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CHALLENGES OF ‘ROYALTY FREE’ MUSIC

September 21, 2021

By Ananyaa Banerjee and Isha Tiwari

Introduction

Bob Marley was once quoted as saying “one good thing about music, when it hits you, you feel no pain”. However, this statement may not ring true for victims whose musical works have been exposed to copyright infringement. For generations, music has provided soul to artists’ works worldwide and the importance of legal protection for such works has developed simultaneously. Music producers are zealously tackling copyright infringement wars as it threatens to wreak havoc over their artistic efforts. In a similar case of infringement in Grand Upright Music Ltd v. Warner Bros. Records[1], it was famously opined by the presiding judge that “thou shalt not steal.” But what if you had no intention of stealing the intellectual work of another and just wanted to explore cheap options without having to pay steep royalties. Given the general public’s benign understanding of convoluted copyright provisions, terms of fair use and the era of Web 2.0, it is only evident that lawsuits would tail-gate. The article will specifically delve into royalty terms with respect to musical works and shed light into the ongoing legal battle between Freeplay Music, LLC. and Ford Motor Co.

What are ‘Royalty Free’ Works?

A general misconception would be that ‘Royalty Free’ music is free to use, which essentially it is not. In layman terms ‘royalty free’ means that once permission is secured from the copyright owner, the user does not have to pay compensation or ‘royalties’ for recurrent use of the subject copyrighted work. Unfortunately, the Indian Copyright Law does not define the term ‘royalties’, instead provides guiding parameters for the Copyright Board for calculating the amount of royalty to be paid for using a copyrighted work.

Typically, if a copyrighted musical work is used in a home video, it would not entail any legal liability and be termed as fair use, but the exemption would fall through if its being used for commercial viewing. This is where royalty free works step in for being useful for content creators who seek out platforms to provide them with cheap and hassle-free musical content. In fact, most of these platforms such as Audio Jungle, Soundstrip, AUDIIO, Ben Sound run on annual non-exclusive license fee. One such platform is Freeplay Music, LLC. (“FPM”) which allows users to avail copyrighted musical works by attaining an automated license agreement for commercial and personal use. A nifty advertising technique to attract with ‘free’ content, but no copyright owner would actually permit another to mint profits off its intellectual property without adequate compensation. As per its partnership with YouTube in 2013, users can avail FPM’s services for free provided for personal use and on payment of an annual fee for commercial use on the media platforms[2].

The Copyright Battle – Freeplay Music, LLC. Vs. Ford Motor Co.

In April, 2020, the automobile manufacturer giant, Ford Motor Co. (“Ford”) landed itself in a copyright infringement battle with FPM. The federal lawsuit was filed in the State of Michigan, wherein it was contended by FPM that Ford had used multiple songs as part of the background music in its promotional advertisements in April, 2017, without attaining any license or paying royalties. Per its contentions, FPM first attained knowledge of copyright infringement when the audio recognition company, TuneSat identified 54 songs out of its 50,000 songs library, being used in 74 advertisements and thus, sought statutory damages worth USD 150,000[3] per infringed work, amounting to USD 8.1 million.

On the other hand, Ford has accused FPM of false advertisement through its trade name and deceptive marketing communications, as per which consumers would prima facie incorrectly assume its music content is free for use, when in fact the payment terms were buried in tedious terms and conditions and the detailed license fee was added onto its website for public viewing only in 2018.

Extent of Liability while using ‘Free’ Music in a Copyrighted Work

In FPM’s case particularly, its policy states that all songs are free for download, provided they satisfy the below mentioned stipulations[4]

  • YouTube – The content is only for personal use on YouTube. The user also gives an explicit right to FPM and YouTube to insert ads in any manner, whether ancillary to the user’s video content or not, while uploading on YouTube or another YouTube based platform. An interesting point here is that nowhere has the definition ‘personal use’ being described for a better understanding of the users. For commercial purposes, the user has to obtain a license for business use.
  • Education – FPM content is free for use for the purposes of educational projects and learning.
  • National Television Broadcast – The content is free for all the qualifying network broadcasters operating on a national basis.

A prima facie perusal of FPM’s ‘Limited License’ reveals that it is non-exclusive, revocable, non-assignable, personal, and non-transferable license to download, display, view, use, play ‘the content’ on a personal computer, browser, laptop, tablet, mobile phone or other Internet-enabled device  and/or print one copy of the content as it is displayed, in each case for personal, non-commercial use only. It clearly stipulates no entitlement of copyright ownership, or any other intellectual property right in the said content and may be immediately suspended or terminated for any reason, based on FPM’s sole discretion, laying the groundwork for user’s liability[5]. Therefore, a user can only escape the clutches of liability if the content is being used in a personal video, which loosely translates to a home video meant for private viewing only. For the purposes of YouTube, the user may have to enlist the video content as ‘private’ as per YouTube’s setting or risk being taken down from the platform.

Reading the Fine Print in Terms & Conditions

It is safe to say that most users have the default habit of skipping the ‘terms and conditions’ policy of any service but such e-contracts (which do not require attestation) have been upheld for their legally validity in courts, even in India. So, would FPM entail any liability for advertising its services as ‘free’ leading its users to believe they aren’t infringing on any copyrighted work or is it a permissible marketing strategy? One of the basic facets of a valid contract is ‘offer and acceptance’, and an offer which one does not see, shouldn’t be held as valid. It is the responsibility of the service provider to mention such terms and conditions in simple and lucid language, with clear visibility for a user’s understanding, failing which it would be rendered unenforceable. In Specht vs. Netscape[6], the United States Court of Appeals for the Second Circuit upheld that a user cannot be made liable for terms and conditions which were not adequately visible. However, entities such as FPM typically have an iron clad license agreement, with complex legal jargon which non-IP sensitised users would reasonably not understand.

Further, it is interesting to mention that FPM entitles itself to make profits from streaming ads on the user’s personal videos, in addition to charging a licensing fee for business use of its content. Therefore, the service may seem ‘free’ to the user but might actually be a clever way to secure licensing fees from them.

Ford accused FPM, similar to a feud back in 2015 with Machinima, Inc., on accounts of violation of fair competition by misleading public with its elaborate display of the word ‘free’ in its trade name and services titled “Songs free for YouTube and more”, as a means of usurping license fees from its users[7]. Further, it was contended that rather than issuing a take-down notice, FPM sends a notice threatening with legal action unless the user agrees to pay the license fee, allegedly sent by TuneSat, a company having close ties with FPM.

A Case of Genuine Infringement or False Advertising?

Commercial exploitation of musical copyrighted works has often led to legal battle on accounts of absence of a valid licensing agreement. In 2020, the online music platform, Spotify, settled USD 1.6 billion infringement lawsuit with Wixen Music Publishing for allegedly streaming the songs without a proper license[8]. Platforms that offer users to freely use their copyrighted works are under a strict liability to clearly identify to their users the terms of agreement, as it is unreasonable to expect a user to comprehend the implied intent of the service provider.

Although the Copyright Law entitles every copyright owner to exercise ownership over one’s work, such practices may not always encourage creativity and may even be detrimental to productivity, as lawsuits are notorious for draining out money and time over the course of their pendency. Guilty or not, it does highlight the growing importance of having clear knowledge about one’s intellectual property rights in their work and where the line of fair use ends and infringement begins.

[1] 780 F. Supp. 182 (SDNY 1991)

[2] https://freeplaymusic.com/#/about-us

[3] Section 504 (c)(2) Remedies for infringement: Damages and profits, Copyright Law of the United States; https://www.copyright.gov/title17/92chap5.html; accessed on May 19, 2020

[4] FAQs; https://freeplaymusic.com/#/faq; accessed on May 19, 2020

[5] Freeplay Music LLC Terms of Use Agreement; https://freeplaymusic.com/#/terms; accessed on May 19, 2020

[6] 306 F.3d 17

[7] Machinima, Inc. vs. Freeplay Music, LLC; https://www.courtlistener.com/docket/4152546/1/machinima-inc-v-freeplay-music-llc/

[8] Spotify settles $1.6 billion copyright infringement lawsuit; https://www.engadget.com/2018-12-20-spotify-settles-1-6-billion-copyright-infringement-lawsuit.html

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