Content Creators at Risk: How Evolving Copyright Law Is Opening New Doors for Litigation

There has been a substantial uptick in litigation involving copyright infringement in the music industry thanks a groundbreaking decision involving the 1977 hit “Got to Give It Up.” The dispute involved Marvin Gaye’s “Got to Give It Up” and the 2013 pop hit “Blurred Lines” by recording stars Robin Thicke and Pharrell Williams.

The “Blurred Lines” decision by federal jury in Los Angeles found that parts of Gaye’s 1977 hit “Got to Give it Up” were copied by Thicke and Williams and a jury awarded the Gaye estate $7.4 million in damages and profits. In appeal, the judgment was cut to $3.2 million in actual damages, and the award of profits from Williams’s share reduced from $1.6 million to $357,000.

That decision created a national spotlight that “shall we say inspired a lot of creative plaintiff’s lawyers to be more aggressive in pursuing claims that in the past might otherwise have been rejected as being too speculative,” according to Robert Jacobs, a litigation partner in the Los Angeles office of Manatt and the leader of the firm’s entertainment litigation practice.

Another reason for the uptick – an evolution of copyright law in general, including changes to the statute of limitations, he added.

“The United States Supreme Court probably five, six years ago issued a decision in a lawsuit involving the rights to the motion picture of Raging Bull that recognized that somebody who is aware of a copyright infringement is not barred by the statute of limitations to pursue the claim even if the person has been aware of it [infringement] for more than the three years, which is provided in the Copyright Act,” according to Jacobs.

The Supreme Court ruling in Petrella v. MGM eliminated a long available defense called laches used to defend against purportedly stale claims. The decision opened the door to a new era of copyright infringement cases, including another lawsuit over Led Zeppelin’s “Stairway to Heaven.”

In Skidmore v. Led Zeppelin, a federal appeals court restored a jury verdict that found Led Zeppelin did not steal “Stairway to Heaven.” The estate of Randy Wolfe of the band Spirit claimed that the 1971 mega-hit “Stairway to Heaven” violated the copyright of the 1968 song “Taurus.” However, the 9th U.S. Circuit Court of Appeals in San Francisco handed the major win in March 2020 to guitarist Jimmy Page and singer Robert Plant. The ruling, which can be appealed to the U.S. Supreme Court, is a potentially precedent-setting win for musical acts accused of plagiarism, and comes in a period when many well-known songwriters have lost high-profile cases.

That case ended up being a loss for the plaintiffs, Jacobs says, but in another era of copyright law a laches defense would have been available. “There was a lot of evidence that the plaintiff’s estate was aware of the claim [the claim accrued in the late 1960s] and plaintiffs allowed continued exploitation of the song ‘Stairway To Heaven’ and result in prejudice,” Jacobs says.

“People can always file suit, but they can only get damages going back three years,” Jacobs said. But the Petrella v. MGM decision eliminated the laches defense and opened up a bit of a flood gate in the 9th U.S. Circuit Court of Appeals for cases getting filed.

Jacobs says all media is at risk, not just he music industry, too. “It really is across the board,” he said. “And the other reality is that as content has proliferated in the last several years with easier access to streaming, so to have lawsuits targeting content creators.”

Line of Defense

An important line of defense for content creators today is media liability errors and omissions coverage, which protects creative professionals from legal challenges to their intellectual property.

Anderson Benson, a Nashville-based independent insurance and risk management broker, was recently appointed as a coverholder by Lloyd’s of London for a worldwide media liability E&O program that is specialized for the music industry but also targets film, television, streaming media, songwriters, composers, artists, music libraries, producers, music labels and publishers. “Anybody that’s releasing content, even YouTube content,” says Brent Daughrity, a partner at Anderson Benson.

The coverage that Anderson Benson offers as a Lloyd’s coverholder can protect more creators, says Daughrity, including social media content. Social media content, including work delivered through “social influencers” can be viewed as intellectual property as it is original content that is filmed, produced, and released.

“With Lloyd’s, we are able to expand the definitions and customize the policy to address new exposures like regulatory fines and non-fungible tokens (NFTs) for social influencers,” said Daughrity. Coverage can also provide protection from regulatory fines when a social media post does not disclose that the post is a paid advertising agreement, he added.

When it comes to the music industry, E&O coverage is basically for defense costs. That means legal costs and other defense related costs for experts such as paying for the cost of a musicologist, which is one of the first things that happens in one of these cases to identify the similarities of a song, he added. Other areas of coverage might include triggers for libel, slander, copyright trademark claims, even emotional distress arising from music content in some cases.

Today’s evolving legal landscape is moving toward very specialized media liability policies for content creators, individual content creators, Daughrity added. “The NFT [non-fungible token] world is very prevalent right now and so both in the art world and the music world there is a big need for coverage that really hasn’t been there,” he said.

A non-fungible token is essentially a digital certificate of certain rights associated with an asset — typically, a digital one — that is stored on blockchains, the decentralized computer networks that underpin most cryptocurrencies. “Nonfungible” simply means that each token is unique, to contrast it with other blockchain tokens — such as cryptocurrencies — that are “fungible.” The importance of NFTs is that even though digital works can be quickly and easily replicated, the NFT owner can claim rights in the “original” of that work. NFTs can also be associated with music, art and other content creations.

While intellectual property exposures for content creators are a concern worldwide, the U.S. litigation climate is where the largest exposures and risks come to bear, Jacob says. “The payday that is available in U.S. courts continues to drive the appetite for litigation in a disparate way that you do not see in other countries,” Jacobs said. “It’s just a completely different set of economics.” The potential for big paydays in the United States is really the driver. “And, the ‘Blurred Lines’ case, with a $7 million jury verdict more or less, set a pretty high bar in people’s minds.”

Daughrity said the need for flexible insurance coverage options for content creations will continue to evolve. Working with Beazley and as a Lloyd’s coverholder is allowing Anderson Benson to create policies that will fit the changing needs of this market, he said.

“It gives us a lot of freedom to really create what that individual creator needs,” whether that is for songwriters, film makers, social influencers or with NFTs. There are so many different facets of creations. “We are able to weave the policy to what that individual needs to be covered.”