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Four Tet allowed to add new legal claims over album takedowns in Domino dispute

By | Published on Friday 17 December 2021

Four Tet

Four Tet was yesterday given permission to amend his lawsuit against Domino to include new allegations that the label is in breach of contract for removing his albums from the streaming services. Although that added complication could see the dispute transfer to the main High Court, and it’s unlikely that the musician will be able to afford to pursue the litigation in that forum.

The legal battle between Four Tet – real name Kieran Hebden – and Domino has been under way for a year now. Hebden argues that under the terms of his 2001 record deal with Domino he should be getting a 50% royalty on all or most of the monies generated by the streaming of the records he made for the label.

It’s the latest in a series of lawsuits between artists and labels over how old record deals are interpreted when it comes to new recorded music revenue streams, which is an issue because record contracts often pay artists different royalty rates depending on how the music is being exploited.

Most of the litigation on this issue to date has occurred in the US, though artists have criticised labels over the interpretation of old deals in the digital age in countries all around the world.

Hebden’s lawsuit basically says his old record deal has been incorrectly interpreted when it comes to streams. For its part, Domino counters that his claim is an incorrect reading of the 20 year old record contract.

Although Hebden’s deal was done before the digital music market had really got started, the Standard Royalty Provisions that accompanied his record contract did have a royalty rate for downloads – which was 18% – and that rate, the label argues, should also apply to streams.

This whole dispute became much more newsworthy last month when Domino removed the Four Tet albums covered by the 2001 record deal from the streaming services, a mere two weeks before the digital royalties earned by artists were set to be discussed in Parliament as the controversial copyright law reforms proposed by Labour MP Kevin Brennan got their second reading in the House Of Commons.

Hebden took to social media to criticise the removal of his old records from the streaming services, writing: “I’m so upset to see that Domino Records have removed the three albums of mine they own from digital and streaming services. This is heartbreaking to me. People are reaching out asking why they can’t stream the music and I’m sad to have to say that it’s out of my control”.

Facing a flood of criticism from music fans and other artists, Domino issued a statement saying it was “just as saddened about this current situation”, but that the label had been advised by its lawyers that “temporarily removing the Four Tet albums from digital services” was “a necessary consequence of Kieran’s litigation at this time”.

The dispute was due to properly get to court next month. However, it transpired that Domino was seeking a summary judgement in its favour ahead of that hearing, while Hebden’s side announced that it wanted to amend its lawsuit to include additional complaints in relation to the takedown of the Four Tet albums.

Both those developments were discussed at an online hearing yesterday.

Domino’s legal rep explained that while the label did not agree with Hebden’s interpretation of the old deal, it had nevertheless offered to pay him what he would be due had the 50% rate been applied on past streams, and also to cover his legal costs. With the old recordings now removed from the streaming services, that would technically mean there is no active dispute for the court to intervene on.

Of course, that would presumably mean the removal of the three Four Tet albums would be permanent not temporary, meaning neither Domino nor Hebden could earn any future royalties from those records. However, the label would avoid a court battle that might set a precedent that could be applied to the interpretation of other old record deals, both Domino deals and across the record industry.

Hebden’s side countered at yesterday’s hearing that the removal of the Four Tet records – a “deliberate, cynical and outrageous” move, Hebden’s lawyer stated – created another dispute, which is why the musician’s team wanted the court to allow it to submit an amended complaint.

In fact, Hebden’s lawyer argued, the takedown of his client’s albums created two disputes. First, another breach of contract dispute, because – under the 2001 deal – Domino was obliged to release any recordings that were made. And secondly, a restraint of trade dispute.

The principle of restraint of trade has come up during disagreements over UK record and music publishing deals at various points over the years, the landmark case – repeatedly cited during yesterday’s hearing – being Schroeder v Macaulay from all the way back in 1974. Although restraint of trade disputes involving artists like Holly Johnson, George Michael and The Stone Roses are possibly better known.

In restraint of trade cases, the key question to be answered is whether contract terms that restrict the ability of people to trade with others are reasonable, given that people being free to conduct all and any business is generally good for society at large.

In the context of the music industry, these cases have often focused on record and publishing deals where a label or publisher automatically owns the copyright in any recordings or songs an artist creates, but isn’t under any obligation to release or publish the music. Where the label or publisher then fails to exploit the artist’s works, said artist is unable to make a living from their new recordings or songwriting.

The Four Tet v Domino dispute is slightly different to most of those other restraint of trade cases, in that the label doesn’t have any claim over his new recordings, which he can exploit however he sees fit. So, by Domino removing the albums from the streaming services, Hebden is not prevented from making a living from recordings, just those specific recordings.

Domino’s rep also pointed out that Hedben is in control of his song rights, so could record new versions of the old tracks and release them himself.

Artists re-recording old music to cut out an old label has obviously become a much bigger talking point in recent years as a result of Taylor Swift’s big bust up with her old label Big Machine, and her subsequent high profile re-records project.

That said, as Hebden’s lawyer pointed out during yesterday’s hearing, the practicalities and legalities of re-records are arguably different when it comes to the kind of electronic music that his client makes.

Either way, none of that will be relevant as this case proceeds, because – although judge Pat Treacy did give Hebden’s team permission to file an amended lawsuit – she said that she would only allow amendments in relation to the new breach of contract claim, not the restraint of trade allegations.

That new breach of contract allegation depends very much on how Domino’s contractural obligation to ‘release’ Hebden’s music is interpreted in the context of the streaming age. Which, of course, is basically the same challenge as with the original royalty rate dispute: how do you interpret old contracts in the context of a music world that neither party could have anticipated when the original deal was negotiated?

In a way, this is one of the most important questions of the whole debate around the streaming business and especially how artists get paid. The question often asked is “what is a fair way to share streaming money between artist and label?” But the honest answer to that question is always: “Well, it depends”. So, “what’s the fair way to interpret old deals when it comes to new revenue streams?” is a much more interesting question.

It’s an increasingly important question now that we are in an age where significant new recorded music revenue streams, which employ significantly different business models, come along every few years. And given that – where artists sign life of copyright deals, so that the label will control any recording rights until the copyright expires – artists and labels are basically entering into 100 year+ business partnerships.

All of which makes this specific dispute very relevant to the wider streaming debate. As does one final aspect of yesterday’s hearing.

The latest developments mean that this case will no longer get to court next month, and will likely be delayed by several months, and maybe up to a year.

Plus, the case is currently being heard in the specialist Intellectual Property Enterprise Court, which is important for Hebden because any potential liabilities to cover the other side’s legal costs are capped in this forum.

However, the Domino side argues that the latest developments mean this case is now too complex to be heard in the IP court, which is designed for simpler and speedier disputes. Therefore, they claim, the lawsuit should be transferred to one of the main divisions of the High Court.

Although judge Treacy did not rule on that proposal yesterday, she seemed to share the label’s concern that this case may no longer be appropriate for the IP court.

However, Hedben’s lawyer was clear, his client cannot afford to take the case to the main High Court, because his potential liabilities to cover the other side’s costs would significantly increase. A transfer to the High Court, therefore, would kill the case.

That, of course, would be a major setback for Hebden. Although, in the context of the wider streaming debate, that development could be just as important.

Artists, songwriters and their managers have long argued that a major problem in the music industry is that only the superstars can ever afford to fight labels and publishers on contract disputes. And that’s a key argument in favour of a contract adjustment right being enshrined into copyright law, with some sort of fast track tribunal to hear disputes.

If Hebden’s case falters because of legal technicalities and a lack of financial resources, groups campaigning for artists will argue that that’s a major failing of the system. And, they will add, if politicians actually care about music-makers, they should fix that failing system, most likely by amending copyright law.

Now, for some labels, a contract adjustment right is the least problematic of the copyright reforms proposed by Kevin Brennan MP, not least because some labels have already interpreted old record deals in a much more artist-friendly way.

Though, at the same time, at least some labels seem likely to oppose any copyright reforms in this domain. And, with this reform, they’ll likely argue that they renegotiate old record deals all the time, so a formal contract adjustment right isn’t necessary.

A decision on whether the Four Tet v Domino case should transfer to the High Court will be made once Hebden’s amended complaint, and Domino’s response to it, have been submitted early next year.

Those filings and subsequent decisions will come as the UK government continues to seek an industry-led voluntary solution to address all the various issues that have been raised in Parliament about how the streaming music business works.

Meaning, however it turns out, Four Tet v Domino is an important dispute that the industry will continue to follow closely.

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