News Zone

Eight Mile Style v National Party of New Zealand: Commercial Lessons Moving Forward 31 May 2018

Eight Mile Style v National Party of New Zealand: Commercial Lessons Moving Forward

There have been a number of articles written about the National Party’s now infamous battle with Eminem. However, those advising businesses wishing to use copyright works should be more concerned about the commercial background.

It must be remembered that the National Party didn’t just go and take Eminem’s well known work Lose Yourself without regard to his or anyone else’s rights.

 

In brief the background is as follows:

In 2014, the National Party of New Zealand released an ad campaign in which many people will have recognised a certain musical riff reminiscent of, if not almost identical to, the song Lose Yourself by US artist Marshall Mathers III, AKA Eminem.

The musical work was used and aired over 11 days on national television, YouTube, the National Party’s website and its Facebook page, and delivered in two forms: a 15-minute campaign video and a 30 second advertisement, the latter of which was aired a total of 186 times.

In September 2016, Eminem’s publishers, Eight Mile Style, filed in the High Court of New Zealand against the National Party for breach of copyright for unauthorised use of the work. The 132-page, 469-paragraph judgment handed down by Justice Helen Cull on 25 October 2017, which scrutinises and details the laws of copyright and the musical DNA of each piece, can be accessed here: Eight Mile Style LLC v New Zealand National Party [2017] NZHC 2603

That litigation is concerned with the copyright in the musical part of the work Lose Yourself, not the lyrics, and as such any references to the work’s copyright refer to this right.

 

Who Said, Owns and Used What?

Eight Mile Style is the owner of 50 per cent of the work Lose Yourself and is the exclusive licensee of the other 50 per cent. The owner of a copyrighted work has rights under the Copyright Act 1994 to action infringement proceedings for breach of copyright. An exclusive licensee has the same rights except as against the copyright owner. As such, Eight Mile Style has the exclusive right in New Zealand to action infringement proceedings for breach of copyright of Lose Yourself.

Since 2002, Eight Mile Style  has authorised the use of either the music or the whole work from Lose Yourself only three times voluntarily and once in a settlement agreement for a breach of copyright. It has never authorised the use of Lose Yourself in politics.

In 2007, Michael Cohen produced – what in the music industry is called a “sound-alike track” – Eminem_abbr, which was later named Eminem Esque. Sound-alike tracks are pieces of work designed for commercial use in advertising, and are designed with a specific piece in mind, then altered enough to not be “too similar” to the original work.

Labrador Inc, a Californian company, was granted the right to licence Mr Cohen’s work Eminem Esque commercially for a royalty fee. Labrador in turn licenced Beatbox Music to be its commercial licence representative for the musical work in Australia, New Zealand and Fiji.

The National Party through its Party Secretary, Mr Gregory Hamilton, empowered Stan 3 Ltd (a company incorporated by the National Party to carry out campaign work) to find the right piece of music for its political advertisement, which required a beat that could be synchronised to the strokes of a rowing team. Stan 3 found Eminem Esque and the rest is history, or it should have been.

John Oliver quipped on Last Week Tonight: “If you are going to rip off someone else’s work, maybe don’t include the name of the person you’re ripping off – call it something less obvious…”. However, it is relatively common for sound alike tracks to include a reference to the artist or music they seek to imitate, so the tracks can be found by those wishing to license them. This is usually because the original artist is unwilling to grant a license or the royalties are too high.

 

Snapshot – Copyright Law in New Zealand

Copyright is a property right that in New Zealand is created by the Copyright Act 1994. It protects original pieces of work, including musical works. It gives the owner or creator the exclusive right (subject to exceptions not relevant in this case) to exploit the work, including to authorise others to do so during the period of copyright.

 

Breach of copyright 

Unlike other forms of intellectual property, copyright is only infringed by copying. For example, if someone independently developed the same music to Lose Yourself without copying Eminem, there would be no copyright infringement notwithstanding that they are identical. In other words, “The ultimate issue in a breach of copyright case concerns derivation, not similarity,” and it must be shown, either on the balance of probabilities by inference or by actual evidence, that the infringing work is causally connected as being copied from the work in question (Henkel KGaA v Holdfast New Zealand Ltd [2006] NZSC 102 at [43]).

Infringement also requires the claimed copyright work to be an original work. The threshold for originality is low. Generally speaking it requires no more than that the work “originate from its author and [is] the product of more than minimal skill and labour” (Henkel v Holdfast at [37]). In other words, if a work does not require minimal skill and labour, for example in the collation of various common musical parts to create a new whole which in itself has no copyright, then the skill and labour required to adapt or change such a collation is also minimal. Therefore, infringement cannot easily occur unless a work satisfies the “minimal skill and labour” threshold. On this point, care must be taken to separate novelty from originality (Henkel v Holdfast at [37]).

Ultimately, the infringing work has to be:

  • a substantial copy of the original work;
  • objectively similar to the original work; and
  • causally connected to the asserted copyrighted work (copying)

In this case, such an inquiry “is a test of hearing and ear recognition” ((Eight Mile Style v National Party of New Zealand [2017] NZHC 2603 at [230]). Merely altering a work will constitute an infringement in copyright if your ears “[tell] you that it is the same” (Eight Mile Style at [270]). It is an assessment of the work as a whole, and “It is not correct to subdivide the … work into its component parts and ask whether copyright might attach to the individual parts” (Bonz Group (Pty) Ltd v Cooke [1994] 3 NZLR 216 (HC) at 219–220).

As such, the approach for assessment of copyright infringement is by qualitative analysis, not quantitative.

 

Arguments and Findings

While National conceded Lose Yourself as a wholewas an original work which had its own copyrights, it argued it was not infringing. In essence National’s arguments were that:

  • Eminem Esque did not substantially reproduce Lose Yourself;
  • Not every aspect of Lose Yourself was original with some aspects borrowed; and
  • Eminem Esque was not an adaptation of Lose Yourself (which the Court agreed with at paragraph [300] of the judgment).

Even though National accepted that it authorised the television broadcast of the advertisement and the synchronisation of Eminem Esque, it maintained there was no breach of copyright in the work Lose Yourself because, in its opinion, Eminem Esque itself did not substantially reproduce Lose Yourself.

However, as is now well known, the Court did not agree.  Her Honour found that the work Eminem Esque was a copy of Lose Yourself – substantially, subjectively and causally –and that Eight Mile Style’s copyright claim was founded. There was therefore breach of copyright, or breach by restricted acts which amounted to copyright infringement, by National because:

  1. National communicated a copy, or a reproduction of a substantial part, of Lose Yourself to the public by using Eminem Esque; and
  2. National authorised the copying of Lose Yourself by authorising the synchronisation of Eminem Esque with the election advertisement.

Damages of NZ$600,000 were awarded against the National Party.  However, the case has been appealed and the appellate scrutiny will be interesting, at least from the perspective of IP lawyers.

However, with some justification National could consider itself unlucky. Commercially speaking, the issue is not so much that National were unsuccessful, but that the case arose at all.

The evidence suggests National had been concerned that Eminem Esque was similar to Eminem’s Lose Yourself.  It seems National’s concern was that the music might be associated with Eminem and alleged hate speeches associated with him which in turn could have reflected poorly on the election campaign. National then requested assurances be sought that National could use Eminem Esque safely.

Amongst five assurances sought, the one National appears to have relied most strongly on was from Beatbox, the Australasian licensor of the work Eminem Esque. The evidence is that on 18 June 2014, Stan 3 received a written assurance from Beatbox “that ‘[t]he agreement [Beatbox] has with the publisher gives us assurance that the music does not infringe on copyright and is free to be used for production purposes’” (Eight Mile Style at [23]).  The publisher referred to the Australian Performing Right Association / Australasian Mechanical Copyright Owners Society Ltd (APRA AMCOS) which oversees the proper licencing and copyright protection of music in Australasia by ensuring licences are correct and that the authors of the works receive royalties where relevant.

National’s legitimate reliance on Beatbox and other industry professionals to ensure Eminem Esque was unencumbered by copyright issues was well-placed. Unfortunately, it appears the assurances were incorrectly given and as a result National, being the end-user of Eminem Esque, was found solely responsible for its use in its election campaign.

As such, a further and possibly more interesting hearing dealing with liability between those who gave the National Party the license to use Eminem Esque is still to be heard. It is also worth noting that the creator of Eminem Esque refusedto give evidence on ‘legal advice’. The plaintiff was able to bring evidence setting out the chain of creation. That Lose Yourself is an award-winning, rarely licensed work undoubtedly did not help.

 

Takeaways

Perhaps the key takeaway is that a license may not be enough.

National secured licences from the creator of Eminem EsqueEminem Esque had been available and used in the US and elsewhere for over a decade (so Eminem was surely aware of it prior to his action against National).  While National took reasonable steps to ensure that it was not infringing, once the work Eminem Esque was found to have been a copy of Eminem’s Lose Yourself and the rights holder had not authorised use of the work, copyright infringement was an inevitable outcome.

A further aspect applying to intellectual property is that dealing with an owner is not always sufficient.  Ownership in the context of intellectual property is often not as relevant as who has the rights, and if those rights are exclusive and held by a third party, the owner might not be in a position to authorise use.   Therefore, when seeking a license to use a copyrighted work it is critical to secure an understanding of the licensor’s power and authority to licence the use of the work.

National’s experience suggests that the traditional sources of copyright licenses cannot be relied on to the degree they have been.

It is also important to note that copyright law and its application varies between jurisdictions and what is permissible in a jurisdiction such as the US cannot be relied on as permissible under NZ law.

Subject to the outcome of further hearings and in particular concerning the liability of those in the chain of licensing, the proceedings highlight the importance of conducting one’s own due diligence before taking actions or making any decisions re use of work, particularly in connection with works that appear to be owned by someone other than the licensor or where the origin is uncertain.

A further takeaway is Justice Cull’s new low-threshold test on the copying of musical works: “a copy is a copy if it sounds like a copy” (Eight Mile Style at [59]).

 

What Next? 

The appeal will be interesting and the second hearing moving forward will be a chance for National to establish the liability on the part of those parties it relied on for advice.

Whether or not this leads to new jurisprudence in the field of copyright or as to the extent of due diligence required when delving into the realm of commercial licences remains to be seen. 

In the meantime, as with many things, it is critical to secure intellectual property and licensing advice before using material deriving from others.

 

Christopher Sheehan and Heather McCaughan                                                                                  

31 May 2018