plays in markets. Applying this idea involves, for example, assessing whether a company’s structure creates certain anticompetitive conflicts of interest; whether it can cross-leverage market advantages across distinct lines of business; and whether the structure of the market incentivizes and permits predatory conduct.

. . . .

This market structure-based understanding of competition was a foundation of antitrust thought and policy through the 1960s. Subscribing to this view, courts blocked mergers that they determined would lead to anticompetitive market structures. In some instances, this meant halting horizontal deals—mergers combining two direct competitors operating in the same market or product line—that would have handed the new entity a large share of the market.26 In others, it involved rejecting vertical mergers—deals joining companies that operated in different tiers of the same supply or production chain—that would “foreclose competition.”27 Centrally, this approach involved policing not just for size but also for conflicts of interest—like whether allowing a dominant shoe manufacturer to extend into shoe retailing would create an incentive for the manufacturer to disadvantage or discriminate against competing retailers.28

The Chicago School approach to antitrust, which gained mainstream prominence and credibility in the 1970s and 1980s, rejected this structuralist view.29 In the words of Richard Posner, the essence of the Chicago School position is that “the proper lens for viewing antitrust problems is price theory.”30 Foundational to this view is a faith in the efficiency of markets, propelled by profit-maximizing actors. The Chicago School approach bases its vision of industrial organization on a simple theoretical premise: “[R]ational economic actors working within the confines of the market seek to maximize profits by combining inputs in the most efficient manner. A failure to act in this fashion will be punished by the competitive forces of the market.”31

. . . .

Practically, the shift from structuralism to price theory had two major ramifications for antitrust analysis. First, it led to a significant narrowing of the concept of entry barriers. An entry barrier is a cost that must be borne by a firm seeking to enter an industry but is not carried by firms already in the industry.34 According to the Chicago School, advantages that incumbents enjoy from economies of scale, capital requirements, and product differentiation do not constitute entry barriers, as these factors are considered to reflect no more than the “objective technical demands of production and distribution.”35 With so many “entry barriers . . . discounted, all firms are subject to the threat of potential competition . . . regardless of the number of firms or levels of concentration.”36 On this view, market power is always fleeting—and hence antitrust enforcement rarely needed.

The second consequence of the shift away from structuralism was that consumer prices became the dominant metric for assessing competition. In his highly influential work, The Antitrust Paradox, Robert Bork asserted that the sole normative objective of antitrust should be to maximize consumer welfare, best pursued through promoting economic efficiency.37 Although Bork used “consumer welfare” to mean “allocative efficiency,”38 courts and antitrust authorities have largely measured it through effects on consumer prices. In 1979, the Supreme Court followed Bork’s work and declared that “Congress designed the Sherman Act as a ‘consumer welfare prescription’”39—a statement that is widely viewed as erroneous.40 Still, this philosophy wound its way into policy and doctrine. The 1982 merger guidelines issued by the Reagan Administration—a radical departure from the previous guidelines, written in 1968—reflected this newfound focus. While the 1968 guidelines had established that the “primary role” of merger enforcement was “to preserve and promote market structures conducive to competition,”41 the 1982 guidelines said mergers “should not be permitted to create or enhance ‘market power,’” defined as the “ability of one or more firms profitably to maintain prices above competitive levels.”42 Today, showing antitrust injury requires showing harm to consumer welfare, generally in the form of price increases and output restrictions.43

. . . .

Two areas of enforcement that this reorientation has affected dramatically are predatory pricing and vertical integration. The Chicago School claims that “predatory pricing, vertical integration, and tying arrangements never or almost never reduce consumer welfare.”49 Both predatory pricing and vertical integration are highly relevant to analyzing Amazon’s path to dominance and the source of its power. Below, I offer a brief overview of how the Chicago School’s influence has shaped predatory pricing doctrine and enforcers’ views of vertical integration.

Link to the rest at The Yale Law Journal

It has been a long time since PG took an antitrust course in law school.

That said, he disagrees with the fundamental premise of the OP that, at the present time, Amazon must be reined in because it is too big and competitors are having a hard time.

PG agrees with the Chicago School argument that antitrust law is designed to benefit purchasers. If a company pushes prices down, absent some other factor, that’s a good thing. Competition that benefits purchasers is a public good. Antitrust law is designed to punish those who act improperly to push prices up.

Under PG’s view, if a seller pushes prices down for a period of time in order to force competitors out of business, then raises prices because competitors are gone, it is then that an antitrust violation occurs and the seller may be punished.

Amazon has not shown any price-increasing tendencies. PG also suggests that Amazon has a lot of competitors selling goods and services online. As far as competition is concerned, the online retail world is very easy to enter – a website, a spare room for inventory, a nearby UPS dropbox and a credit card processing service (there are lots) is about all that is needed. After all, Amazon began in Jeff Bezos’ garage.

Since the infrastructure necessary to become an online seller of goods and services is already in place and that infrastructure is not controlled by Amazon, Amazon cannot raise prices on its merchandise without leaving itself open to underpricing by competitors.

Walmart has put at least tens of thousands of merchants in small and medium-sized cities out of business.

Only a few years ago, Walmart was the bête noire of the same types of people who are complaining about Amazon’s antitrust violations today.

From The Unconvincing Antitrust Case Against Wal-Mart:

I recently picked up a copy of the July Harper’s Magazine to read an essay by Barry C. Lynn entitled, “Breaking the Chain: The Antitrust Case Against Wal-Mart.” If you can’t tell from the title, the basic point is that antitrust authorities should break up Wal-Mart and put an end to the immense havoc that the retail giant has caused the economy.

. . . .

Let me first summarize the Lynn’s argument and then discuss why they are entirely wrong as a matter of economics and sensible antitrust policy below the fold. Here are the basic moves in Lynn’s case against WM:

First, Wal-Mart is a monopsonist. Lynn writes that one in five of every American retail sales occurs at WM, and WM is dominating its retail rivals.

Second, WM leverages its monopsony power in a manner which antitrust law should prohibit. Lynn seems to have two antitrust harms in mind here.

The first is that WM has “changed the game” with respect to bargaining between supplier and retailers. WM dominates upstream suppliers by demanding lower prices, and using its own in-house brands to discipline suppliers, resulting in shrinking manufacturer profit margins. The article discusses WM’s reputation as a hard-nosed, no nonsense negotiator and cites examples of negotiations with Coca-Cola and Kraft. Lynn points to the use of “category management,” a practice where retailers delegate shelf space display decisions to a manufacturer (called the “category captain”) within a product category (say, sodas or soups).

Of category management, Lynn alleges without any substantiation that the practice has resulted in collusion by suppliers as well as retailers:

“one common result is that many producers simply stop competing head to head . . . . in many instances, a single firm ends up controlling 70% or more of US sales in an entire product line . . .. In exchange, its competitor will expect that firm to yield 70% or more of some other product line, say, snacks or spices. Such sharing out of markets by oligopolies is taking place throughout the non-branded economy . . . but nowhere is it more visible than in the aisles of Wal-Mart.”

Note the tension between the claim of supplier collusion and shrinking supplier margins. However, more importantly is the notion that category management and other changes in the bargaining relationships are necessary bad on antitrust grounds. There has been very little economic analysis of category management As a side note, Benjamin Klein, Kevin M. Murphy and are working on a paper entitled “Exclusive Dealing and Category Management in Retail Distribution,” which analyzes the economics of these arrangements as well as exclusive dealing contracts in retail . . . . From an antitrust perspective, it is difficult to imagine why category management would be any more of a concern than exclusive dealing, which is analyzed under the rule of reason and violates the Sherman Act when a number of conditions are satisfied (monopoly power, substantial foreclosure, barriers to entry, etc.). Category management only grants the manufacturer the right to favor his own product, and can be terminated by the retailer at any time, whereas exclusive dealing completely forecloses rivals from shelf space.

. . . .

The second antitrust harm Lynn points to is equally unconvincing. Lynn writes that even if WM is efficient, increased concentration in retail represents a “gathering of power unchecked and unaccountable,” and those who would defend efficiency must “view the American citizen not as someone who yearns to decide for himself or herself what to buy and where to work in a free market but to say, instead, ‘let them eat Tastykake.’”

. . . .

The data don’t match the theory. Taking Lynn’s antitrust theories on their own terms, perhaps the best place to start is that the data simply don’t agree. Retail margins have remained nearly constant for the past twenty years . . . .  Barriers to entry at retail are negligible, and because supracompetitive profits are dissipated through competition, payments to retailers are ultimately passed through to consumers.

What about prices? Lynn talks a great deal about the good old days of antitrust before the Reagan administration where the “goal was to enforce a balance of power among economic actors of all sizes, to maintain some degree of liberty at all levels within the economy.” The essay is essentially an ode to these discredited days of antitrust when consumer welfare took a back seat to attacking concentration for its own sake. For example, Lynn describes comments by then AG William French Smith that “bigness is not necessary badness” as “radical” and “astounding.” Really? Not to any undergraduate student of industrial organization. But what about prices? Does Lynn consider any of the competitive benefits of Wal-Mart, or is the antitrust case against Wal-Mart to be made at the expense of the consumer in the name some fuzzy principle of antitrust populism? Lynn’s essay says very little about prices except the following:

“to defend Wal-Mart for its low prices is to claim that the most perfect form of economic organization more closely resembles the Soviet Union in 1950 than 20th century America. It is to celebrate rationalization to the point of complete irrationality.”

Does anyone really believe that a retailer who earns 30% retail market share by competing vigorously for consumers is the equivalent to a central planner? I hope not. Retail competition is incredibly robust, as is easily observed by watching retail profit margins over the past 20 years in which concentration has increased substantially. To describe Wal-Mart’s negotiations with large manufacturers like Coca-Cola and Kraft as analogous to central planning activity is ridiculous.

Luckily, there is economic evidence that Wal-Mart is in fact very good for consumers.

Link to the rest at The Unconvincing Antitrust Case Against Wal-Mart

PG suggests that bigness is not badness. Bad actions by large or small entities is badness.

Walmart (“Low prices every day”) and Amazon (“Free Shipping” “Prime Day) are especially beneficial to middle class and lower class consumers for the simple fact that those consumers can buy more with their dollars.

PG suggests that the current consumer-oriented antitrust regimen is far more friendly than its predecessors, such as the now-gone Fair Trade laws which granted producers the right to set the final retail price of their goods, limiting the ability of chain stores to discount.

Even if a retailer wanted to sell products to consumers at a lower price and believed it could do so profitably, Fair Trade laws allowed manufacturers to prohibit such discounting. Essentially, Fair Trade laws allowed manufacturers the right to engage in legal price-fixing, a practice that only benefitted inefficient retailers, not consumers.

 

Patreon, Copyright, and Personal Choice

10 May 2019

From Kristine Kathryn Rusch:

Patreon’s Terms of Use has a possible rights grab buried in them. This is the relevant passage:

By posting content to Patreon you grant us a royalty-free, perpetual, irrevocable, non-exclusive, sublicensable, worldwide license to use, reproduce, distribute, perform, publicly display or prepare derivative works of your content. The purpose of this license is to allow us to operate Patreon, promote Patreon and promote your content on Patreon. We are not trying to steal your content or use it in an exploitative way.

Now realize that contracts need to be read in their entirety, and this is just one paragraph. But the first sentence of this paragraph gave me pause when I first read it years ago, and clearly it upset PG as well.

That sentence at the end of the paragraph? Technically, it’s not theft if you sign away the copyright. So that “steal” thing is kind of a misdirection.

And here’s another point: Even though the FAQ and Patreon’s home page contradict the rights grab, the grab is in the Terms of Use. The reassurances aren’t.

Since I’ve worked in publishing for decades, I learned the difference between language in a contract—which the Terms of Use is, whether we like it or not—and reassurances from the company. Language in a contract can be enforced relatively easily. Reassurances are usually just that: a nice pat on the head accompanied by a don’t worry your pretty little head, sweetie.

. . . .

I saw that possible rights grab the day I logged onto Patreon and started my account. And, at that moment, decided not to ever filter any fiction through Patreon’s site.

I have very different attitudes about my fiction and my nonfiction. I write nonfiction for other people. I write fiction for myself. I’m a control freak about my fiction. I’m quite loose with my nonfiction.

And those distinctions are on purpose.

To put it another way, I look at the difference this way: I’m going to the Licensing Expo in June and while there, I will be acting as a licensor for my fiction IP. I’m not even going to mention the nonfiction IP.

I see lots of possibilities for fiction. I know there are a lot of ways I can exploit the nonfiction as well, but I’m not as interested. I only have so much time in the day, and I’ll spend it on fiction.

The upshot is that I’m extremely protective of my fiction. In no way do I want to get in a pissing contest with an internet company that deals with billions of dollars in revenue when it claims that it owns my IP.

. . . .

So when I saw that clause in the Patreon Terms of Use, I cast about for mitigating factors. There are several. The final sentence of the paragraph for one. The FAQ for another. Unfortunately, those things don’t clarify the possible rights grab. Instead, they muddy the waters. There’s enough confusion to make a lawsuit possible, which brought up the nightmare I listed above.

I felt disappointed that I couldn’t use Patreon as another revenue stream for my fiction. But I wasn’t so disappointed that I would throw caution to the wind and jump onto the platform for a few extra bucks.

I hesitated on the nonfiction as well, but ultimately decided that I could take a risk with the nonfiction that I would never take with the fiction. I even put up exclusive nonfiction content on Patreon, but it’s similar to what I put on my website, and it’s never something that I would want extra copyright protection on, like some kind of investigative reporting or a piece of creative nonfiction.

I’m very protective of my IP, but I’m fluid in the ways I exploit it. Making a judgement about which service to use and which one to abandon has become old hat for me.

I do that when I see contracts. I’ve walked away from short story contracts, foreign contracts, traditional publishing contracts, and movie deals. I’ve walked away from deals that would have paid me hundreds of thousands of dollars but would have taken my IP for that price. I have yet to find that price that “they” swear we all have—you know: where you will sell out your principles for a fortune. Offer me tens of millions for total ownership of my fiction IP and I will say no every single time.

Nonfiction, though…I’ll think about it. Maybe this comes from the fact that I got my nonfiction education in radio as a volunteer. In other words, I wrote nonfiction for free (or rather, as I saw it, in return for a master class in writing under fire). When I became proficient, I got paid (a tiny salary, but still). So there was money, but it was never the focus of the nonfiction.

. . . .

1. Know What You’re Signing. Make sure you understand the legalese. Make sure you know what each clause means and/or how a court might interpret those clauses in relation to all other clauses.

As PG mentioned in his long post, “Under general principles governing the interpretation of contracts, if there is a conflict between a specific and a general provision, the specific provision will govern.” He uses the Patreon Terms of Use as an example. The first sentence in the copyright grab is very specific. The second, slightly reassuring sentence, is very general.

In other words, the copyright grab has a good chance of holding up in a court challenge. Right now, we’re discussing a made-up court challenge that might never happen. So…

. . . .

6. Don’t Ever Delude Yourself About The Consequences. Ever. Don’t let the phrase, “Yeah, I know it’s bad, but they’ll never do that to me” out of your mouth. If something is in a contract, or part of a deal, then there’s a very real chance that that something will get activated. Someone—maybe not the person you’re negotiating with—will do that horrible thing allowed by the contract.

Be prepared for that. If you can live with that bad thing, then sign the deal. If you can’t, don’t sign.

The choice really is that binary.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

As usual, Kris has created an insightful post about a good way of thinking through a common business problem.

The most common response PG has received when he points out an egregious contract provision to the other side of a potential deal (the ones who wrote the contract) is something like, “We would never do that.”

PG’s reply is usually some version of, “That’s wonderful. I’m sure my client will be happy to hear that you won’t mind taking that provision out of the  contract.”

When a large organization is on the other side of a negotiation, about 99% of the time, the next statement is some version of, “I’m sorry, I can’t do that. This is our standard contract that everyone signs.” Sometimes it’s followed by a reference to computer accounting systems or, occasionally, an unnamed lawyer or department full of lawyers (“our lawyers”).

In ancient times, when contracts were engraved on brass or copper plates, changing a “standard contract” was certainly a laborious and time-consuming task. In the 21st century, every contract exists as an electronic document somewhere. If it’s electronic, it’s easy to change. On occasion, PG has offered to prepare a clean version of the contract without the nasty bits to help lessen the other side’s onerous workload.

In some cases, the counterparty with whom PG is negotiating honestly believes the contract can’t be changed. Someone higher in the organization has said so.

What the other side is really saying is, “We won’t change the contract for your client.”

For large publishers, without going into details, PG will assure one and all that the publishing contracts for best-selling authors tend to differ quite a lot from those publishers’ “standard contracts” which “can not be changed”.

PG has sometimes wondered if, when one acquiring editor at a publisher is saying, “I’m sorry, we can’t change our contract”, another editor is saying, “What language would you suggest?”

When someone is reviewing a contract, including a contract that will govern rights to a book or story they have written, it can be a useful exercise to ask, “What is the worst thing that could happen to my story or me if every single provision in this contract were strictly enforced according to the literal meaning of the words?”

Another useful exercise is to ask, “If people I didn’t like were to acquire this company, would I upset if they looked at the contract and did (or didn’t do) everything the contract permitted?”

One of the particular problems with traditional publishing contracts is atypical of business contracts in the non-publishing world.

Most business contracts last for a specific period of time – one year, three years, maybe even ten years. Such agreements can be extended or renewed if both sides agree. If someone enters into a bad contract, in the worst case, there is an end in sight for the obligations and restrictions contained in the agreement.

This is not the case for an author entering into what passes for a standard publishing agreement, at least in the US. As PG has noted many times before, language such as “the full term of the author’s copyright” can be expected to appear somewhere. In the US and many other countries, this means that contract is a lifetime contract for the author. The contract has a good potential for continuing for the lifetimes of the offspring of authors in their middle years as well.

If PG were king for a day, he would decree that all traditional publishing contracts would last for no more three years (maybe five if he was feeling charitable toward publishers that day).

At the end of the initial term, a publishing contract could be renewed for an additional three year period if, at that time, both the author and the publisher agreed that it would be renewed. If the contract was not renewed, the author would regain all rights to the book(s) covered by the contract.

If Amazon continues to compete with traditional publishers for the books of entrepreneurial authors and if publishers decided to respond by aggressively competing with Amazon, publishers might match Amazon’s KDP contract terms – either the author or Amazon can terminate the agreement at any time and remove the author’s books from Amazon’s store.

 

‘Blurred Lines’ on Their Minds, Songwriters Create Nervously

15 April 2019

From The New York Times:

It’s not easy to be a songwriter in the pop world these days. Listeners rarely see your name. For anything but a giant hit, royalties from streaming are infinitesimal — and big tech companies seem to want to keep it that way.

And then there’s the shadow of “Blurred Lines.”

Four years after the copyright trial over that No. 1 song — in which Robin Thicke and Pharrell Williams, its primary writers, were ordered to pay more than $5 million for copying Marvin Gaye’s disco-era hit “Got to Give It Up” — the case still looms over the music industry and individual songwriters, who were left to wonder when homage bleeds into plagiarism.

Intellectual property lawyers and music executives interviewed for this article said the case had fueled a rise in copyright claims. In September, Ed Sheeran will go to court to defend “Thinking Out Loud,” a Grammy-winning song that has been accused of mimicking another Gaye classic, “Let’s Get It On.”

. . . .

The aftereffects of the “Blurred Lines” decision — which was upheld on appeal last year — have been felt most acutely by rank-and-file songwriters, who work in obscurity even as their creations propel others to stardom. The ramifications for them have been inescapable, affecting royalty splits, legal and insurance costs, and even how songs are composed.

The songwriter Evan Bogart, who has written for Beyoncé, Rihanna and Madonna, described second-guessing himself in the studio, worried that a melody or lyric might cross a line he can no longer locate.

“I shouldn’t be thinking about legal precedent when I am trying to write a chorus,” Mr. Bogart said.

Most accusations of plagiarism never go before a judge. Instead, they are settled quietly — and often protected with confidentiality agreements — with the results evident only in the fine print of writing credits.

. . . .

Occasionally, an outlying case will force industrywide adjustment. In 1976, for example, songwriters had to reckon with the idea of unintended infringement after George Harrison was found to have “subconsciously” based his first solo hit, “My Sweet Lord,” on a girl-group classic, the Chiffons’ “He’s So Fine.” After the decision, Mr. Harrison wrote in his memoir, he felt a “paranoia about songwriting that had started to build up in me.”

The “Blurred Lines” case, many lawyers and executives say, has become the latest watershed, putting the commonly understood rules of songwriting up for debate.

As songwriters often remark, there are only so many notes in the scale, and influence is essential to the art. Harvey Mason Jr., a songwriter and producer, said the “Blurred Lines” case “unnerved a lot of people writing songs, because a lot of what inspires creative people is the work that has been done before.”

. . . .

At the “Blurred Lines” trial, an eight-person jury heard detailed and esoteric testimony by expert witnesses from both sides about what, if anything, Mr. Thicke and Mr. Williams had copied from “Got to Give It Up.” The Gaye estate contended that specific musical passages had been lifted. Lawyers for Mr. Thicke and Mr. Williams countered that they had simply created a genre piece with a similar groove and feel, the kind of thing that musicians — and copyright lawyers — had long considered fair game.

In a dissenting opinion published when the case was upheld last year, Judge Jacqueline H. Nguyen of the United States Court of Appeals for the Ninth Circuit argued that the verdict allowed the Gaye estate “to accomplish what no one has done before: copyright a musical style.”

Mr. Thicke was also a fickle witness. He had given interviews citing “Got to Give It Up” as inspiration for his song, only to deny it in depositions, saying he had been intoxicated when talking with music journalists.

“I doubt if any more artists will tell Rolling Stone where they got their inspiration,” Tor Erik Hermansen, part of the songwriting and production duo Stargate, said in an interview.

Although the case did not result in any changes to copyright law, it has had a palpable effect. More songwriters are arming themselves with expensive insurance policies. And musicologists — academically trained experts who sometimes consult in copyright cases — are in greater demand.

. . . .

Songwriters now face heightened scrutiny of their work while it is still in progress, as record companies and music publishers sometimes vet new songs for echoes of past works.

“I’ve had a couple experiences where I was writing something and a lawyer and musicologist said, ‘It sounds like this old song, it’s a very active estate, they’re going to come after you,’” said Mr. Mason, who has worked with stars like Whitney Houston and Kelly Clarkson. “I changed a few notes.”

Link to the rest at The New York Times

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