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Canadian Recording Industry Faces $6 Billion Copyright Infringement Lawsuit
Michael Geist ^ | 07 December 2009 | Michael Geist

Posted on 12/08/2009 5:34:43 AM PST by ShadowAce

Chet Baker was a leading jazz musician in the 1950s, playing trumpet and providing vocals. Baker died in 1988, yet he is about to add a new claim to fame as the lead plaintiff in possibly the largest copyright infringement case in Canadian history.  His estate, which still owns the copyright in more than 50 of his works, is part of a massive class-action lawsuit that has been underway for the past year.

As my weekly technology law column (Toronto Star version, homepage version) notes, the infringer has effectively already admitted owing at least $50 million and the full claim could exceed $6 billion. If the dollars don’t shock, the target of the lawsuit undoubtedly will: The defendants in the case are Warner Music Canada, Sony BMG Music Canada, EMI Music Canada, and Universal Music Canada, the four primary members of the Canadian Recording Industry Association.

The CRIA members were hit with the lawsuit [PDF] in October 2008, after artists decided to turn to the courts following decades of frustration with the rampant infringement (I am adviser to the Canadian Internet Policy and Public Interest Clinic, which is co-counsel, but have had no involvement in the case). The claims arise from a longstanding practice of the recording industry in Canada, described in the lawsuit as "exploit now, pay later if at all."  It involves the use of works that are often included in compilation CDs (ie. the top dance tracks of 2009) or live recordings. The record labels create, press, distribute, and sell the CDs, but do not obtain the necessary copyright licences.

Instead, the names of the songs on the CDs are placed on a "pending list", which signifies that approval and payment is pending.  The pending list dates back to the late 1980s, when Canada changed its copyright law by replacing a compulsory licence with the need for specific authorization for each use. It is perhaps better characterized as a copyright infringement admission list, however, since for each use of the work, the record label openly admits that it has not obtained copyright permission and not paid any royalty or fee.

Over the years, the size of the pending list has grown dramatically, now containing over 300,000 songs. From Beyonce to Bruce Springsteen, the artists waiting for payment are far from obscure, as thousands of Canadian and foreign artists have seen their copyrights used without permission and payment.

It is difficult to understand why the industry has been so reluctant to pay its bills.  Some works may be in the public domain or belong to a copyright owner difficult to ascertain or locate, yet the likes of Sarah McLachlan, Bruce Cockburn, Sloan, or the Watchmen are not hidden from view.

The more likely reason is that the record labels have had little motivation to pay up.  As the balance has grown to over $50 million (Universal alone owes more than $30 million), David Basskin, the President and CEO of the Canadian Musical Reproduction Rights Agency Ltd., notes in his affidavit that "the record labels have devoted insufficient resources to identifying and paying the owners of musical works on the Pending Lists." Basskin adds that some labels believe addressing the issue would be "an unproductive use of their time."

Having engaged in widespread copyright infringement for over 20 years, the CRIA members now face the prospect of far greater liability.  The class action seeks the option of statutory damages for each infringement.  At $20,000 per infringement (the amount owed on some songs exceed this amount), potential liability exceeds $6 billion.  These numbers may sound outrageous, yet they are based on the same rules that has led the recording industry to claim a single file sharer is liable for millions in damages.

After years of claiming Canadian consumers disrespect copyright, the irony of having the recording industry face a massive lawsuit will not be lost on anyone, least of all the artists still waiting to be paid.  Indeed, they are also seeking punitive damages, arguing "the conduct of the defendant record companies is aggravated by their strict and unremitting approach to the enforcement of their copyright interests against consumers."


TOPICS: Business/Economy; Music/Entertainment
KEYWORDS: haha; riaa

1 posted on 12/08/2009 5:34:44 AM PST by ShadowAce
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To: rdb3; Calvinist_Dark_Lord; GodGunsandGuts; CyberCowboy777; Salo; Bobsat; JosephW; ...

2 posted on 12/08/2009 5:34:58 AM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: ShadowAce

Big Chet Baker fan. Too bad about the heroin. I guess whoever his estate is should look forward to a big pay day.


3 posted on 12/08/2009 5:53:22 AM PST by equalitybeforethelaw
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To: ShadowAce

wtf


4 posted on 12/08/2009 6:00:12 AM PST by happinesswithoutpeace (You are receiving this broadcast as a dream.)
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To: happinesswithoutpeace; equalitybeforethelaw

I posted this for the irony it presents.


5 posted on 12/08/2009 6:04:41 AM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: ShadowAce

Sounds like one infringement suit I can enthusiastically support.


6 posted on 12/08/2009 6:09:12 AM PST by Gil4 (Sometimes it's not low self-esteem - it's just accurate self-assessment.)
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To: ShadowAce

This is the same recording industry that strong armed the Canadian government into putting a tax on blank CDs on the basis that they are being used for piracy.

http://74.125.95.132/search?q=cache:Zy6jyyvYYYwJ:www.digitalhome.ca/index.php%3Foption%3Dcom_search%26Itemid%3D99999999%26searchword%3Dercentage%26searchphrase%3Dany%26ordering%3Dnewest%26limit%3D10%26limitstart%3D25+%22+the+tax+on+a+50+spindle+package+of+CD-R+or+CD-RW+discs+is+now+%2413.50%22&cd=1&hl=en&ct=clnk&gl=us&client=firefox-a

“At 29 cents per disc, the tax on a 50 spindle package of CD-R or CD-RW discs is now $13.50 and constitutes a major percentage of the cost of CDs.”

“The levy on CD’s originally began in 1998 and the levy per recordable CD was initially set at 5.2 cents. At the time CD-R discs were often several dollars per disc so the levy represented only a small percentage of the products overall cost.”


7 posted on 12/08/2009 6:17:21 AM PST by Dr. Sivana
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To: Dr. Sivana

And their math is wrong—at 29 cents per disc, the tax on a 50-disc spindle is $14.50, not $13.50


8 posted on 12/08/2009 6:20:12 AM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: ShadowAce
Sony, Time-Warner, those guys are becoming really entertaining.
9 posted on 12/08/2009 6:22:10 AM PST by expat_panama
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To: ShadowAce

wat?


10 posted on 12/08/2009 6:24:05 AM PST by happinesswithoutpeace (You are receiving this broadcast as a dream.)
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To: happinesswithoutpeace

Sorry—I can’t read your mind. If you have a question, please ask it.


11 posted on 12/08/2009 6:26:58 AM PST by ShadowAce (Linux -- The Ultimate Windows Service Pack)
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To: ShadowAce

lol


12 posted on 12/08/2009 6:27:54 AM PST by happinesswithoutpeace (You are receiving this broadcast as a dream.)
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To: ShadowAce
This truly is, delicious irony.

13 posted on 12/08/2009 6:46:58 AM PST by pyx (Rule#1.The LEFT lies.Rule#2.See Rule#1. IF THE LEFT CONTROLS THE LANGUAGE, IT CONTROLS THE ARGUMENT.)
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To: ShadowAce
And their math is wrong—at 29 cents per disc, the tax on a 50-disc spindle is $14.50, not $13.50

No, no, it's OK - those are Canadian Dollars, they're worth less!

14 posted on 12/08/2009 6:49:55 AM PST by PugetSoundSoldier (Indignation over the Sting of Truth is the defense of the indefensible)
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To: ShadowAce

Chuckle. Hoist by their own petard.


15 posted on 12/08/2009 6:52:37 AM PST by Still Thinking (Quis custodiet ipsos custodes?)
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To: ShadowAce

Hey ShadowAce

lulz


16 posted on 12/08/2009 7:34:42 AM PST by happinesswithoutpeace (You are receiving this broadcast as a dream.)
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To: ShadowAce

Payback,

it’s a bitch...


17 posted on 12/08/2009 4:41:09 PM PST by SubGeniusX (The People have Unenumerated Rights, The Government does not have Unenumerated Powers!)
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To: Dr. Sivana

Doesn’t that just sound like you’re being ripped off?

A lot of people, mainly geeks, use CDs for data and software storage, especially Linux geeks who tend to have many versions of many distros on CD. A good geek may have hundreds of CDs, not one with music on it. Yet he paid how much to the copyright cartel?


18 posted on 12/09/2009 6:27:53 AM PST by antiRepublicrat
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To: ShadowAce
Schadenfreude
19 posted on 12/09/2009 6:34:57 AM PST by TChris ("Hello", the politician lied.)
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To: antiRepublicrat
Doesn’t that just sound like you’re being ripped off?

A lot of people, mainly geeks, use CDs for data and software storage, especially Linux geeks who tend to have many versions of many distros on CD. A good geek may have hundreds of CDs, not one with music on it. Yet he paid how much to the copyright cartel?


I am not Canadian, so it does not affect me. Besides the uses you mention, there are genuine archival backups of purchased CDs. On top of that, who gets the royalties? Chances are, it will be given to the guys already making the big bucks, when in fact the "pirated" music may well consist of far more obscure material. The wrong people are getting compensated.
20 posted on 12/09/2009 6:50:41 AM PST by Dr. Sivana
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To: Dr. Sivana

The labels always want the money for themselves, screw the artists. Did you know that the money from all of these file sharing settlements goes to the labels, not a dime to the artists?


21 posted on 12/09/2009 9:52:25 AM PST by antiRepublicrat
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