Envato’s legal team can move forward with “you are considered to be opted in” unless you actively “opt out”, but they should be aware of USA case law that have set precedents when using that aggessive/ predatory approach:
Several court cases illustrate that “opt out” notifications alone can be insufficient for establishing legally binding contracts or settlements, especially when more robust forms of consent are required.
- Wright v. Linkus Enterprises, Inc.: In this case, the court determined that relying solely on “opt out” procedures for Fair Labor Standards Act (FLSA) claims was insufficient. The court emphasized that under the FLSA, employees must “opt in” to be bound by a settlement, thereby requiring affirmative consent rather than passive non-action (Overtime Law Blog).
- Kakani v. Oracle Corp.: The Northern District of California found that using “opt out” notices to bind employees to FLSA settlements was inappropriate. The court held that it would be “unconscionable” to strip workers of their FLSA rights without their affirmative consent (Overtime Law Blog).
- E.D. Cal.: Settlement of Rule 23 and 216(b) Class Hybrid Action: The Eastern District of California also highlighted the insufficiency of “opt out” notices in a hybrid action involving both Rule 23 class actions and FLSA collective actions. The court mandated that “opt in” notices were necessary for FLSA claims to ensure proper consent (The Holland Law Firm, P.C.).
These cases illustrate that courts often require more than just “opt out” notices to ensure that individuals are fully aware and consent to being bound by legal agreements or settlements, especially in the context of employment and labor laws.
Is Envato doing it’s due diligence by merely sending an e-mail to all music authors stating “You will be considered OPTED IN, unless you actively OPT OUT using this link?”
Will every author actually see, read, and fully comprehend that email notification? What happens if the email ends up in “Junk”, “SPAM” or was never received due to an email box being “full”?
What if the Email was accidntally deleted without being read by non active music authors with active accounts who are simply disengaged with the music licesning business, but still have an account to obtain passive monthly income?
I did some research on the concept of “Opt Out” notifications and Envato’s legal team should be aware of this legal concept / opinion below. For the record this is not my writing. I am copying and pasting this from some research I did on line and it states :
"Whether an “opt-out” constitutes a legally binding contract depends on several factors, including the jurisdiction, the specific terms of the agreement, and the manner in which the opt-out notice is communicated and received.
1. Clear and Conspicuous Notice: The email notification must clearly and conspicuously inform the individual of the opt-out terms. This means the information should be easy to find and understand.
2. Reasonable Opportunity to Opt-Out: The individual must be given a reasonable opportunity to opt out. This involves allowing adequate time and providing straightforward instructions on how to opt out.
3. Acceptance and Assent: For a contract to be legally binding, there generally needs to be mutual acceptance and assent to the terms. Simply sending an email without ensuring the recipient actually received and read it may not meet this standard.
4. Jurisdiction-Specific Regulations: Different jurisdictions have varying standards for what constitutes a legally binding contract, especially in the context of electronic communications. For example, certain consumer protection laws might require explicit consent rather than implied consent through an opt-out mechanism.
5. Previous Relationship and Established Practices: The nature of the relationship between the company and the individual and any established practices regarding communication and agreements can also influence whether an opt-out mechanism is considered legally binding.
In summary, while an “opt-out” notice sent via email can potentially be part of a legally binding contract, it must be clearly communicated, provide a reasonable opportunity to act, and meet the legal standards of mutual consent and acceptance. It is advisable for companies to seek legal counsel to ensure compliance with relevant laws and regulations."
So since imposing “opting out” as the only of course action the author has to take, and let’s face it, this aggressive tactic and strategy clearly benifits one party in the transaction: ENvato. The Author and owner of the content does not beneifit from this policy as they are forcibly “opted in” unless they “actively opt out”. I really think it’s in Envato’s best legal interests to send a new email asking authors to “Opt into” 3rd party revenue streams that engage in AI Training of human authored music works/ sound recordings.
Generative AI Music is brand new, it’s developing fast, laws regulating the technology have yet to be developed, royalty structures and norms for this new way of creating music have NOT BEEN ESTABLISHED. With the Major Record labels filing lawsuits against two major players in generative AI music: SUNO and UDIO, for copyright infringement, I really would think that it would be wise of Envato to obtain full written consent with author signatures, and counter signatures by Envato where there is no doubt that both parties gave their FULL CONSENT to the new agreement / terms of service, to sell/ license digital goods (owned by authors) on this platform to 3rd party AI companies which are most likely NVIDIA, META, APPLE, GOOGLE, MICROSOFT, OPEN AI, ADOBE, SUNO, UDIO (In my humble opinion). Yes, I am of the opinion that “YOU WILL BE OPTED IN” unless you actively OPT OUT, is sketchy at best, and considered NOT LEGALLY BINDING by a judge or a jury, at worst. Rememeber ENVATO Legal Team, The major labels are seeking damages of $150,000 per illegally ingested song that trainied SUNO and UDIO’s AI Models.
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