Sheffield rock band Def Leppard have announced their intention to re-record their entire back catalogue (which according to Wikipedia runs to some 11 albums) in a slightly novel way to circumvent a dispute with their record label Universal Music Group (‘UMG’). The dispute, described by frontman Joe Elliott as the band being “at loggerheads” with UMG, relates to the payment of digital royalties – something UMG are no strangers to with their high profile and ongoing dispute with Eminem’s producers FBT.
According to Elliott the band sent Universal a letter saying: ‘No matter what you want, you are going to get “no” as an answer, so don’t ask…That’s the way we’ve left it. We’ll just replace our back catalogue with brand new, exact same versions of what we did.”
In essence where artists are under a ‘pre-internet’ (sounds almost prehistoric these days) record contract, it is likely to be silent, or at least say very little, about downloads and the royalties associated with downloads. The stance of most record labels is to simply pay royalties on downloads as if it were a physical CD (or other) sale, i.e. around the 15% mark. However, artists argue that this is not equitable and that in actual fact their royalties should be based more on a licensing model, i.e. around 50% (the argument being that record labels simply licence tracks to iTunes etc. en mass and they do not incur the same costs that are associated with physical CD sales). This is what has happened to Def Leppard. However, unlike most artists, they have a contractual clause allowing them to veto the sale of their music online, so as it stands noone is making any money selling Def Leppard’s music online.
As UMG do not seem willing to meet their demands, Def Leppard have instead decided to ‘forge’ their own tracks i.e. make as good copies as possible of the entirety of their back catalogue and then sell these online (taking all of the profits). To some this may bring up the question of copyright infringement. However, provided a song has already been published and the correct royalties are paid to the songwriters (which in this instance is themselves) then anyone can release their own version of a song without infringing the copyright of its authors. UMG themselves? They will be the owners of the copyright in the sound recording of each track, but this will not be copied and so there will be no infringement of their rights. If for example someone were to do a remix of a Def Leppard’s song, then in all likelihood this would use the sound recording of the track (i.e. UMG’s copyright), and if the appropriate consent was not obtained, then it is likely to be an infringement of UMG’s copyright.
Whilst it may appear that Def Leppard have come up with an ingenious way of side-stepping the wishes of their record label, there are a couple of potential pitfalls:
(1) Recording restriction: An absolutely standard clause in a recording contract is a ‘recording restriction’ i.e. an artist cannot re-record any tracks recorded for record label within X years of release. The reason for this is that without such a restriction, the record label would end up paying a lot of money to (record, promote and release a track, only for the artist to re-record and release the track just before the ‘official’ track is released. This would mean, in effect, denying the label the income it would have (justifiably) expected. Whilst I don’t know what clauses does Def Leppard’s record contract include (and for the older tracks at least any restrictions will probably have expired), this is certainly something that could crop up.
(2) Passing off: This is an interesting point and one that was raised in discussing the Def Leppard issue with other IP lawyers. As a starting point I will say that there is simply not the scope to discuss the issue fully in this post (I could probably pen a thesis on it). However, in brief, there is an argument that by re-releasing the same songs and replicating them as closely as possible, consumers will not be able to tell the two tracks apart and may well therefore mistake the re-released tracks for the original tracks, thus mistaking Def Leppard’s ‘products’ for those of UMG. This could potentially be a passing off. However, I am far from happy that such a claim would hold. In order to show passing off you must first show goodwill and I can see some very interesting arguments as to who owns the goodwill in this instance i.e. Def Leppard or UMG (the answer to which may well come down to looking at the recording contract).
What will certainly be interesting to see is how (if indeed they choose to) UMG react to Def Leppard’s actions.