Music Business Handbook and Career Guide

Part 2: Songwriting, Publishing, Copyright, and Licensing

Music CopyrightChapter 6

Start Thinking. . . 1. A composer is commissioned to write a

piece of music for a film. Who owns the copyright—the composer or the film producers?

2. A church choir performs a nondramatic musical work during a Sunday service. Are they infringing copyright?

3. A CD store plays the latest album over the store’s sound system. Are they infringing copyright?

Chapter GoalsAcquire a clear understanding of copyright

terminology.Learn which authors’ and composers’ rights are

protected under the copyright statute.Gain an understanding of what is meant by “fair

use” of copyrights.Learn the copyrighting process and what is

required in respect to copyright “formalities.”Understand the “work made for hire” doctrine

and how it works in the marketplace.Discover how copyrights can be transferred,

assigned, recaptured, and terminated.

BackgroundAuthor of work may reap fruits for limited

periodFirst U.S. copyright law passed in 1790Current copyright revision enacted in 1976International copyright not automatic

Universal Copyright Convention 1955Berne Convention 1989

Goal of Congress: seek balance of interests between copyright owners and users

Ultimate authority in copyright law = U.S. Constitution

Essential Provisions1. The 1976 statute preempts nearly all other

copyright laws—both statutory and common law2. The duration of copyright has been lengthened

over the years: generally, life of author + 70 years3. Performance royalties:

sound recordings digital transmission musical works

4. Public broadcasters, cable systems, jukebox operators , schools, colleges to pay for use of copyrighted music

Essential Provisions5. Congress codified the principles as to what

constitutes the “fair use defense” to otherwise infringing activity

6. Policies and rates of music use licenses were to be periodically reexamined

7. Some formal procedures, such as copyright notice and renewal, were treated more permissively, and others were eliminated

Key Termsaudio visual worksbest editioncollective workcompilationcopiescopyright owner (proprietor)createdderivative workdevice, machine, process

Key Termsdigital phonorecord deliverydisplayestablishmentfixedfood service or drinking establishmentperformphonorecordspseudonymous workpublication

Key Termspublically

1. place open to the public 2. transmit or otherwise communicate to the

public registration sound recordings transfer of copyright ownership transmission program transmit work made for hire

CoverageKey principle of copyright protection:

not extend to ideasonly expression of ideasallows normal development of musical forms

Protection granted to original works of authorship

Protection also for lawful compilations and derivative worksbut not to preexisting material

No copyright on publications by the U.S. government

Exclusive RightsThe owner’s bundle of rights includes these

rights:1. to reproduce the copyrighted work in copies or

phonorecords2. to prepare derivative works based upon the

copyrighted work3. to distribute copies or phonorecords of the

copyrighted work to the public 4. to perform the copyrighted work publicly5. to display the copyrighted work publicly6. to perform the copyrighted work publicly by

means of a digital audio transmission

Fair Use of Copyrighted MaterialCopyright owners versus legitimate nonprofit

entitiesSince 19th century certain uses are fair within

reason:criticism, comment, news reporting, teaching,

scholarship, or researchFour criteria incorporated in new law:

1. the purpose or character of the use2. the nature of the copyrighted work3. the amount and substantiality of the portion used4. the effect of the use on the potential market for or

value of the copyrighted work

Fair Use of Copyrighted MaterialFirst Amendment versus fair use doctrine

conflict with dissemination of informationexpression of ideas allows free speech to

flourishCertain performances are not considered

infringements

Copyright Ownership

Composers’ Share (50%) Lyricists’ Share (50%)

Example 1. One composer and one lyricist, sharing equally

One composer: owns 50% One lyricist: owns 50%

Example 2. Two composers splitting their share equally, three lyricists dividing their share unequally

First composer: owns 25% First lyricist: owns 25%

Second composer: owns 25% Second lyricist: owns 15%

Third lyricist: owns 10%

Multiple authors

Copyright OwnershipOwnership limitation

not in material objectCollective works

separate contributions versus collective workFilm music

synchronization licenseblanket copyright

Transfer or AssignmentAny or all exclusive rights may be transferredRecordation of transfer

written agreement filed with Copyright OfficeTermination or recapture

excludes work made for hirewriters and publishers may negotiate shorter

term

Work Made for HireEmployer = author = owner of copyrightSection 101 conditions:

1. work prepared by employee2. work specifically ordered or commissioned

Disputes center on language of first condition

Musical ArrangementsArrangements = derivative works

permission must be obtained from copyright owner

mechanical license allows minor changesArranger’s rights

one-time fee based on AFM scalearrangers receive no rights, royalties or

incomePublic Domain

arranger may receive half mechanical royaltiespayment for performance and printed music

sales

Sound RecordingsMusical work different than sound recording

recording company = owner of sound recording

publishing company = owner of musical workOwner of sound recording has exclusive

right:1.to duplicate the sound recording in

reproduction2.to prepare derivative works3.to distribute phonorecords 4.to perform by digital audio transmission

Sound RecordingsPerformance rights exclusion

Far less performance rights income compared to many countries

The Digital Performance Right In Sound Recording Act of 1995

Imitation exclusionimitations that mimic original recording

permittedmarketing restrictions

Compulsory Mechanical LicenseAfter first recording of nondramatic music

licensing to others compulsoryfixed statutory royalty

Special conditions:transcriptions excludedpirates and counterfeiters excludedonly minor changes allowedcopyright proprietor must be given notice of

intentCompulsory license bypass

Royalty Payments (Section 115[C])Royalty rates set by statuteOwner must be identified in Copyright Office

recordspayment for phonorecords made and

distributed“distributed” ambiguitynot for returnspayment for giveaways

Duration of CopyrightBefore 1978:

56 yearsUnder Copyright Act:

50 years after author’s death

After Sonny Bono Copyright Term Extension Act (1998): 70 years after

author’s death

Duration of CopyrightSubsisting copyrights in their first term on

January 1, 1978 (Section 304)Renewal registrationSubsisting copyrights in their renewal termAfter 75 yearsAfter January 1, 1978Works in the trunk (Section 303)

FormalitiesFormalities = actions a claimant must take to

validate claim to copyrightNotice on printed musicNotice on phonorecordsNotice errors or omissionsDeposit (Section 407)Registration (Section 408)Fees (Section 708)Copyright Royalty Board

Infringement, RemedyCopyright infringement assessmentRemedies:

1. injunction2. impoundment3. destruction4. damages

If copyright not registered before infringement: no statutory damages no attorney fees

Record Counterfeiting, PenaltiesPiracy and Counterfeit Act of 1982

piracy and counterfeiting a felonymaximum penalty of a $250,000 fine and jail

terms 180-day period at least 10 copies or phonorecords or one or more copyrighted works with a retail

value of more than $2,500.

Changing LawsTwo economic coalitions: creators and usersFirst sale doctrineThe Audio Home Recording Act of 1992 The Digital Performance Right in Sound

Recording Act of 1995The Digital Millennium Copyright Act of 1998

Rights in Names and TrademarksNot covered under copyright law in U.S.U.S. Patent and Trademark OfficeSelection of a name

research to avoid duplication and confusionRights in a name

performing groups should draw up written agreement

For Further Thought. . . What is the key principle of copyright

protection, and how does this foster musical creativity and growth?

Discuss which sections or implications of copyright law affect the following groups of people:authorspublishersschoolsauthors working under work-for-hire

agreementslyricists