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Copyright rulings extend liability risks

Copyright rulings extend liability risks

The lines are being blurred when it comes to infringement of copyrighted music, as musicians turn to the courts to defend their art and large verdicts garner major media and insurer attention.

Companies need to implement clear risk management procedures to ensure they are not inadvertently or maliciously using copyrighted music, with insurance policies providing the last line of defense against such claims.

Marvin Gaye’s family emerged victorious, at least temporarily, in a case involving a song called “Blurred Lines” by Robin Thicke, Pharrell Williams and T.I., which a jury in March 2015 decided infringed on the late Mr. Gaye’s “Got to Give It Up.” The verdict has been appealed to the 9th U.S. Circuit Court of Appeals in San Francisco, with oral arguments scheduled for Oct. 6, but a lower court judge awarded $5.4 million in damages and 50% of future song royalties to the Gaye family. The decision generated significant backlash because the infringement finding was based on the songs having the same “feel” or “groove,” which the “Blurred Lines” artists argued does not constitute infringement.

“I think that dispute really does a very good job of summarizing the state of copyright infringement actions, particularly in the case of music infringement,” said Coe Ramsey, an entertainment lawyer with Brooks, Pierce, McLendon, Humphrey & Leonard L.L.P. in Raleigh, North Carolina. “There really couldn’t be a better song title at issue in that case.”

More than 200 musicians urged the appellate court in an amicus brief filed last year to overturn the verdict, arguing it threatened to punish songwriters for creating new music inspired by previous work.

“If something as subjective as vibe and influence could be used to determine copyright infringement took place, it certainly wouldn’t encourage that creativity and that development of music,” said Shannon Groeber, Philadelphia-based senior vice president for JLT Specialty USA, a unit of Jardine Lloyd Thompson Group P.L.C.

Claims of copyright infringement in the music sector tend to fall into two areas: failure to secure the correct — or any — license; and accusations the music is similar to an existing piece — a difficult claim to adjudicate because it requires a complex and often subjective analysis of alleged similarities, experts say.

The fair use doctrine can be used to defend against claims of copyright infringement if the use of copyrighted material is done for a transformative purpose, said Joy Butler, attorney and author of “The Permission Seeker’s Guide Through the Legal Jungle.” But a 2013 opinion from the 2nd U.S. Circuit Court of Appeals in New York made the distinction between a transformative use that is protected and a derivative use that is not a lot murkier, she said.

In Cariou v. Prince, the court found that reliance on fair use does not require any comment on the original work. Instead, fair use can exist when the work alters the original with new expression, meaning or message.

The fair use defense could apply in nonprofit education, newsgathering or social commentary as outlined in the Copyright Act, Ms. Butler said. “The tricky thing with fair use is there is no bright line rule. Even if your particular use falls into one of those areas, it doesn’t necessarily guarantee that it will be found to be fair use. But it is a very helpful component in evaluation.”

The potential exposure is heightened by the ease of obtaining and sharing copyrighted content via the internet and social media, she said.

“But just because you can copy and paste something from online and put it into your print ad or put it on your social media site doesn’t mean you should and doesn’t mean it won’t have consequences,” she said.

Because music copyright infringement claims are often difficult to defend and the verdicts can be expensive, especially if the infringing music or use has garnered significant revenue, the insurance market for such exposures can be challenging.

“For pure music risks, some are quite difficult to place and can be quite expensive,” said Angela Weaver, London-based media liability underwriter/media specialist for Beazley P.L.C. “This is borne out by the size and the complexity of the claims. Consequently, the market is no wider than it was five or 10 years ago. Insurers remain cautious.” A risk management step is to have professionals vet the music to try to eliminate the potential for infringement, but this has its limitations.

“The difficulty here for any risk manager ... is that there is such a large library of music, it’s hard to cross-check a new song against every potential influence or song, especially if the court is going to expand what copyright infringement means in the music space,” said Anthony Dragone, claim advocate with Willis Towers Watson P.L.C.’s FINEX claims and legal group in New York.



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