Both within and outside the United States, “royalty streams” – the flows of royalty payments from users to the creators and copyright holders – are among the most convoluted sets of issues that entertainment lawyers tackle. Copyright requires a great deal of industry knowledge and experience: in music particularly, copyright
- is split among so many people and companies,
- according to so many different proportions, and
- stemming from so many different uses of the copyright
that keeping them straight is a full time job. And once you move outside the United States, the system of royalty streams becomes even more complicated.
In theory, royalty money should flow smoothly and directly – as if through a pipeline – into the bank accounts of creators and copyright holders. In the real world, pipelines leak, and royalty payments can often slip out of their proper path and be diverted somewhere else. Some of these diversions are simply errors; others are more sinister.
It can be challenging for a creator or copyright holder even to discover a diversion, but sometimes clues are found when we compare statements from several royalty streams. To take a musical example, imagine you are an American singer/songwriter. You (or your publisher) licensed the use of your musical composition in an episode of an American television program. You (or your record label) likewise licensed the use of your sound recording. You receive statements from your performing rights organization (a “PRO”: in the US, as a songwriter, ASCAP or BMI or SESAC; as a recording artist, SoundExchange) detailing payments received for transmissions of that television episode.
Now suppose you discover that ASCAP sends you payments for digital retransmissions of that television episode in the UK. But SoundExchange, which should be sending you payments for the same retransmissions, does not. You’ve just found a leak.
Like fixing a leaky pipe, the primary challenge in recovering a missing royalty payment is to trace the royalty stream back to its source and figure out where along the way particular payments went astray. In the example above, all you know is that SoundExchange hasn’t sent you payments reflecting the UK retransmission of your sound recording. But where is that payment held up?
- Did SoundExchange receive it, but not send it to you?
- Did SoundExchange not receive the payment from its UK equivalent, PPL-UK?
- Did PPL-UK not receive it because the retransmitter is not a PPL-UK license holder?
- Did PPL-UK receive payment, but mistakenly send it somewhere else?
- Did PPL-UK receive payment, but is holding the funds because it can’t figure out where to send them?
Investigating the royalty stream involves communicating with each organization through whose hands the missing payments ought to have passed. Depending on the complexity of each royalty stream, there are often multiple points where the payment could have been diverted, and finding the right person at each organization who can and will communicate with you is often a challenge. However, with dogged persistence, we are usually able to identify the location of the leak.
Where payments are held or diverted by mistake, the problem can usually be resolved without resort to litigation. Once we’ve identified where the leak is, the next step is finding the right person at the leaking organization, pointing out their error, providing missing information or correcting mistaken information, and making sure the correction is actually made. Of course, this is much easier said than done, and can take months of steady communication and following up in order to ensure that the payment problem is resolved.
Sometimes, though, the leaky organization either refuses to acknowledge the error, or it turns out that the missing payment wasn’t an error at all; it was a deliberate copyright infringement for which payment was never intended to be made. In the example above, if it turns out the UK retransmitter was not a PPL-UK license holder, it might be because the retransmitter was naive and genuinely unaware that it needed a license and once told, will make it right. But it might turn out that the naive retransmitter, once confronted, refuses to pay. Or it might turn out that the retransmitter is simply a thief who knew all along he needed a license but deliberately chose (and continues to choose) not to pay. In those cases, litigation may be an appropriate course of action.
As a law firm focused on copyright in a global marketplace, the Law Offices of Joshua Graubart, P.C. can help you trace and collect on royalties generated in the United States and abroad. The firm has an extensive network of contents among copyright management organizations worldwide, and can often efficiently locate and collect on missing royalties. Where users persist in refusing payment, the firm has extensive experience in enforcing copyrights through litigation.