Last week EMI sued video streaming site Vimeo for inducement of copyright infringement by encouraging users to submit their own video “lip dubs” of their favorite songs.

No doubt that Vimeo will raise issues of fair use and derivative works in their defense. A derivative work is “an expressive creation that includes major, copyright-protected elements of an original, previously created first work.”

The fair use doctrine allows limited use of copyrighted material without requiring permission from the rights holders. But attached to fair use is the concept of transformativeness—when a derivative work transcends or places the underlying work in a new light.

Law schools use the example of when the artist Marcel Duchamps painted a moustache on the Mona Lisa (L.H.O.O.Q, the most famous derivative work in the world) to illustrate the doctrine. In 1994 the US Supreme Court established guidelines in Campbell v. Acuff-Rose Music, Inc.

But who cares about all that crap anyway. Too confusing. But it does remind me of an out of body experience I encountered with Mashboxx many years ago when dealing with the Harry Fox Agency.

When we first started Mashboxx, one of the label presidents insisted that we use professional voiceovers at the beginning, middle and end of each free stream of every song. It was ridiculous, of course, but we played along knowing full well that we would eventually talk them out of this stupid idea. They were too worried about users ripping the streams, so this would be the deterrent.

So we went ahead and hired professional announcers and recording a number of various generic tags to play over the intro and outros of each free song stream. Users would get 3-5 free plays per song. But we had to also get licensed by HFA.

We had many meetings with HFA, an experience akin to falling down the rabbit hole in Alice in Wonderland. Bizarre hardly explains the mindset. In one meeting our attorney got so frustrated that we had to keep him from jumping across the table and strangling an HFA executive. Literally. But we forged ahead with them nonetheless.

After months of going back and forth, HFA told us that they were not legally allowed to give us a license for our sampler files. Why? Because since we had to insert voiceovers into the songs, the compositions then became derivative works. And HFA could not legally license derivative works!

I’ll spare you the rest of the idiocy. Let’s just say that we decided that we didn’t need to worry about HFA and just went ahead with our plans. And eventually we were able to explain to record labels that
the voiceover idea wasn’t really very smart after all. It did take time though.

I have no idea how the Vimeo case will wash out. But what’s interesting is that Vimeo is owned by IAC, Barry Diller’s company. And IAC has deep pockets. It would be way too cynical for me to suggest that litigation is a profit center for the record industry. But don’t be surprised to see EMI get a nice, fat settlement out of this.

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