Record Labels Must Submit Copyright Proof

The five major record companies must submit proof today that they own copyrights to the 213 songs they claim were pirated over the Napster Inc. song-sharing network, a federal judge has ordered.

U.S. District Judge Marilyn Hall Patel’s order addresses one of Napster’s last-gasp defenses against the record companies’ copyright-infringement lawsuit. Attorneys for the Redwood City, Calif.-based company argue that the labels may not own the digital rights to the songs recorded by their artists, and that they may have improperly claimed that the songs were “works for hire.”

The latter issue is important because it determines how long a label reaps all the financial benefits from a song. The label controls the copyright for 95 years if it’s a work for hire, but if not, an artist can reclaim the rights after 35 years.

Lawyers for the record companies say Napster’s arguments are far-fetched at best. But the issues raised by the company are sensitive ones, given the labels’ current tussles with artists over online distribution and the rights to master recordings.

Neil Boorstyn, a lawyer in San Francisco whom Patel appointed as a special master in the case, will review the copyright records and advise whether the labels held the copyright to each work. If Patel finds that the copyright to any of the songs does not belong to the labels, that portion of the case will be dismissed, although the actual copyright holder could sue Napster. No deadline was set for Boorstyn to submit his report to Patel.

Jonathan Schwartz, general counsel for Napster, said the proceeding is significant “because it will reveal whether the record labels actually own the digital rights to the works they’re suing Napster over.” He added, “This process could be an important step forward for artists who believe they should control the digital distribution of their music.”

Matt Oppenheim, an attorney for the Recording Industry Assn. of America, said digital-distribution rights aren’t at issue in the Napster case. The songs traded over the service were ripped from CDs, not distributed by the labels as MP3 files and copied by Napster users, Oppenheim said.

The artists’ contracts will clearly show that they assigned their copyrights to their labels, he added.

Patel probably will not decide the work-for-hire issue unless an artist’s contract is missing standard assignment of rights provisions.