PRS For Music (PRS), the collecting society for songwriters and music publishers has announced that it has issued proceedings against SoundCloud for infringement of its members' copyrights after SoundCloud continually refused to obtain a PRS licence.
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SoundCloud launched its free music streaming services in 2008 and now has more than 175 million users per month. It provides a digital distribution service for creators enabling its users to upload, record, promote and share music. The service originally operated without any licences. Last year, SoundCloud stated that it intends to launch a subscription service which has led to the Warner Music Group and independent labels agreeing to provide licences in the US. Licences with record labels cover the recordings but do not cover the underlying compositions; so far the streaming service has no licences in place with any performing rights organisations such as PRS.
Writers and publishers assign certain performing rights in their works to PRS when they become members. PRS then collects and distributes royalties to its members. In its current format, SoundCloud does not pay musicians or their publishers any royalties. PRS has been in negotiations with SoundCloud for the past five years asking that it stops infringing their members' copyrights. PRS has requested that the platform either obtains a licence for its existing services in the UK and Europe or take down its members' music from its site.
Further to receiving a letter of claim from PRS, which included a list of 4500 of its members' works, SoundCloud stated that it had removed 250 posts but it was unclear as to why only these works had been removed. SoundCloud has informed PRS that it will be defending the claim and amongst other defences PRS has stated that SoundCloud is disputing that it requires a licence for its UK and European streaming services. This argument stems from the provisions provided by the E-Commerce Directive 2000 (the directive) which gives online intermediaries 'safe harbour' from copyright infringement liability.
SoundCloud on the other hand has issued its own statement responding to the news stating that it was in the midst of an active commercial negotiation with PRS when it received the letter of claim, which it finds regrettable.
Tell me about the safe harbour provisions?
The directive was implemented as a way to protect internet access providers and certain other technology companies, acting as intermediaries, from copyright infringement liability when providing services to consumers and to allow for the functioning of the internet. Therefore the safe harbour provisions were intended for hosting, conduit and cache services to ensure they were not liable when their activities were passive and technical and where they had no knowledge or control over the content that they handled.
The provisions enable web hosts to be protected from copyright infringement claims if content is uploaded to its site by users and they have no actual knowledge of illegal activity or information and if they become aware of such activity or information, they act expeditiously to remove or disable access to the information. It is on this basis that we understand that SoundCloud has argued that it does not need to obtain a licence from any performing rights organisations; it has never uploaded any of the content to the platform and it has said that it will remove any songs in which PRS has rights if requested to do so.
The British Academy of Songwriters, Composers and Authors claim that platforms such as SoundCloud use the safe harbour legislation as a way to deny responsibility for the music that is illegally uploaded and shared on their sites. PRS also believe that some intermediaries are exploiting the safe harbour provisions and in doing so are depriving creators of fair value for their work and undermining legitimate music services which are an increasingly important revenue stream for creators.
How does this case affect me?
If the claim reaches court, it would test the safe harbour legislation. If SoundCloud is found to have infringed the copyrights of PRS' members, because it is found to be actively providing content rather than merely hosting it, it could result in it being ordered to remove all music owned by PRS' members from its platform and pay damages or an account of profits. It will also require a licence for any such content to be re-uploaded to its site
The case highlights the challenges that musicians face in the digital market. The online market has created the opportunity for greater access to music, however musicians aren't always receiving the royalties that they are due.
If you are a writer you should register your works with a performing rights organisation who can collect income due to you from performances of your music and bring a claim against third parties who play, perform or make your music available online, without obtaining a licence to do so.
If you would like further information on this case or assistance with a copyright or licensing query then please get in touch with Carol Isherwood.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.