Michelle Phan is a YouTube celebrity and beauty guru and has garnered over 7 million subscribers and one billion lifetime views. However, not everyone is a fan of Ms. Phan. On July 16, 2014, Ultra International Music Publishing, LLC and Ultra Records, LLC (collectively, “Ultra”) sued Ms. Phan for copyright infringement for allegedly using their songs without a license. A licensing agreement is a legal contract between two parties, known as the licensor and the licensee. Here, Ultra (the licensor) would have granted Ms. Phan (the licensee) the right to Ultra’s copyrighted music. However, Ultra claims that Ms. Phan had illegally used forty-five (45) different songs, including sole works of Kaskade or a collaboration between Kaskade and other artists, in her YouTube videos and is seeking up to $150,000.00 in damages per infringement.
Although Kaskade declared his support for Ms. Phan by tweeting, “Summary: I’m not suing @MichellePhan + @ultrarecords isn’t my lapdog. I can’t do much about the lawsuit except voice support for her.” Ultra issued an official statement that reads, “When a music artist or songwriter signs to Ultra, it is our responsibility to protect what they have created. Enforcing copyrights is fundamental to the survival of artists, writers and producers, and to Ultra’s ability to continue to invest in and support them, so that they can continue to bring great music to music fans around the world. Whatever Ultra collects enforcing these important rights is shared with its artists according to their agreements.”
Armed with strong ammunition, Ms. Phan went on the defense and filed her counterclaim against Ultra on September 18, 2014 for Declaratory Relief, Violation of Section 512(f) of Digital Millennium Copyright Act, and Intentional Interference with Contract. In particular, Ms. Phan claims that in 2009 she contacted Ultra’s Senior New Media Manager to negotiate an agreement whereby she would be granted permission to use any of Ultra’s music in exchange for her including credit to the artist and an iTunes link in her YouTube videos. For the next four years, Ms. Phan and Ultra worked cooperatively pursuant to the aforementioned agreement. Ms. Phan alleges that Ultra’s representatives even offered suggestions to particular tracks by its artists that could be used as background music in her YouTube videos. However, on March 18, 2014, Ultra demanded that Ms. Phan cease and desist from using any of Ultra’s music. Ultra also sent takedown notices to YouTube for 12 of her videos. Ms. Phan is now seeking damages for Ultra’s takedown notices, which she claims were sent in bad faith, and for knowingly materially misrepresenting her infringing use of the music. She is also seeking damages for Ultra’s bad faith actions in attempting to disrupt her contractual relationship with YouTube.
It is unclear whether the negotiated terms of the agreement between Ms. Phan and Ultra was finalized in a written license agreement. However, it does not seem to be the case given that neither of parties attached any agreement to their respective complaint or counterclaim. If this is the case, the obvious take away message is to “get it in writing.” Although some licensing agreements can get lengthy and complicated, most agreements include terms such as the grant/scope of the license, royalty rates, how royalties are calculated, length of the license, and renewal options. A finalized license agreement probably could have saved each party time and money because now each side will have the additional “joy” of arguing whether a license agreement (if any) was formed via those emails between Ms. Phan and Ultra’s Senior New Media Manager and what were the terms of that agreement.