IP Law Daily Amazon may be liable for streaming different versions of songs without serving separate licensing notices
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Monday, April 10, 2017

Amazon may be liable for streaming different versions of songs without serving separate licensing notices

The music publishing company Yesh Music LLC, which owns the copyrights to songs created by the post-rock band The American Dollar, could proceed with copyright infringement claims against Amazon.com and Amazon Digital Services, but only to the extent that Yesh had alleged that Amazon did not serve separate Notices of Intent (NOI) to obtain a compulsory license for alternative versions of songs that appended the designator "(Ambient)" to already existing titles, the federal district court in Brooklyn, New York, has ruled. Amazon showed that the plaintiffs had been served with valid NOIs, and it also showed that the company had not committed incurable technical violations of the NOIs. It failed, however, to show that Amazon had not impermissibly altered ten NOIs—after they had been served—to include the "(Ambient)" songs (Yesh Music, LLC v. Amazon.com, Inc., April 8, 2017, Cogan, B.).

Lawsuit. Yesh Music and John Emanuele—one of two members of The American Dollar band—sued Amazon.com and Amazon Digital Services (collectively, "Amazon") for the infringement of multiple copyrights to songs that were recorded by the band. The plaintiffs (collectively, "Yesh") alleged that: (1) Amazon’s NOIs were invalid because they were never served, or they were untimely or improperly served; (2) some of the NOIs were invalid because they failed to comply with technical requirements regarding NOI content—i.e., they failed to identify Amazon Prime Music as a service that would offer the plaintiffs’ musical works to subscribers, they failed to include the requisite signature and designated distribution date, and they incorrectly included the parenthetical "(Alt Mix)" in song titles, even though the "alt mix" versions of those songs were never released to the public)—and (3) Amazon failed to serve separate NOIs for the "ambient" versions of Yesh’s songs.

Actual service. Amazon sufficiently showed that Yesh had received, via first class mail, six Notices of Intent (NOI) to obtain a compulsory license for songs that were created by The American Dollar. According to the court, Amazon’s NOI agent—General Counsel of Music Reports, Inc.—had stated in an affidavit that it had established and followed a formal procedure for creating and mailing NOIs, and further stated that the established procedure was used to send the NOIs that Yesh purportedly never received.

Significantly, the mailbox rule created a rebuttable presumption that a letter or notice was received by an addressee if the evidence indicated that an office procedure was established and followed in the regular course of business and the letters or notices were properly addressed and mailed. In this case, the plaintiffs failed to address the agent’s affidavit or proffer any argument in support of their claim that Yesh had never received the NOIs. Consequently, they failed to rebut the presumption that they had received the NOIs.

Method of service. The court rejected Yesh’s argument that three NOIs were invalidly served because Yesh had revoked its prior consent to electronic service. Although Yesh had sent an email to Amazon’s agent—asking the agent to immediately "cease the issue of any and all future compulsory mechanical licensing NOI’s"—the email did not operate as a revocation of consent to electronic service, the court explained. The consent to electronic service thus was never revoked and Amazon’s electronic service of all three NOIs was valid.

Timeliness of service. Yesh argued that all twelve of the asserted NOIs (ten related to Yesh and two related to Emanuele) were untimely served because Amazon had been distributing phonorecords of Yesh’s musical works—by streaming them over the Internet—for "years" before the NOIs were served.

However, the Yesh songs that were streamed through Amazon’s MP3 store were subject to a voluntary license that Yesh had granted to Amazon, and a compulsory license under the NOI was therefore not required. In addition, Amazon was not required to secure a compulsory license for its non-premium "music locker" service because that service merely "stored" songs that subscribers uploaded, and thereafter allowed those subscribers to download or stream their uploaded songs. Consequently, the uploaded songs were never "distributed" to the public.

Finally, none of the songs that Yesh had identified were played or downloaded through Amazon Prime Music or Amazon Cloud Player Premium. For all of those reasons, Amazon successfully showed that phonorecords of Yesh’s musical works were not impermissibly distributed by Amazon before the NOIs had been served. Because the 12 NOIs were timely served, valid compulsory licenses were conferred to the musical works at issue.

Technical violations of NOI requirements. Yesh argued—unsuccesssfully—that Amazon’s NOIs did not cover the use of Yesh’s musical works by Amazon Prime Music because the NOIs failed to specifically explain that phonorecords of Yesh’s songs would be distributed through a "bundled subscription" service.

The regulations did not require entities seeking a compulsory license to specifically identify the name or type of music service that the phonorecords would be distributes through, the court explained. And even if they did, Amazon’s NOIs were sufficient because they had identified "Digital Phonorecord Deliveries … including, but not limited to, interactive streams and permanent digital downloads associated with a paid locker service and/or a purchased content locker service." Further, the phrase "including, but not limited to" was a signal to Yesh that the distribution of phonorecords would not be limited to locker services, or even to services of the same general kind.

In addition, the regulations required Amazon to identify the types of phonorecord configurations that were "expected to be made," and Amazon did that. Yesh failed to allege that Amazon knew about Amazon Prime Music when the NOIs were sent, and Yesh did not allege that Amazon had concealed its actual expectations in bad faith. For those reasons, the NOIs covered "bundled subscription services"—such as Amazon Prime Music—as well as locker services.

Yesh also alleged that six of the twelve NOIs were invalid because they lacked a signature. However, two of those six were sent by mail and carried an authorized signature, and the remaining four were sent electronically, in a manner that satisfied the alternative option to the signature requirement. Finally, to the extent that Amazon’s electronic service did not strictly comply with the alternative method of verification, it was a "harmless error," according to the court.

"Ambient songs." Amazon admitted that it had not served separate NOIs for the "ambient" songs. It nevertheless argued that those songs embodied the same musical work as the corresponding non-ambient songs, and that neither the Copyright Act nor the applicable regulations required an entity to serve additional NOIs for new sound recordings of the same musical work.

The court identified two disputed issues with respect to the ambient songs: (1) whether they embodied different musical works than the non-ambient songs, as Yesh had argued, and (2) if not, whether Amazon was required to send separate NOIs for each sound recording of a musical work for which it had already obtained a compulsory license. The first issue was a factual one; the second, a legal one.

The court could not decide, on summary judgment, whether the ambient songs and the non-ambient songs embodied different musical works. After listening to the samples that Amazon had provided, it could not conclude that no reasonable factfinder would find that the coupled songs were different musical works. The court acknowledged that they were similar, but the degree of variation and the interpretations of the significance of those variations were disputed facts for trial.

The court decided, however, that "if plaintiffs’ ambient songs are found to be the same musical works as the non-ambient songs, Amazon [would not be] required to serve additional NOIs and its use of the ambient songs [would be] covered by its compulsory license."

The case is No. 16 Civ. 1406 (BMC).

Attorneys: Richard M. Garbarini (Garbarini Fitzgerald PC) for Yesh Music, LLC. Daralyn Durie (Durie Tangri LLP) for Amazon.com, Inc., and Amazon Digital Services, Inc.

Companies: Yesh Music, LLC; Amazon.com, Inc.; Amazon Digital Services, Inc.

MainStory: TopStory Copyright NewYorkNews

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