Major record labels rip off 300,000 songs for compilation CDs, may owe $60 billion in damages

Jazz great Chet Baker's estate is suing the major record labels for releasing his music on Canadian CDs without paying compensation (a common practice in Canada, where over 300,000 songs have been released on CD without compensation). The defendants -- Warner Music Canada, Sony BMG Music Canada, EMI Music Canada, and Universal Music Canada -- have admitted that they owe at least CAD$50 million, but Baker's estate is entitled to up to CAD$60 billion.
The claims arise from a longstanding practice of the recording industry in Canada, described in the lawsuit as "exploit now, pay later if at all." It involves the use of works that are often included in compilation CDs (ie. the top dance tracks of 2009) or live recordings. The record labels create, press, distribute and sell the CDs, but do not obtain the necessary copyright licences...

It is difficult to understand why the industry has been so reluctant to pay its bills. Some works may be in the public domain or belong to a copyright owner difficult to ascertain or locate, yet the likes of Sarah McLachlan, Bruce Cockburn, Sloan, or the Watchmen are not hidden from view.

The more likely reason is that the record labels have had little motivation to pay up. As the balance has grown, David Basskin, the president and CEO of the Canadian Musical Reproduction Rights Agency Ltd., notes in his affidavit that "the record labels have devoted insufficient resources for identifying and paying the owners of musical works on the pending lists." The CRIA members now face the prospect of far greater liability.

The class action seeks the option of statutory damages for each infringement. At $20,000 per infringement, potential liability exceeds $60 billion.

Geist: Record industry faces liability over `infringement'


  1. > entitled to up to CAD$60 billion

    Sounds more like he’s entitled to CAD$20,000 per infringed song. Still pretty tough luck for the defendants.

    All I can ever think of when I see stories like this is the IT Crowd infringement spoof. Curse you, Linehan!

  2. Best. Christmas. Gift. Ever.

    Somehow I’m fairly certain that, if they lose, the labels will be fined the minimum damages despite recent cases where individuals were charged the maximum.

  3. Perhaps the recording industry will be on the other end of a judgment which most reasonable people would find excessive ($80,000 per song and the like). It is unlikely that they will be fined the maximum, but there is always hope for a karmic judgment.

  4. Someone should really explain to these labels that piracy is wrong – especially when it’s for profit and not just personal use. (Then again, I’m sure the execs use the profit for personal purchases and large, personal pay cheques.)

  5. So, this does mean that these record companies will lose their Internet access, right? Three strikes and you’re out?

  6. It is possible that as the statement of claim is popping up in a few politician’s e-mail inbox this morning, causing beads of sweat to form on the foreheads of those who needed that money to get reelected… It will be interesting to see the actual reaction to this lawsuit.

  7. “No, those laws we are proposing do NOT apply to us, they only apply to individuals, corporations you see are not people”-CEO Screw the People LTD.

    1. It’s funny because the definition of a corporation is a company entity that is treated as a person.

  8. Clearly these flagrant copyright infringers, or ‘thieves’ to give them their proper name, should be fined to the greatest extent of the law to make an example of them lest other, young, easily misled record labels take this action to mean that it’s all right to steal music.

  9. Prediction: Record industry uses it’s high-powered lawyers to turn the tables and counter-sue the defendant(s) (for defamation or something), and win a large cash award.

    Seriously, the defendant(s) have about zero chance of winning.

  10. People, people, people…

    It’s only ‘stealing’ if WE do it! If Big Music does it it’s ‘marketing’.

    When we share music with our friends, we’re not trying to promote the artists we like to people whom we know very well, we’re being horrible thieving pirates who break Holy Commandments.
    When Big Music releases and sells compilation albums, and then doesn’t compensate artists for sale of their work, it’s because.. well I can’t think of a reason right now.. but dammit I’m sure they’ve got a Very Good Reason why they would sell music and not compensate the artists involved, especially until after they’re.. you know.. Dead.

    Hmm, perhaps the reason is “Because They Can”.

    1. Um, no. The estate of a musician is suing the Canadian version of the RIAA, which the labels are all members of.

  11. haha. their own dogs of war biting them in the ass.

    i know they won’t be held anywhere near the standards to which they hold the public, but it’s a nice dream.


    1. Wow, a Cher reference. That is awesome.

      On the topic of Big Music: Can you smell what they’re cookin’? It’s called “hypocrisy”

  12. Please, oh please let them end up having to pay the full $60b amount. I would give up Christmas for that…

  13. Re: the discrepancy of 80 and 20k. I’m guessing Canada has slightly smaller caps on infringments.
    It’s not 20k per song he’s entitled to, it’s 20k Per Infrigement. i.e. You have to count each time they printed or broadcast the song seperately.
    Karma’s a bitch, but you gotta love her howl.

  14. Well if it’s 20,000 USD per song for a non-commercial copy, then the fines must be much higher for commercial infringement, right?

    I hope the record labels get the maximum possible fine, since this is a clear attempt to intentionally and knowingly break the law in order to make money.

    This story has finally converted me from thinking that the recording industry are merely greedy (News at eleven, corporate executives want more money!) to thinking that they are a criminal cartel.

  15. These guys are trying to eat the internet to stop the rest of the world from doing what they apparently do routinely in the name of an easy buck.

    I wanted to be all ironic and clever, but it turns out I’m just plain furious.

  16. I think the $20K / $80K difference is not because of who’s doing it, but what country they’re doing it in – the $80K per song cases were in the USA, this is in Canada where I’d guess the statutes provide for $20K per song, not $80K.

  17. Cory you’re drawing the wrong conclusion from the cited article. Chet’s estate filed a class action suit on behalf of numerous artists with a total of 300,000 known infringements. Chet’s estate will get some of that but I don’t think Chet managed to record 300,000 tracks in his lifetime.

    1. Anon31,

      I don’t think Chet managed to record 300,000 tracks in his lifetime.

      It’s per infringement, not per track.

  18. “It is difficult to understand why the industry has been so reluctant to pay its bills.”
    Only to people who don’t know their history. The recording industry treats artists as a necessary evil, and tends to avoid paying them as often as they can get away with.

  19. Damn, I knew the recording industry were a bunch of greedy fucks, but this is the icing on the cake. Is incompetence like this rampant in large organizations? In recent memory this is the second time (that I can recall, the watchmen movie being the first) that the acquisition of rights have been put on a “to-do” list and then the list is subsequently lost.

    I hope they pay through the nose for this crap. I hope that politicians will wake up and stop the insane from running the asylum. I hope musicians abandon record labels en mass, letting those rotting husks of the record industry die.

  20. IANAL, but this seems to be a textbook case of where the “Unclean hands doctrine” may come into play. The RIAA, if they’re proven to have engaged in such gross and malicious copyright infringement, may in fact lose the right to sue others for copyright infringement. The idea is that the RIAA must play by the rules it wants others to play by: if they don’t, courts can refuse to rule for them in similar cases.

  21. Oh, sweet irony! And the fact that they admit they owe at least $50 million is priceless.

    I only hope they are taken to the cleaners with this one. You reap what you sow, and these are the same bastards who lobbied for years to get the $20,000 per song punitive damages and have railed against consumers to have those penalties enforced.

    I wonder, what will the implications of this be on ACTA and other upcoming copyright laws? $60 billion could be enough to bankrupt the entire recording industry.

  22. Somehow I’m fairly certain that, if they lose, the labels will be fined the minimum damages despite recent cases where individuals were charged the maximum.

    Not in Canada, here they only tried once to sue uploaders and were told by the judge that it won’t work that way as they get the levy on the empty CDs (it was a bit more complex than that, but that’s essentially how it played out).

    Still, it will be interesting how the courts rule, but even if the labels lose it won’t have any effect on the individual downloaders / uploaders as this would still fall under the “commercial exploitation” and Canadian Copyright already covers this.

    Time for some popcorn.

  23. I don’t remember the details, but isn’t the penalty $20,000 per infringement? I would expect each infringement to be each song on each album, i.e. one for each new compilation album produced. If that were the case, the actual damages would be astronomical!

    1. I’m not sure how the trials in Canada turned out as far as the what the charges were to the defendant and how much damages the record companies were claiming, but I do recall the recent Jammie Thomas-Rasset trial here in the states. In that trial, the record companies went after her on a song for song infringement, $80k per song for a total of 24 songs (1.92 million total).

      But even at that calculation, $80k times 300k infringments only comes out to $24 billion USD.

      1. $80k times 300k = $24 billion

        It’s CAD$20,000 per infringement, not USD$80.000. And your calculation only shows the (number of tracks) x (fine per infringement), but if we are working on infringement meaning per-copy-made, then your calculation needs to show the (number of tracks) x (fine per infringement) x (number of infringements).

        Hmm.. at those calculations, it would be 20k x 300k = 6 Billion. Which would then imply 10 infringements.. doesn’t seem right, unless they’ve restricted the numbers like they did in Jammie Thomas-Rasset (only charging 24 tracks).

        Anyone got real numbers for this?

  24. Since they did this to make money, they should be fined in full. They fine the little people in full when they do this for person use only and not to make money.
    I hope people watch this. And when they do get small fines, I hope people who got sued by the music industry past and future use the outcome of this to get their fines minimalized. I’ve also been very curious if the fines that have been imposed on people who download are actually going to the singers/song writters or if the music industry is pocketing 100%. It would be very intersting to know.

  25. According to Ars:

    ..possibly to the tune of $60 billion. This is because the class is asking for both statutory and punitive damages for the labels’ behavior (as Geist points out, the same standards being used to go after individual file sharers), meaning that the labels could be asked to pay up to $20,000 per infringement.

  26. Let’s see now:

    The owe $60 Billion:

    Simple solution:

    Ban all the major music/video corporations and all affiliates, especially all their attorneys/barristers/private investigators, etc. from ever using the inter net again. (or any subsequent name they may wish to change it to, in order to circumvent the order) for only 1 year per offence (aggregate, all guilty parties, equally guilty.)

    All fines collected, may not be shared by any attorneys involved in the media industry. other than those suing the media companies… and must be distributed to the public at large (no politicians that have accepted any donations from said media corps, need be concerned. All politicians involved in writing the law, shall be treated as co-defendants.) Those suing the media, may only get reasonable fees, nothing more than 0.5% (which is not a small sum)

    Since this is an egregious and premeditated offence of an ongoing nature, all media, attorneys and politicians involved in the law, should all be required to serve minimal jail time of 1 hour per offence served consecutively, no concurrent time allowed, and fines may not be reduced. They may share the debt of the fines, but all sums must be collected before time served counts- jailing starts at end of trial…time counts when money has been fully collected.

    Ignorance of the law is neither an excuse, not possible, on the part of the defendants, in this case.

    (That should solve a bunch of the world’s problems)

  27. As much as I’d love to see a $60bn judgment against the labels, I’d be much more happy with a finding that copyright as it stands is unenforceable.

  28. I would also give up Christmas to see them have to pay the billions……but it’d be $6b not $60b at 20k*300k wouldn’t it?

    Which would still make me happy to se ethem have to fork over….like it’d happen though

    These are just two of the latest stories that confirm I will never willingly buy a major label release again – maybe used if I really want it…..I am all for supporting artists and will spend my money in manners that do that. Major labels certainly are not it.

  29. Geist corrected his blog – it’s $6 billion.

    Off by a factor of 10, but still, that’s a lot of cake!

  30. If the infringement is per-track, it may be $60bn. $20,000 x 10 tracks (average) per cd x 300,000 cds. If its per cd, or the 300,000 number is the infringing tracks (and not infringing cds), then $6bn seems correct.

  31. While I’d LOVE to see the labels eat the big one for this and pay the full fees, there’s no way the labels themselves (not the parent corporations) have the capital. Look at EMI’s recent inability to obtain a bank loan to cover its own ass for the foreseeable future… the labels are in dire straights and I feel like that’s a big part of why the RIAA has continued its witch hunt for those “missing cd sales.”

    Instead of fighting back, we should just float away on a magical cloud piloted by Jesus, FSM and Lakitu and forget completely the boundaries of our Earthly delights, reveling forever in a sea of free music and movies. Remember… there are NO boundaries in Fantasia, physical OR intellectual, and EVERYONE has a cigar box guitar.

    Sorry guys, I’m a little high.

    Peace and Fair Use,

  32. Dear Santa,

    I have been a very good boy this year. RIAA however has been very bad. Please make sure they receive a $6 Billion lump of coal in their stocking this year. That would make my year.

    Sincerely – Dave in Canada

  33. Cory,

    This is what I’ve been saying — Canada views music and movie production as transient and expendable — we pay for it in taxes, then throw it away.

    To expect us to enforce others’ IP rights, considering we don’t support our own, is completely unrealistic!

    This blade cuts both ways.

  34. There is no such thing as intellectual property. The record labels have no moral case against individuals and that means – gasp! – that individuals have no moral case against the record labels in this case. Down with copyright.

  35. ahahahahahahahahahahhahahahahahahahahahaha … cough…hack…cough..[inhale] HAHAHAHAHAHAHAHAHAHAHAHAHA HAHAHAHAHAHAHAHAHAHAHAHAHA

    How about 60 billion days in the worst prison in Canada for *each* executhief and all the corporate board members, and how about all their lawyers, too? I **do** hope they are jointly and severably liable for the penalties: the corporations should cease to exist, and the executhieves should be left completely destitute.

    I hope they suffer a great deal :)

    PS: The ReCaptcha thing for comments isn’t working reliably.

  36. Lmmm… if Chet Baker’s estate say they’re entitled to 60$ cad billion, what about all the other ”estates”, the total amount could be in the thousands of trillions … hey wait a minute ! … that’s exactly the total debt of the americans ! … so this is another disguise attempt by the americans to pay their debts by grabbing the astronomical richness of Canadians…

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