Tuesday, October 17, 2006

Ringtone Ruling

Those wondering what type of novel issues of law might arise out of the Copyright Royalty Board's referral to the Register of Copyrights under new Section 803(a) need not wonder any more. In a 34 and a half single page ruling handed down yesterday (available at the Copyright Office website on the left side), the Register of Copyrights tackled the very important commercial question of whether (at least classes) of ringtones are subject to the section 115 compulsory license as digital phonorecord deliveries (known as "dpds"). The question was answered affirmatively. This is an epoch-making decision that bears repeated readings and not just the quick one I did for this posting, and not just for ringtones: one can expect statements made about the derivative right and derivative originality to be cited in diverse contexts. The politics of the dispute are also interesting, given that there is overlap between the RIAA and the NMPA (the combatants in the dispute) in terms of corporate membership of labels and music publishers. Since the amount paid for ringtones may be substantially less than the free market rate, the cost to consumers may go down as to payments to music publishers decrease. I imagine not just RIAA, but celllphone providers are rejoicing.

The Register carefully distinguished between earlier types of ring tones (monophonic, polyphonic) that were mostly synthesized and between more recent types (mastertones) which contain portions of an actual sound recording. She also noted that there are ringtones that are mixes of the original recording and other material; as to these 115 is not available.

The ruling focuses on 10 to 30 second tones. RIAA asserted musical ringtones are dpds subject to 115. Music publishers disputed the claim, arguing among things that ringtones were derivative works, fall outside the 115(a)(2) arrangement privilege, and that they are not distributed for private use. Since I assume that the music publishers would agree that delivery of an entire song as a ringtone (and certainly to a cellphone for playback) would be a dpd, the dispute is rooted in whether 115 covers snippets, including whether snippets implicate the reproduction and distribution right or instead the derivative right. Earlier ringtones would seem to have the strongest claim to involve the derivative right; with mastertones either you think 115 is limited to entire works or you don't.

The one part of the ruling that may have implications beyond ringtones involves the general standards for infringement of the derivative right. I was very happy to see the Register decline to follow the Ninth Circuit's approach in Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F.2d 1341 (9th Cir. 1988), which held that merely placing art works on ceramic tiles violated the derivative right. I confess however to being somewhat confused by the to-and-fro in yesterday's ruling between the standard for infringement of the derivative right and the standard for originality for constituting a protectible derivative work. Nimmer has long proposed such a relationship: “Unless sufficient of the pre-existing work is contained in the later work so as to constitute the latter an infringement of the former, the latter by definition is not a derivative work.” 2 Nimmer on Copyright § 8.09[A], p. 8-138 (2004)," but I have never understood it.

To me, he is mixing apples and oranges. For example, one could have a protectible derivative work based on public domain material material. Nor do I see how creating such a syllogism actually helps out in practice; to me, it does the opposite by directing courts to a different issue altogether. In the case of ringtones, the issue is not whether the snippet would be protectible on its own, but rather whether 115 covers such uses, an inquiry which centers on whether less than the whole of the work can still be a dpd and whether the arrangement provision in 115(a)(2) is implicated. It is, as the Register noted, a question of statutory intepretation, not one of too-cute rules of thumb. I understand the Register had to address the issue because the parties devoted so much attention to it, but to me it was beside the point.


X.Trapnel said...

So I'm a bit confused--I had assumed that, for example, making a ringtone myself out of an mp3 I have created from a CD I own would count as fair use. Was that never correct? Is it still possibly correct, and this is merely about doing it commercially?

Anonymous said...

Boy, I hate that decision. I find myself looking for ways to prevent a Hank Williams recording from being bastardized, or worse, one of his compositions being stripped down to a monophonic "hook" played on a child's xylophone. It's so loathesome, I could cry. Sorry, Hank.

However slavish the adherence to the musical notation, when you turn a complex melody into a ditty, you've got a derivative; and when you turn a work of art into an unavoidable annoyance, I think you've altered the "fundamental character of the work," and "allow[ed] the music to be perverted, distorted, or travestied."

If I were litigating it, I think I'd hang my hat on the "private use" limitation. The intended private use is hearing a recorded performance -- whether long or short, copy or derivative, is beside the point. The often and necessarily public performance as a signal from the telephone company to the owner of the phone, alerting him to an incoming telephone call, is plainly not the "private use" that Congress intended.

The competing interests behind the grant/denial of a compulsory license -- public access to the work vs. the author's right to control distribution -- swings sharply in favor of the author when the music is necessarily bowdlerized and the value of the copyright is predictably diminished. No legislative purpose envisioned by the grant of compulsory licenses is served by treating ringtones as DPDs.

John Noble

Anonymous said...

The Register went astray in a number of areas. For example, the notion as John Noble points out, that a ringtone made up of a snippet of a master recording cannot be a perversion or distortion of the original is plainly wrong from the point of view of the author of the work - - the party who should have been the most important in that determination. Or the too subtle and slippery distinctions between ringtones that would qualify under 115 and those that would not indended, no doubt, to effectively force the market into considering all ringtones as the same.

But the really shocking part is this: the notion that 115 as a compulsory license was intended to be expanded in scope to fit new technology, such as ringtones, if the Register thought that technology was similar to the technology actually before Congress when the compulsory was devised and set into statute. Courts, in my opinion, would not go that far. Compulsory licenses are a taking. They should be construed as norrowly as possible.

Still there is this reality. Music publishers actually beleived that they should get more money for a 30 second use than they did for a full use. Now that might be true in the context of a car commercial. But a 30 second dpd and a 3 minute dpd are essentially the same except that one is a lot shorter and should be a lot cheaper - - but wasn't. That's what drove this opinion and that was never said, making the process mostly a sham while setting the stage for the Copyright Royalty Board to regulate this once open market - - but only for publishers.

Does that make sense? Record companies and providers like Verizon can make whatever they want and charge whatever the market can bear but songwriters (don't cry any tears for the publishers)have to take what the government thinks they are worth. Why does the Register think publishers were charging more for less music? Because the govenment was setting the rate for full songs and the publishers had to compensate someplace for that artificial non-market-based pricing. Shooting ringtones back into the artificial construct of a government mandated rate is doubly painful.

She was right a year or so ago. 115 has no place in the law and represents an unecessary and unjustifiable intrusion on the private market for copyrighted goods. The publishers were idiots not to seize on that view and instead they are turning 115 into an even bigger mess than it was. Their shield is melting.

Max Lybbert said...

x. trapnel, I'm not a lawyer, but I understand this Copyright Office ruling to cover people/companies selling ringtones. The argument really was "who should collect royalties, and how much should they be?"

There's a statutory royalty set for certain uses, and through recording contracts the RIAA basically collects that for everyone. The RIAA said that sales of ringtones should fall under that statutory royalty, and the opposition said that ringtones required enough creativity that they were derivative works, and royalties should be negotiated for reach song.

The Copyright Office determined that most ringtones don't require that much creativity, and are more like shortened records of the songs than derivative works, ergo the statutory royalty that would apply to making/selling records applies to selling ringtones. If a royalty must be paid, it goes to the RIAA. OTOH, if you've got a fair use argument, you don't pay the royalty.

William Patry said...

Anyone have thoughts on the public performance aspects of it as tied into John Noble's private use idea: is a cellphone transmission a private performance in ordinary usage?

Anonymous said...

I could see some of the ringtone nowadays doesn't have any license.