Music Industry Faces $6 Billion Copyright Infringement Lawsuit

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The music industry is very keen on making people who infringe their copyrights pay exorbitant fines, but what about when they are the copyright infringers? A class action by Canadian musicians accuses them of systematically infringing copyright, with potential damages of $6 billion:

As my weekly technology law column (Toronto Star versionhomepage version) notes, the infringer has effectively already admitted owing at least $50 million and the full claim could exceed $6 billion. If the dollars don’t shock, the target of the lawsuit undoubtedly will: The defendants in the case are Warner Music Canada, Sony BMG Music Canada, EMI Music Canada, and Universal Music Canada, the four primary members of the Canadian Recording Industry Association.

The CRIA members were hit with the lawsuit [PDF] in October 2008, after artists decided to turn to the courts following decades of frustration with the rampant infringement The claims arise from a longstanding practice of the recording industry in Canada, described in the lawsuit as "exploit now, pay later if at all."  It involves the use of works that are often included in compilation CDs or live recordings. The record labels create, press, distribute, and sell the CDs, but do not obtain the necessary copyright licences.

Instead, the names of the songs on the CDs are placed on a "pending list", which signifies that approval and payment is pending.  The pending list dates back to the late 1980s, when Canada changed its copyright law by replacing a compulsory licence with the need for specific authorization for each use. It is perhaps better characterized as a copyright infringement admission list, however, since for each use of the work, the record label openly admits that it has not obtained copyright permission and not paid any royalty or fee.

After years of claiming Canadian consumers disrespect copyright, the irony of having the recording industry face a massive lawsuit will not be lost on anyone, least of all the artists still waiting to be paid.

Given the excessive punishments for copyright infringement that the music industry has successfully lobbied for, the final payout on this, both in Canada and worldwide, could easily exceed the combined market capitalisation of all the big recording companies put together. So it looks like they've been hoist by their own petard, although I'm sure their lawyers are working overtime trying to worm out of their just deserts.

There is no conformation yet that Lord Mandelson is planning a "300,000 strikes and you're out" law to combat these serial copyright infringers.

Update: there was a mistake in the original maths, the actual figure is $6 billion not $60 billion (calculated from 300,000 copies at $20,000 each).