SHOOT article: AMP SEEKS PERMANENT SOLUTION TO TEMP TRACKS, October 4, 2002

Musicologists To Examine Copyright Infringement, Industry Practices.

By Robert Goldrich
NEW YORK—Looking to address what's generally regarded as a steadily, if not exponentially, growing number of copyright infringement claims by record labels and publishers against music in commercials, the Association of Music Producers (AMP) is bringing together leading musicologists for a seminar later this month in New York. AMP hopes the session will generate meaningful turnout from the agency community—specifically heads of production, broadcast business affairs managers and in-house legal counsel—as well as lead members of the Association of National Advertisers, the American Association of Advertising Agencies and the Association of Independent Commercial Editors.

AMP president Jeff Rosner, executive producer of Sacred Noise, New York, explained that musicologists were chosen to headline the seminar because they have a birds-eye view of the business, particularly pertaining to industry practices, infringement claims and legal liabilities. This perspective, observed Rosner, is invaluable, especially since claims often are settled out of court, with those settlements stipulating that the parties involved not speak publicly about individual cases. Musicologists, said Rosner, can at least shed light on the matter, providing a viable handle on the general state of affairs and what can be done to improve the situation.

At press time, AMP had lined up three musicologists for its late October session: Dr. Earl Spielman, Anthony Ricigliano and Sandy Wilbur. As a precursor to the seminar, AMP informally polled several musicologists, including Spielman, Ricigliano and Wilbur. Their feedback included observations on the temp track, whereby a copyrighted composition or song has been used ostensibly without permission from the publisher for the purpose of editing and presenting a prospective commercial to the client. This track, if it is not actually licensed for use in the actual spot, frequently becomes the "guide" for the musical direction given to the composer.

In response to AMP's survey, Spielman noted, "Of the fifty most recent complaints I have worked on in the ad world, virtually all have involved a temp track circulated between editors, ad agencies and their clients." Spielman estimated to SHOOT that approximately two-thirds of his work is in music for advertising. Of that, about 75 percent involves comparison between a new composition and an existing composition; 15 percent entails a comparison based on sound-alike elements; and only 10 percent involves original music without any reference to another composition.

In his survey feedback to AMP, musicologist Matthew Harris related that a majority of tracks he has cleared had a reference track. "Of those," he said, "about one out of three was never approved for broadcast, even if revisions were made." And when he entered into a situation in which a claim had been made against a composition, "many had used the plaintiff's song as the reference track."

Responding to the AMP poll, Ricigliano stated, "The biggest problem occurs as soon as an overture has been made to the publisher" with regard to licensing the temp music. In those instances, he continued, both publisher and record label are "on the lookout for anything even remotely resembling their music in the final commercial."

GUIDELINES

AMP's set of music production guidelines—released nearly two years ago (SHOOT, 10/27/ 00, p. 1) and published in the Association of Independent Commercial Producers (AICP) Membership Directory—contains a section specifically addressing alleged music copyright infringement. (AMP and the AICP maintain a strategic alliance.) The AMP guidelines define the potential risk entailed, advising that "caution must be exercised in the use of existing music as 'direction' for companies and composers. Copyright laws apply not only to the literal notes of music compositions, but to the sound of the musical arrangement, as well. Thus there can be great risk-to the advertiser, the agency and the music company—in making something 'sound like' someone else's song or soundtrack. Note that the use of published recordings without permission—even for presentation of 'testing' purposes—could be viewed as infringement of copyright law. Further, an 'infringement' claim can be based upon intent. Intent is often determined by whether a piece of music is 'discoverable'—i.e., has been laid back to a rough cut or animatic."

This section of the AMP guidelines goes on to point out that "risk is increased significantly when an inquiry has actually been made into the availability of that song or soundtrack for use in a commercial. (If such an inquiry has been initiated with the publisher of a musical wok now being cited as a musical 'direction,' it is prudent to notify the music company assigned to the project, and to enlist the services of a musicologist to analyze the relevant recordings.) To avoid unnecessary legal exposure, AMP recommends that discussions of direction be limited to musical styles or genres, that music professionals be included in the discussions, and that 'needle drops' be kept out of the presentation process (unless licensing of the recording is intended)."

Copyright infringement also raises the question of indemnification—and who should be indemnifying whom. The AMP guidelines suggest the need for "co-indemnification in the [ad agency] Music Rights Agreement with respect to scripts and materials furnished by the agency." Historically, the indemnification clause in such a rights agreement has placed full responsibility for the originality of the acquired work with the supplier and composer. Further, the clause has usually required that the supplier and composer, jointly or individually, "hold harmless" the agency and its client from any and all claims, judgments, legal costs, et cetera, stemming from any actions and/ or claims made against the work.

Past president and current board member of AMP, Lyle Greenfield, who is president/creative director of New York-headquartered Bang Music, agreed that if a music house is doing "original work," it should guarantee that originality and take full responsibility. But if the agency assignment instead calls for, in essence, trying to sound like or copycat something, then fairness dictates that there be some form of legal indemnification for the music house.

Attorney Robert Sacks of Kane Kessler, the New York law firm representing the AICP, contended, "It's premature for the music producer to agree to indemnification until it and its client resolve which parties in the creative and production process should be responsible for potential claims."

E&O

As chronicled in SHOOT, some agencies require that music production houses carry an errors & omissions (E&O) insurance policy in order to provide indemnification. However, such E&O coverage is undermined and rendered non-applicable with the use of temp tracks. Currently, coverage regarding music comes in the form of a general E&O policy, the language of which isn't specifically geared to the ad music business. About a year ago, AMP and AICP played lead roles in getting what appeared to be extensive E&O coverage tailored to the music and sound design industry (SHOOT, 7/27/01, p. 1).

But ultimately that insurance policy—which was to have been underwritten by Entertainment Brokers International (EBI, a former division of Fireman's Fund)-fell by the wayside when different parties involved balked at certain provisions, according to Greenfield.

A key stumbling block in attaining such E&O coverage is current ongoing industry practice, which includes the extensive use of temp tracks. These tracks open up potential legal exposure—at a time when record labels and publishers have adopted an aggressive claims stance—causing insurers to shy away from offering a comprehensive policy. AMP hopes that its seminar featuring musicologists will promote awareness of this fact among agency business affairs people and lawyers, as well as heads of production. This in turn will encourage industry creative practices that avoid potential legal risks and liabilities.

Such a working environment, if achieved, could cut down claims and result in the creation and availability of viable, perhaps even more relatively affordable insurance coverage specific to the ad music business.
"The ideal way to deal with the situation is to take the temp track away from film when it goes outside the editorial suite and especially when it goes to the client, agency and music production house," contended Rosner. "Actually, there's even risk to having it [a temp track] in the editorial suite."

Rosner acknowledged that the time crunch in the business is profound and that eliminating temp tracks could add days to the process. However, he stressed, it's incumbent upon the industry "to get agency legal departments and heads of production to realize how important this issue is," so that creatives adjust their practices accordingly.

Greenfield concurred with and amplified Rosner's remarks. "For example, an editor cutting to a temp track should not send the spot with that track to the music house," related Greenfield. "The temp track must be removed before being relayed onto the music producer. There's been a tendency on the part of some involved in the process to play fast and loose with copyrighted work that they don't have authorization to use, even for presentation purposes. That has to change for the good of the entire advertising community. We're not protected and cannot protect others if we're circulating other people's copyrighted material [without authorization] in the music creation process."

According to AMP, two major ad agencies in New York—Ogilvy & Mather and Grey—have made it their policy not to use temp tracks in light of the situation. SHOOT phone calls to Karl Westman, senior partner/executive music producer of Ogilvy & Mather, New York, and Sallie Moore, music producer at Grey Worldwide, New York, had not been returned at press time.

STOCK REPORT, SETTLEMENTS

Stock music can also prove vulnerable. Word on the industry grapevine is that a leading ad agency has a lawsuit pending against it because the stock music it used in some spotwork sounds very much like a piece of copyrighted music on a record. The stock music house supposedly signed an indemnification agreement, but has neither the proper insurance coverage nor sufficient assets to offer protection against the copyright infringement claim.

As alluded to earlier, claims of copyright infringement are often settled out of court. Spielman noted that agencies and clients generally make a concerted effort to avoid litigation in that they don't want to see such claims go public. "Even if they're in the right, they [agencies and clients] will often attempt to settle rather than go to court," related Spielman.

Indeed, relatively few complaints end up in advanced stages of litigation, much less go all the way through a trial and final judgement. Among the most publicized cases was one involving the Spin Doctors, who alleged that their hit "Two Princes" was infringed upon by a sound-alike track in a Miller Lite Ice spot (SHOOT, 6/6/97, p. 7). Chicago agency The Leap Partnership and Milwaukee-based Miller Brewing Co. had to pay an undisclosed amount in damages.

Conservative estimates are that settlements of copyright infringement claims-not to mention the cost of legal counsel—easily amount to millions of dollars annually.

CREATIVE BENEFIT

Generally, those in the music production house ranks contend that by not using temp tracks, the industry can mine greater creative potential. AMP secretary Jan Horowitz, business manager of David Horowitz Music Associates (DHMA), New York, acknowledged that "advertising has to reference popular culture" but noted that "often the best music and sound comes out of simply saying to a talented composer, 'Look at this and what do you hear?'"

This is in sharp contrast to a scenario in which an agency requests that a music house try to emulate or approximate not just a rock track, but a track from such and such a band-actually the first eight bars of such and such a track on such and such a CD. When getting into this situation, AMP and leading musicologists agree it's important that everyone involved understands the potential risks.

At press time, the date, time and New York venue for the musicologists' seminar were being finalized. Greenfield noted that tentative plans call for similar sessions to take place in Chicago and Los Angeles in the coming months.