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klemchukllp · 5 years

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Is the MMA Unconstitutional? Eminem’s Publisher Sues Spotify

New Lawsuit Alleges the Music Modernization Act (MMA) is Unconstitutional

In the latest chapter of music industry versus streaming services, Spotify has come under fire again for allegations that it did not secure the proper licensing rights from popular rap artist Eminem before streaming his songs billions of times. The music publisher claims the Music Modernization Act is unconstitutional.

New Twist on Licensing & Royalty Right – Is the MMA Unconstitutional?

Eight Mile Style, Eminem’s music publisher, filed a copyright infringement lawsuit in federal court last week against Spotify over royalty and licensing rights. While lawsuits against Spotify have not been uncommon, the latest development is new because Eminem’s publisher’s claims that the Music Modernization Act (“MMA”), which Spotify used to avoid paying royalties, is actually unconstitutional on its face.

The complaint made by Eminem and his publisher is groundbreaking because this is the first time a famous artist has declared the MMA to be unconstitutional, which surprises many as the MMA was supported by many different stakeholders in the music industry. While all sides agreed that the MMA was not a perfect piece of legislation that would solve all standing issues, the MMA enjoyed popular support because it was the first piece of legislation that actually began to tackle new copyright issues that had arisen due to the new technology platform and services that are known as digital streaming.

Eight Mile Style Argues Copyright Control Provision-Loophole in MMA is Unconstitutional

Before the passage of the MMA, digital streaming services such as Spotify and Apple Music had been sued multiple times under allegations that they had not paid the proper royalties due to songwriters, artists, and composers. In their defense, the streaming services had argued that the lack of a digital and centralized database made it unduly burdensome for the services to be able to track down the rightful owners of copyrighted works.

In the particular case at hand, Eight Mile Style has alleged that Spotify has purposely used the MMA to skirt paying proper royalties because it has listed many of Eminem’s songs under “copyright control,” which means that the song has no known owner. While Eight Mile Style is mostly faulting Spotify for its allegedly deceitful practices, complaining that it is ridiculous that Spotify would try to assert that Eminem’s music has no “known owner,” the complaint also takes issue with the MMA by arguing that it is unconstitutional because it does not provide adequate compensation for copyrighted works taken under “copyright control,” thereby violating the Fifth Amendment’s Takings Clause.

Generally, the “copyright control” provision of the MMA was intended to be applied to music that has either become public domain by virtue of the expiration of copyright protection or because there are no confirmed owners of the copyright in question. Because Spotify used this provision in order to avoid paying royalties, Eight Mile Style is arguing that this loophole in the MMA violates the Fifth Amendment, which limits the eminent domain (i.e., taking) power of the federal government by requiring compensation to be paid when private property is taken for public use, because streaming services have thus been able to avoid paying royalties by claiming works to be under “copyright control.”

The Music Industry and IP Counsel Will be Interested in the Outcome of This MMA Unconstitutional Claim

While it is possible that Eight Mile Style and Spotify could potentially settle this case before it ever gets to the Supreme Court, many agree that the Fifth Amendment issues raised by Eminem are not frivolous and should be heard before the Supreme Court. As such, it behooves counsel to follow this case as it winds its way through federal courts and potential appeals. Should the case settle early, it is possible the claim that the MMA could have unconstitutional issues will likely be raised by others. Additionally, streaming music platforms falling back on the MMA copyright control provision as a default safe harbor from obtaining proper licensing and paying royalties should take heed.

Read more about MMA Unconstitutional on Klemchuk Intellectual Property Trends Blog

#Eminem Spotify MMA Copyrights

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klemchukllp · 5 years

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12 Legal Issues to Consider in Operating an Online Business

The following article provides a high-level summary of some of the key issues online business operators face in running a website or other ecommerce business. Conducting business online or maintaining a website may subject businesses to unforeseen legal liabilities. The following issues are a brief survey of key issues:

1. Internet Business & eCommerce

A good starting point is analyzing a company’s online presence and auditing their procedures to analyze how to grow their brand and online influence. As part of this, the company’s agreements and websites should comply with the myriad of laws and regulations affecting websites and online businesses, such as COPPA.

2. Domain Name Acquisition

Domains are often the key to an online business, but can present a number of problems. Domain name issues include securing a domain name initially, as well as protecting domain names from adverse parties that attempt to trade off the goodwill associated with the company’s brand. Sometimes, the company needs defense, retrieval, and protection of domain names on the Internet.

3. Digital Millennium Copyright Act (“DMCA”) Compliance

Companies operating website, particularly where third-party content may be uploaded directly, should consider adopting agreements and procedures to shield clients against claims of liability and copyright infringement. This procedure is sometimes referred to as a “copyright policy” or “DMCA takedown procedure.”

4. Online Privacy

Online privacy continues to become a bigger issue. With the spread of mobile devices, tablets, and apps, privacy issues are becoming more complex. Companies should consider composing or updating their privacy policies as well as adopting internal security protocols aim at protecting the online privacy of customers and website users.

5. Social Media Law

While a powerful vehicle to build brand strength and interact with customers, social media can create a number of legal issues for online businesses. A social media policy provided to employees as well as guidelines can be effective steps to reduce risk. Areas to consider are employment related use of social media, confidentiality, sponsorship, and branding guidelines.

6. Privacy Policies

Privacy policies should not be copied from online templates or rival companies. They should be drafted comprehensively to address unique issues of an online business and to accommodate future growth. Whether a company looks to collect analytics or more personalized information, the company should focus on its specific business needs and risk factors. Privacy policies should be updated as a business evolves.

7. Terms of Use Agreements

Terms of Use (TOU) agreements can limit liability for companies that maintain an Internet presence. These agreements should be optimized to address a company’s specific business and should not be simply cut and pasted from the Internet. What works for one company may not work for another company.

8. Ecommerce Agreements

Ecommerce agreements come in many forms such as licensing, advertising agreements, and payment processor agreements. Ecommerce agreements should be drafted to address the primary legal risks involved in a particular ecommerce contract or business transaction.

9. Online Sweepstakes & Games

Online sweepstakes, contests, and games create a number of legal pitfalls. Depending on the sweepstake, contest, or game, compliance with the laws of all 50 states as well as the federal government may be required. Registration in specific states may also be required. Online businesses may benefit from guidance as to whether a particular new initiative is considered a sweepstake, contest, or game.

10. Domain Theft

Recovering hijacked domains can often be difficult and time-consuming. Often times, avoiding domain theft in the first place is much easier than attempting to recover a stolen domain. While difficult, it is possible to recover a hijacked domain.

11. Website Agreements

Website agreements can be customized to limit legal liability and reduce risks of disputes by analyzing an online business’s intellectual property portfolio, business processes, and brand objectives. Website agreements can be used for mobile applications in addition to websites.

12. Impersonation and Username Squatting

Impersonation and username squatting can occur when a third party registers a social media account using someone else’s identity. This can result in harmful posts and information being published in social media. Username squatting can also prevent a trademark or brand owner from controlling their trademark. Often times, registering usernames in advance is the best strategy to avoid impersonation or username squatting.

While the above identifies a number of ecommerce and internet law issues affecting website and online business operators, an in-depth analysis may be required.

Read the full article for key takeaways to online business legal issues.

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Klemchuk LLP is a litigation, intellectual property, transactional, and international business law firm dedicated to protecting innovation. The firm provides tailored legal solutions to industries including software, technology, retail, real estate, consumer goods, ecommerce, telecommunications, restaurant, energy, media, and professional services. The firm focuses on serving mid-market companies seeking long-term, value-added relationships with a law firm. Learn more about experiencing law practiced differently and our local counsel practice.

The firm publishes Intellectual Property Trends (latest developments in IP law), Conversations with Innovators (interviews with thought leaders), Leaders in Law (insights from law leaders), Culture Counts (thoughts on law firm culture and business), and Legal Insights (in-depth analysis of IP, litigation, and transactional law).

#ecommerce onlinebusiness entrepreneur

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klemchukllp · 6 years

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You know that silly fear about Alexa recording everything and leaking it online? It just happened

"Alexa, I told you so..." Amazon Alexa glitch sends private conversation to third party. #OnlinePrivacy #Amazon #Alexa

https://www.theregister.co.uk/2018/05/24/alexa_recording_couple/

#OnlinePrivacy #Amazon #Alexa

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klemchukllp · 6 years

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Memes 'will be banned' under new EU copyright law, warn campaigners

Will EU copyright law ban memes? #copyrights #EU #DigitalRights

https://news.sky.com/story/memes-will-be-banned-under-new-eu-copyright-law-warn-campaigners-11398577

#copyrights #EU #DigitalRights

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klemchukllp · 6 years

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You know that silly fear about Alexa recording everything and leaking it online? It just happened

"Alexa, I told you so..." Amazon Alexa glitch sends private conversation to third party. #OnlinePrivacy #Amazon #Alexa

https://www.theregister.co.uk/2018/05/24/alexa_recording_couple/

#OnlinePrivacy #Amazon #Alexa

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klemchukllp · 6 years

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Nonlawyers at LegalZoom performed legal work on trademark applications, UPL suit alleges

LegalZoom hit with unauthorized practice of law lawsuit over trademark work. #trademarks

http://www.abajournal.com/news/article/LegalZoom_UPL_lawsuit_trademark

#trademarks

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klemchukllp · 6 years

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Amazon patent describes mirror for trying on virtual clothes

Amazon obtains patent on mirror device for virtual viewing of different apparel. #amazon #patents #fashionlaw

https://www.engadget.com/2018/01/03/amazon-patent-mirror-virtual-clothes/

#amazon #patents #fashionlaw

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klemchukllp · 6 years

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Law firms try self-analysis, ‘Moneyball’ style

Big law firms apply "Moneyball" analysis of their business including predictive indicators and leading KPIs. #lawfirms

https://www.ft.com/content/2bed0a22-c66f-11e7-b30e-a7c1c7c13aab

#lawfirms

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klemchukllp · 6 years

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Man’s YouTube Video of White Noise Hit With Five Copyright Claims

Can a recording of "white noise" lead to copyright infringement claims? Professor hit was 5 copyright claims over same recording. #copyrights #youtube

https://gizmodo.com/man-s-youtube-video-of-white-noise-hit-with-five-copyri-1821804093

#copyrights #youtube

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klemchukllp · 6 years

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The Most Important Tech Trends Of 2018, According To Top VCs

Top tech trends for 2018 according to Venture Capital. #venturecapital #technology2018

https://www.fastcompany.com/40503654/the-most-important-tech-trends-of-2018-according-to-top-vcs

#venturecapital #technology2018

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klemchukllp · 6 years

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The Legal Risks of Monitoring Employees Online

Can employers' monitoring employees online lead to legal claims? This articles discusses a surprising number of concerns with employee online privacy. #onlineprivacy #employeerights

https://hbr.org/2017/12/the-legal-risks-of-monitoring-employees-online