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Selling CDs on web site

 
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Chris K
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PostPosted: Thu Feb 16, 2012 8:42 pm    Post subject: Selling CDs on web site Reply with quote

May I request some advice please.

If I wanted to sell CDs online, what are the copyright implications? They would be CDs recorded by other people, and I would just be providing an online sales outlet on my own web site.

I'm thinking that there might be two issues.

Firstly, if they themselves had breached any copyright, I suspect I would also be in breach of copyright - is that correct? There's no way I can actually check the copyright on all the music on their CDs - would I be covered if they signed a contract stating that all the music on the CDs is not in breach of any copyright?

Secondly, if the recording artists haven't breached any copyright, does that mean that there are no copyright implications I need to worry about?

Thanks for any advice.
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AndyJ
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PostPosted: Thu Feb 16, 2012 10:24 pm    Post subject: Reply with quote

Hi Chris,
First of all, a warning. This is an extremely complicated area and I cannot possibly cover all the details here, so if you are in any doubt about your legal position, you should contact a good lawyer with experience of the music business. Do not use any old High Street solicitor because chances are they won't have the expertise to assist you. You will become a publisher and that has some serious responsibilities.
I assume you will have the permission of the artists and more importantly the producers to sell these CDs. As you are probably aware there are (generally) three separate sets of rights in a music cd: copyright in the song (writer/composer), the performance rights of the artist/band and the copyright in the recording (owned by the producer).
From what you say, it appears that 2 and 3 are not the problem, just whether the artist/band have the necessary licence to perform other people's songs.
This is where it starts to get complicated. There are two separate rights that a song writer/composer can license: the performing* right and the mechanical right. Performing right allows an artist to perform the song in public, and mechanical right allows a recording to be made. Both of these rights attract separate royalties which are collected by two separate copyright collection societies, PRS and MCPS, although they now operate jointly as PRSforMusic. You should spend a bit of time exploring their site.
If the artist/band has not got permission to use the songs, then that will be infringement and you would also be liable for secondary infringement as someone who is dealing in the work, unless the last bit below applies and you can prove it. :
Quote:
23 Secondary infringement: possessing or dealing with infringing copy.
The copyright in a work is infringed by a person who, without the licence of the copyright owneró

(a) possesses in the course of a business,

(b) sells or lets for hire, or offers or exposes for sale or hire,

(c) in the course of a business exhibits in public or distributes, or

(d) distributes otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,

an article which is, and which he knows or has reason to believe is, an infringing copy of the work.


If you have taken reasonable steps to satisfy yourself that there is no infringement of the writer or composer's copyright, then you should be able to claim this defence if it later transpires you were deceived. If there is to be a contract then, yes, they should state that not only do they have the necessary licences to perform and record the music, but also that they indemnify you against all claims for secondary infringement. Furthermore, if you are not dealing directly with the artist/band, make sure that the contract also covers the artist's performance rights. These performance rights cover several forms of exploitation including the basic agreement to allow the performance to be recorded, then for copies of the recording to be sold, lent or otherwise issued to the public, and following on from that, synchronisation ('sync') rights and 'grand' rights. The latter two concern the use of the recording on the radio, on television or in film or for dramatic performances such as stage shows or musicals etc. Again, if there is to be a contract make sure you are indemnified against any claim arising out of the producer's failure to secure these rights.

And when you sell these CDs you will be responsible for paying the royalties due from the sales back to the various beneficiaries, namely the composer/lyricist, the artist and the producer.

Good luck with your project.

* Note that 'performance' right and 'performing' right are two completely separate things. The former belongs to the performer(s) and the latter to the composer/lyricist.
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Advice or comment provided here is not and does not purport to be legal advice as defined by s.12 of Legal Services Act 2007


Last edited by AndyJ on Sat May 05, 2012 12:27 pm; edited 1 time in total
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Chris K
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PostPosted: Sun Feb 26, 2012 7:08 pm    Post subject: Reply with quote

Many thanks for your reply, and for the links. It was very helpful and I'll also spend some time studying the links. It does sound as if I'll have to be extremely careful about covering myself. Thanks again.

PS. Sorry for the late response to your reply - I would have responded sooner but I didn't get an email notification of a reply this time so it must have gone astray.
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jimm1909
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PostPosted: Wed Mar 28, 2012 3:48 am    Post subject: Reply with quote

What if I wanted to sell CD's through an affiliate like Amazon on my site? I reckon that is okay right?
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RedRobin
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PostPosted: Mon Feb 11, 2013 8:52 pm    Post subject: Reply with quote

In view of music CD's themselves being merely manifestations of original licences, do the sales of secondhand CDs infringe the original creators copyrights if no royalties are paid - Usually due to a retailer dealing in secondhand music CDs not being registered or having a structured relationship with PRSforMusic or similar?

Last edited by RedRobin on Mon Feb 11, 2013 11:26 pm; edited 1 time in total
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AndyJ
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PostPosted: Mon Feb 11, 2013 11:24 pm    Post subject: Reply with quote

Hi Red Robin,
There are no royalties due on the physical sales of second-hand CDs (or any other copyright work except art works - see below) due to the principle of the exhaustion of rights. In the US this is known as the first sale doctrine.
This principle means that the author's or producer's right of publication (ie issuing a book or CD etc for sale) ends with the sale of the physical item, and so the new owner of the book/CD is able exercise the right to sell on, lend or otherwise dispose of (including by destruction) the article. The one thing he can't do is copy it because that infringes the author's/producer's reproduction right which has not been exhausted.
The current debate centres on whether the same principle should apply to all digital downloads such as those from the iTunes store or eBooks from Amazon. Because there is no tangible object associated with the download, the purchaser is not buying a chattel, but instead they are buying a licence to play the music or read the words, and in most cases, the buyer/licensee does not have the automatic right to sell on his licence as he would if he owned a physical object. Decisions in the European courts (eg Usedsoft v Oracle) relating to software licences suggest that there is an exhaustion of rights for licences, but in other jurisdictions the decisons have favoured the rights owners. The law in this area is still developing.
The one area where UK law (and most EU states and the USA) makes special provision for resales is the art world. It is called the Artist's Resale Right and is described here: DACS website
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RedRobin
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PostPosted: Mon Feb 11, 2013 11:49 pm    Post subject: Reply with quote

Hi Andy Smile

I can see how things can get mighty complicated and how so much depends on testing issues in actual court cases and hence court judgements.

It might be argued that because a download is a copy, it therefore potentially infringes copyrights in spite of it being secondhand (beyond the first sale).

A download isn't a transfer or moving of an original digital item but is a direct and 100% faithful copy thereof.
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AndyJ
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PostPosted: Tue Feb 12, 2013 12:10 am    Post subject: Reply with quote

RedRobin,
Yes a download is a copy, but assuming your bought a track from iTunes then it would be a legal copy. That of course is entirely different to downloading the song from a torrent site where there is no legitimate licence attached to the transaction.
The point of difference lies in the fact that most legitimate downloads are accompanied by licences, but the terms of these licences are not standard concerning to the rights of the licensee over the download he has purchased. Most users don't know/care until it comes time to consider getting rid of any tracks which they no longer want. This was exemplified by the - as it happens, untrue - story that Bruce Willis wanted the right to leave his digital record collection to his kids.
The Usedsoft case was interesting because it appears to support the view that a licence of this sort should be transferable, but clearly the difficulty lies with ensuring that the original download is removed once the 'right' to it has been transfered to a new owner. A company in the US have a business plan which attempts to address this issue but the record companies are opposing them. As I say this story has some way to go.
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typonaut
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PostPosted: Tue Feb 12, 2013 12:33 am    Post subject: Reply with quote

UsedSoft is effective really only in the case of software - thanks to an EU Directive on that particular issue. It also relies upon the licence being perpetual, and not a rental.

To bring music into the scope of this judgement one would need to persuade a court that digital downloads are in fact software. I think you can try that argument, but I'm not sure you'd get anywhere.

But, I agree that this is a question that has some time to run yet, and I think it is likely that a solution will come via EU Directive.
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RedRobin
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PostPosted: Tue Feb 12, 2013 1:08 am    Post subject: Reply with quote

typonaut wrote:
UsedSoft is effective really only in the case of software - thanks to an EU Directive on that particular issue. It also relies upon the licence being perpetual, and not a rental.

To bring music into the scope of this judgement one would need to persuade a court that digital downloads are in fact software. I think you can try that argument, but I'm not sure you'd get anywhere.


....Yes, "software" is a rather generic term. It's usual for software programs aka software Apps (Applications) to have a licence which ends when passed on to another user. This other user is then expected to register their ownership of the licence but very few people accept why they should pay to do so when they have bought a secondhand computer with such software already installed.

It's not commonly realised that each font (typeface family) is a software program even though you can't program it without additional software.
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