“It appears that technology platforms evading infringement liability have been the big winners of stagnated DMCA reforms, although the NMPA’s recent enforcement campaign is having some impact on addressing major licensing issues for the music industry.”
On September 27, the National Music Publishers’ Association (NMPA) and online game platform provider Roblox announced that the two parties had settled ongoing copyright litigation in the Central District of California over Roblox’s unauthorized use of copyrighted music on its online gaming platform. The settlement also creates an opt-in mechanism for eligible NMPA publishers and opens a negotiation period for individual publishers to engage Roblox in go-forward licensing deals.
NMPA Settlements Follow Strong Language on Willful Infringement by Gaming, Fitness Platforms
The legal action against Roblox was filed in Central California this June on behalf of several prominent music publishers and members of the NMPA, including ABKCO Music and Universal Music. The suit involved claims that Roblox was engaged in a massive copyright infringement scheme by offering its users, most of which are users under the age of 13, access to a centralized synchronization library allowing them to incorporate copyrighted content into their gaming environments. In particular, the music publishers targeted Roblox’s in-game items like Boomboxes and Game Passes that users can buy to access the music library while traveling through certain sections of the Roblox universe.
“Roblox is fully aware that it is required to obtain licenses to exploit copyrighted music on its platform, including obtaining necessary reproduction, sync, and public performance licenses, but willfully refuses to do so,” the June complaint against Roblox read. The music publishers alleged that Roblox had built an economy within the gaming platform based on copyright infringement by allowing users to upload music through the purchase of the virtual currency that users must purchase from Roblox, “Robux.” Financial disclosures by Roblox to the U.S. Securities and Exchange Commission and cited in the complaint indicated that Roblox “primarily generate[s] revenue through the Roblox Platform, based on the direct sale of Robux to users.” The NMPA members argued that Roblox’s decision to make unlicensed music available to users was a major reason why the company was able to build a total base of more than 200 million users, including 36.2 daily active users.
The NMPA has been busy in recent years enforcing its members’ copyright protections in the face of a growing number of Internet-based services incorporating music into their platforms to recognize tremendous value. In February 2020, the NMPA and interactive fitness company Peloton settled a copyright suit and entered into a joint collaboration agreement to optimize Peloton’s music licensing services, a positive outcome to a lawsuit that began with the NMPA accusing Peloton of willful infringement and seeking about $300 million in damages. About a week before the Roblox settlement, the NMPA announced that it had entered into a partnership agreement with live video streaming platform Twitch, expressing optimism over the creation of new economic models for music on gaming platforms whereas a year ago, the trade association was accusing Twitch of failing to procure proper licenses for the use of its Soundtrack tool.
A few Big Tech names are also taking action on music licensing, which may indicate that the wider world of consumer tech is coming to a reckoning with unauthorized uses of copyrighted music on their platforms. At the beginning of September, VentureBeat reported that Facebook Gaming had increased its music licensing activities on behalf of streamers using the platform and opened up access to its licensed music library to more than 100,000 Facebook Gaming users. About a week later, Apple announced that it would be using music recognition technology it acquired in 2018 when it bought Shazam to develop a system for identifying music clips in DJ remixes uploaded to Apple Music so individual creators can be compensated for the use of their works.
Enforcement Campaign Against Internet Platforms Highlights Shortcomings in DMCA, CASE Act
The NMPA’s enforcement campaign highlights some of the shortcomings of the current state of online copyright enforcement under the Digital Millennium Copyright Act (DMCA). A landmark bill on regulating digital transmissions of copyrighted content when it was enacted in 1998, the DMCA has become outdated, with provisions, like the notice-and-takedown and safe harbor provisions of Section 512, that have lost the balance originally intended by the DMCA’s creators. Last May, the U.S. Copyright Office issued a study on how courts have interpreted Section 512, which found that the statute has allowed tech platforms to avoid infringement liability to the detriment of rights holders. Last December, Senator Thom Tillis (R-NC) issued a discussion draft of a bill to modernize the DMCA that, among other things, would have increased technical obligations for online service providers under Section 512, but efforts on passing that bill have largely stalled.
Failure to update the DMCA is unfortunate given dissatisfaction over notice-and-takedown procedures experienced by content creators and music publishers alike. In 2017, the NMPA, the Recording Industry Association of America (RIAA), the American Society of Composers, Authors and Publishers (ASCAP) and several other music copyright trade organizations sent a letter to the U.S. Copyright Office identifying key failures of the DMCA and advocating for a range of voluntary and legislative measures to restore Section 512’s intended balance. On the consumer side, Internet users transmitting content on platforms like BitTorrent have received takedown notices threatening their Internet access despite the fact that the content triggering the takedown notice was open source. It appears that technology platforms evading infringement liability have been the big winners of stagnated DMCA reforms, although the NMPA’s recent enforcement campaign is having some impact on addressing major licensing issues for the music industry.
The NMPA’s efforts to license Internet-based platforms may also be evidence of shortcomings with more recent copyright reforms that Congress has been able to enact. The Music Modernization Act introduced blanket licenses for digital streaming music providers, allowing those providers to distribute sound recordings without negotiating for the distribution rights on each individual recording, has done a lot to clarify the legal landscape for companies like Spotify and Apple Music that are dedicated to music playback. However, as the Mechanical Licensing Collective’s (MLC) first report on historical unmatched royalties issued this February shows, music streaming services being covered by blanket licenses don’t include many companies making use of streaming music content to increase the value of their Internet-based services. Last December, Congress passed a COVID-19 stimulus bill that incorporated the Copyright Alternative in Small-Claims Enforcement (CASE) Act, creating the Copyright Claims Board for the adjudication of small copyright claims up to $30,000. Those proceedings, however, must be entered into voluntarily and, at best, only provide an ad-hoc solution to a licensing problem vexing the entire music industry.
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