Question on music copyrights and sampling:
OK, say I want to put out a promotional mixtape using samples. I do not have the money/resources to clear many/any samples. However, I want to use samples as I already have the songs made and it greatly enhances the quality of the tape and will lead to greater publicity. If the tape gets big and garners publicity, I don't want to be sued. I used some big name samples so, even though the chance of being sued is probably low, I don't want to risk it.
Could I start an LLC and release all the music under it? That way if I was sued, I would have no personal liabilities. And since it's a promotional tape, I wouldn't have any sales to lose.
And aside from moral implications, could this strategy have any negative consequences in the future? I live in Virginia if it matters. With samples from US artists and international artists.
1 Answer from Attorneys
To make a prima facie case for copyright infringement (this is not a "moral" issue; copyright infringement is against the law. See 17 USC 501-513), all the copyright holder would have to show is (1) a valid copyright exists (the music industry has no trouble with this one) and (2) the defendant has made a substantially similar copy of the copyrighted materials (again, not a problem for the music industry). Money does not enter into this equation (that is, it doesn't matter how much or whether at all you make money from the copies). Copyright infringement also has a criminal component that can carry significant prison time (see 18 USC 2319).
I've never had much trouble in piercing the corporate veil provided by a small business to get at the personal assets of the owner; business owners who form the entity to shield themselves from liability often leave gaping holes in their corporate veils. An LLC or corporation would not protect the owner from criminal liability at all.
All sections of the US Code referred to can be found at http://www.gpo.gov/fdsys/browse/collectionUScode.action?selectedYearFrom=2009&page;.go=Go
Note that defending a copyright infringement suit in civil court can cost $hundreds of thousands; defending a criminal charge based on copyright infringement can cost even more.
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