ARTIFICIAL INTELLIGENCE HEADLINE FROM THE “IF YOU CAN’T BEAT ‘EM, JOIN ‘EM” DEPARTMENT

Earlier this week, artificial intelligence video synthesis firm Runway AI, Inc. and Lionsgate Entertainment Corporation announced a partnership this week to create a new AI model trained on Lionsgate's film and TV library. The deal will allow Runway to legally access the library as training data and will also reportedly provide Lionsgate with tools to enhance content creation while potentially reducing production costs.

Lionsgate has apparently decided that AI is a way to boost efficiency in content production. Michael Burns, Lionsgate's vice chair, stated in a press release that AI could help develop "cutting edge, capital efficient content creation opportunities." He added that some filmmakers have shown enthusiasm about potential applications in pre-production and post-production processes. Runway plans to develop a custom AI model using Lionsgate's proprietary content portfolio. The model will be exclusive to Lionsgate Studios, allowing filmmakers, directors, and creative staff to augment their work. While specifics remain unclear, the partnership marks the first major collaboration between Runway and a Hollywood studio.

As Runway co-founder and CEO Cristóbal Valenzuela stated in its press release: "We’re committed to giving artists, creators and studios the best and most powerful tools to augment their workflows and enable new ways of bringing their stories to life … the history of art is the history of technology and these new models are part of our continuous efforts to build transformative mediums for artistic and creative expression; the best stories are yet to be told."

As everyone now knows, generative AI models are master imitators, and video synthesis models like Runway's latest Gen-3 Alpha are no exception. The companies that create them must amass a great deal of existing video (and still images) as samples to analyze, allowing the resulting AI models to re-synthesize that information into new video generations, guided by text descriptions called prompts. The problem for the AI world is that wherever that training data is lacking, it can result in unusual generations. Until recently, AI companies have gotten into legal trouble for scraping vast quantities of media without permission. In fact, Runway is currently the defendant in a class-action lawsuit that alleges copyright infringement for using video data obtained without permission to train its video synthesis models. While companies like OpenAI have claimed this scraping process is "fair use," US courts have not yet definitively ruled on the practice. There are numerous pending lawsuits concerning AI as it applies to music and sound recordings as well as film. With other potential legal challenges ahead, it makes sense from Runway's perspective to reach out and sign deals for training data that is completely in the clear. Even if the training data becomes fully legal and licensed, different elements of the entertainment industry view generative AI on a spectrum that seems to range between fascination and horror. The technology's ability to rapidly create images and video based on prompts may attract studios looking to streamline production. However, it raises polarizing concerns among unions about job security, actors and musicians about likeness misuse and ethics, and studios about legal implications.

As evidenced by the statements so far, news of the deal has not been received kindly among vocal AI critics found on social media. On X, filmmaker and AI critic Joe Russo wrote, "I don’t think I’ve ever seen a grosser string of words than: 'to develop cutting-edge, capital-efficient content creation opportunities'” and film concept artist Reid Southen shared a similar negative take on X: "I wonder how the directors and actors of their films feel about having their work fed into the AI to make a proprietary model. As an artist on The Hunger Games? I'm pissed. This is the first step in trying to replace artists and filmmakers."

It's a fear that we will likely hear more about in the future as AI video synthesis technology grows more capable, and potentially becomes adopted as a standard filmmaking tool. AI can be an excellent tool for creation, but it can also be used as a weapon. As studios explore AI applications despite legal uncertainties and labor concerns, partnerships like the Lionsgate-Runway deal may shape the future of content creation in Hollywood.

Wallace Collins is an entertainment lawyer and intellectual property attorney based in New York with over 30 years’ experience in music, film, television and emerging technology, and he handles many current digital media matters including issues that arise with AI. He was a songwriter and recording artist for Epic Records before receiving his law degree from Fordham Law School. Website: http://www.wallacecollins.com 

BEWARE: ARTIFICIAL INTELLIGENCE POSES A THREAT TO ARTISTIC CREATIVITY AND A POTENTIAL COPYRIGHT INFRINGEMENT NIGHTMARE!

The headlines these days are full of stories about artificial intelligence (“AI”). It seems AI has gone from science fiction to reality in a very short period of time. From Open AI’s ChatGPT app to Google’s MusicLM music creation tool, the future is now. A few decades back the struggle over digital rights and copyrights was a sideshow, of concern only to a relatively small slice of the population. Now, however, everyone is online, which means that even if you don’t consider yourself a creator as such, material you write, post or share could become part of an AI engine and used in ways you never imagined. To wit, several of my clients have recently raised concerns about the threat of AI, and the threat AI may pose to authors, artists (both fine and graphic artists) as well as songwriters and musicians… so let me try to break it down.

The tech behind AI is a complicated, but at its most basic AI engines ingest massive data sets, which they then use to train software that can make recommendations or even generate code, art, or text. Sometimes the engines are scouring the web for these data sets so they can learn what is on a webpage and catalog it for search queries; other times, AI engines have access to huge proprietary data sets built in part by the text, photos, and videos users have posted on their respective platforms. Unlike the music piracy lawsuits of decades ago, the AI engines are not making copies of the data they use and distributing them under the same name. The legal issues, for now, tend to be about how the data got into the engines in the first place and who has the right to use that data.

AI proponents argue that AI engines can learn from existing data sets without permission because there is no law against learning, and that turning one set of data into something entirely different is protected by the law, as affirmed by a lengthy court fight that Google won against authors and publishers who sued the company over its book index, which cataloged and excerpted a huge swath of books. Those against AI argue that if AI is going to use original material created by others then the AI engines should get a license from the original author or creator, or from whoever owns the copyright. Otherwise, the AI engines are violating the rights of the authors and creators of the underlying materials and, even if the result is not an exact copy of the underlying work (think “sampling” in music), the resulting AI product would not exist “but for” the underlying work and the use of the AI work competes with the artists or creators’ ability to make a living.

As of now, the US Copyright Office has stated that it will not accept a copyright registration on any work of authorship created using AI. However, there is still the issue of whether the resulting AI creation infringes the copyrights of other authors when it incorporates the work of the original authors into a new AI work or some sort (regardless of how remote or miniscule the resulting use in the new AI-generated work). Using the MusicLM system as an example, the Google researchers noted that MusicLM did have a tendency to incorporate copyrighted material from training data into the generated songs. During an experiment, they found that about 1% of the music the MusicLM system generated was directly replicated from the songs on which it trained (a threshold apparently high enough to discourage them from releasing MusicLM to the public in its current state).

Assuming MusicLM or an AI system like it is one day made available, it seems inevitable that it will give rise to major legal issues, even if the systems are marketed as tools to assist artists rather than replace them. AI music generators violate music copyright by creating a mosaic of coherent audio from prior works they ingest in training, thereby infringing the US Copyright Act’s reproduction right. Similar concerns have been raised around the training data used in image, code and text-generating AI systems, which is often scoured from the web without creators’ knowledge. New works generated by an AI system would arguably be considered derivative works, in which case only the original elements of the AI-generated work would be protected by copyright (although it is unclear what might be considered “original” in such a context).

It might not be long before there is more clarity on the matter. Several lawsuits are making their way through the courts which will likely have a bearing on music-generating AI, including one pertaining to the rights of artists whose work is used to train artificial intelligence systems without their knowledge or consent.

Current AI platforms are crude and imperfect, but by design AI improves and gets “smarter” the more it is used. AI may still be in the early horse & buggy stage - but AI could quickly advance to the Tesla level. Authors, creators and artists beware!

 

Wallace Collins is an entertainment lawyer and intellectual property attorney based in New York. He was a songwriter and recording artist for Epic Records before receiving his law degree from Fordham Law School. www.wallacecollins.com 

 

 

THE MUSIC MODERNIZATION ACT: A BREAKDOWN OF THE BENEFITS AVAILABLE FOR ARTISTS AND SONGWRITERS

The Music Modernization Act (“MMA”) passed both the Senate and the House after the herculean efforts of some individuals and organizations who worked tirelessly to negotiate compromises to accommodate all sides, and was signed into law. The MMA finally moved the recorded music industry forward in a way that facilitates more artists and songwriters being able to make a fair living from making music. The MMA proposes to reform the music licensing landscape in several substantive ways -  and vigilance is required to ensure that composers, songwriters and other copyright creators receive all the benefits available to them under the MMA.

The MMA is comprehensive and sweeping in its scope. The MMA revamped Section 115 and repealed Section 114(i) of the U.S. Copyright Act. It creates a public database to facilitate and expedite payments to songwriters and it overhauls the rate Court system and upgrades the standard for setting rates to a "free market" standard. The MMA also incorporates several other major pieces of legislation including the CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act) which grants copyright protection to pre-1972 sound recordings so songwriters and artists can receive royalties on pre-1972 recordings and the AMP Act (Allocation for Music Producers Act), which improves royalty payouts for producers and engineers from SoundExchange when their recordings are used on satellite and online radio. Notably, this is the first time producers have ever been mentioned in copyright law.

Here are some details of the highlights of the MMA’s benefits explained:

Section 115 Reform and the Public Database

The MMA ends the bulk Notice of Intent (NOI) process through the Copyright Office, which can prevent songwriters from being compensated or compensated in a timely manner for uses of their works. Under the MMA, the digital services would fund a Mechanical Licensing Collective (MLC), and, in turn, be granted blanket mechanical licenses for interactive streaming or digital downloads of musical works. The MLC would be governed by publishers and self-published songwriters. The MLC would address the challenges digital services face today when attempting to match songwriters and publishers with recordings. The MMA also creates business efficiencies for the digital services by providing a transparent and publicly accessible database housing song ownership information. Additionally, because the database would publicly identify songs that have not been matched to songwriters and/or publishers, publishers would also be able to claim the rights to songs and get paid for those songs. Songwriters and publishers would also be granted an audit right which is not currently available under Section 115 of the US Copyright Act.

Willing Buyer/Willing Seller Standard

The MMA upgrades the current standard to a free market standard. Section 115 of the Copyright Act has regulated musical compositions since 1909—before recorded music even existed. Section 115 allows anyone to seek a compulsory license to reproduce a song in exchange for paying a statutory rate. Current law directs the Copyright Royalty Board (CRB)—the government body responsible for setting the statutory rate—to apply a legal standard to determine rates that does not reflect market value. The MMA replaces the current flawed legal standard with a standard that requires the Court to consider free-market conditions when determining rates.

Rate Court System Overhaul & Section 114 Repeal

The MMA overhauls the rate Court system. Currently, ASCAP and BMI are each assigned to a single, respective rate court judge. Every case must be adjudicated before each performance rights organization's (PRO’s) respective designated consent decree judge. Under the MMA, a district judge in the Southern District of New York would be randomly assigned from the wheel of district judges for rate setting disputes. The “wheel” approach would enable BMI and ASCAP, as well as licensees, to go before any judge in the Southern District of New York on a rotating basis - rather than being assigned to a single judge - for the purpose of rate setting disputes. This approach ensures that the judge will find the facts afresh for each rate case based on the record in that particular case, without impressions derived from prior cases. The MMA would also repeal Section 114(i) of the U.S. Copyright Act which prevents rate courts from considering sound recording royalty rates as a relevant benchmark when setting performance royalty rates. As a result, the playing field has been uneven, at the expense of songwriters. The MMA moves the industry to a fairer system under which PROs and songwriters would have the opportunity to present evidence about the other facets of the music ecosystem to judges for their consideration. This repeal creates the opportunity for songwriters to obtain fairer rates for the public performances of their musical works.

Wallace Collins is a lawyer with 30+ years’ experience specializing in entertainment law and copyright, trademark and internet law matters. He was a teenage recording artist for Epic Records before attending Fordham Law School. T: (212)661-3656 / www.wallacecollins.com

ENTERTAINMENT LAWYERS: WHO? WHAT? WHEN? WHERE? & HOW MUCH?

            As an artist or creator in the entertainment industry you do not need to know everything about the business in order to succeed, but you should hire people who do. When I was a teenage recording artist some years back, I can remember being intimidated by the "suits". Now that I am on the other side of the desk, I have a broader perspective. I am here to tell you that those "suits" can help you; provided, however, that like any other aspect of your life, you use your instincts in making your selection.

            The best place for you to start building your "team" of representatives is with a competent lawyer who specializes in entertainment law, which is a combination of contract, intellectual property (copyright and trademark) and licensing law. Eventually, your team could possibly include a personal manager, an agent and a business manager/accountant. Your lawyer can assist you in assembling your team. He may then function as the linchpin in coordinating the activities of your team and insuring that these people are acting in your best interests.

            A good lawyer will navigate you safely through the minefield that is the entertainment industry. Entertainment contracts can be extremely complicated. Proper negotiating and drafting requires superior legal skills as well as knowledge of entertainment business and intellectual property practice. Your lawyer can explain the concepts of copyright and trademark to you and assist you in securing proper protection for your work. In addition to structuring and documenting a deal to maximize the benefits to you, some lawyers also actively solicit deals for their clients. Moreover, if you are not properly compensated in accordance with your contract, you may look to your lawyer to commence a lawsuit to enforce the terms of your contract.

            When looking for a lawyer, you should not be afraid to speak with a few before retaining one. Some lawyers are with large firms but many are solo practitioners. Lawyers have various personalities and legal skills and you should seek out a situation where the "vibe" is right. Although your first contact may be on the telephone or online, most likely you will have an initial consultation for which there may be a modest charge, although some lawyers may not charge for that first meeting depending on the circumstances. Remember, your lawyer's time is money, so be prepared and be on time for your appointment.

            It is not necessary that your lawyer like or even understand your creative endeavors be it an app, a book, music, your film or TV pilot idea. It is more important that you feel he or she is a trustworthy and competent adviser. The lawyer/client relationship is known as a "fiduciary" relationship which means that a lawyer must always act in your best interest and not his own or that of anyone else. Your lawyer is also under a duty to keep your conversations with him confidential. It is often in your best interest that it stay that way.

            Keep in mind that a lawyer with other big name clients is not necessarily the best lawyer for you; if it comes down to taking your calls or those of a superstar, which do you think will get preference? 

             You are probably wondering, "How much will this cost?" Well, remember that the only thing a lawyer has to sell is his time. A lawyer, much like a doctor, is selling services, so if you go to him for advice you should expect to pay. With the odds of success in this business being what they are, very few lawyers will agree to work for you and wait for payment until you are successful and can pay your bills. A lawyer specializing in the entertainment field usually charges an hourly fee or a percentage of the money value of your deal. Hourly rates generally run from $300-$500 and up. Percentages on a pending deal are based on the "reasonable value of services rendered" in connection with a particular contract and generally run around 5-10% of the deal depending on how it is structured. A few lawyers may charge a set fee to review and negotiate certain documents. Check around to see if the fee arrangement proposed is competitive. Most lawyers will require a payment of money in advance or "retainer", which can range anywhere from $500 to $10,000 (and more for litigation matters). Even those who take a percentage of the deal as a legal fee may require that you pay some amount as a retainer deposit. In addition to the hourly fee or percentage, you are usually required to reimburse your lawyer for his out-of-pocket costs, including long distance telephone calls, photocopies, postage, fax, etc. 

            You should realize that in retaining a lawyer you are making a contract even if your agreement is not written. In return for a fee, the lawyer promises to render legal services on your behalf. However, some lawyers may want a fee arrangement in writing (specifically in connection with a percentage deal) and/or a payment direction letter. A cautious lawyer will advise you that you have the right to seek the advice of another lawyer as to the propriety of a percentage fee arrangement.

            You should consult a lawyer if you are asked to sign anything. Too many aspiring creative artists want to get a deal so badly they will sign almost anything that promises them a chance to do it. Even successful careers have a relatively short life span, especially when it comes to careers in music, movie and television. Therefore, it is important for you to get maximum returns in the good years and not sign away rights to valuable income.

            Do not rely on anyone else (or even their lawyer) to tell you what your contract says. Your lawyer will "translate" the deal for you and explain to you exactly what you are getting into. Do not let anyone rush you or pressure you into signing any agreement. There is really no such thing as a standard "form" contract. Any such contract was drafted by that party's attorney to protect that party's interests; your lawyer can help negotiate more favorable terms for you. Everyone needs someone to look out for his or her interests. That is why you need a lawyer. If you believe in yourself and your talents, give yourself the benefit of the doubt, invest in legal representation and do not sign anything without consulting your lawyer and making sure it is the right deal for you.

            As a final piece of free legal advice: never sign anything – other than an autograph - without having your own lawyer review it first.

Wallace E.J. Collins III is an entertainment and intellectual property lawyer. He was a songwriter and recording artist for Epic Records before receiving his law degree from Fordham Law School. Tel: (212) 661-3656; wallacecollins@gmail.com; www.wallacecollins.com 

WHAT’S THE SCORE WITH SYNCHRONIZATION RIGHTS

As the composer of a film or TV score or as a songwriter, artist or producer whose song is used in a movie, TV show, advertisement or video game, under U.S. copyright law you own 100% of the copyright in your work from the moment you create the work and "fix it in a tangible medium." However, you must be careful what you sign so that you do not assign away those rights without fair compensation for your work. 

When it comes to the use of music there are two copyrights: one in the musical composition or song and one in the sound recording which is the fixation of the sounds that make up the music. When music is used in synchronization with visual images, whether it is created especially for the particular score or whether it is a pre-existing song that the director wants to use in a scene in a TV show or a theatrical motion picture, this is referred to as the "synchronization" of music with visual images. Permission in the form of a synchronization license (sometimes referred to as a “synch license”) must be procured by the makers of the audio/visual production from both the owner of the sound recording (the artist or record company) and from the owner of the song copyright (the songwriter or publishing company) Sometimes these are one and the same person or entity, sometimes they are not.

A synchronization license may take various forms. If a show's producer, director or music supervisor decides that a certain pre-existing song is right for a particular scene in a film or TV show or commercial or video game, then a synch license covering the master and the composition would be requested. Depending on the length and prominence of the use, if limited solely to use in the show the amount paid can range from a few hundred dollars to tens of thousand of dollars, or more. If the company also wants the right to include the music on a soundtrack album, then additional provisions would be required for that use which would pay royalties for each record sold. Also, the song should be registered by the author with the performing rights society (e.g., ASCAP, BMI, SESAC, etc.) so that revenues from performances in foreign movie theaters (U.S. movie theaters do not pay performance royalties) and from television broadcast can be collected and paid to the author.

On the other hand, a songwriter may be specifically employed to write incidental music or underscore cues for a film or for a TV commercial or other audio/visual work. Such an arrangement may be structured as a "work made for hire" whereby the songwriter is employed to write specific music which may ultimately be owned by the producer of the film. There is no set fee for such an arrangement - it can range from a few hundred dollars for a small budget project to hundreds of thousands of dollars for a blockbuster film score. However, in such circumstances, since the production company would usually claim ownership of the copyright, the author needs to be sure to try to negotiate to receive the 50% "writer share" of performance monies and have producer only get the 50% "publisher" share - otherwise the author may not be entitled to performance royalties from his or her performing rights society and it would all go to the producer. Issues like this would depend on the careful negotiation of the contract between the parties and their legal counsel.

Since this is a complicated area the details of which are beyond the scope of this article, I would suggest that if such an offer is made to you, an experienced entertainment lawyer would be a good investment on your part.  My advice on such matters is always “don’t sign anything – other than an autograph – unless you have a lawyer review it first!”

Wallace Collins is an entertainment and intellectual property lawyer based in New York. He was a songwriter and recording artist for Epic Records before receiving his law degree from Fordham Law School. Tel: (212) 661-3656;  www.wallacecollins.com