Tom Iverson analyses the recent dispute between Ministry of Sound and Spotify.
Ministry of Sound brought proceedings in the High Court last September against Spotify (Claim No. HC13C03860). The case was settled at the end of February this year. This article considers the basis for the claim and the arguments raised by both sides (Particulars of Claim dated 2 September 2013 prepared by Edmund Cullen QC (PoC)) and Defence dated 15 October 2013 prepared by Henry Carr QC and Guy Hollingworth (Defence)). It also considers what might have happened had the case proceeded to trial, in particular, it addresses whether there can ever be copyright in a music compilation or playlist. Recital 19 to the Database Directive 96/9/EC suggests that, as a rule, there cannot. But the test of author’s own intellectual creation sets no such limitations, raising potential issues of public policy.
Ministry of Sound is a well known group operating mainly in the field of dance music. Its main source of income derives from sound recordings, including compilation albums, as well as its world-famous nightclub in Elephant & Castle and certain other music-related operations. The nightclub opened in 1991, and Ministry released its first sound recordings in 1993. Since then, Ministry’s compilation albums have sold almost 50 million copies worldwide, selling around 3 million copies of the 30 or so physical compilations and 50 or so digital compilations that Ministry releases each year. The brand has been hugely successful, having 45 albums reach number 1 in the UK Compilation Albums Chart. This popularity has endured, and in the summer before proceedings were issued, 11 of the UK Top 40 dance albums were Ministry compilations. Ministry is arguably the biggest dance music brand in the world, it has the planet’s largest independent record label, and its compilations have won numerous awards.
Spotify’s 21st century business operates a music streaming service, providing content from a range of major and independent labels with a repertoire of over 20 million tracks. Part of Spotify’s service allows users to create “playlists” of tracks and other users to search for and share those playlists. Users can name and arrange the playlists in any way that they like. The Spotify service is an “information society service” within the meaning of Article 2(a) of Directive 2000/31/EC (E-Commerce Directive) and regulation 2(1) of the Electronic Commerce (EC Directive) Regulations 2002 (E-Commerce Regulations). It is also a “service provider” within the meaning of regulation 2(1) of the E-Commerce Regulations and s 97A of the Copyright, Designs and Patents Act 1988 (CDPA). Additionally, the Spotify service acts as a store for information provided by a recipient of the service within the meaning of Article 4 of the E-Commerce Directive and regulation 19 of the E-Commerce Regulations.
Ministry alleged that Spotify had infringed its copyright in certain compilations by carrying out, or authorising the carrying out, of certain acts in relation to the whole or a substantial part of those compilations without Ministry’s consent, contrary to s 16 of the CDPA, namely copying the compilations or communicating them to the public. It stated that in numerous instances, Spotify users were compiling playlists that were the same, or substantially the same, as various Ministry compilations. Many of the playlists referred to Ministry compilations in their titles. The playlists were accessible to other users, who could then use the Spotify service to stream those tracks.
Ministry asserted that:
- Spotify had made copies of the whole or a substantial part of the track listings in certain Ministry compilations;
- Spotify had made those track listings available to the public by electronic transmission in such a way that members of the public could access them from a place and time individually chosen by them; and
- Spotify users had infringed Ministry’s copyright in the compilations by copying them or communicating them to the public, and so: (i) by providing the service, Spotify had given users the means to do so; and (ii) by failing to take steps to prevent the creation of such playlists or to remove infringing playlists, Spotify was liable.
Ministry claimed that copyright subsists in each of its compilations as a database under ss 1, 3(d) and 3A(1) of the CDPA, on the basis that each compilation is an original copyright work (a database) because the selection and/or arrangement of its contents constitutes its author’s own intellectual creation pursuant to s 3A(2) of the CPDA. Section 3A(1) states that a database is:
…a collection of independent works, data or other materials which –
(a) are arranged in a systematic or methodical way, and
(b) are individually accessible by electronic or other means.
Ministry explained that its compilations are usually created by its in-house team, consisting of music industry experts, DJs and individuals specifically recruited for their knowledge of music. The 15-strong team has decades of experience in creating compilation albums. They use not only their personal knowledge, but also sources such as DJ charts, airplay and sales statistics.
They start by putting together a concept for a new compilation album, which might derive from the music being played in clubs in the UK or abroad which has not yet reached the mainstream, or may tap into a current trend in popular culture, or may be based on a historic back catalogue. Alternatively, consultants are hired from time to time to bring in new ideas to the compilations team. The individual members of the team working on a particular project will be picked depending on the specific individual’s area of expertise, age and musical tastes.
Once a concept has been determined, the team working on the project compiles a long-list of approximately 100 tracks based on their personal knowledge, by researching previous albums, music charts and radio playlists, while also considering the likelihood of being able to secure a licence for any particular track. Compiling this long-list takes approximately two weeks, including making numerous revisions to ensure that the list matches the concept. The long-list is then reduced to around 60 tracks, in part depending on the licences that can or cannot be obtained.
The team members with the most relevant knowledge then create a final track list. Each CD or mix will have a different theme within the concept. The team member with the best knowledge of the relevant repertoire arranges the compilation based on factors including exclusivity and familiarity of the tracks, balance of sound, artists and mix of each CD and the chronology of the selected tracks. Individuals within the team revise and re-order the tracks as necessary to finalise the compilations. Revisions can be required during the mixing process or as a result of licensing issues. The final running order is approved by Ministry’s Senior Product Manager and the Head of Compilations.
In defending the claim, Spotify raised numerous points, the most significant of which was that copyright did not subsist in the particular compilations or, indeed, in any music compilation.
No “author’s own intellectual creation”
Spotify argued that Ministry had substantially overstated the creative process. Instead, the concepts are simple and banal themes generally relating to an established type of dance music, and, of course, there is no copyright in a concept. Further, many of the tracks are obvious “standards” within a particular genre, are taken from pre-existing compilations, or are based on chart popularity, and, as such, do not reflect the authors’ own intellectual creativity. Reducing the long-list to the tracks to be included was primarily dictated by licensing and commercial decisions, meaning that even if any authors’ own intellectual creative choices had been made, these were not reflected in the ultimate compilations.
Spotify also asserted that the arrangement of tracks reflected banal and obvious choices, such as arranging tracks chronologically or putting popular tracks at the start and end of the running order. To the extent that any authors’ own intellectual creativity had been used in editing and mixing the tracks together, this had not be reproduced in the playlists (given the Spotify playlists were created from individual tracks, not edited or mixed together, and all of the individual tracks were properly licensed).
For these reasons, Spotify claimed that the process referred to by Ministry did not constitute the authors’ own intellectual creation within the meaning of s 3A of the CDPA. Alternatively, even if copyright could subsist in a compilation of recordings of musical performances, the authors’ own intellectual creation in this case was insufficient to overcome the strong presumption in Recital 19 of the Database Directive.
A compilation of sound recordings is not covered by the Database Directive
Spotify argued that a compilation of sound recordings on an album is not covered by database copyright. Recitals 17 and 19 of the Database Directive state:
(17) Whereas the term database should be understood to include collections of works, whether literary, artistic, musical or other, or of other materials such as texts, sounds, images, numbers, facts, data; whereas it should cover collections of works, data or other independent materials which are systematically or methodically arranged and can be individually accessed; whereas this means that a recording or an audio visual, cinematographic literary or musical work as such does not fall within the scope of this Directive;
(19) Whereas, as a rule, the compilation of several recordings of musical performances on a CD does not come within the scope of this Directive, both because, as a compilation, it does not meet the conditions for copyright protection and because it does not represent a substantial enough investment to be eligible under the sui generis right.
(The sui generis database right is a separate right from copyright in a database. It subsists if there has been a substantial investment in obtaining, verifying or presenting the contents of a database (regulation 13, Copyright and Rights in Databases Regulations 1997). It should be noted that Ministry did not claim that Spotify had infringed the sui generis database right.)
Spotify argued that those recitals reflected a decision made by the legislature to exclude compilations of sound recordings from the scope of the Database Directive. The reasons for this were that phonograms are not protected as authors’ rights at international level, but are instead given lesser protection as neighbouring or related rights. The Database Directive did not intend to give a term extension to the protection already afforded to sound recordings. As such, for database copyright protection to be given to sound recordings, such as the Ministry compilations, on the basis that they constitute a compilation of other sound recordings, this would be an unwarranted extension for the term of protection (copyright in a database lasts for 70 years from the end of the calendar year in which the author of the database dies). In the alternative, Spotify argued that the exceptional circumstances required to justify an extension of term did not exist in the present case. Additionally, Spotify argued that the Database Directive applies only to databases that are literary and artistic works within the scope of the Berne Convention, which it asserted a compilation of sound recordings will rarely, if ever, be.
What would the court have held had the case proceeded to trial?
Anyone who has listened to a DJ in a nightclub or at a wedding knows that there can be genuine creativity involved in compiling a playlist. This art form is well recognised, even in putting together the running order of an individual artist’s studio album, let alone a compilation of 60 tracks from multiple artists covering many years or even decades. Big names in the world of dance music are paid big bucks (significantly more than producers in many instances) to select and arrange compilation albums. So is this the sort of creativity that should be protected by copyright?
Copyright in a database only subsists if it is “original” in the sense that, by reason of the selection and/or arrangement of its contents, the database constitutes the “author’s own intellectual creation” (s 3A(2) CDPA). In other words, picking the tracks and the running order must be the compiler’s own intellectual creation.
Recitals 15 and 16 to the Database Directive state:
(15) Whereas the criteria used to determine whether a database should be protected by copyright should be defined to the fact that the selection or the arrangement of the contents of the database is the author’s own intellectual creation; whereas such protection should cover the structure of the database;
(16) Whereas no criterion other than originality in the sense of the author’s intellectual creation should be applied to determine the eligibility of the database for copyright protection, and in particular no aesthetic or qualitative criteria should be applied.
So, eligibility for protection depends on whether it is the author’s own intellectual creation and that alone. As the CJEU stated in Case C-604/10 Football DataCo v Yahoo! UK Ltd:
“… the significant labour and skill required for setting up that database cannot as such justify such a protection if they do not express any originality in the selection or arrangement of the data which that database contains.”
So as long as the author’s own intellectual creativity is in fact used in the selection and arrangement of the compilation or playlist (a question of fact in each case), the only significant problem appears to lie with the general rule under Recital 19 to the Database Directive.
In some ways, it is hard to see that compilations of musical performances do not, as a rule, “meet the conditions for copyright protection”. Recital 16 states that no criterion other than originality, in the sense of the author’s own intellectual creation, should apply in determining eligibility for copyright protection, and Football DataCo states that the author’s own intellectual creation must be applied to the selection or arrangement of the data within the database. This view appears to be shared by the authors of Laddie, Prescott and Vitoria who state their belief that:
“… a person can research and put together a compilation of songs and create something which must be properly considered as constituting the author’s own intellectual creation. Whether or not a compilation album amounts to the author’s own intellectual creation will depend on all the facts. Some will qualify, others will not. It is submitted that it depends what kind of work goes into the creation of the compilation. Notwithstanding the words of Recital 19 there is no absolute rule that a compilation of recordings of musical performances cannot qualify for copyright protection. (The Modern Law of Copyright and Designs (4th ed.) (Laddie), para 32.32 – it should be noted that the Fourth Edition of Laddie pre-dates the CJEU decision in Football DataCo).
That said, even if that view is correct, there could be a strong public-policy argument against the subsistence of database copyright in music compilations, or, indeed, any multi-track sound recording (where a similar level of creativity might be involved). As noted in Spotify’s defence, whether or not it is fair, sound recordings are treated differently to literary, artistic and musical copyright works and so the term of protection granted is generally for a fixed term from the end of the year of first release. Although it was extended in the UK last year, by the Copyright and Duration of Rights in Performances Regulations 2013, from 50 years to 70 years (put simply), this is significantly less than the usual “life plus 70 years” awarded to author’s works. There has been a great deal of debate over the term of protection for sound recordings for many years, and for a parallel form of extension to come into effect, as it were, “by the back door” in the case of album track listings (and not just compilations) would cause a major stir.
Some might see that as a just reward for the creativity that goes into track selection and arrangement in many cases, something often undertaken by individuals who do not benefit from copyright in the sound recording or in the music and lyrics. On the other hand, the star DJ can be rewarded with a royalty. Perhaps the real problem is for the label investing in the process, which would welcome the back-up of a property right, rather than the slender advantage of being the first to market. At the same time, streaming services want their subscribers to be free to copy their favourite playlists, whatever the source. Understandably, it seems that neither Ministry nor Spotify wanted to set an unhelpful legal precedent.
Tom Iverson, Associate, Michael Simkins LLP
Article written for Entertainment Law Review.