Peloton accused of infringing copyright on music it already licensed. NMPA v. PELOTON

A copyright is a set of exclusive rights granted to the author of a new work of expression. In the United States an author is granted a copyright when they fix their work in a tangible medium. A copyright can be registered with the United States Copyright Office to strengthen the rights associated the rights of the copyright owner, however fixation is what creates the author’s copyright. A copyright grants its owner the exclusive right to reproduce, distribute, perform, display, transmit and make derivative works based on the original work. If someone other than the copyright owner attempts to exercise one of these exclusive rights that can be considered copyright infringement. A copyright owner can combat copyright infringement by filing a lawsuit. The plaintiff in a copyright lawsuit can request an injunction to stop infringing activity and damages for copyright infringement which has occurred.

Each of the exclusive rights granted by copyright law are treated like property. A copyright owner can sell or license each right associated with a copyright and attach conditions to those rights. A copyright owner can even choose to not exploit one of these rights in a way that is inconsistent with their ideals or business models.

One of the types of licenses that a copyright holder of an audio work can grant is a synchronization license. A music synchronization license, or “sync” for short, is a music license granted by the owner of the copyright of a particular composition, allowing the licensee to synchronize music with some kind of visual media output. A stumbling point that a licensee can encounter is that a license to perform music for customers does not necessarily grant the licensee the right to synchronize the music along with visual media. For this reason, it is important that experienced copyright attorneys review copyright license agreements so all parties are aware of what rights are actually granted by the license.

A case which highlights the importance of having an experience attorney help craft a copyright license agreement is: DOWNTOWN MUSIC PUBLISHING LLC, v. PELOTON INTERACTIVE, INC., 1:19-cv-02426 (S.D.NY 2019). The defendant in this case sells stationary fitness bikes and treadmills and streams to its subscriber members workout videos that feature musical works, including works owned by the plaintiff. The defendant claims to have entered into catalog wide reproduction and performance licenses with the copyright owners for all the music used by the defendant.

The plaintiff ins this case are a group of music publishers that license the synchronization rights to copyrighted musical works on behalf of copyright owners. Plaintiffs have identified more than 1,000 musical works that they own or control (in entirety or in part) in videos that the defendant has made or currently makes available to its customers. The plaintiffs contend that each video using a copyrighted piece of music requires a separate synchronization license, therefore one song being played in 55 separate videos would require 55 different synchronization licenses. The plaintiff sued the defendant for copyright infringement in March 2019.

The defendant responded to the complaint with its own allegations. The defendant claims that it negotiated reproduction, performance and synchronization licenses in good faith in 2012 when it was a small startup company. Some copyright owners granted all three licenses, other copyright owners said that synchronization licenses were premature and only granted licenses for reproduction and performance. Now, the defendant is valued at $4 billion dollars. The defendant claims that the plaintiff interjected itself into licensing negotiations in an attempt to extract licensing fees that are higher than average. The defendant has counter claimed alleging that the plaintiff’s behavior violates anti trust laws.

One thing of note is that the defendant claims that the world of music licensing is murky and difficult to navigate. The plaintiff notes that the Music Modernization Act signed into law in late 2018, provides for the creation of a centralized database of musical work ownership information which should help prevent licensing confusion in the future. Hopefully the defendant is correct and the Music Modernization Act will help stream line licensing, however a database will never be an adequate substitute for the assistance of an experienced copyright attorney.

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