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Tony Berman will be speaking on a panel at the 129th Audio Engineering Conference on Sunday, November 7th from 9:00am - 10:30am room 132 at Moscone Center, San Francisco.
The panel will be discussing the current state of digital distribution of commercial audio recordings, and how the audio engineering community can get involved with digital distribution channels to create a new direction toward the goal of high resolution downloads.
by Mark A. Pearson, Esq.
The following is the third in a series of articles that will try and explain some of the pros and cons of entering into a licensing agreement in today’s entertainment industry.
Recently, we were approached here at BEAT-LAW by a client wondering if she could terminate a licensing agreement she’d entered into without any penalty (i.e. without getting involved in litigation). My first reaction was to grab a copy of her license and look for the stated ‘term’, or duration of the license. Unfortunately, the license was silent as to the term. Why, you might ask, was there no stated duration? Well, the license was oral. It turns out the parties had been working on a hand-shake agreement for years.
I suppose I should start by letting you know that you should always strive to get your agreement in writing, and in most cases there should be a stated duration. Seems rather a basic idea, but often because of the nature of the parties involved and their relationships there is no written agreement. It happens.
Here are two examples of a situation where you might find Intellectual property, namely copyright rights, being licensed without a written agreement. Two friends, one a producer and the other a singer, get together in the studio to record a few songs. The producer brings with him a bunch of pre-recorded tracks he had put together several years earlier. The singer records some new vocals. The producer mixes the vocals with the tracks, and we have ourselves a new master recording. There was no written agreement between the parties, but rather a handshake agreement that the singer could ‘own’ the new master recording. Thus, the producer has licensed his tracks to the singer under an oral agreement. I should also mention that all of this happened in California.
The second example comes where two parties, a record label and a distributor, enter into discussions to release an album. The parties, both based in Illinois, haven’t reached a formal agreement but decide to go ahead and get the album out in time for the Christmas season. Subsequently, the parties never come to a formal agreement as there were ongoing disagreements on several terms. However, the album was released under direction of both parties, and thus an agreement was formed.
The first question is whether these agreements are, in fact, binding and legally enforceable. Under U.S. Copyright Law, "A transfer of copyright ownership, other than one by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent." 17 U.S.C. § 204(a). This is the old Statute of Frauds concept, and seems to suggest the oral agreements in the examples, above, would be unenforceable. However, almost across the board courts have ruled that oral or implied transfers of copyright ownership create a non-exclusive transfer of ownership. These non-exclusive transfers can be made without a written agreement and, most importantly, do not violate the Copyright Act. Walthal v. Rusk, 172 F.3d 481, 1999 U.S. App. LEXIS 5455 (7th Cir. 1999), I.A.E., Inc. v. Shaver, 74 F.3d 768 (7th Cir. 1996).
Therefore, in both examples, above, the oral transfer of copyright rights created an implied non-exclusive license. It’s important to note the nature of non-exclusive licenses by pointing out that the producer in the first example could go ahead and use the tracks (i.e. license them to third parties) without getting the singer’s permission. This non-exclusive license created by the oral and implied agreement opens up a huge can of worms, and is a glaring example of why you should always seek to “get it in writing”.
Remember our client wanted to know if she could terminate her oral agreement without penalty. The next question is: When can oral or implied licenses, or even ones that simply have no stated duration, be terminated?
There are several possible ways to terminate an oral or implied license. The parties can simply agree to terminate the license. This can be done by agreeing to an end date during the negotiations stage: In the second example, above, let’s say the parties had agreed that the distribution license was to last for three years, and had email messages supporting this point. It would then be arguable that the agreement duration was agreed upon as being three years. Termination can also be accomplished by agreeing to modify the oral or implied license at a later time: The parties agree that their relationship is not fruitful after six months, and agree in both words and performance to terminate the agreement.
Termination by agreement would also work where a written license states a termination date (i.e. language in the agreement stating, “This term of this agreement shall be perpetual” or “This agreement shall last for three (3) years from the date first stated above”, etc.), or the parties agree in writing at a future date to terminate earlier or later. Note that an oral agreement can amend a written agreement, thus it becomes important to always include a clause in your written agreements stating that the agreement cannot be modified except by an amendment executed by the parties.
Sometimes, termination can be implied by the conduct of the parties involved. The label never sends any materials to the distributor for use in manufacturing the album, and the distributor never raises an objection.
What happens, though, if the license is silent as to the duration? Most states have laws making any agreement that is silent as to duration terminable at-will whether written, oral or implied. This is the case here in California, where absent language or a showing of an agreed upon duration, a contract can be terminated by either party. Zimco Restaurants, Inc. v. Bartenders and Culinary Workers' Union, Local 340, 165 Cal. App. 2d 235, 331 P.2d 789, 792-92 (Cal. Ct. App. 1958). So, it appears that, in both examples, that the parties could just terminate the agreement by simply putting the other party on notice that they had elected to terminate.
In 1993, the Ninth Circuit in Rano v. Sipa ruled that under § 203 of the Copyright Act, non-exclusive licensing agreements silent as to duration are not terminable at-will from the moment of creation; instead, they are terminable at the will of the author only during a five year period beginning at the end of 35 years from the date of execution of the license (unless they explicitly specify an earlier termination date). 17 U.S.C.S. § 203(a). Rano v. Sipa Press, 987 F.2d 580 (1993). For background purposes, under § 203 of the Copyright Act the copyright holder who has assigned or licensed their rights to a third party can reclaim their rights after 35 years as an operation of law. § 203 applies to exclusive and non-exclusive transfers, and the only time it does not come into play is when the subject of the copyright was made as a Work For Hire. You can learn more about Work For Hire agreements by checking out this MELON article.
The bottom line is that the Ninth Circuit’s ruling means that in California, any state law regarding at-will termination of agreements silent on duration is trumped by federal law where the subject of the license is copyright transfers. Thus the parties in the first example would not be able to terminate the license unilaterally until 35 years after the agreement was created. Let’s say the singer never really did much with the master recording, but Dr. Dre heard the track and wanted to license it from the producer. Obviously, the good Dr. would want an exclusive license on the track, which wouldn’t be available since the singer has a valid, oral, non-exclusive license that the producer couldn’t cancel. I’m guessing the singer is going to get paid to get those rights back. I’m also guessing the producer now wishes he had a written agreement.
Just so you are aware, there is plenty of debate on the Rano ruling. Several jurisdictions have criticized Rano, and the Seventh Circuit rejected Rano; ruling that Illinois state laws allowing for at-will termination of non-durational copyright licenses are valid. Walthal v. Rusk, 172 F.3d 481 (1999). In the second example, the record label, realizing their oral agreement with the distributor was not favorable and that the planned written agreement wasn’t going to happen, could simply terminate unilaterally by giving the distributor notice that the agreement was rescinded. Again, check your facts, because some jurisdictions hold that when an agreement does not contain an express statement as to duration, the court should determine the intent of the parties by examining the surrounding circumstances and by reasonably construing the agreement as a whole in determining the issue of duration. Sensormatic Sec. Corp. v. Sensormatic Elecs. Corp., 249 F. Supp. 2d 703, (D. Md. 2003). It is also the case in California that the general rule increasingly has given way to courts' willingness to "gap fill" a reasonable duration. Foley v. Interactive Data Corp., 47 Cal. 3d 654, 765 P.2d 373, 385-86, 254 Cal. Rptr. 211 (Cal. 1988). The question in our second example then becomes whether the parties have acted in a way that would lead a court to determine a reasonable duration, or have inferred duration by some other means.
A final way of allowing a party to unilaterally rescind a contract regardless of there being a stated, implied or written duration is when the other party materially breaches the contract. Under well-settled copyright law, a party would be able to claim copyright infringement if the other party exceeded the scope of the licensing agreement, see, e.g., S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081 (1989), breached a covenant or condition, see, e.g., Fantastic Fakes, Inc. v. Pickwick International, Inc., 661 F.2d 479 (1981), or breached the agreement in such a substantial and material way as to justify rescission. See e.g., Affiliated Hosp. Prod. Inc. v. Merdel Game Mfg. Co., 513 F.2d 1183, 1186 (2d Cir. 1975). Thus, if the distributor in the second example fails to pay the label, the label could terminate based on a material breach of the contract.
At the end, or termination, of the day you always want to “get it in writing”, but if you don’t and you end up wanting to rescind (or wanting to stop the other party from rescinding), you need to be aware of the laws in your particular jurisdiction. It might not be as simple to terminate a licensing agreement as your standard, blanket, terminable at-will state law might lead you to believe. Oh yeah, it goes without saying, you might also want to avoid breaching your agreements, as a rule.
The DMCA, a U.S. copyright law enacted in 1998, was created to protect intellectual property on the Internet. The Act also created carve-out “safe harbor provisions” (as previously discussed in a post here) to protect service providers from infringing acts committed by its users. To qualify for such protection, providers must comply with certain regulations: they must promptly take down unauthorized materials from their site when notified by the true copyright owner. Furthermore, they must be able to show they did not actually know the material was infringing and still did nothing. In other words, they must not have deliberately turned a blind eye to the problem. In addition, even if providers did not have any such actual knowledge, they must not have been aware of any facts or circumstances that made the infringing activity apparent.
Why did Viacom sue Google’s YouTube?
Viacom, which owns the MTV, Comedy Central and Nickelodeon networks, claimed that Google allowed tens of thousands of Viacom’s copyrighted videos to be uploaded onto YouTube, without authorization, which resulted in hundreds of millions of views. (Google acquired YouTube in 2006 for nearly $1.7 billion.) Viacom argued that because Google and YouTube actually knew of and were aware of the infringing activity, they were not protected by the safe harbor provision, and therefore subject to liability. Viacom sued for $1 billion in damages.
Did Google know about the infringing material?
To some extent, there was evidence that Google was aware that unauthorized, copyrighted materials were uploaded onto YouTube. This evidence was presented in court documents, in the form of emails that had been exchanged between the founders of YouTube. The emails essentially showed that they chose not to take down such materials, in order to increase user traffic on the site.
However, Google’s attorneys successfully argued that despite its general awareness of the unauthorized videos, Google did not actually know that they were copyrighted materials owned by Viacom. On user-generated content sites, it can be extremely difficult to distinguish between authorized and unauthorized material; the site-owners do not know who actually posts the clips.
Why did the court side with Google?
The issue comes down to whether a provider’s general knowledge that unauthorized materials are present on the site is enough knowledge to lose its safe harbor protection? Judge Stanton answered “no”, ruling that forcing service providers to police copyrighted material, that is, to require providers to actively discover what is authorized and what is not, would contravene the structure and intent of the DMCA. The responsibility of monitoring the material rests squarely on the shoulders copyright owners. Indeed, this case shows that the DMCA regime works efficiently: after Viacom sent one mass takedown notice to YouTube on February 2, 2007, in regards to some 100,000 unauthorized videos, YouTube immediately removed nearly of them, wrote Judge Stanton. Because YouTube complied with these basic requirements, it is protected under federal law from claims of copyright violation.
Should service providers employ filtering technologies now?
Since Viacom filed suit, YouTube implemented an automated filtering system in 2008 to detect and block infringing clips from being uploaded onto its site. It has also secured rights through various licensing deals to post hundreds of thousands of music videos, TV shows, and film clips.
Based on Judge Stanton’s ruling, these extra precautions do not appear to be necessary. Basically, so long as the provider complies with a takedown notice in a timely manner, and it does not actually know that certain unauthorized materials, belonging to specific copyright owners, are present on its site, then that is all that is necessary to be protected under federal law.
Why is this decision important? What does it mean for the future of information and media on the Internet?
With the explosion in user-generated content on the Internet over the past few years, there has been a constant battle between the creative community (the owners and creators of the content) and the disseminators of the information. It essentially comes down to two viewpoints: those companies and users who see the Internet as a rich entertainment platform, with free flowing ideas and content, and those parties who value the creative product they have created as personal property.
If the ruling survives Viacom’s anticipated appeal, it is an affirmation of the current statutory framework, and basically takes the burden off of user-generated service providers from having to monitor each and every piece of material that its users post to its site, as long as it plays by the rules. On a broader scale, the decision encourages users to freely share media through services such as YouTube and Facebook, thereby facilitating the growth of a rich online community of information, communication and entertainment.
Tony and Mark will be speaking as guest Panelists at the Soul Music By the Bay Conference on June 25-26, 2010. This Conference will be the first event of its kind- featuring the industry's professional leaders who will provide cutting edge information, as well as live performances by talented artists. A great networking event!
Tony, along with featured artists, will discuss the importance of Live Performances, how to connect with an audience, and maintain a lasting career as a performer.
Mark will discuss how lawyers use strategies to negotiate contracts on behalf of clients with studios, record companies, endorsers, as well as the impasse in union contract wars. Learn how entertainment attorneys can protect against copyright infringers, invasion of privacy, and help in making the appropriate contractual decisions to help further artists' careers.
The following is the second in a series of articles that will try and explain some of the pros and cons of entering into a licensing agreement in today’s entertainment industry.
There are any number of different types of licensing agreements that come across my desk in a typical work week. Some are short-form agreements, and others spell out every detail of the parties’ intentions over 50 pages or more. One thing they all have in common; boilerplate provisions. You know; the stuff that gets jammed into the last few pages of the license under the heading Miscellaneous. Well, I’m here to remind you that while they may not be the sexiest part of a license, boilerplate provisions can solidify a good license or create possible pitfalls in a bad one.
This week we focus on an important boilerplate provision known as the Indemnity Clause. An Indemnity or indemnification Clause is a provision in which one or both parties to the license agree to hold harmless the indemnified party from liability to a third party for loss or damage resulting from such liability.
As we discussed in Part 1, there is a trend in the entertainment industry toward licensing intellectual property rights. Music and motion pictures licensed for distribution would be an example. Inherent in the licensing of intellectual property is a fear on the part of the licensee that a third party’s rights may be violated by the licensor’s work. For example: Two musicians write a composition together and record a master of the song. Musician A, a rather shady character, licenses the exclusive right to distribute the master to Distributor. Distributor distributes the master and pays royalties and advances to Musician A. Meanwhile, Musician B, who owns all rights to the master, knows nothing about the agreement between Musician A and Distributor. When Musician B finds out about the agreement she sues both the Distributor and Musician A jointly and severally for copyright infringement and to recover monies earned under the license.
In the example, a solid indemnity clause in the agreement with Musician A would protect the Distributor from liability stemming from Musician B’s rights in the master. Without an indemnification Clause, or with a poorly worded and thus unenforceable Clause, Distributor might be liable to Musician B for big bucks!
A good Indemnification Clause starts with setting forth a clear intention to indemnify. You should start the clause by stating the intention of the parties to provide indemnity. Next, set forth the indemnitor and indemnitee. The indemnification may or may not be unilateral. If there is a third party involved in the indemnification (an insurance provider for instance), make sure they are included. The clause must state that the indemnitee need notify the indemnitor of a claim or lawsuit in a timely manner, and how long the indemnification will last. Will indemnity survive the termination of the license and for how long? Finally, always include a clear statement on the losses, damages and liabilities covered, including whether or not future losses are covered.
You cannot draft an Indemnification Clause without understanding what can and cannot be indemnified. First and foremost, the indemnification must be as against liability to a third party. Public policy dictates that an Indemnification Clause is not enforceable if it seeks to indemnify against illegal activity, wrongful acts or a breach of a fiduciary duty. In the example listed above, you might make an argument that the Distributor was negligent in not discovering Musician B. In some jurisdictions negligence might void the Indemnification Clause. Other jurisdictions make a distinction between active and passive negligence, allowing for indemnification if the negligence was passive. Arguably, the Distributor not discovering Musician B is passive negligence, if negligence at all. The important thing to remember is; if the Indemnification Clause is clear and knowingly bargained for, it is more likely to be enforceable even if it covers negligent acts. A simple way of making it apparent that the Indemnification Clause was knowingly bargained for is to put it under its own heading. Get it out of the Miscellaneous bin.
Once you’ve established a clear definition of whom and what is being indemnified, here are some other things to think about when drafting your clause. It’s implied that the indemnification covers legal costs and attorney’s fees, but it never hurts to make sure you expressly set forth langue covering those costs and fees.
A big issue revolves around the issue of consent to settle. If you are an indemnitor you want to make sure you have approval over any settlement that the indemnitee enters into. Going back to our example, imagine if Musician A had the legal right to enter into the agreement with the Distributor, but Musician B filed the lawsuit anyhow. Distributor could simply settle with Musician B to avoid the hassle, and send the bill to Musician A. Now, imagine if Musicians C, D, E & F also came forward and filed claims against the Distributor, who in turn settles with all of them. Ouch! On this same note, Indemnitors may also want to participate in the indemnitee’s defense, including selection or approval of the attorney.
Finally, you’re going to want to think about how the Indemnitee is going to be paid in the event of a lawsuit or settlement. Will the Indemnitee be able to withhold payment under the license in order to pay for the cost of defending? Back to the example; under their license, Distributor is paying a royalty to Musician A on the master Distributor is exploiting. Musician B sues, and Distributor notifies Musician A that it is seeking indemnity under the agreement, and will be withholding payment of royalties to pay for its legal defense. Here at BEAT-LAW, we’ve seen instances where the indemnification clause called for a bond to be established upon commencement of a lawsuit, or where the indemnitee is able to call for advance payment from the indemnitor to cover all legal fees. If you are the indemnitor, you’d prefer that no payment be made until after final adjudication of any claim or lawsuit. Whatever the parties agree upon, make sure your Indemnification Clause clearly covers this issue. Do not remain silent!
Imagine a music service that allowed you to search for and download nearly any song for free with no monthly limits or caps. You could burn the downloaded music to a CD, either creating mixes or burning complete albums. This service exists, but it isn’t called Napster, and this isn’t 1998. All-you-can-eat music download services are being utilized by various universities who pay a site license on behalf of their students. While the downloads aren’t exactly free if the students are paying for it in the form of tuition or a technology fee, most college students don’t feel like they’ve paid for anything when it’s wrapped up in their regular tuition bill. Why does this feel an awful lot like what Napster was proposing to the record labels 10 years ago? Because that’s exactly what it is.
The following is the first in a series of articles that will try and explain some of the pros and cons of entering into a licensing agreement in today’s entertainment industry.
As the various business models of the entertainment industry continue to reinvent themselves almost on a daily basis, one prevailing trend is the growing use of licensing. More entertainment product is now self-produced by artists than ever before. The “Studio System” and “Major Label” business models are quickly becoming obsolete. It’s beyond the scope of this article to make any grand sweeping speculation as to why the industry models are changing. Are these changes the result of the economy, backlash against the ‘old systems’, or technology changes? The answer probably lies somewhere in the murky gray area known as “a combination of all of the above”. The point is that change is here, and change means an influx in the use of licensing throughout the entrainment industry as the shift continues toward independent production.
Take the music industry, for example. Under the old model, record labels hired talent evaluators to find artists, signed those artists to a recording contract, paid for the artist to record an album, created and distributed the album, and then profited off the sale of the album. The label owned the copyright to master recordings that made up the album, and shared in the copyright of the song publishing with the songwriter. The artist made money off of royalties paid by the label (including their advance) based on sales of the album, and on royalties paid to the songwriter by a performing rights organization (ASCAP/BMI) for use of the song.
The Digital Millennium Copyright Act (DMCA) made a number of changes to copyright and how copyright enforcement works in the age of the internet. To say that the DMCA has a mixed reputation would be an understatement. One controversial provision prevents consumers of lawfully purchased music or movies from making legal copies because doing so would involve circumventing copy protection measures. An example of this would be the copying of a DVD to a portable device like an iPod. The provision that criminalizes the mere possession of circumvention tools such as DVD copying software is equally controversial.
Sometimes the controversy is caused by the misuse of the DMCA by companies inappropriately invoking its provisions to unfairly limit consumer choice. This was done by Lexmark, an inkjet and laser printer manufacturer who tried to use the DMCA to prevent third party ink makers from competing with Lexmark’s high priced refills. Their efforts failed in court.
What is Sampling? Sampling has several definitions, but the one used most commonly in music today is the practice of taking a section of recorded music, such as a guitar riff or a horn flourish, and inserting it into a new recording, often with some modification and in a loop. The use of samples in music can vary. Some samples are a straightforward reproduction of a familiar section of a popular song set to a new style of music. Examples of this approach are MC Hammer’s “U Can’t Touch This,” Vanilla Ice’s “Ice Ice Baby,” and Kid Rock’s “American Badass,” which sample Rick James’ “Superfreak,” Queen’s “Under Pressure,” and Metallica’s “Sad But True” respectively.
We get asked all the time about the copyright notices on CDs. There seems to be a lot of confusion about what is required and what exactly is meant by the “c in the circle” and the “p in the circle”. So let’s lift the veil on this issue.
There are two copyrights in music: the sound recording (which in general is owned by the record label) and the musical composition, including the lyrics (owned by the publishers).
But there is also a separate copyright for the CD packaging and artwork.
Example: © 1983 ABC Record Co.
Example: (p) 1983 ABC Record Co.
What about the copyright in the underlying musical compositions?
Where should the copyright notices be positioned?
The notices should be affixed to copies of the CDs in a way that gives “reasonable notice of the claim of copyright.” The three elements of the notices should appear together, as in the examples above, on the CDs or on the CD labels and inserts.
Are the notices really necessary?
The omission violated an express written requirement that the published copies or CDs bear the notice.
This refers to the old copyright law requirement that a published copy bear the notice of copyright. If it did not, the applicant had five years to cure the omission or error in notice before the work went into the public domain. So, for works that are published between January 1, 1978 and March 1, 1989, no corrective steps are required if the omission violated an express written requirement that the published copies bear the notice (i.e., the old copyright law) because the work has already gone into the public domain.
The copyright owner must have made a reasonable effort to add the notice to all copies or CDs that were distributed to the public in the United States after the omission was discovered.
If these steps were not taken, the work went into the public domain in the US five years after publication. At that time all US copyright protection was lost and could not be restored.
Since prior law required the use of copyright notice, such use is still relevant to the copyright status of older works. While the use of a copyright notice is no longer required under US law thanks to the Berne Convention, it is often beneficial. Notice informs the public that the work is protected by copyright, identifies the copyright owner, and gives the year of first publication. Further, if there is proper notice of copyright on the work, and the work is in fact infringed, it mitigates defendant’s claim of an innocent infringement defense.
The Grammy Foundation® and The Entertainment Law Initiative® present Digital Music Distribution - The Paradigm Shift on Wednesday, June 10, 2009, from 7PM to 9PM.
BEAT-Law's Tony Berman will be a featured panelist, along with Jonathan Earp, VP of Legal Affairs, IODA; Sean Leonard, Digital Strategist; and David Hirshland, President, Bug Music. Tony will be speaking about the subscription services business model as well as the issues of “disintermediation,” as that term is commonly understood by the digital music industry.
The purpose of this legal seminar is to educate and update the emerging trends of music industry distribution through "brick and mortar" stores to online digital music distribution with digital downloading technology such as Emusic.com, Napster, iTunes, and IODA.
Topics will include use of widgets, iTunes, blogging, Facebook, MySpace, YouTube, and more.
Gary Culpepper, Esq., co-founder and former Executive Vice President, Business and Legal Affairs Emusic, will moderate the seminar, with opening remarks by Scott Goldman, Vice President, The GRAMMY Foundation. It will be held at The NEW offices of The Recording Academy, 3030 Olympic Blvd., Santa Monica, CA.
Today's podcast answers a question from Paul, a member of a tribute band whose theater-style shows involve numerous singers and musicians, as well as a great deal of interstate travel. Paul asks how he can find out how income is taxed in various states? Also, if he incorporates his band, will the band have to collect taxes from the performers as employees, or can they be hired as independent contractors? Finally, is there an ultimate guidebook to bands navigating the music industry?
Podcast: What Royalties can I get for someone Sampling my Beats?
Today's podcast features BEAT-Law associate Mark A. Pearson answering a question from Robert, of Superstarz Ent. Robert says, a record label wants to use some of his beats for a major recording artist. What royalties is Robert entitled to?
Will the PRO-IP Act Prove to be PRO-blematic?
Despite much controversy, President Bush signed into law the Prioritizing Resources and Organization for Intellectual Property Act of 2008, affectionately known as the PRO-IP Act, on October 13, 2008.
The usual suspects were characteristically divided over the PRO-IP Act. Big content owners (RIAA, MPAA) in the entertainment industry enthusiastically pushed the bill, while public interest groups (EFF, Public Knowledge) fiercely argued to have some of the most extreme provisions of the bill pulled.
Another supporter of the act was the U.S. Chamber of Commerce, which reported that 40% of the nation's economic growth, more than $5 trillion, comes from intellectual property. This includes music, movies, pharmaceuticals, fashion, and software, which together represent more than half of U.S. exports.
Particularly in light of the current economic crisis, Congress and the President seemed eager to protect such a large portion of the economy.
Neither side got everything they asked for, however, both were relatively successful in reaching a compromise.
As many YouTube enthusiasts know, takedown notices have become a standard operating procedure for many creative, young internet-video clip-makers. The most common and successful defense to these notices is a claim of fair use.
Recent litigation initiated by the Electronic Frontier Foundation, in support of Stephanie Lenz, has caused the courts to push back on the recording industry's aggressive tactics of what the EFF calls bad faith takedowns.
The video in question is Ms. Lenz's 29-second clip of her 18-month old son dancing with Prince's "Let's Go Crazy" playing in the background, which the EFF called "self-evident non-infringing fair use."
The US District Judge who heard the case insisted that the copyright owner must consider the fair use doctrine as part of its initial review, before sending out takedown notices.

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