WASHINGTON DISTRICT COURT REDEFINES DIGITAL DISSEMINATION OF COPYRIGHTED WORKS
The heirs of Harold Arlen, Ray Henderson, and Harry Warren have joined to sue the giant Amazon for allegedly selling unauthorized recordings of their songs from “pirate” record labels. Though the composers may not be household names, these songwriters have made a lasting impression on the Standard American Songbook, including songs like “Over the Rainbow,” “At Last,” and “I Only Have Eyes For You.” The claim involves the defendant companies allegedly selling unauthorized recordings of their songs from “pirate” record labels. These “pirate” labels rip recordings from vinyl records or phono records (non-digital recordings) and upload them to a digital database. The pirate labels then sell these copies for a lower price than the official version. Amazon then buy the copies and distribute the recordings on numerous online music products.
The alleged pirate label (also named as a defendant in the suit) is knowns as “Limitless Int. Recording.” Limitless, an unknown record label with no web presence, completely duplicated the original album artwork and removed the original label logos, as well as ripped the audio from a physical phono record (record, cassette tape, CD). Limitless then contracted with Valleyarm who then contracted with Amazon. They then sell to Amazon for prices below the release ($0.89 instead of the standard $1.29).
The major claim against Amazon involves “making available for sale unauthorized copies of such recordings in violation of exclusive distribution rights under 17 USC §106(3).” Section 106 of the Copyright Act makes is clear that a violation of the exclusive distribution rights requires actual dissemination of the infringed copies by sale or other transfer of ownership, renal, lease, or lending. Amazon argued that that a copyright owner’s exclusive distribution rights include the right to make copyrighted work available to the public, such as by placing the copyrighted works on servers or computers accessible to internet users.
The court found that Amazon had not violated §106(3) because downloading from Amazon’s digital music store occurs only after the customer pays for the download. The court held that §106(3) of the Copyright Act requires “actual dissemination” of the copyrighted work, in the context of a digital music store, actual dissemination means the transfer (or download) of a file containing the copyrighted work from one computer of another. The court reasoned that “because downloading from a digital music store, such as Amazon’s, occurs only after the customer pays from the download,” the distribution requirement of “making available” is not satisfied “simply by making the copy available for sale.”
This ruling creates a massive loophole for digital music distributors to escape liability in copyright cases. This creates little to no incentive for Amazon (or other large digital streaming services) to confirm that the music they are receiving is legal. Leaving the policing of these channels completely on the copyright holder. In a digital world, there is no way for a copyright holder to police all of these channels. More concerning is the lack of incentive for these massive companies to police their own products. Oftentimes the “pirate” labels and the middlemen are judgement-proof entities which are either impossible to find or are insolvent. If a copyright holder is unable to police their works and to rightfully collect upon those works, the copyright becomes worthless.