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'