Tag: amfa

Why the High Court of Justice Denied UK Broadcast Royalties to US Performers

A cartoon-style judge with white curly hair, wearing a black robe and a white collar, is raising a gavel with a serious expression. The judge has a small Union Jack flag on their robe.

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In my most recent post, I wrote about the unsuccessful effort of the American Federation of Musicians (AFM) to overturn a British regulation that ensured US performers would continue to be denied payment of royalties for recordings broadcast over radio in Britain. The British action came after a public consultation and was based on the principle of material reciprocity; British performers are denied those same benefits in the US. This also ensures that royalty revenues that otherwise would have gone to US performers are distributed in Britain as long as British performers in the US are not entitled to receive royalties for their recordings. While Britain has long maintained a policy of material reciprocity (in effect, treating US performers as badly as the US treats its own and foreign performers), the AFM saw an opportunity to bring a legal challenge because Britain had just expanded the mutual recognition of royalty rights for performers as a result of its accession to the CPTPP Trade Agreement (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership). This is the sequel to the earlier blog post.

As part of the part of legislation introduced to implement its accession obligations to the other eleven members of the Agreement (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam), the UK agreed to grant national treatment with respect to royalties to performers from those countries, and to performances first published in those countries. As reported by the International Comparative Legal Guide;

“Parliament amended the Copyright, Designs and Patents Act 1988 to widen the circumstances in which performances would qualify for protection, including where recordings were first or simultaneously published in a qualifying country. Those amendments appeared to extend statutory rights to a broader class of foreign performers, including those from the United States.”

To close this potential loophole, regulations were subsequently passed allowing the UK government to impose restrictions limiting the scope of the amendment to nationals of CPTPP member states only. Ironically, even though the US was the original inspiration for the Trans-Pacific Partnership, which later became the 12 nation CPTPP, the United States is not a member because–in his first act as President in 2017–Donald Trump announced the US was withdrawing from the Agreement. To ensure that benefits arising from the CPTPP apply only to citizens of countries that are members of the Agreement, the British government clarified and narrowed the grant of national treatment through the Copyright and Performances (Application to Other Countries) (Amendment) (No. 2) Order, 2024. (the “Order”). This legislative word salad is hard to decipher but the end result was the continued exclusion of US performers, reflecting the concerns of the British music community. In a further twist, British law allows the payment of royalties to US producers, but not performers. The AFM challenged the Order.

The AFM claimed the Order conflicted with three international treaties, the Rome Convention of 1961, the WIPO Performances and Phonograms Treaty (WPPT) and the CPTPP, even though the US is not a Party to two of these, the Rome Convention and the CPTPP.

In the case of the Rome Convention, the claimants’ case, as summarized by the Court, (Para 24) was that:

“…since 1963, the UK has been obliged by the Rome Convention to provide for payment of equitable remuneration to US national performers whenever a phonogram carrying their performances is published in a Contracting State within 30 days of its first publication, regardless of the fact that the US is not a party to the Convention and regardless of the fact that US law provides for no equivalent right to UK performers when phonograms carrying their performances are broadcast or played to the public in the US.”

The Convention requires granting of national treatment to performances that are published in a contracting state within 30 days of original publication, regardless of the nationality of the artist, unless the contracting state has opted out. In 1963 Britain declared that it would not grant national treatment to recordings produced by a national of a non-Contracting State, but with a caveat “unless…the phonogram has been first published in a Contracting State…”. That state must also have not opted out of national treatment. The AFM claimed this wording meant that broadcasts in the UK of recordings produced in the US that had also been published in a Rome Convention country simultaneously or within 30 days of original publication qualified for equitable remuneration (royalties). Most US recordings are usually released abroad within a month of their US release.

In the case of the WPPT, to which both the US and UK have acceded, national treatment is required unless a derogation has been noted. A derogation would allow a member to restrict royalty payments if not provided reciprocally. However, the UK has made no such derogation.

Finally, with regard to the CPTPP, the claimants’ case was based on the fact that if a phonogram was first published in a CPTPP member state, (e.g. Canada), it should be accorded national treatment regardless of the nationality of the performer. This is reminiscent of the “Backdoor to Berne” used by US book publishers before the US acceded to the Berne Convention in 1989, whereby they simultaneously published in Canada to get the benefits of the global protection afforded by membership in the Convention, even though the US was not a member.

On the face of it, the AFM’s arguments would seem to have legal logic even if the end result would be to give US performers rights that they and foreign performers do not enjoy in the US. The validity of their arguments was further reinforced by the fact that the British government, subsequent to the passage of the 2024 exclusion Order, amended its reservation to the Rome Convention to remove the controversial wording of “unless…the phonogram has been first published in a Contracting State…etc”. But in any event, the AFM’s claims were all dismissed–but not because the Court rejected the arguments on their merits. The case was dismissed because the treaties referred to have not been incorporated into British legislation.

Under UK law (and US law too, for that matter), treaties are not self-executing. Their provisions must be enacted into domestic law insofar as legal changes are required for treaty compliance. An example would be changes to the Customs tariff. Changes are made to domestic legislation to implement a treaty only to the extent necessary. The full text of a treaty is not enacted into legislation. A treaty is not binding with respect to domestic law; legislation is. The full text of a treaty is a document in international law, but it is not necessarily part of the corpus of domestic legislation. In legal terms, the treaty is “unincorporated” in terms of domestic legislation. As explained by Google’s AI overview, which is probably about as concise a definition as you are going to get:

“An unincorporated treaty is an international agreement ratified by a state’s executive branch but not formally enacted into domestic law by its legislature (e.g., Parliament or Congress). While binding internationally, these treaties generally do not create enforceable rights or obligations for citizens in domestic courts.”

Or, to quote from the Court’s decision (para 117)

“It is to be expected that the UK government will seek to comply with the UK’s international obligations as it understands them to be, but the fact that it says so (either of its own motion or in response to questioning, and with whatever degree of emphasis or conviction) does not turn the provisions of unincorporated treaties into a source of rights and obligations in domestic law”.

Thus, the AMF challenge failed. It was the view of the British High Court of Justice that here is no requirement in British law to grant national treatment royalty rights to US performers for music broadcast in the UK, despite whatever treaty obligations the UK may have taken on. Note the similarity to the Irish Music Case in the US that I referred to last week. The US was found to be in default of its international obligations under the WTO but because the US Administration was unable to get Congress to amend US law, Irish musicians have been blowing their tin whistles in vain for more than two decades. With respect to performance royalties, as I noted in last week’s blog post, maybe it’s time the AMF redoubled its efforts to fix the problem at home. The Court in effect suggested this was the solution; (Para 69)

“…the reason why US performers receive no such remuneration is that US law does not provide equivalent rights to UK performers. The position would be different if US law were to provide for reciprocity in this respect…”;

Once the US treats performers with the same respect and benefits as the rest of the world, these issues of material reciprocity vs national treatment would quickly disappear.

© Hugh Stephens, 2026. All Rights Reserved.

US Musicians Unsuccessfully Seek Royalty Benefits in UK they are Denied in US: Maybe They Should Fix the Problem at Home?

A cheerful radio host sitting at a desk with a microphone, computer, and coffee cup, wearing headphones, with an 'ON AIR' sign in the background.

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US artists and musicians, unable to get Congress to grant them royalties for their performances broadcast over terrestrial radio networks in the US, continue to try to obtain in foreign countries what they cannot get at home. Sometimes they have been successful, as in the case of Canada where as part of the update of NAFTA and its replacement by the Canada-US-Mexico (CUSMA) Agreement (or USMCA if you prefer) in 2020, Canada granted US performers “national treatment”. This means they get treated “no less favourably” than—i.e. just as well as—Canadian performers with respect to royalty payments. In other words, they get paid.  Canadian performers in the US also get national treatment, which means they get treated just as badly as their US counterparts, receiving no royalties at all when their music is broadcast terrestrially. The US music industry, or at least the part of it affected by US restrictions on royalty payments (performers and labels), has long lobbied to remove this inequity. A few years ago legislation designed to fix this problem, the American Music Fairness Act, or AMFA, was introduced into Congress. As I explained at the time;

“US terrestrial radio stations are not required to pay royalties to performers or labels for playing recorded music on air. Online broadcasters and streaming services do, but not over-the-air AM/FM radio stations. Terrestrial stations do, however, pay royalties to composers and songwriters for music played on air, but not to performers.”

It is a strange, assymetric exemption from the requirement to pay royalties. Passage of AMFA would close this loophole by ensuring that performers (artists, singers and musicians) as well as owners of the sound recording copyright, normally labels, receive royalties when a work is broadcast commercially on terrestrial radio. But the AMFA bill, and successive versions introduced since, did not make it across the finish line.

If this seems odd and inequitable, it is. It relates to the influence of the National Association of Broadcasters (NAB) in Congress. For decades the NAB has managed to block legislation that would fix this anomaly by arguing that terrestrial stations provide “free airtime” that promotes new recordings. This is a specious argument akin to the canard that platforms distributing pirated content promote legitimate business by giving new content greater exposure. If the “free exposure” argument was ever valid, it is no longer in a world where new music is promoted on digital radio channels and through Spotify, YouTube and Tiktok. Nowadays, triggering algorithmic discovery is key, yet over-the-air radio stations are still getting a free ride when playing recorded music. Given the strength of the NAB lobby don’t look for AMFA to pass Congress any time soon, despite the concerted efforts of the American Federation of Musicians. And it is not just a US problem. Not only do US performers not get paid when their music is broadcast terrestrially on radio in the US, neither do non-US performers or labels. This leads to another dimension of the issue.

The failure to allow foreign performers to collect royalties in the United States usually has a knock-on effect for US artists when their music is played abroad–unless the US has been able to obtain national treatment through a special bilateral agreement. Performers’ organizations in other countries object to US musicians being granted royalties in their own country because if US artists gain access to a national royalty pot, the amount paid out to domestic performers is reduced (by the amount paid to US artists). When US artists are denied royalty payments on the basis of reciprocal as opposed to national treatment, the collected royalties that would normally go to American performers are redistributed to domestic counterparts or retained by performing rights organizations for the benefit of the domestic music industry as a whole. Normally, payments going to US performers abroad would be offset by payment of royalties in the US to foreign musicians–and everyone would gain–but because of US legislation, the US royalty revenue stream for this music category is non-existent, for everyone. Therefore, from the point of view of domestic musicians, it is unfair for US artists to expect a benefit abroad that is denied to foreign performers in the US. International copyright treaties allow for withholding of national treatment benefits under the principle of material reciprocity. Put bluntly, this means that “If you withhold royalty payments from our performers, we will do the same to yours”.

While material reciprocity is a well recognized principle of international copyright, it’s not all that simple because there are provisions in some international treaties that require national treatment (i.e. payment of royalties) for recordings based on where they are first released even if the artists themselves are from countries (like the US) that deny royalty benefits. This would override reciprocity provisions. In 2020, the EU Court of Justice ruled that denial of royalties to US performers in Ireland on the basis of reciprocity was inconsistent with EU law, which does not mention reciprocity. Since then the Netherlands and Sweden have dropped the reciprocity rule and allow payment to US performers, but most EU countries still do not. Nor does the UK, a non-EU member since January 31, 2020.

It is ironic that Ireland was the jurisdiction where US performers made a legal breakthrough in terms of overseas royalty payments given the WTO Irish Music case. Here the US continues to ignore a WTO panel finding made over 25 years ago, in 2000. The WTO panel ruled that another royalty exemption, in this case a US law that allows business establishments to play licensed music without royalty payments as long as it is “background music”, is non-compliant with US treaty obligations. The US Administration at the time was unable to get Congress to amend the law and offered to pay compensation, but this lasted only three years. This case remains an outstanding irritant between the US and the EU, with the US continuing to say that it will “work closely with the U.S. Congress and will continue to confer with the European Union in order to reach a mutually satisfactory resolution of this matter.” So far nothing has happened, and Irish musicians are out of pocket at least $1 million dollars a year for Irish music played as background entertainment in US business establishments. (i.e. Irish pubs in the US).

If you are looking for consistency in abiding by trade obligations when it comes to large countries versus small ones, you will be disappointed. The Irish Music Case is a good example of assymetric respect for international trade rules. The Donald Trump technique of respecting trade obligations very selectively, or not at all, is not a new phenomenon, although it is far more apparent today. In any event, if you are an advocate for a particular constituency, such as US performers, consistency is not the issue. Results are. It was in this vein that the American Federation of Musicians (AFM) challenged recent British legislation that denied payment of royalties to US performers. The UK has maintained the principle of material reciprocity for many years, but its recent accession to the CPTPP Trade Agreement (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) opened the door, or so thought the AFM , to revisiting the issue. They brought forth a number of interesting arguments, but in the end did not prevail. In my next blog post, I will look at the issues raised, and the reasons for the British court’s decision.

At the end of the day, the best solution for everyone would be to close the US loophole. This would eliminate the reciprocity issue once and for all. Maybe it’s time the AFM redoubled its efforts to fix the problem at home.

© Hugh Stephens, 2026. All Rights Reserved.

The USTR “Watch List” Designation You Will Never See

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In my last blog post, I discussed the annual Special 301 Report issued by the Office of the US Trade Representative (USTR). The Report is a global survey of the intellectual property (IP) practices of a number of US trading partners, a kind of “report card” in which those that “fail” (badly) are named to a Priority Watch List (PWL) and those that fail, but not so badly (and so are encouraged to do better), are put on the Watch List (WL). The purpose is to highlight practices that damage the interests of American IP-based businesses and IP stakeholders in order, eventually, to get them changed. While one can quibble with some of the IP “transgressions” identified by USTR in its wide-ranging survey, removing or modifying the IP impediments identified in the Report generally speaking results in better outcomes for innovation and creativity both for US IP interests and foreign rightsholders, at least in the area of copyright. (The practices, laws and policies named in the Report are not restricted to copyright; they cover the full range of IP issues such as patents, trade secrets, industrial designs, geographic indications and trademark infringements/counterfeiting). I am going to restrict my commentary today solely to copyright issues.

Since the Report is a US government document mandated by US legislation, and deals with US foreign trade, it is not surprising that problematic IP issues inside the United States are not included in the document. Thus, US rightsholders are deprived of the salutary effect that arises from shining a spotlight on such practices. Were the USTR to hold up a mirror to the US and apply the same sort of critical analysis it applies to other countries, what would be the result? We will never know as USTR has no mandate to publish such a document; the closest it came to criticizing a US company was its inclusion of Amazon’s non-US affiliates in its 2020 “Notorious Markets” list which forms part of the Special 301 Report. Since USTR will never publish a Watch List that includes the United States, someone needs to step into the breach, hold up that mirror and attempt to write what a US Watch List designation might look like. That someone will be me. However, as noted, the commentary will be based exclusively on copyright issues; I am not going to tread into the minefield of patent trolls, counterfeit products, trade secrets or any of the other aspects of IP that are also grist to USTR’s mill.

In assessing what a US Watch List citation might look like, I will follow the same general approach that USTR applies when it passes judgement on the copyright practices of other countries. A measure doesn’t have to discriminate against US IP interests or rightsholders to be included in the Special 301 Report (i.e. it doesn’t matter if US rightsholders are granted national treatment; USTR can still object to the practice), so I will apply that principle. In judging whether to include criticism of certain US measures, or lack of them, I will be guided by the sort of issues that USTR identifies in the practices of other countries named to the PWL or WL. Since I know a bit about copyright in Canada, and since Canada is again on this year’s WL as it has been for the past couple of decades (except when it was downgraded to the PWL), I will use Canada as my principal marker.

For example, in this year’s Special 301 Report in which Canada once again features on the Watch List, the USTR Report critically notes that “Levels of online piracy remain very high in Canada, including through direct downloads and streaming”. In actual fact, Canada is a relatively minor league player when it comes to online piracy. According to the brand protection website Bytescare, Canada doesn’t even rank in the top 20. The list is dominated by Russia, China, India, Brazil etc, and the United States. In fact, according to Variety, the US is the leading source of online piracy globally with 13.5 billion visits to piracy sites annually. Aha, you say, but what about the rate of piracy? Canada’s population is only 40 million so no wonder it is not as high on the list as some others in terms of total piracy visits. According to the Canadian Internet Registration Authority, as quoted by Global News, Canada’s piracy rate in 2022 was a shocking 22.5 %. The US rate in the same year? As estimated by media research firm Parks Associates, it was 22% is but expected to rise to 24.5 percent by 2027. So I guess the US should be called out for its high levels of online piracy. After all, what is sauce for the goose is sauce for the gander.

I will draw on another example from this year’s USTR Report to justify inclusion of a separate observation in my assessment, regarding music royalties. This year, Barbados is singled out for, among other things, “the refusal of Barbadian television and radio broadcasters and cable and satellite operators to pay for public performance of music.” But guess what? Neither does the US, in certain circumstances. As I outlined in this blog (“The American Music Fairness Act (AMFA): A Better and Fairer Solution for Performers than Seeking “National Treatment”), US terrestrial radio stations are not required to pay royalties to performers or labels for playing recorded music on air, a longstanding practice that dates back to the early days of radio. The same free ride does not apply to digital broadcasters and streaming services. Terrestrial AM/FM radio stations are required to pay royalties to composers and songwriters for music played on air, but not to performers. The US is the only developed country jurisdiction to provide such an advantage to terrestrial broadcasters, although since 1997 Canada has had a carve out whereby commercial radio broadcasters are required to pay only $100 in performance royalties on the first $1.25 million in advertising revenue. Needless to say, this is opposed by Canadian performing rights organizations.

The US AM/FM exception denies royalties to US performers for music played on US terrestrial radio, but it also applies to foreign performers when their music is similarly played in the US. For this reason, many countries, including Canada, apply or applied a reciprocity provision (an exception to national treatment) to payment of royalties to US performers when their music is played terrestrially. Unable to get the US Congress to change US law, US performing rights organizations convinced the US government to seek national treatment in Canada with respect to all categories of IP covered in the IP chapter of the USMCA/CUSMA, a goal that was achieved when the new Agreement was signed. Thus, US performers in Canada now get equivalent treatment to Canadian performers; in other words, they get better IP protection in Canada than they do (or Canadian performers do) in the US. Yet Canada is on the USTR Watch List. Sauce for the goose…

That is some of the background to my decision to put the United States on the Watch List in 2024 for copyright-related issues. There are other reasons as well. I know you want to read the full reasoning, so here goes;

The United States remains on the Watch List for 2024. Despite a strong legal framework in place, the US continues to be the source of the largest number of visits to online pirate sites globally. Unfortunately, unlike some 40 countries globally, including USMCA partner Canada, the US has been unsuccessful in implementing any form of site blocking legislation. Site blocking has proven to be an effective and low cost tool, in combination with other measures, to reduce visits to pirate websites and to convert users to legitimate sources of online content. The US authorities are encouraged to work with Congress to put in place an effective mechanism to implement site-blocking in order to reduce high rates of piracy estimated to be in the vicinity of 25% of users. We also have continuing concerns about the inadequacy of US law in protecting performance rights for music played on terrestrial radio stations. The United States is the only developed country that provides an exception for payment of performance royalties for terrestrial stations, a situation that has led to the denial of performance royalty payments to US musicians and labels on the basis of reciprocity in a number of countries where it has not been possible to obtain a national treatment commitment to protect US performers. We remain deeply concerned by stakeholder reports that a 2020 Supreme Court ruling in the US (Allen v Cooper), that upheld the ability of US states to impair the rights of copyright holders based on the principle of sovereign immunity, remains unaddressed. This interpretation opens the door to widespread “legalized infringement” by state operated institutions, such as state university libraries. With regard to fair use, we are encouraged by recent court rulings that suggest a more narrowly defined interpretation of “transformative use” is being applied by US courts in adjudicating fair use claims. We are also encouraged by the passage of legislation to increase criminal penalties for illegal streaming (the Protect Lawful Streaming Act) but note that the legislation has been rarely used since it came into effect in 2020 and urge the US Department of Justice to take full advantage of the tools at its disposal to curb the high rate of online piracy and illegal streaming in the United States. We look forward to working with the United States to resolve these and other important issues.

So there you have it, a slightly cheeky (and tongue-in-cheek) Watch List designation for the US, aka “The Watch List Designation You Will Never See”. I hope this doesn’t upset my many Stateside friends. It is offered in the spirit of “no one is perfect”. All we can do is strive for perfection through learning from each other.

© Hugh Stephens, 2024. All Rights Reserved.