News headlines about facial recognition technology primarily focus on the government’s use and misuse of the technology. Likewise, technology companies and legislators frequently advocate against the government’s use of facial recognition tools to conduct mass surveillance or generate leads in investigations. For example, following widespread claims of the technology’s racial bias, Amazon, IBM, and Microsoft announced that they would stop selling facial recognition tools to law enforcement agencies. And following the arrest of an innocent black man who was falsely identified by facial recognition, major cities like San Francisco and Boston banned law enforcement from using the technology.
However, as industry commentators focus on the government’s use of facial recognition tools, private businesses in the U.S. regularly deploy facial recognition technology to secretly surveil their customers. Companies rely on the technology to gather information about customers’ identities and demographics to tailor their marketing strategies, monitor customers within stores, or sell the information to third parties. Since there are no federal regulations governing the technology, commercial uses of facial recognition technology remain relatively unchecked, even as companies invade their customers’ privacy rights without any warning.
How Does Facial Recognition Technology Work?
Based on photos or still images, facial recognition technology scans, maps, and analyzes the geometry of a person’s face to verify their identity or collect information about their behavior. When mapping a face, the technology creates a mathematical formula — called a facial signature — based on the person’s distinct facial features, such as the distance between their eyes. Facial recognition systems can create and store facial signatures for each scanned image containing a face. When a user uploads a new photo, the system cross-references the generated facial signature with existing ones in the database and can verify the person’s identity with a matched signature.
Businesses have created databases of facial signatures to identify customers of interest in future video footage. In addition, businesses can use facial recognition software from companies like Clearview AI, which cross-references an uploaded photo against billions of public images to verify a person’s identity. Clearview AI is known to offer free trials of its software, luring businesses and rogue employees into using the technology. With such easy access to facial recognition software, private use of the technology has proliferated, hardly slowed by regulatory barriers.
Commercial Uses of Facial Recognition Technology
No matter the industry, facial recognition can help businesses glean more information about their customers, make informed business decisions, and increase their revenues. Shopping malls and mega-stores like Macy’s, Rite-Aid, Apple, and Walmart have used facial recognition to identify shoplifters, target loyal customers, and track customers’ reactions within the store. Amazon has sold facial recognition technology that assesses customers’ faces to discover whether they are attentive or indifferent to certain displays. While customers are surely aware these mega-stores have security cameras, they are likely unaware these stores may know their name, home address, how many times they’ve frequented the location, and whether they are happy with their in-store experience. Outside of retail stores, in cities like Miami, thousands of Uber and Lyft drivers have digital tablets in their backseats that use facial recognition technology to assess a rider’s age, gender, and demographics, in order to display ads tailored to the rider’s perceived characteristics.
In states without biometric privacy laws, any citizen who shops at a mall or grocery store, or attends a concert or sports game, will likely be the subject of unsuspecting facial recognition. Additionally, facial recognition tools can even identify an individual who rarely shows their face in public. Clearview AI created a facial recognition database by scraping ten billion images from public websites. Clearview analyzed the images and developed facial signatures for nearly half the U.S. population.
As of 2020, more than 200 companies had accounts with Clearview, including professional sports leagues, casinos, fitness centers, and banks. These companies can upload a photo of an individual’s face — pulled from security footage or driver’s licenses — and cross-reference it against Clearview’s database to find a match. With limited regulation and easy access to facial recognition tools, consumers will face the technology’s adverse consequences, such as misidentifications and loss of privacy rights.
Misidentifications and Privacy Risks
The accuracy of facial recognition technology to correctly identify a person depends on their age, gender, or race. Research from the National Institute of Standards and Technology revealed that facial recognition systems are less accurate when identifying people of color. The algorithms are more likely to misidentify African Americans, Native Americans, and Asians compared to Caucasians. Researchers also have found these algorithms to be less accurate when identifying women, transgender individuals, and children.
Misidentification can carry damaging consequences to an individual’s liberty and dignity. Robert Williams, the black man who was wrongfully arrested based on a facial recognition match, was a victim of misidentification. These same misidentifications are likely occurring at private establishments, where security guards use the technology to scan for known criminals and remove purported “matches” from their stores.
In addition to misidentifications, facial recognition technology intrudes on an individual’s right to privacy. The technology allows companies to identify customers without their consent, collecting information about customers’ demographics and preferences. Furthermore, companies that store facial templates are subject to data breaches, where thousands of their customers’ faceprints could become compromised. Unlike online passwords, a stolen faceprint is indefinitely compromised — a customer cannot change their faceprint. Last year, thousands of scammers in the U.S. tried using stolen faceprints to fraudulently obtain government-assistance benefits. As facial recognition technology grows, bad actors will attempt to use stolen faceprints for financial gain.
Federal, State, and Local Regulations
There are no federal regulations curbing the private use of facial recognition technology, but Congress’s interest in regulating the technology is increasing. Legislators introduced three separate bills to regulate facial recognition technology in the past few years, yet none passed the introduction stage.
One of the bills introduced in the Senate, the Commercial Facial Recognition Privacy Act, would have required all private entities to obtain explicit consent from customers before collecting faceprint data. The bill’s consent requirement is based on the Illinois Biometric Information Privacy Act (BIPA), one of only three state-enacted biometric privacy laws.
BIPA requires businesses that use facial recognition technology to obtain consent from consumers before collecting their faceprint data. It also requires these businesses to provide information about how they protect and store the biometric data. BIPA permits individuals to sue companies who violate any requirement in the statute and offers significant statutory damages for violations. In February 2021, Facebook paid out $650 million to settle a BIPA class-action lawsuit. To date, more than 800 BIPA class action lawsuits have been filed against Illinois businesses.
Despite BIPA’s teeth, businesses can freely use facial recognition in almost every other state. Texas and Washington are the only other states with biometric privacy laws that regulate commercial use of the technology. Yet, neither state permits citizens to sue companies for violating the statute, meaning there is much less pressure to comply. Enforcement lies with each state’s attorney general, who can impose civil penalties on violators.
Fortunately, bans on private use are growing at the city level. In September 2020, Portland, Oregon, became the first municipality to ban private entities from using facial recognition in public places, such as shopping malls. Since then, two other cities have followed suit. New York City now requires commercial establishments to post notices when using facial recognition technology, and Baltimore banned all private sector use of the technology, even subjecting violators to criminal penalties. The recent wave of restrictions at the city level indicates that regulations may first arise where the commercial sector flourishes — in major cities.
Calls for Regulation and Future Outlook
Despite the pervasive commercial use of facial recognition technology, sixty percent of Americans are unaware that retail stores use the technology. This lack of awareness stems in part from the lack of regulation. Aside from a few states and a handful of cities, most businesses are unregulated: free to implement facial recognition tools without warning their customers. So far, calls for regulation have primarily come from companies that have developed facial recognition technology themselves: Microsoft, IBM, and Amazon. While these calls may be aimed at influencing friendly regulations, Microsoft’s President Brad Smith has called for legislation requiring stores to provide notice and obtain consent, similar to BIPA’s consent requirement. As BIPA has revealed, requiring businesses to obtain consent from consumers would at least hold businesses accountable for their facial recognition uses.
Nevertheless, some businesses may not wait for enacted legislation before shelving their facial recognition products. In November 2021, Meta announced that Facebook will no longer use facial recognition software and plans to delete the faceprint data of one billion Facebook users. Meta’s decision was motivated by concerns about the technology’s “place in our society.” This drastic move may prompt other industry leaders to start influencing the future treatment of facial recognition technology, with the hopes of clearing up the current regulatory uncertainty that threatens innovation and investment. While some may question Meta’s sincerity or true motives, its decision could foreshadow an era of much-needed regulatory action.
Michael Willian is a third-year law student at Northwestern Pritzker School of Law.
The COVID-19 pandemic has brought the issues of personal privacy and biometric data to the forefront of the American legal landscape. In an increasingly digital world, privacy laws are more important than ever. This reality is especially true in the context of remote workplaces, where employers have facilitated a digital migration through a variety of means. The platforms employers use have the propensity to violate personal privacy through the capture and storage of sensitive biometric information. In response, states across the nation are exploring solutions to the potential privacy issues inherent in the collection of biometric data. One of the first states to do so was Illinois, enacting a standalone biometric privacy statute in 2008: the Illinois Biometric Information Privacy Act (“BIPA”). Today, BIPA is more relevant than ever and should act as a statutory blueprint for states looking to protect personal privacy and biometric data amid a global pandemic. Ultimately, though, BIPA must be supplemented by federal legislation drafted in its likeness to effectively protect individuals’ privacy on a national level.
II. Background of the Biometric Information Privacy Act
To fully understand BIPA and all its implications, one must appreciate the context in which it was enacted. The Illinois legislature passed BIPA in October 2008. The Act was passed in the immediate wake of the bankruptcy of Pay By Touch, a company which operated the largest fingerprint scan system in Illinois. Pay By Touch’s pilot program was used in grocery stores and gas stations, and its bankruptcy left users unsure of what would become of their biometric data – i.e., their fingerprints. “Biometric data – a person’s unique biological traits embodied in not only fingerprints but also voice prints, retinal scans, and facial geometry – is the most sensitive data belonging to an individual.”
Understandably, private citizens in Illinois and across the country want to safeguard their sensitive biometric data. With potential issues such as identity theft and data manipulation more prevalent than ever, people have plenty of incentives to ensure their unique identifiers stay private. In response to those concerns, legislatures have passed statutes to address biometric data and personal privacy. BIPA represents one of the most stringent of such acts in the country, setting strict requirements for the management of biometric identifiers in Illinois.
BIPA defines “biometric identifier” as (1) a retina or iris scan, (2) fingerprint, (3) voiceprint, or (4) a scan of hand or face geometry. Further, “biometric information” refers to any information, regardless of how it is captured, converted, stored, or shared, based on an individual’s biometric identifier used to identify an individual. The requirements outlined in Section 15 of the Act – which addresses the retention, collection, disclosure, and destruction of biometric data – implicate a slew of potential legal issues. The section stipulates that a private entity can collect a person’s biometric data only if it first informs the subject that a biometric identifier is being collected, informs them of the specific purpose and length of term it is being collected for, and receives a written release from the subject.
Further, the Act outlines the following concerning retention of such data:
(a) A private entity in possession of biometric identifiers or biometric information must develop a written policy, made available to the public, establishing a retention schedule and guidelines for permanently destroying biometric identifiers and biometric information when the initial purpose for collecting or obtaining such identifiers or information has been satisfied or within 3 years of the individual’s last interaction with the private entity, whichever comes first.
Thus, BIPA represents a statute narrowly aimed at maintaining the security of biometric data. While BIPA was relatively unknown in Illinois between 2008-2015, a wave of litigation has since swept through the state as employees began suing their employers. Such litigation was seemingly inevitable, as BIPA provides sweeping protection for individuals against biometric data abuse. The complexities of such issues have become clearer and potential legislative solutions to them even more important in the midst of a global pandemic.
III. Personal Privacy & Biometric Data in the COVID-19 Pandemic
The issues surrounding data privacy have become increasingly relevant in the ongoing COVID-19 pandemic, which effectively digitized the workplace as we know it. As the pandemic raged in the early months of 2020, workplaces around the globe were suddenly forced to digitally migrate to an online work environment. An inevitable result of newfound online worksites has been an increase in the utilization of biometric data. In an effort to facilitate remote work, companies have had to make work-related information accessible online. Employment attorney Eliana Theodorou outlines the ensuing issues for companies undertaking such efforts in an article entitled “COVID-19 and the Illinois Biometric Information Privacy Act.” For example, Theodorou writes, “Some of these platforms involve video recording or access by fingerprint, face scan, or retina or iris scan, which may result in the capture and storage of sensitive biometric information.” Thus, the collection and retention of biometric data has necessarily increased during the pandemic as companies made information accessible remotely when they shifted online.
Potential privacy issues accompanying the storage of biometric data will become even more difficult to navigate as companies return to physical workplaces with the pandemic still raging. Per Theodorou, “As workplaces reopen, there will likely be an uptick in the collection of biometric data as employers turn to symptom screening technologies that collect biometric data.” This could include, for instance, contactless thermometers and facial recognition scanning technologies used for contactless security access. The issue will thus continue to be the collection and storage of sensitive biometric data as employers return to work with the newfound priorities of social distancing and limited contact. The reality is that biometric data is still a relatively new concept, with its own specific set of issues and potential solutions. Personal privacy becomes ever harder to maintain in a digital world, with the use of biometric information often a necessity both for remote access and in-person return to work. Ultimately, the risks associated with the collection of biometric data remain largely undefined or misunderstood by employers. That lack of understanding has been exacerbated by a global pandemic necessitating a digital work migration.
IV. Possible Solutions to the Privacy Issues Raised by COVID-19 and Remote Workplaces
Illinois has provided a stellar blueprint for biometric data privacy in BIPA. However, other states have been slow to follow. As of November 2021, only a handful of other states have enacted legislation aimed at the protection of biometric data. Texas and Washington, like Illinois, have passed broad biometric privacy laws. Other states like Arizona and New York have adopted more tailored biometric privacy approaches, while others have enacted laws specifically aimed at facial recognition technology. There are also proposed bills awaiting legislative approval in many more states. Ultimately, implementing widespread legislation on a state-by-state basis will be a slow and drawn-out process, rendering countless Americans’ biometric data vulnerable. Rather than continue this state-based campaign to solidify biometric data privacy, citizens must turn to the federal government for a more comprehensive and consistent solution.
The primary roadblock to legitimate privacy in the biometric information space is the lack of a centralized federal initiative to address it. “Despite its value and sensitivity, the federal government currently has no comprehensive laws in place to protect the biometric data of U.S. citizens.” The privacy issues inherent in the popularization of biometric data in pandemic-era remote workplaces demand federal attention. A wide-ranging statute applicable in all states is the first step in properly addressing these issues. Congress should look to BIPA as a blueprint, for it remains the only state law passed to address biometric data privacy which includes a personal call to action. It is unique in that regard, especially considering it was passed in 2008, and consequently provides the most aggressive statutory response thus far to potential privacy concerns. Whether a federal act is feasible remains unclear. In August 2020, Senators Jeff Merkley and Bernie Sanders introduced the National Biometric Information Privacy Act of 2020, which suggests the imposition of nationwide requirements similar to those outlined in BIPA. The viability of such an Act is doubtful, as previous privacy legislation has been difficult to pass. However, it is a sign of movement in the right direction – toward increased protection of personal privacy in a pandemic which has made biometric data more relevant and potentially at-risk for improper management and manipulation.
What’s The Issue?
It seems logical that the creator of a work would own the rights to that work. This general idea imports easily into some industries but creates problems in the music industry. The reality is that the main rights holder of a creative musical work is often not the musicians but collective management organizations (CMOs). After pouring countless hours, days, months, and years into perfecting a single music work or album, the musician often ends up not having total control over his or her work. The music industry is driven by smoke and mirrors where the distributors and records labels often do not disclose who owns the rights to which musical work. George Howard, co-founder of a digital music distributor called TuneCore and professor at Berklee College of Music, describes the music industry as one that lacks transparency. He explains that the music industry is built on asymmetry where the “under-educated, underrepresented, or under-experienced” musicians are deprived of their rights because they are often kept in the dark about their rights as creators.
As a result of the industry having only a few power players, profit is meek for musicians. Back in the day, musicians and their labels were able to get a somewhat steady source of income through physical album sales. However, with the prominence of online streaming, their main source of income has changed. The source of this issue seems to stem from how creators’ rights are tracked and managed.
A piece of music has two copyrights, one for the composition and one for the sound recording, and it is often difficult to keep track of both because the ownership of these rights are split amongst several songwriters and performers. The music industry does not have a way to keep track of these copyrights, and this is an issue especially when there are several individuals involved in creating a single musical work. With the development of digital ledger technology and its influence in various industries, it could be time that this development makes its way into the music industry and provide a solution to compensate musicians for their lost profits.
Blockchains: the solution?
Lately, blockchain technology has been at the forefront of conversations. For example, the variation in Bitcoin’s pricing has been a hot topic. Blockchain technology seems like a mouthful, but it is simply a “database maintained by a distributed network of computers.” Blockchains allow information to be recorded, distributed across decentralized ledgers, and stored in a network that is secure against outside tampering.
With the advancement of online music streaming, and entertainment going digital, blockchain seems like the perfect tool to be used in this industry. Since the issue of weakened profits seems to stem from disorganized tracking and monitoring of creators, blockchain technology could be utilized to improve the systems used for licensing and royalty payments. A blockchain ledger would allow a third party to track the process of a creative work and be an accessible way of managing intellectual property rights of these creative works. By tracking and monitoring their works, musicians could potentially gain back their profits, or at least recuperate some of their losses.
In 1998, there were several companies that came together to create a centralized database to organize copyrights for copyright owners so that royalty payments would be made in an orderly fashion. This effort was called the Secure Digital Music Initiative (SDMIT) and its purpose was to “create an open framework for sharing encrypting music by not only respecting copyrights, but also allowing the use of them in unprotected formats.” Unfortunately, this initiative failed to provide a universal standard for encrypting music.
The latest venture was the Global Repertoire Database (GRD) which aimed to “create a singular, compiled, and authoritative ledger of ownership and control of musical works around the world.” This was a very ambitious move and required two rounds of financing which consisted of the initial startup funds and the funds to cover the budgeting for the year. Although there were significant contributions to this mission, some collection societies, such as the American Society of Composers, Authors and Publishers (ASCAP), started to pull out of the fund due to GRD’s failure and debt that it accumulated.
Even though this venture failed to provide a centralized database that could resolve royalty and licensing issues, there is now a growing consensus in the music industry for a global, digital database that properly, and efficiently, manages copyright ownership information. The next venture could utilize blockchain technology because of the advantages for storage, tracking, and security that it offers. In addition, not only could blockchain provide a centralized database so that music content information is accurately organized, it could provide a way to close the gap between creators and consumers and dispose of intermediaries. This would allow for a more seamless experience and transparency for the consumer and allow the creators to have more control over their works. Further, this ledger would allow these creators to upload all of their musical work elements, such as the composition, lyrics, cover art, video performances and licensing information, to a single, uniform database. This information would be available globally in an easily verified peer-to-peer system.
On the other hand, since blockchains are tamper-resistant, the data could not be “changed or deleted without affecting the entire system” even with a central authority. This means that if someone decides to delete a file from the system, such a deletion will disrupt the whole chain. There could also be issues with implementing such a large network of systems, or computers, due to the sheer amount of music that is globally available. Additionally, to identify each registered work, the right holders have to upload digital copies of their works which would require an extensive amount of storage and computational power to save entire songs.
Nevertheless, blockchain could provide the base for implementing a centralized database using a network of systems, or computers, in order to organize royalty payments for these musicians. Proponents contend that, with the help of Congress, this could be made possible. Congress recently introduced Bill HR 3350, Transparency in Music Licensing and Ownership Act. This act, if passed, will require musicians to register their songs in a federal database or else forfeit the ability to enforce their copyright, which would prevent them from collecting their royalties for those works. Although this might seem like an ultimatum, this proposed Act would provide the best way of changing how the music industry stores its information to provide an efficient way to distribute royalties and licensing payments to these artists.
People are split in their opinions about blockchain technology in the music industry. There are some who see this as a more accurate way of managing “consumer content ownership in the digital domain.” Others do not see this as a viable plan due to its lack of scalability to compensate for the vast amount of musical works. Even with the development of the music industry into the digital field, the goal is always to protect the artists’ works. Plan [B]lockchain ledger may not completely solve the royalty problem in the music industry, but it can provide a starting point in creating a more robust metadata database and, in combination with legislative change, the musical works could remain in the hands of their respectable owners.
Jenny Kim is a second-year law student at Northwestern Pritzker School of Law.
Throughout the past two years, AI-powered stem-splitting services have emerged online, allowing users to upload any audio file and access extracted, downloadable audio stems. A “stem” is an audio file that contains a mixture of a song’s similarly situated musical components. For example, if one records a mix of twenty harmonized vocal tracks, that recording constitutes a vocal stem. Stems’ primary purpose is to ease integrating or transferring their contents into either a larger project or a different work. Traditionally, only producers or engineers created and accessed stems. Even when stem sharing became commonplace, it was only for other industry insiders or those with licenses. But AI stem-splitting technology has transformed stem access. For the first time, anyone with internet access can obtain a stem through stem extraction software, which will likely push music production’s creative envelope into new realms. One inevitable consequence, however, is the question of copyright protection over stems extracted from copyrighted works.
Section 102 of Title 17 extends copyright protection not only over the stems’ original copyrighted audio source but also over that source’s components, such as the stems. Any modification of that work, such as extracting a stem and using it elsewhere, likely qualifies as a “derivative work” under Section 103. Importantly, Section 106 allows only copyright owners to authorize making derivative works. In light of this regime, what flexibility, if any, do artists have in using AI-extracted, copyrighted stems? Three considerations shed light on an answer: fair use, de minimis use, and the use of content recognition software coupled with licensing.
Codified under Section 107, the fair use defense provides a possible safeguard for would-be infringers. To establish this affirmative defense, a court would need to find the statute’s four factors sufficiently weigh toward “fair use.” Unfortunately, courts reach incongruous interpretations of what permissible fair use includes, rendering the defense a muddled construct for many artists. Squaring the four factors with stem usage, however, may offer guidance.
In the seminal music fair use case, Campbell v. Acuff-Rose Music, Inc., the Supreme Court emphasized that this first factor will likely weigh toward fair use when the work is “transformative.” The Court went so far as to note “the more transformative the new work, the less will be the significance of other factors . . . .” Thus, an artist fearing infringement should strive toward transforming the copyrighted material into something distinct, used for noncommercial purposes. In the absence of a bright-line rule from the Court, however, artists will still need to use reasonable judgment about what types of stem usage is “distinct.” For example, suppose Artist A extracts a strings stem from a copyrighted work and only uses two seconds of it within another work that comprises numerous other instruments and melodies. Meanwhile, Artist B extracts the same strings stem; however, Artist B uses the entire strings melody within their work and only adds percussion and minor counter-melodies. Artist A would likely be in a more favorable legal position than Artist B given A’s efforts to materially transform the copyrighted audio.
The commercial nature of copyrighted stem usage is also unclear. An artist may choose to work with stems for solely experimental purposes. For example, an artist who shares their work via Soundcloud or YouTube does not expect another person to use those platforms to directly purchase the work. With stems’ increasing public accessibility, many will simply want to experiment with a music tool that, until recently, has largely remained a foreign concept. If this issue reaches a court, the court would need to conduct an analysis set against the landscape of such heightened accessibility. An increase in this noncommercial, creative use may offer hope to artists in the future, but it is too soon to tell.
The second factor favors artists borrowing from copyrighted works with lower creative value. Unfortunately, music is typically found to be one of the most creative forms of copyrighted work. For example, a district court in UMG Recordings, Inc. v. MP3.Com, Inc. analyzing this second factor noted that the disputed material—copyrighted musical works—was “close to the core of intended copyright protection” and “far removed from the more factual or descriptive work more amenable to ‘fair use.’”
Though courts’ future inquiries into stem usage may differ from previous analyses of sample usage, the inquiry will likely change very little for this factor. Although a stem could potentially represent only a minute portion of the song, this factor’s inquiry focuses on the source of the stem, rather than the stem itself. Consequently, rarely will this factor work to a potentially infringing artist’s benefit, even if their stem usage is quite minor.
The third factor, however, may offer hope for such minor stem usage. Courts will undoubtedly reach differing interpretations about how minimal the copyrighted portion’s “amount” and “substantiality” must be for this factor to weigh toward fair use. A court will need to weigh numerous variables and how they intersect. For example, is an artist using a thirty-second loop of a vocal stem or a five-second loop? Does that vocal stem include the chorus of a song? What about any distinct lyrics? Just minor humming? These considerations are not entirely novel. Artists purporting to use copyrighted samples have long been able to argue—with little success—that their samples’ amount and substance pass muster under this factor. Yet, stems are not samples; in fact, they typically represent a considerably smaller portion of a work. Given just how recent and novel their public accessibility is, it remains unclear whether a court would treat stem use any differently under this factor than it has treated instances of sample use. Carefully using a minor portion of a vestigial stem to avoid a work’s core substance, therefore, could potentially facilitate a favorable outcome.
The fourth and final factor of fair use is “[u]ndoubtedly the single most important element.” This factor examines both the infringement’s effect on the potential market and “whether unrestricted and widespread conduct of the sort engaged in by the defendant . . . would result in a substantially adverse impact on the potential market for the original.”
In the sampling realm, this factor has tipped the scales before. For example, in Estate of Smith v. Cash Money Records, Inc., a district court found fair use when the defendants inserted a thirty-five-second “spoken-word criticism of non-jazz music” into a hip-hop track. In its analysis of this fourth factor, the court emphasized that “there [was] no evidence” that pointed to overlapping markets between the spoken jazz track and the hip-hop track. The court, noting this factor’s high probative value, then weighed this factor in the defendants’ favor.
In the stem realm, the novel nature of widespread public use means courts will need to determine both whether this factor should remain highly probative and how much deference to give stem users in analyzing market overlap. After all, an artist who incorporates a stem into a work intended for a twenty-five-person YouTube following likely affects the original work’s market differently than an artist who disseminates that work to millions of followers. This factor’s outcome will also rely on the stem’s source. Similar to sampling, if an artist uses a stem in a drastically different arena than the one for which the stem was created, this factor will weigh more toward fair use.
For example, suppose Artist A locates an insurance advertisement jingle. Artist A then extracts a stem from that advertisement audio and uses the stem in a new hip-hop track. The advertisement’s potential market is likely different from the hip-hop track’s potential market. Artist A’s work would likely have little impact, if any, on the advertisement’s market. Artist B, meanwhile, creates a hip-hop track but uses a stem from another hip-hop song produced twenty-five years ago. Though Artist B may believe the stem from the older hip-hop track no longer caters to the same hip-hop market to which Artist B is targeting, a court may be more inclined to find a material impact on the older track’s market: it would provide another way in which music listeners, particularly hip-hop listeners, could hear that older track. Nonetheless, it would remain up for a court to decide.
De Minimis Use
Artists might also be able to use extracted, copyrighted stems if such use is de minimis. The Ninth Circuit in Newton v. Diamond held de minimis use—“when the average audience would not recognize the appropriation”—is permissible. Yet, following the Newton decision, the Sixth Circuit in Bridgeport Music, Inc. v. Dimension Films foreclosed the possibility of de minimis copying. Similar to fair use analysis, it is difficult for an artist to determine whether the use of a stem in their work is de minimis under this standard.
Thus, an artist who loops only a small, relatively generic-sounding portion of a stem may find additional legal protection. But they might not. If they are in a jurisdiction that does not recognize de minimis use, or they use a stem in a way that extends beyond what a court considers de minimis in a de minimis jurisdiction, this avenue will be unavailable.
Content Recognition Software
Beyond legal defenses, a newer scheme of licensing deals coupled with content recognition software may offer protection for stem usage. For example, if a user on the content platform TikTok uploads content with copyrighted audio, TikTok’s content recognition software recognizes the audio, then pays the appropriate royalties to the audio’s copyright holder through preexisting licensing deals. Yet, because schemes like TikTok’s and stem usage are both relatively new, it remains unclear whether artists could find the same protection through individual stem use. Indeed, if an artist uses only a small part of a single stem, it may very well be impossible to detect the stem’s source; however, emerging technology may change this soon. Further, these licensing deals restrict such artists to sharing work only on particular platforms—notably, neither Soundcloud nor YouTube. Ultimately, this protection carries promising potential for expanded, authorized stem use. But perhaps not quite yet.
Matthew Danaher is a second-year law student at Northwestern Pritzker School of Law.