By Jeff Price

I am not the first person to write about this topic, but with the recent ruling by a federal judge reducing LimeWire’s possible copyright infringement damages from 1 trillion (no, I am not kidding), to a possible 1.5 billion dollars, I thought it important to bring up again.

In the US, courts have ruled that peer-to-peer file sharing services like the original Napster, LimeWire etc are infringing on a record label’s copyright and can be sued for damages.

LimeWire, just like the original Napster, was sued by a consortium of labels (predominantly the major labels) for infringing on the labels’ copyright by allowing people to use the LimeWire software to distribute and download the labels’ recordings for free.

This same infringement also applies to the songwriter (the publisher) as it is not only the record labels’ recording of the song but also the song itself that is being illegally distributed and downloaded (you can read more on copyright in the Free TuneCore Music Industry Survival Guide: How Not To Get Screwed; Six Legal Rights That Drive The Music Industry)

Although damages for the LimeWire case are not set to be awarded until May, 2011, and there most likely will be legal appeals before the dust settles, at some point some money will be paid to the labels by LimeWire.

Now here’s the really important point:

When an artist signs to a record label he or she transfers his or her rights to the label. Because of this rights transfer, the copyrights to the recordings of the songs are exclusively owned or controlled by the labels.

This same concept applies even if the artists license his or her recordings to the label.  With a license there is an exclusive rights transfer for those recordings for the duration of the term of the license.

Therefore, the band gets no money from these damage payments and/or settlements as this is money collected on copyright infringement, not on revenue made by licensing or selling the music (which the band does get paid on).

Or said another way, of the hundreds of millions of dollars paid to and collected by the labels for copyright infringement, not a penny has gone back to the artist.

The labels position is, as per the contract, bands get paid a % of the money collected from the sale or license of the music.  There is nothing in the agreements that also states that bands get to make money from entities infringing on the copyright of the recordings.

Despite this position making logical legal sense, I can’t help but think it’s just plain wrong.  I wish I could provide a concrete legal reason as to why, but I cannot.  Suffice it to say, paying the bands some portion of this money is just the right thing to do.

The importance of this issues ties into TuneCore’s mission for 2011; to arm artists with the knowledge that enables them to make informed decisions, control their rights, make money, and pursue their passions on their own terms.

To coincide with this, we have already begun to build and launch a global system that, with your permission, enables TuneCore to get and pay you your money already sitting with public performance organizations around the world.

We recently announced the hire of Jamie Purpora, TuneCore’s new President of Music Publishing Administration.

There will be more announcements coming shortly.

In the meantime, though we may sound like a broken record, we cannot stress enough the importance of arming yourself with knowledge, learning the basics of copyright, and understanding the issues.  These tools will allow you to make the best decisions to achieve your musical goals.

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