Michelle Phan, the YouTube mega-star and beauty entrepreneur, has been slapped with a massive copyright infringement lawsuit. Phan, 27, launched her YouTube channel in 2007 and subsequently rose to fame as one of YouTube's most famous personalities, building a fan base of 6.6 million followers and subsequently locking down a cosmetics line deal with L'Oreal and launching a monthly beauty-subscription service complete with a $3.8 million round of funding, led by Crosscut Ventures and Amalfi Capital.
However, according to the complaint filed by Ultra Records and Ultra International Music Publishing last week in the U.S. District Court for the Central District of California, Phan is doing more than giving makeup tips in her YouTube videos -- she is infringing a lot of its artists' works. In fact, Ultra claims that in its initial analysis of Phan's videos, it counted "nearly fifty examples of blatant copyright infringement" of its artists' music, and stated that "the full extent of Phan’s infringement has not yet been determined."
Oh, and New York City-based Ultra does not stop there. The record label also claims that Phan is fully aware that what she is doing is illegal, writing: "Phan knows and has been informed that she does not possess a license from [Ultra] to use the [music at issue], and yet continues to willfully infringe in blatant disregard of [Ultra’s] rights of ownership."
As the world's leading independent electronic label, Ultra maintains an impressive roster, which includes Benny Benassi, Fedde Le Grand, Deadmau5, and Steve Aoki, among many others, making for plenty of infringement opportunities. Ultra claims that their initial investigation revealed that more than fifty of Phan's videos include copyrighted music she has used in lieu of obtaining licenses for (aka failed to pay for). (She's a big fan of Kaskade and Late Night Alumni). Additionally, Ultra claims that not only has Phan failed to pay for the rights to use the songs, she is profiting from them, as she "monetizes her YouTube videos by collecting substantial income from YouTube derived from the advertisements that appear in association with her videos." The complaint goes on, stating: "Phan’s videos are also available through her own website located at michellephan.com, which website also prominently features advertising."
Due to the relatively extensive amount of infringement (the specific videos at issue have been have been viewed more than 150 million times), it comes as little surprise that Ultra is seeking an array of remedies. In addition to asking the court to order preliminary and permanent injunctions (which would potentially mean that Phan would have to remove all 50+ videos from her Youtube channel and her website), Ultra wants monetary damages. According to its complaint, Ultra cites to the copyright provisions in the U.S. Code, stating that it "is entitled to maximum statutory damages of $150,000 for each copyright infringed." So, $7.5 million dollars. And Ultra wants Phan to pay for all of its court fees and the cost of its legal counsel.
A few interesting point come to mind. Primarily, it is hard to believe that given the reach and the arguable level of sophistication associated with Phan's Youtube and her associated business empire, that she had not consulted with legal counsel regarding the legality (or lack thereof) of her videos. Yet, stranger things have happen. You may recall that in June 2013, celebrity gossip blogger, Perez Hilton, was sued for copyright infringement, stemming from his unauthorized use of others' photos. There appears to be a overarching theme here and it is that IP laws do not apply to blogs. But it is worth noting that along with the evolution of technology has come IP laws, particularly copyright laws, that take the digital landscape into account. Hence: the Digital Millennium Copyright Act (DMCA).
The DMCA, which amends the Copyright Act, aims to ensure the protection of copyright works in the digital world by fortifying the technological blocks on access and copying of those works within a legal framework. Essentially, the DMCA provides a process for a copyright owner to give notification (a DMCA Takedown Notice) to an online service provider concerning alleged copyright infringement. Upon receipt of a valid DMCA notice, the service provider must take down the offending content, take reasonable steps to contact the owner of the removed content so that a counter-notification may be filed, and if it receives a valid counter-notification, it generally restores the content in question.
Also worth noting (for the sake of exploring the issue fully): There is a chance that Phan consulted with a lawyer, who told her that she could use the music without initially licensing it and if Ultra wanted to come after her, they would likely just apply a licensing fee to any use of its songs on her site retroactively. In the music industry, this is not an uncommon practice. In lieu of suing for copyright infringement, labels have been known to charge the blogger (or whoever is using the unlicensed music) for prior usage; that way the blogger will continue to use the music, and the record company will be paid the licensing fee while also benefitting from the publicity from such usage. As for why that didn't happen here, there are likely two reasons. It could be that this was what Ultra proposed initially but when they received no response (or licensing fee check) from Phan, they filed suit to recover licensing fees for the existing songs and prevent further unauthorized use. Another possibility is that Ultra considered the possible benefits of filing suit. In any lawsuit of this kind, it is important for the moving party to consider what it has to gain. Judging by Phan's array of business ventures (think: the national advertising campaigns in which she has appeared, a book deal, a makeup line, etc.), she has resources, and as a result, Ultra could walk away with a hefty damages award or more likely, a sizable settlement. This factor likely came into play in terms of deciding whether or not to sue.
Turns out, Kaskade isn't angry. The Grammy nominated musician, who is no longer repped by Ultra Records, took to his Twitter to set some things straight …