It all started back in 2006, when the Hollywood-funded anti-piracy group BREIN reportedly asked musician Melchior Rietveldt to compose music for an anti-piracy video. The video in question was to be shown at a local film festival, and under these strict conditions the composer accepted the job.

However, according to a report from Pownews the anti-piracy ad was recycled for various other purposes without the composer’s permission. When Rietveldt bought a Harry Potter DVD early 2007, he noticed that the campaign video with his music was on it. And this was no isolated incident.

The composer now claims that his work has been used on tens of millions of Dutch DVDs, without him receiving any compensation for it. According to Rietveldt’s financial advisor, the total sum in missed revenue amounts to at least a million euros ($1,300,000).

The existence of excellent copyright laws and royalty collecting agencies in the Netherlands should mean that the composer received help and support with this problems, but this couldn’t be further from what actually happened.

Soon after he discovered the unauthorized distribution of his music Rietveldt alerted the local music royalty collecting agency Buma/Stemra. The composer demanded compensation, but to his frustration he heard very little from Buma/Stemra and he certainly didn’t receive any royalties.

Earlier this year, however, a breakthrough seemed to loom on the horizon when Buma/Stemra board member Jochem Gerrits contacted the composer with an interesting proposal. Gerrits offered to help out the composer in his efforts to get paid for his hard work, but the music boss had a few demands of his own.

In order for the deal to work out the composer had to assign the track in question to the music publishing catalogue of the Gerrits, who owns High Fashion Music. In addition to this, the music boss demanded 33% of all the money set to be recouped as a result of his efforts.

The conversation between Gerrits and the composer’s financial advisor was recorded by Pownews, and during the conversation the financial advisor confronts Gerrits with his unconventional proposal.

“Why do you have to earn money?” he asks, as usually all of the money goes directly to the artists.

“It could be because a lot of people in the industry know that they are in trouble when I get involved,” Gerrits responds, adding that he can bring up the topic immediately in a board meeting next week.

Once again trying to find confirmation for the proposal, the composer’s advisor later asks if the music boss indeed wants one-third of the money.

“Yes, that’s the case, but then [the composer] would make 660,000 euros and now he has nothing,” Gerrits responds calmly.

The seemingly corrupt practices of Gerrits resulted in mass disbelief among many Dutch viewers and today the news is being reported by several mainstream outlets in the Netherlands. As a result of the controversy, Gerrits quickly decided to temporarily resign as Buma/Stemra board member to focus on his defense.

Responding to the press, Gerrits further claims that he was somehow “misinterpreted,” but unfortunately for him the recordings leave little room for that.

BREIN director Tim Kuik, whose organization is accused of distributing the unauthorized copies, noted to TorrentFreak that this is a contractual issue in which BREIN is not involved. Kuik further said that BREIN is not the distributer nor the client in this case.

Whatever BREIN’s role in this case, there is little doubt that someone in the movie industry failed to pay the composer. And instead of standing up for the rights of a musician, a board member of the music royalty collection agency tried to exploit the situation for financial gain.

Sickening.

Update: Pownews’ written report no longer references BREIN’s involvement in the case. Although BREIN is responsible for many anti-piracy warnings on DVDs in The Netherlands, the video described in this article was made for another party related to the movie industry. This confirms the statement of BREIN director Tim Kuik.

Update: Dutch politicians, musicians and a Buma/Stemra board member are shocked by the revelations and describe Gerrits’ actions as “corrupt,” a “money grab” and “mafia-like.” Politicians want more transparency from the royalty collecting agency, and will debate the issue in parliament.

Source: Copyright Corruption Scandal Surrounds Anti-Piracy Campaign

In this respect Belgian group Sabam is one of the most aggressive of its kind. Earlier this year it was revealed that they even collect money for artists that don’t exist.

Today Sabam is making the headlines again, and this time they want to see money from Internet providers (pdf). The music group is claiming 3.4 percent of Internet subscriber fees as compensation for the rampant piracy that they enable through their networks.

Sabam base their claim on a provision in the Copyright Act of 1994, which states that authors should be paid for any “public broadcast” of a song. According to Sabam, downloads and streams on the Internet are such public broadcasts, and they are therefore entitled to proper compensation. This 3.4 percent share is the same amount as the copyright fees on cable television.

But even in the event they begin to receive payments, Sabam stresses that any compensation would by no means legalize piracy. The license fee is only meant to legitimize the ISPs part in transferring these unauthorized files.

The Belgian Internet providers, who are also involved in a longstanding legal battle with Sabam over a network-broad piracy filter, believe the demands of the music rights group make little sense.

“It’s their interpretation of the law, but that is not legally justified,” Belgacom spokesman Jan Margot told De Standaard in a response.

IT lawyer Matthias Dobbelaere agrees that Sabam’s interpretation might be a bit far-fetched: “I don’t think such a broad interpretation of copyright law will hold up,” he noted.

The decision of the music rights group to claim a share of subscriber fees comes after they were unable to reach a workable solution in direct talks with ISPs. The ISPs say they would rather focus on offering legal alternatives than quibble over piracy, a point also noted by Minister of Economy Vincent Van Quickenborne.

“The timing is unfortunate, just as Belgacom and others come to the market with a range of legal streaming services,” a spokesman for the Minister said, adding that his department would look into the legal issues.

Aside from the question of whether the law provides for such an Internet licensing fee, the 3.4 percent figure seems unfair as only a minority of the Internet users transfer unauthorized music.

The plan would mainly hurt legitimate consumers who will have to pay more for their Internet access. Perhaps even much more, as the movie, book, software, gaming, photography and other industries will also claim their share of the booty.

Source: Music Rights Group Bills Internet Providers For Piracy ‘Licence’

With the falling value of the dollar, the cost of imported Thai coconut milk has gone up over 400%. Restaurants don’t have a large profit margin to begin with and because of this increase in cost, John was running his restaurant on a dangerously tiny profit margin.

Factor in the ailing US economy and John was barely managing to keep his business afloat. I was happy to lend him a sympathetic, if somewhat distracted, ear. Then he mentioned a female lawyer from BMI had stopped by during the previous week’s lunch hour.

When a lawyer from BMI stops by a local neighborhood business, it’s typically not to buy something. True to form, the BMI lawyer in this story wasn’t there to support a local business. She was there for a public performance license shakedown.

BMI is a collective rights organization (CRO). A CRO collects royalties and then distributes them back to copyright owners. This is conventionally thought of as the most effective way to collect royalties and it likely is – imagine if every single music label was in charge of collecting royalties for its artists!

Royalties are an enormously important source of revenue for copyright owners. Music copyright owners in particular. When an artist gets a song played on the radio, royalties are collected and paid out. But in recent years, BMI and ASCAP (another CRO) have increasingly turned to a more obscure way to collect royalties – the public performance license.

The license is exactly what it sounds like – a license that grants the right to perform the copyrighted work of another to the public. Most people would think this only applies to live music venues with lots of different bands playing each week. But BMI and ASCAP are now actively applying this license to small, local, neighborhood businesses that decide to have a little live music for the benefit of their customers.

This is completely within BMI and ASCAP’s legal rights. But just because they have the right to do it, it does not mean they should. As my friend John put it:

“At the restaurant, we wanted to support local artists and decided to start having live music on Friday nights. It was a big success. Our customers enjoyed the music and the band was happy to have a steady gig. Several months later a female lawyer came into our restaurant during lunch and demanded we buy a public performance license from BMI. She wanted $3000!”

“Even though we only played original music, she said we should buy the license anyway. Apparently, even if the band members use something as minor as a Led Zeppelin riff while they tune-up their instruments – that’s a violation.”

John’s experience illustrates exactly why BMI’s heavy-handed bullying can have a negative impact on the future of music. It wasn’t a “let’s work together” scenario. BMI didn’t offer John any alternatives – just pay up – or else. They wanted John to get a license simply because there was a slight chance of a future violation!

The purpose of copyright law is “to promote the progress of science and useful arts.” Copyright is the financial incentive that drives creative innovation. When properly administered, copyright can be a powerful tool for fostering greater creativity. However, BMI’s public performance license bullying in this situation resulted in the exact opposite – the progress of music was suffocated. John eloquently stated the result of BMI’s threat:

“I said the hell with it! We only have music on Friday nights. It’s not worth $3000. How is a neighborhood restaurant running on a razor-thin margin in this economy supposed to afford an extra $3000? So I cancelled the band. Net result? Our customers suffered, local music suffered. A complete lose-lose situation.”

The bottom line to BMI and other collective rights organizations? Your customers are not your enemies. Promoting live music is good for BMI and the artists they collect royalties for. Working together with local businesses rather than trying to bully and intimidate them will leave all parties better off.

As for John’s restaurant, it really is a shame. The coconut curry still tastes as awesome as ever. But the lively dueling banjos in the background are gone for good.

The above is a guest post by Allan Gregory. Allan is a bar-certified lawyer in the state of Florida, with a special interest in Internet Law.

Source: Music Copyright Police Ruin Artists’ Gigs (and Coconut Curry)

They target schools and kids’ community centers, charge charities for the singing of Christmas carols without a license, and even crash weddings if they have to.

While these copyright collectors are very strict in forcing their rules onto others, they often fail to live up to their own standards. This attitude was brilliantly exposed by the Belgian TV-show Basta when it exposed local music royalty collecting agency SABAM for charging people to pay non-existent artists.

This week, German royalty collecting agency GEMA made the headlines with a similar mistake. The group is claiming money from the nonprofit organization Musikpiraten, for releasing a compilation CD featuring the winners of its Creative Commons competition “Free! Music! Contest.”

Musikpiraten received a 350 euro invoice for five tracks listed on the CD, a false claim for which the pirates are considering filing a copyfraud complaint.

“GEMA’s claim that they hold these rights is demonstrably false. All artists have explicitly declared that they are neither members of GEMA nor of any foreign royalties collection society. The demands are therefore clearly a copyfraud,” Christian Hufgard, chairman of Musikpiraten explains.

The false claim appears to have been sent because some of the authors have names similar to registered GEMA members. But even then, the mere notion that the CD features work from a Creative Commons competition should have made GEMA reconsider their claim. That didn’t happen though.

According to the Musikpiraten chairman, GEMA and other royalty collectors simply assume that all artists fall under their wings. This is an outdated assumption, especially in the digital era where many artists allow people to share and redistribute their work.

“Internet portals like Jamendo.com with more than 52,000 albums published under Creative Commons license are a proof that the principle of ‘all rights reserved’ is outdated. If an artist verifies to us or to another publisher that he or she is not a member of GEMA, this certainly must have more weight than the blanket assumption that every author is a member of GEMA or a similar society,” Hufgard says.

This is not the first time that a royalty collection agency has filed a false copyright claim, and some artists have even cancelled their membership because they do more harm than good. Michael Koch, singer and guitarist of “the.princess.and.the.pearl,” one of the bands who GEMA falsely claimed royalties for, is one of them.

“We don’t think highly of GEMA. I used to be a member, and our band actually lost a couple of gigs, because the organisers of small festivals were unable to afford the GEMA fees, of which hardly anything flows back to the band in terms of royalties,” he says.

“The fact that we, as non-members, must prove that our music has not been composed by a GEMA member, demonstrates that the society has too much power – and that it abuses it ruthlessly,” Koch adds.

A testament to the ruthless stance of GEMA is the fact that they didn’t immediately send a credit note when the mistake was pointed out to them. Instead, the royalty collecting agency suggested that the artists probably forgot to register the tracks with GEMA, and they asked Musikpiraten to convince them that the identical names are a pure coincidence.

Source: Music Royalty Collectors Accused of Copyfraud

The SGAE is the main collecting agency for performance royalties, which it then distributes to artists and copyright holders. Sometimes it goes that ‘extra mile’ to enforce these royalties, as it did in 2005.

The SGAE hired a private investigator to gatecrash a wedding reception in Seville and video it. The video was to be used as evidence that the venue was playing music without paying the fees SGAE felt it should. However, when the case came to trial, the judge threw out the video evidence as it was collected illegally, in violation of the privacy rights of the people at the event. Despite the loss of the taped evidence, the venue was fined €43,179 ($59,200 US) for using the music without paying royalties.

However, that story had a happy ending of sorts. The SGAE was later fined €60,101 ($82,400 US) for the violation of privacy. Excluding court costs, that’s a €16,992 loss for the SGAE, as well as the bad publicity it generated. Yet, in the world of copyright enforcement, if there is weight to be thrown around and fees to collect, it will be done. The head of the SGAE, Pedro Farre, is reported in The Times as saying “Using private detectives to investigate fraud is common. We will carry on doing it.”

The agency was also critical over the ruling that his agency violated the wedding’s intimacy, saying in 2006 that any questions over the legality of the video were “demagogic arguments”, and that the issue should be that the venue was using music illegally, not the legality of the evidence.

Now, in 2008 another similar case is reaching the courts. This time, instead of having a private detective recording the wedding, a tape the SGAE says they obtained from a legitimate attendee will be presented as evidence. Again, at issue is the privacy of the wedding – there is a constitutional right in Spain to one’s own image – which might still invalidate the video. Those at the wedding, after all, have no impact over the venue’s decision regarding licensing, and it’s their right to privacy that the venue’s lawyer, JoaquÍn Moeckel, says is being violated in the case against the Salón de Bodas.

Source: ‘Wedding Crashing’ Royalty Collector Continues to Break the Law

To make it even worse, the artists will lose all the money collected for them up to March 31, 2000, if they don’t sign up before the end of this year. What a crazy world are we living in. Some random company is allowed to collect the royalties of artist that are not even aware that this company is doing so. I mean, there could be better and more effective ways than this..

I agree that it is quite hard to contact “Ol’ Dirty Bastard” directly, since he’s not among us anymore, but it can’t be too hard to find out where his royalties should go to. Wilco, Kim Wilde, if you’re reading this… SoundExchange has some money for you.

Source: Company Collects Royalties but Can’t Find the Artists