There has been much talk surrounding the "mass NOI" issue stemming from the loophole, allowed by the copyright office, which allows tech companies to profit from works without obtaining a proper compulsory license. Here Chris Castle breaks down the problem in detail.
Guest post by Chris Castle of The Trichordist
You’ve probably heard about the “mass NOI” problem resulting from the Copyright Office allowing Big Tech to profit from a loophole in the Copyright Act. The loophole permits digital music services to get away with what would otherwise be both infringement and nonpayment of royalties under yet another safe harbor, this time from 1976.
Remember that under U.S. law, unless the service has a direct license with the copyright owner, a digital service can rely on the government’s compulsory license by sending a “notice of intention” (or “NOI”) to the copyright owner. One could argue that those are mutually exclusive end states, so keep that in mind. As anyone who has done song research knows, there are a number of reliable places to look for a song copyright owner, starting with the performing rights societies like ASCAP and BMI that provide a free lookup service on their websites.
But…you can’t find what you don’t look for.
Enter the loophole.
The Copyright Act says that if you can’t find contact information for the song copyright owner in the Copyright Office’s public records, then you can send your NOI to the Copyright Office instead of to the copyright owner. Then you are deemed to have a compulsory license after that service date. The problems is that while the government might have thought in 1976 when the section was enacted that they had to tie up that loose end by referencing the Copyright Office, they probably did not realize that they were also requiring a look up in what was to become arguably the least reliable source of song information. Not to mention that updating the Copyright Office records is done at a waddling pace.
Oh and one more thing – if the service sends the address unknown notice to the Copyright Office, they don’t have to pay royalties until the copyright owner becomes identifiable in the public records of the Copyright Office, which may be never. (I have an article in the American Bar Association Entertainment & Sports Lawyer periodical on this for those who want more information.)
The way the loophole works is that if a song has not been registered in the Copyright Office (which is not required) then the service can say that the address of the copyright owner is “unknown,” even if the service has actual knowledge of the copyright owner’s contact. See the loophole? Even if they know who you are and how to reach you, they can say they don’t know if you haven’t registered your copyright – which you are not required to do unless you’re planning on suing. In addition to actual knowledge, there’s also the argument that a reasonable person could have found the song copyright owner if, for example, that song is in the Billboard Hot 100’s Top 5.
If you’ve ever tried to register a copyright, you know how long the Copyright Office can take to get you a conformed copy of your registration–months. Why? Because they appropriately give your registration the once over to make sure that you filled it out correctly and giving that attention takes time. Anywhere from six to ten months in fact.