Warning: Discussing legal issues involves a lot of repetition in order to make sure the concepts are being explained enough.
My experience with copyright law is limited to the written word, but a sad byproduct of US Copyright Law is that it's intentionally vague enough that I can provide some insight into the issue at hand. Everything comes down to a case-by-case basis, and while there are criteria for a judge to consider, in the end it comes down to the opinion of the courts and any precedent the parties can present in court. The last time US Copyright Law was overhauled was the late 1970s, and any amendments since then to include the effect of the internet have been intentionally vague to reflect lawmaker's understanding that the use of materials on digital media is constantly changing.
I would split the blame 60-40 in this case, with Ocasek's publisher Universal Music Publishing Group (UMPG) holding the majority of the blame here. UMPG's system should have kicked back that Ocasek reserves the right to personally approve or deny any requests to use his music. The fact that Ocasek has veto power from his publisher is the result of his signing with UMPG in 2007, decades after the Car's hits and long enough to cement his place in popular culture and give him the leverage to request this kind of power. Generally, the publishing company holds nearly all the power, since publishing deals are worked out early in an artist's career when an advance from the publisher can mean the difference between starving or not. Considering the Car's songs ubiquitous placement in TV shows, movies, and regular rotation on classic rock radio, UMPG was confident that they would make enough money from licensing to justify giving Ocasek personal control over where his music would be used.
As a similar example, in 2011 Louis CK wanted to use the Who's classic "Who Are You" in an episode of his show Louie. According to Pete Townsend's publishing deal, regardless of whether Townsend or the publisher was contact for approval to use his music, the other side would automatically agree to however much was being charged. Louis CK was told to ask Townsend personally, because he was known to charge less for the use of his music than what the publisher would charge if they were approached first. After sending Townsend copies of previous episodes, CK was granted the use for a much lower sum than he would have been charged had he gone through the publisher.
The episode, "Country Drive", aired in 2011, around the time Who primary songwriter Pete Townsend was in the midst of selling his publishing rights to Spirit Music Group for up to $100 million, but it is realistic that his previous publisher would have granted him this same power. However, unlike Ocasek, Townsend's deal with Spirit does not grant him personal veto power.
The 40% blame on Matador is tied to the fact that Car Seat Headrest's use of "Just What I Needed" skirts the line between homage and cover, with no clear dividing line. Several of the very memorable parts of the Cars song are used in his composition “Just What I Needed / Not Just What I Needed”, woven in with original elements. A very similar example is "John Allyn Smith Sails" by Okkervil River, which interpolates the old folk song "Sloop John B." to describe the suicide of poet John Berryman. The big difference here is that "Sloop John B.," as a traditional folk song with no one author, does not have a copyright.
Consequence of Sound has a very good article about "John Allyn Smith Sails" that you should check out.
Fair Use, which you probably see slapped on the description of numerous YouTube videos in an attempt to skirt takedown notices, is not a state of being in copyright law, but a defense. If you are sent a letter from a copyright owner saying you violated the terms of their copyright, you can say it was Fair Use, but not before. Fair Use came about because of the number of cases involving copyright violations due to the ease of copying and distributing materials on the internet. Did I mention the US Copyright Law hasn't had an overhaul since the late 1970s? As with most aspects of US law, it doesn't matter what you do until you get caught.
In the end it doesn't matter whether it's Fair Use or not, because Matador has acquiesced to the demands of UMPG and are removing the offending song without getting the courts involved. This is how nearly all copyright disputes are resolved: the owner of the work contacts whoever they think is using it in an illegal manner, and it gets taken down. This is due to several high-profile precedents in the 1990s involving companies photocopying peer-reviewed articles for employee use & email forwarding stock tip newsletters which resulted in six-figure settlements with copyright holders.
Let's just say Matador dug in their heels and took this to court. The four criteria to determine whether something has been use in accordance to the Fair Use defense are:
- the purpose and character of your use.
- Courts have generally cited this first criteria as one of the most important (though from a legal standpoint, all four criteria must be weighed equally). Did Car Seat Headrest transformed the material in any meaningful way, adding new insights and aesthetics to the original work? I would say that while the new composition is somewhat trans formative, it is not trans formative enough to qualify as fair use; rather, it hews closer to a cover song than an original song. The new song starts out sounding like a cover song, pulling a bait-and-switch on the audience's expectation of what they are about to hear, thus employing a copyrighted work that, temporally, covers the song before transforming it.
- the nature of the copyrighted work.
- "Just What I Needed" is a published composition that has enjoyed wide popularity from its initial release in 1978 to the present day.
- the amount and substantiality of the portion taken
- Car Seat Headrest uses the palm-muted 8th note E chord from the intro of "Just What I Needed," setting the stage for the listener to expect a straightforward cover, when instead the song goes into an original direction. Later, the lyrics are very similar, but slightly different, from the first verse of the Cars song.
- the effect of the use upon the potential market
- Car Seat Headrest is a band who, despite many self-released albums and critical adulation, is relatively unknown to the US listening audience. Their new label, Matador, is one of the larger "indie" labels, though its distribution has, in the past, been bankrolled by a major label, i.e. a company whose stock is traded on the US stock market. The cultural impact of The Cars dwarfs even hyperbolic estimates of Car Seat Headrest's popularity, and this new composition is unlikely to cause UMPG to lose any money.
In terms of a utopian ideal of copyright law, I would say Car Seat Headrest could not claim Fair Use. The new composition is too close to the most prominent parts of "Just What I Needed", and for the purpose of conforming to the law, it should be considered a cover song, despite Will Toldeo's additions to the song. There is no legal number associated with the percentage of another composition can be used in a new one before Fair Use is no longer a valid argument. When a late night talk show utilizes a popular song or a clip of another song, and the host says they can only use 30 seconds of it, that is not due to a law on the books, but its the limit that most entertainment lawyers agree is the most you can show and still successfully argue Fair Use.
Matador could claim that they acted in good faith in requesting a license to use the song on the Car Seat Headrest album, and the blame for Ocasek not having the opportunity to veto the licencing before the records are pressed should fall on UMPG.
Matador could claim that they acted in good faith in requesting a license to use the song on the Car Seat Headrest album, and the blame for Ocasek not having the opportunity to veto the licencing before the records are pressed should fall on UMPG.
BUT WAIT!
Matador should have waited until it had the full approval from the publisher before pressing the records. The thing is, pressing records and setting up promotion for a new album takes time, but getting approval for a music license takes even longer. This is a matter of UMPG saying "okay we will approve this eventually" and Matador taking that as a good sign that they could go forward with manufacturing with the understanding that they would get official notice before the album's release date. Matador had started the ball rolling, and had enough faith in UMPG to fill their paperwork requirements to start manufacturing before official approval was given. Matador probably also has enough clout at their pressing plant that the plant will manufacture their records before official approval.
This example toes the line between homage, cover song, and transformative work, thus making it difficult to come to a verdict beyond a reasonable doubt. Matador were smart to destroy their stock, despite being unable to write it down as an expense, because UMPG can afford much better lawyers than Matador ever could. Eventually that's what it comes down to: how good of a lawyer can you afford?
This example toes the line between homage, cover song, and transformative work, thus making it difficult to come to a verdict beyond a reasonable doubt. Matador were smart to destroy their stock, despite being unable to write it down as an expense, because UMPG can afford much better lawyers than Matador ever could. Eventually that's what it comes down to: how good of a lawyer can you afford?