Record Companies Settled Royalty Lawsuit for $50 Million

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Old 03-Jun-2011
Post Record Companies Settled Royalty Lawsuit for $50 Million

Canadian record labels had originally faced as much as $6 billion in damages in the case concerning the infringing use of music tracks on compilation disks under the pretense that “approval and payment is pending”. Musicians launched a lawsuit against the labels after becoming tired of the so-called “pending list” growing to over 300,000.

The country’s record labels took a decision to settle charges brought by performers over the use of music tracks mentioned on so-called “pending lists” for almost $50 million. About 2 years ago record companies were alleged of using music tracks in compilation CDs or live recordings, saying that “approval and payment is pending”. It appeared that by the time the lawsuit was launched back in 2008, this “pending list” had grown to over 300,000. That’s why the performers, tired of continued infringement by record companies, were demanding $20,000 per each case of infringement in a massive class-action lawsuit. This made a total judgment as high as $6 billion.

The plaintiffs complained that right owner permission to reproduce their creative works wasn’t obtained in majority of the cases. Instead, the record labels simply presumed that a license can be obtained from the rights holder at a price of the prevailing “industry rate” which is paid for mechanical reproduction. However, the record labels largely failed to seek out the musicians and pay them any royalties.

Despite the fact that record labels are always insisting that their aim is to protect the performers, we could once again see a perfect case of profits trumping ethics. The plaintiffs’ attorney pointed out that the result overall was over $50 million in settlement benefits to the artists, which can be considered a strong financial resolution to the case.

The country’s Musical Reproduction Rights Agency, along with the Society for Reproduction Rights of Authors, Composers and Publishers, supported the content creators and promised to end the practices of the pending lists. Now the record companies will have to get permission from right owners to use their works. In case the artist can’t be located the record labels will have to apply for a so-called “unlocatable license”, which only allowed them to hold the money in trust by the above mentioned agencies until the copyright holders are locate

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