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.