Four Tet has been granted permission to pursue a case of breach of contract against Domino Recordings. It follows the label’s removal of three albums from streaming services last month.
The streaming takedown was the latest twist in a legal battle between Four Tet (Kieran Hebden) and his former label, Domino.
Music Week first broke the news of the legal case, which centres on a dispute over streaming royalties for three albums released after 2001 - Pause, Rounds and Everything Ecstatic. You can read the full background and Hebden’s case for a 50% streaming royalty rate here. It comes amid an industry-wide debate about fair streaming remuneration.
When Domino removed those disputed albums from DSPs last month, Four Tet’s legal team moved to amend their case to include a claim of breach of contract, or a possible restraint of trade claim, because the label was restricting the availability of the music to Four Tet’s fans on streaming platforms around the world.
The full trial is set to proceed in early 2022 and could set a precedent for artist and label royalty and contract disputes in the streaming era.
Deputy Judge Pat Treacy presided over a hearing today at the UK’s Intellectual Property Enterprise Court. While she ruled against a possible application for a claim of restraint of trade after arguments from both sides, the claim for breach of contract will be able to proceed as part of Four Tet’s royalties case against Domino.
“Digital exploitation is now the mainstream method of exploitation of sound recordings, and a refusal to digitally exploit effectively leaves those recordings sat gathering dust on the metaphorical shelf for the remaining life of copyright [70 years],” Four Tet’s lawyer Sam Carter of Hogarth Chambers told the court. “That runs fundamentally contrary to the intentions of the parties when entering into a recording contract. The [streaming] takedown was, in my submission, a deliberate, cynical and outrageous act, effectively depriving my client’s fans and the world of access to these masters, at least by the now globally accepted mainstream mechanisms.
“The timing of the act just before a trial to determine the proper rate for digital exploitation also makes the defendant’s cynical motivation clear. The takedown was a barely disguised attempt to avoid the court determining the proper rate for digital exploitation.”
All of this music that I made is not available to stream or download anymore because @dominorecordco have removed it against my wishes. They have taken it down to try and stop the legal dispute we are involved in over the royalties they pay me. pic.twitter.com/5hf4UDk11Q— Four Tet (@FourTet) December 15, 2021
The case is complicated by the fact that the historic contract between Domino and Four Tet dates from 2001, even before the arrival of the iPod. Both sides are now drawing on case history for their arguments about the music industry in the streaming era.
Carter told the court that pulling the albums from DSPs was an attempt to remove the basis of the dispute over the 2001 contract.
“That is a wholly improper motive,” he said. “The defendant has committed an act of fundamental breach to try to avoid the court ruling on its previous acts of breach.”
Following the claim of breach of contract, Four Tet and his legal team are now seeking a reversion of rights to the masters, so that Hebden would regain control of the three disputed albums and other releases under the period of the contract.
“The masters have been digitally sterilised,” said Carter. “Four Tet is being effectively prevented from digitally reaching the public with the masters for the rest of the life of copyright.
“These albums have been out there for 20 years and the albums have a significant fanbase, and the vast majority of that fanbase listens to them online. They won’t be able to do so again until copyright expires.”
Under life of copyright, the rights for 2001’s Rounds album would expire in 2071.
Domino’s barrister, Tom Richards of Blackstone Chambers, told the court that Domino had sought to reach a settlement with Four Tet during the legal case. The label has offered to pay Hebden all the money to which, based on his own claim, he would be entitled, as well as all the costs of proceedings.
“What the defendant [Domino] has done was an attempt to bring this dispute to an end by avoiding the need for a trial,” said Richards. “Now, that attempt may prove to have been a successful attempt, it may prove to be a misguided attempt, but there is no basis to allege that it was an attempt made otherwise than in good faith.”
Four Tet is being effectively prevented from digitally reaching the public with the masters for the rest of the life of copyright
Sam Carter, Four Tet’s barrister
Richards also told the court that Domino had offered to no longer exploit the masters as commercial releases. He said that this was in light of the fact that Hedben, as revealed in a witness statement, had previously requested the removal of albums from Spotify, and that they remained down from the service for a three-year period before the latest takedown.
“So the suggestion now that the defendant [Domino] was under a positive obligation to exploit [those albums] digitally does come as some surprise,” he told the court. “And in the context in which it was made, the offer, including the takedown, was perfectly reasonable. Of course, it was an attempt to avoid the need for any trial. But that involves no absence of good faith... and was squarely in accordance with the claimant's own clearly expressed preferences in relation to digital exploitation.”
Richards cited several precedents including the 2010 case involving music publisher Crosstown and the famous George Michael vs Sony Music trial of 1994, in which the singer alleged that his contract was a restraint of trade.
“In my submission, that summary of the state of the recording industry in the early 1990s has little or no bearing on the present dispute in circumstances where the music industry has radically changed in the intervening quarter century, and the digital exploitation that is now the predominant method,” said Carter. “The factual context, even as between 1994 and 2001, was entirely different because of the internet.”
The hearing covered detailed arguments about what constitutes “reasonable endeavours” for an album release, good faith in how a rights-holder operates, at what point a label is in breach of contract and the ownership of master recordings. Carter said it was “far from clear” whether rights were unconditionally acquired by Domino in the 2001 deal.
Richards said a rights-holder was entitled to make commercial decisions in its own interests in regard to how and when an album is released, and that it was not “reasonable” to expect ongoing exploitation of the master recordings by a label.
“‘Release’ in this agreement wouldn’t require the defendant to do anything in the digital sphere, because what would have been contemplated [under the 2001 contract] was the release of CDs or perhaps vinyl,” he told the court.
What the defendant has done was an attempt to bring this dispute to an end by avoiding the need for a trial
Tom Richards, Domino’s barrister
During questioning by Deputy Judge Treacy, Richards said that Domino was within its legal rights to remove albums from streaming services “because they were the copyright owners - they were free to exploit in any way or indeed not to exploit.”
“The fact that those albums have gone reduces his overall stream count, which then feeds into the Spotify algorithms and decreases the amount to which consumers are directed towards his other records,” argued Sam Carter on behalf of Four Tet. “There are ongoing and increasing losses being suffered by my client as a result of this act of fundamental breach.”
Richards cited previous cases to explain that Four Tet still owned his publishing rights and was able to re-record songs, perform them and exploit those compositions for commercial gain.
However, Carter suggested that Kieran Hebden was not in a similar position to Taylor Swift, who is re-recording her albums following a dispute with her former label.
“Some fans have a particular emotional connection with the original version [of an album],” he told the court. “A re-recording is potentially a grey area in the circumstances because all of the music was created electronically. I would suggest that the law is a grey area."
While Four Tet has been able to pursue his latest claim against Domino, the complexity of the case means that it is possible that the hearing could be moved to the High Court.
“If the claim is transferred to the High Court, my client will not be able to afford this litigation,” said Carter. “My client is a litigant in person with limited resources.”
The legal hearings will resume early next year.