Vinyl Vault lights fuse on copyright time bomb—but is it armed?

Amoeba Records' new out-of-print music service proves a deep knowledge of the industry it cherishes. But the much-loved music store's archive of obscure classics is also a potential time bomb, ticking away inside a bizarre legal tangle that few in the business are inclined to unravel.

Amoeba Records' new out-of-print music service, Vinyl Vaults, proves a deep knowledge of the industry it cherishes. But the much-loved music store's archive of obscure classics is also a potential time bomb, ticking away inside a bizarre legal tangle that few in the business are inclined to unravel.

Amoeba is the real deal, a California record-store chain with three massive retail outlets in an age of digital downloads. It has 10,000, 19,000, and 28,000 square feet in Berkeley, San Francisco, and Hollywood. Its online efforts are more modest, launched in 2012 after a bafflingly expensive $11 million, 6-year in-house project. It offers just 600,000 items, Amoeba told Variety, because its reporting system isn't robust enough for the major labels.

Sales are steady, though, in an age when it competitors are failing. And now the chain is digitizing LPs, 45s, and 78s of forgotten and undervalued music.

It sells tracks as MP3s for $0.78, in Apple Lossless (ALAC in MPEG4's M4A file format) for $1.18, and WAV files for $1.58. There's a slight discount for buying albums. Amoeba says in its FAQ that it tried to run down the rightsholders for these recordings. Where it can't, however, it posts the music anyway, and said to Variety it holds fees for that music in escrow.

There's a problem here. There's no such provision in copyright law for such an exemption, and Amoeba could find itself in real trouble, no matter its goodwill and above-board behavior. This doesn't mean that current copyright law is reasonable on this score; it is not. Rather, that it's fairly clear that what Amoeba is doing isn't permitted.

There's no active copyright police trolling for violations: rightsholders would have to discover Amoeba's work and decide to act, whether to claim escrow fees or file suit. I hoped to ask the chain about the legal advice it had received, but at this writing haven't received a response.

Music published in the United States has two sets of rights attached: the composition itself, which is under a straightforward copyright, and the audio recording, protected separately by a "phonogram" right. Performers negotiate through contract their rights in a work, as a variety of law prohibits reproductions of performances without permission of the artists. (Some countries also have moral rights separate from intellectual property ones, which give irrecoverable vetoes to artists to keep their name on a work or off it, and to prevent their material from being used in a way to derogate them or their work.)

Amoeba runs into trouble in both regards. Compositions published in the United States before 1923 are in the public domain. You'll find that most compositions were put into print because audio recording rights were so fuzzy. Composers and music houses made money selling sheet music to the oceans of home musicians of the day who performed for family and their own enjoyment. (Has that day come back? It seems increasingly so!)

But after 1923, as with books, almost every composition remains either under copyright until 2019 or later, or difficult to track down affirmative knowledge that it's protected. Compositions, books, and other kinds of media between 1923 and 1951 were under copyright's aegis for 28 years and required a renewal in writing to extend the expiration for another 28 years. If the first extension was missed, later updates to copyright law don't protect lapsed work. Some of what Amoeba has digitized may fall into that category. But any work from that time that had a renewal was swept into a 1976 copyright law and then the later 1998 "Sonny Bono" extension. Works from 1923 expire no earlier than 2019 if renewed.

The legal nature of phonogram rights is particularly bizarre. In the United States, no federal law covered audio recordings until 1972. Instead, common law and state law governed whether an audio recording could be duplicated, and such rights would never expire. In fact, all recordings from the dawn of sound in the 1870s through early February 1972 remain under such murky law until 2067! On February 15, 2067, all pre-1972 recordings are federalized for a split second and then pushed into the public domain. (I wrote about this at BoingBoing in relation to the Library of Congress's extensive historical holdings, much of them now digitized, that the library cannot release without permission.)

For the kind of material that Amoeba discusses, it's likely virtually all of it remains under protection until 2067. There are two odd footnotes to this, as well. First, some copyright scholars maintain that the pre-1972 miasma of laws indicates that the party that possesses the master recordings also has the phonogram right to duplicate them unless addressed in a recording contract — and maybe even despite contract terms. (Amoeba's FAQ references those holding rights to either compositions or master recordings.) You can see how that might freak record labels out. They wonder if an album they've sold in the millions since the 1950s or 1960s could actually belong to someone else who holds the master, either to recover past royalties or for future sales.

The second quirk is that because of mergers, acquisitions, and bankruptcies of labels dating back at least to 1900, modern record labels may have the phonogram rights to a lot of out-of-print albums and not even realize it, until there's money to be made or to use as a weapon in negotiation. For instance, RCA was originally part of GE, and owned NBC. RCA bought Victor in 1929; GE divested RCA in 1930, and bought it back in 1986 to get NBC (later sold to Comcast). It spun off RCA's catalog to Bertelsmann, which ultimately sold all its music rights to Sony Music Entertainment. You can't use a Victor recording without Sony's permission.

Some of that history is easy to trace, and I expect Amoeba went directly to the source for well-known ancient labels, like Victor, OKeh, and Columbia (also owned by Sony). Edison's record label shut down in 1929 and masters were sold to Henry Ford, who wanted to protect industrial history. The masters are with the National Park Service now, but the ownership of the rights is cloudy.

The small label Dust to Digital re-releases 78rpm and other old recordings in some incredible curated compilations, but its founder tells me it has been assiduous in tracking down ownership. That was particularly arduous in producing Opika Pende, which had 100 recordings from across Africa from 1909 to the 1970s that had never been issued since their original date.

Where does this leave Amoeba? It seems to be standing on the notion that orphaned works are up for grabs so long as you pay out the owners' cut later when it's claimed. Orphaned works are creations for which no clear knowledge of ownership exists. But there's no provision in U.S. law for how to deal with orphaned works of any kind, music or otherwise. A proposal from 2006 was languishing at the Copyright Office, as it requires Congress to take it up (ha) to establish a clear procedure in law. It's just started moving along again, with the public comment period closing February 4th.

The Copyright Office's most recent statement (PDF) about potential legislation back in October 2012 sums up the issues neatly, including Amoeba's potential problems:

Under current law, anyone who uses an orphan work without permission runs the risk that the copyright owner(s) may bring an infringement lawsuit for substantial damages, attorneys' fees, and/or injunctive relief unless a specific exception or limitation to copyright applies. In such a situation, a productive and beneficial use of the work may be inhibited—not because the copyright owner has asserted his exclusive rights in the work, or because the user and owner cannot agree on the terms of a license—but merely because the user cannot identify and/or locate the owner and therefore cannot determine whether, or under what conditions, he or she may make use of the work. This outcome is difficult if not impossible to reconcile with the objectives of the copyright system and may unduly restrict access to millions of works that might otherwise be available to the public (e.g., for use in research, education, mainstream books, or documentary films).

The legislative proposal suggests that anyone who engages in a good-faith effort to find the rightsholders for a given work (of any kind) would be released from harm should the owners later turn up and threaten a lawsuit. Instead, the party who used the orphaned work would have to then pay a fee that is customary and in line with other work of the same sort. Some worry this law would only help large media companies who could afford both the searching and any fees required later, but I think it has a broader applicability as it eliminates the threat of lawsuit and actual lawsuits, and only allows reasonable fees. (For essentially non-commercial uses, no fee would be owed as long as the work was pulled down if requested, kind of like the safe-harbor provision in the odious Digital Millenium Copyright Act, which prevents liability to hosts of content as long as they follow the form of a take-down notice by purported copyright holders.)

There's a model for this, which reared its head two weeks ago in the case of Jonathan Coulton, Glee, and "Baby Got Back." The compulsory rights model for music licensing, as defined in the U.S., mandates that any composition, once publicly distributed (for sale, given away, or otherwise), can be covered by another artist with a simple notice and a standard fee per copy sold or distributed. For physical recordings and digital downloads, the rate is 9.1¢ for songs up to five minutes and 1.75¢ for every minute (or fraction) thereafter. The original composer can't prevent covers; the artist performing the cover creates a right in the resulting audio recording, but has no copyright in composition, and thus can't protect an arrangement or interpretation.

(That bit Coulton, as Glee's plagiarism of his arrangement is essentially legal, even though Glee, as a TV show, had to obtain synchronization and other rights to distribute its version of "Baby Got Back." But Glee may have used Coulton's actual audio, and if so, Coulton can pursue action on the violation of his phonogram rights.)

Orphaned rights rules can have unintended consequences, because a "good-faith" effort can be subject to interpretation. A bill in the UK in 2010 would have defined an orphan work so broadly that a photograph disseminated in any form, even posted on a personal Web site or emailed to a friend, could be stripped of its identifying characteristics and used without permission by any media firm or private party. The bill lacked strong good-faith provisions and penalties. The bill would have required a standard payment in what would become a form of compulsory use. Proposed rates would be low compared to actual licensing fees. Photographers and others balked and the provision was removed in 2010, but appears to be a problem again this year.

Google in its book-scanning effort became mired in this because it mixed together four categories of books: those to which publishers acceded to include in its scanning or posting efforts, copyrighted works to which the owners were known and didn't give permission, public domain works, and orphaned works. Orphaned works were the least of their problems, really, but its attempted settlement with authors' and publishers' associations would have anointed Google as the sole entity allowed to offer orphaned works for sale, rather than establish a broad principle that any private or non-profit group could follow. Not cool, Google. (The associations also don't speak for all authors and publishers, but were essentially claiming that right.)

Nonetheless, copyright in the United States has already locked up so much material intended to assist in the progress of science and the useful arts beyond the intended brief monopoly that ignoring orphaned works and allowing the status quo to persist would be a colossal mistake. Amoeba's efforts may yield it only hundreds of thousands of dollars, and it's clearly partly a labor of love. But one vindictive rightsholder could make life exceedingly unpleasant for the record-store chain, and pursue maximum statutory damages regardless of all of Amoeba's good faith.

Dust to Digital, the re-release label mentioned earlier, is starting up a non-profit to rescue the massive amount of music locked up in out-of-print 78rpm discs and older recordings. The firm has equipment placed with collectors to let them slowly digitize their discs. But until the law is clarified about orphan works and the risks that ensue, Amoeba may have stepped forward to take the heat, while others linger behind seeking clarity.