Case Comparison – Entity Production Inc. v. Psychotic Records, Inc. and Bridgeport Music, Inc. v. Dimension Films – the Current State of Music Sampling

Mary Ellen with Ed from Midnight Syndicate at Cinema Wasteland 3/31/12

Technology since the 90s has driven and ultimately reigned in the unauthorized use of copyrighted material, especially music. From the widespread use of unlicensed music samples in the early days of hip hop to the rise of clearinghouses for the licensing of samples currently, musical artists have become more willing to pay for others’ works used in their creations. Many musicians formerly espoused a “live and let live” philosophy when it came to enforcing their ownership rights in their compositions and recordings. However, when digital technology allowed individuals to upload, download and share their music collections and obtain music without paying for it through the internet, the record companies and artists started to feel the pinch. With reportedly millions of dollars in lost sales through organized sharing sites such as Napster and Grokster, some high profile artists launched a war against unauthorized distribution and use of their music, Metallica in particular. The Napster lawsuits led to agreements that benefited both the artists and satisfied the public’s desire for convenient access to music. Now Napster is a pay site and ITunes distributes more music than any record company on earth.

Similarly, musical artists grew weary of other artists using parts of their recordings without permission in their new recordings. Arguments that the excerpts taken were too small to be actionable (the de minimis claim) were common in copyright infringement cases, which required “substantial similarity” between the original composition and the new song. This standard was used in sampling cases until 2005, when the Bridgeport Music, Inc. v. Dimension Films, Inc. case was decided. The Bridgeport case established a bright line test for copyright infringement by music sampling, stating that no matter how minimal the amount taken, physical copying of any part of a sound recording constitutes infringement. The only issue is whether the actual sound recording has been used without authorization. The 6th District Circuit Court of Appeals based their analysis on section 114(a) of Title 17 of the U.S. Code, the 1976 Copyright Act, which sets out the exclusive rights of copyright in sound recordings, including reproducing the work in copies or phonorecords, and the right to prepare derivative works based upon the copyrighted work. In short, only the copyright owner of a song may sample any part of that song. IN Bridgeport, the defendants had used a two second sample of a guitar solo from a George Clinton and the Funkadelics song in a tune that was recorded and then used in a movie soundtrack. The lower court went into great detail about the distinctiveness of the riff taken, how it was looped and used in five parts of a new song. The appeals court threw that analysis aside in stating that once a copyrighted sound recording has been digitally sampled, there is infringement and no de minimis analysis should be undertaken. The test is still based on substantial similarity for compositions (recall the “My Sweet Lord”/”He’s So Fine case in the seventies), but the “physical taking” involved in sampling sound recordings amounts to copyright infringement no matter how small the part taken or how the parts may have been changed.

The Stop Online Piracy Act (SOPA) Uncovered

Nobody likes pirates (except in the movies), whether they are on the high seas or selling counterfeit goods on the streets. Recorded music piracy was first stopped by an amendment to the Copyright law that took effect in 1972 (17 U.S.C. §102(a) (7)), closing the loophole that left sound recordings unprotected. The Copyright Act was loosened up in 1976 to allow artists and other creators to obtain automatic copyright in their original works of authorship without the technical requirement of placing a copyright notice on each copy of their work, to prevent it from being thrown into the public domain. Once digital media became more and more omnipresent, it became necessary for lawmakers to keep up with the times and craft amendments to the Copyright Law to protect artists, writers and musicians from having their works taken and used by others without payment or attribution.

The 1998 Digital Millennium Copyright Act attempted to address many of the concerns brought by the new technologies by identifying them and applying the existing protections of the law to online transmissions and storage of copyrighted material. The Act added new section 512, which limited liability of online service providers for copyright infringement by reason of such transmission or storage by the provider, with the proviso in section 512(E) that presumes the authorization of the copyright holder in making the material available online. If there is no such authorization, the service provider must respond expeditiously to remove the material claimed to be infringing upon notice from the copyright owner of his agent. (§512(c) (3)).

Filmmaking as part of a Nonprofit Organization

Installment I. Intro and Background of Nonprofit Laws

Can a nonprofit organization exempt from taxation under I.R.S. §501(c) (3) make a profit? And if so, what kind of trades or businesses can it operate at a profit and still keep its tax exempt status? This question came from a filmmaker whose father has a tax exempt ministry, and who wants to make a film related to the ministry and finance it by selling advertising on a YouTube channel which would show the movie and other videos related to it. Since the documentary is about the ministry, would the YouTube channel advertising income come under the exemption of the nonprofit organization? Before analyzing the options the ministry has for financing its film, it is instructive to discuss the underpinnings and history of the §501(c) (3) tax exempt status for nonprofit organizations and how it has evolved over the last sixty years.