Michael Geist inflates pending lists claim to vilify record labels

Prof. Michael Geist is no lover of the recording industry. In fact, he uses every opportunity he gets to slag and demonize it. Like a professional propaganda expert, his attacks use exaggeration, misleading information and half truths to achieve his obvious ends.

Prof. Geist went on a cross country blitz yesterday with his blog, “Canadian Recording Industry Faces $60 Billion Copyright Infringement Lawsuit” and Toronto Star article “Record industry faces liability over `infringement” over the Chet Baker suit, as if something new has happened with the case. In fact, the case was started in August 2008 (not October 2008 as asserted by Prof. Geist). It also hasn’t only been going on “for the past year”, as he claims. Chet Baker isn’t “about to add a new claim to fame”. Despite having started over a year and a half ago, the class action case hasn’t even been certified yet. So why the fervour to publicise the case now?

Prof. Geist tries to taint the recording industry as blatant copyright infringers, without ever delving into the industry wide accepted custom for clearing mechanical rights. The pending list system, which has been around for decades, represents an agreed upon industry wide consensus that songwriters, music publishers (who represent songwriters) and the recording industry use and rely on to ensure that music gets released and to the market efficiently and the proper copyright owners get compensated.

The agreement, the mechanical licensing agreement or MLA, defines the respective obligations of music publishers and record labels to identify the proper rights holders and make sure they get paid when music is released in English language Canada (a similar agreement is negotiated with Quebec music publishers). The record labels have specified reporting requirements to provide the necessary data to identify proper rights holders, and the CMRRA and their Quebec equivalent, SODRAC, which act as agents or collectives for the songwriters and publishers, take the information provided by the labels, identify the proper rights holders, issue licenses to the labels, accept payment from the labels, and distribute the royalties to the proper rights holders.

In many circumstances, rights are directly licensed or pre-cleared so the pending list system never even comes into play.

The pending lists regime is used to help resolve unidentified or unsettled potential claims that are not automatically identified or settled. Songs can end up on the list for many reasons: for example, ownership is still being determined by the CMRRA, ownership is disputed between one or more music publishers or songwriters, the owner can’t be found, a song may be in the public domain, the ownership may be unknown or in dispute. An individual song may contain numerous samples or snippets of other songs, and sorting out ownership can take years in some cases.

The money earmarked to be paid to someone is set aside in a “pending list”. The money is reserved pending the identification of the unidentified writers. In the meantime, all rights holders, including songwriters and music publishers, want to get the music out to consumers and earning royalties. As soon as owners are identified, or claims resolved, the publisher gets paid and the claim is removed.

The pending lists system represents a remarkable degree of flexibility on the part of all music industry stakeholders, who, in the interests of getting music to consumers quickly, permit the reproduction of music in return for a pre-agreed compensation when proof of entitlement is made. This internationally accepted practice benefits musicians, labels, songwriters, publishers, retailers, radio stations and consumers.

In his blog, Prof. Geist claimed that the Canadian recording industry has a potential liability that “exceeds $60 billion”. Of course, nothing could be further from the truth.

The MLA – the industry wide agreement between music publishers and the record labels — values the publishers’ and songwriters’ rights in sound recordings. It is such a well established rate that the Copyright Board uses it as a proxy in fixing royalties for other uses of music. There is no conceivable way that the pending lists could produce such a staggering price tag using the MLA.

Further, as Prof. Geist must know, Canadian courts cannot award statutory damages of $20,000 “per infringement” under the Copyright Act, as he claims. Given the number of songs alleged to be on the list; it is also a mathematical impossibility that any judgement could be anywhere in Prof. Geist’s stratospheric calculations.

We all know that lawsuits almost always overstate their claims in the interest of maximizing a potential return. Yet Prof. Geist uncritically reports a “potential” claim that is surreally high, as if it was a fact. Well, exaggerated headlines gets people’s attention; so why not just make numbers up? Won’t people just believe what they read anyways when it comes from a “Research Chair in Internet and E-commerce Law at the University of Ottawa”?

Yesterday Prof. Geist admitted in a twitter posting last evening that his calculations were an “embarrassing math error”. (He made a similar admission in an updated blog posting.) However, by this time his inaccurate and misleading blog and Toronto Star article had already been widely disseminated and syndicated through the web to thousands of people including by readers of the Toronto Star, New York Post, ZDNet, Billboard Business News, Zeropaid, TG Daily, Techdirt, Eye Weekly, and TorrentFreak.

It is fascinating to observe Prof. Geist’s sudden epiphany about “rampant infringement” in the music industry. He has repeatedly opposed copyright reforms that would better equip copyright holders to enforce their rights against BitTorrent and other file share networks and services. Several weeks ago he led a frenzied propaganda campaign attacking the Anti-Counterfeiting Trade Agreement (ACTA). See, Fear Mongering and Misinformation Used to Slag ACTA. Two weeks ago he made disingenuous use of statistics to argue that “Canada is a low piracy country”. See, OECD counterfeiting report misinterpreted to support myth of Canada as a low piracy country. Now he makes an “embarrassing math error” in trying to make news out of an old claim against the recording industry.

Print Friendly, PDF & Email

5 thoughts on “Michael Geist inflates pending lists claim to vilify record labels”

  1. James Grahame says:

    Thanks for providing an alternative viewpoint.

    However, I think you’ve rather missed the point; the plaintiff asserts that the pending list system is being used in an unreasonable manner to defer or avoid payment of mechanical royalties.

    You assert that “As soon as owners are identified, or claims resolved, the publisher gets paid and the claim is removed.” However, to my knowledge there are no searchable pending lists made available to artists, nor is this information publicly audited. It appears to be a case of the fox guarding the hen house.

  2. Here’s the thing, you say the pending list system “represents an agreed upon industry wide consensus that songwriters, music publishers (who represent songwriters) and the recording industry use and rely on to ensure that music gets released and to the market efficiently and the proper copyright owners get compensated.”

    Well, excuse me, but how is that ANY different from P2P? What you’re saying is that it’s a system where you commit copyright infringement, and later decide on honoring copyright. To blatantly disregard copyright, when it’s deemed ‘inefficient’ is highly hypocritical and ethically suspect, especially when stronger penalties are being pushed for.

    If I want to use a copyrighted work, I have to go get a license first. if I don’t, I get sued for infringement. Why is it one rule for us, and another for the industry?

    Let’s boil it down to bare facts. This list is nothing more than a documented list of works used without licenses found. It is a list of copyright infringements. As the people behind the list are those that have pushed for the heavier punishments, ethically, they should face the strongest (after all, you’re the ones crying you need the penalties, but you’re also the heaviest infringers)

    ” Further, as Prof. Geist must know, Canadian courts cannot award statutory damages of $20,000 “per infringement” under the Copyright Act, as he claims.”
    Except, I just looked at the law. Page 60 of the copyright law states
    “38.1 (1) Subject to this section, a copyright
    owner may elect, at any time before final judgment
    is rendered, to recover, instead of damages
    and profits referred to in subsection 35(1) [actual damages],
    an award of statutory damages for all infringements
    involved in the proceedings, with respect
    to any one work or other subject-matter, for
    which any one infringer is liable individually,
    or for which any two or more infringers are liable
    jointly and severally, in a sum of not less
    than $500 or more than $20,000 as the court
    considers just.” That looks like $20,000 per infringement to me.
    Also, 38(7) says
    “(7) An election under subsection (1) [above] does
    not affect any right that the copyright owner
    may have to exemplary or punitive damages”

    Basically, the law says that it CAN be $20,000 per infringement (contrary to your claim) and that more damages can be awarded as well.

    At the end of the day, the law is the law. It trumps any agreement you’ve made, especially as it’s a law you’ve been lobbying for, and wanted to make stronger.

  3. Thank you for clarifying that it is normal industry practice to not care so much about the letter of the copyright law, but rather pay out royalties when the proper clerical procedures have come to their ends.

    In the meantime, we will continue the normal citizen practice of not caring so much about the letter of the copyright law, but rather give our custom to companies that do not chronically screw both artists and creative fans, and instead promote culture both in action (free sharing) and politics.

    Oh, and in the meantime, we will also rewrite the letter of the copyright law to put the first kind behind bars rather than just suing them.

    Cheers,
    Rick Falkvinge,
    The Pirate Party (lawmakers)

  4. Thank you for your comment.

    There is a major difference between a practice agreed to by users ( the labels) and rights holders (the publishers and songwriters) that permits distribution under a contract to pay royalties to the person entitled, and users who simply decide that they can copy when it is obvious there is no consent.

  5. Thank you for your comment.

    There is a major difference between a practice agreed to by users ( the labels) and rights holders (the publishers and songwriters) that permits distribution under a contract to pay royalties to the person entitled, and users who of p2p systems simply decide that they can copy when it is obvious there is no consent.

    It is no 20k (max) per infringement. If you look at the wording quoted by you above, you will see it says “an award of statutory damages for all infringements involved in the proceedings, with respect
    to any one work or other subject-matter”. So if there are 100 copies made of the same sound recording, each is an infringement. But, the most that can be recovered for all such infringements in one proceeding is 20k.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: