The Second Circuit Court of Appeals ruled this week that the ASCAP and BMI antitrust consent decrees do not prohibit “fractional licensing” of songs. Fractional licensing means that if there are non-ASCAP or non-BMI songwriters who have partial rights in a particular song, ASCAP and BMI can license only the fraction of the song attributable to the ASCAP or BMI songwriters. The other fractional interests of the song would have to be licensed elsewhere (for example, from SESAC or GMR).
Particularly with the recent advent of Global Music Rights (GMR), music licensees (such as broadcasters, websites, restaurants, bars, retail establishments, fitness clubs, and etc.) are concerned that the ruling could lead to additional performance rights licensing organizations (“PROs”), and in turn higher collective licensing fees (and exposure to potential copyright infringement claims to the extent such additional licenses are not secured).
It’s too early to tell what the practical effect of this ruling may be in the music licensing marketplace.
On July 20, US Congressman Jim Sensenbrenner (R-WI) introduced the Transparency in Music Licensing Ownership Act. The legislation would create a database of music copyright ownership and licensing information. The database would cover both musical works and sound recordings.
A copy of the legislation is available here.
According to Representative Sensenbrenner’s press release, the legislation would:
- Require the Register of Copyrights to establish and maintain a current informational database of musical works and sound recordings while granting the Register authority to hire employees and contractors, promulgate regulations, and spend appropriated funds necessary and appropriate to carry out these functions.
- Ensure that the database is made publicly accessible by the Copyright Office, in its entirety and without charge, and in a format that reflects current technological practices, and that is updated on a real-time basis.
- Limit the remedies available to a copyright owner or authorized party to bring an infringement action for violation of the exclusive right to perform publicly, reproduce or distribute a musical work or sound recording if that owner/ authorized party has failed to provide or maintain the minimum information required in the database.
The legislation is cosponsored by Representatives Suzan DelBene (D-WA), Blake Farenthold (R-TX), and Steve Chabot (R-OH).
Shortly after the introduction of the legislation, BMI and ASCAP announced that they have been separately creating a similar database by combining their repertories. The BMI/ASCAP database is set to launch in the fourth quarter of 2018.
Continue reading “Music Licensing Databases? The Transparency in Music Licensing Ownership Act and ASCAP/BMI”
The Fair Play Fair Pay Act of 2017 currently pending in the House of Representatives would amend the Copyright Act to extend the public performance right for sound recordings to any audio transmission. Currently, the sound recording public performance right applies only to digital audio transmissions (e.g., Pandora, SiriusXM, etc.). The new public performance right would mean that AM/FM broadcast stations would be required to pay royalties for terrestrial/over-the-air broadcast transmissions of sound recordings. Currently, 21 Representatives have co-sponsored The Fair Play Fair Pay Act.
Opposition to the Fair Play Fair Pay Act continues to grow. The Local Radio Freedom Act proposes a resolution providing that:
Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air, or on any business for such public performance of sound recordings.
Currently, 191 Representatives have co-sponsored the Local Radio Freedom Act, and 22 Senators have co-sponsored the companion bill in the Senate.
On Thursday, the United States filed its brief in its appeal of a decision by the district court for the Southern District of New York, which rejected the US Department of Justice’s earlier determination that a longstanding DOJ consent decree governing BMI requires “full-work” (or “100%”) licensing. Rather, the district court held that BMI can engage in “fractional licensing.”
BMI is a performing rights organization (a “PRO”), which aggregates its members’ rights for the public performance of copyrighted musical works and collectively licenses those rights to music users, such as radio and television stations, internet radio stations (e.g. Pandora), interactive streaming services (e.g., Spotify), websites, bars, restaurants, and fitness clubs. BMI and ASCAP are the two largest PROs in the United States, and each are governed by DOJ consent decrees, which were first entered into in 1941. SESAC and the recently-established Global Music Rights (GMR) are the two other PROs in the United States. SESAC and GMR are not subject to DOJ consent decrees.
The district court’s September 2016 decision was applauded by BMI and the other PROs, as well as other songwriter and music publishing stakeholders. Licensees of music public performance rights, such as radio and television stations, however, decried the district court’s decision.
Continue reading “Music Performing Rights Organizations and the “Full-Work” vs. “Fractional” Licensing Dispute: Government Seeks to Overturn Fractional Licensing Decision”
Earlier this month, a New York jury awarded nearly $1.2 Million to former DJ Orrin Lynn Tolliver, Jr. in a dispute over a sample used in The Black Eyed Peas’ hit song “My Humps.”
Tolliver, who formed an early hip-hop group in the 80’s called Sexual Harassment, collaborated with his friend and producer James McCants to record a song called “I Need A Freak” at McCants’ studio in Cleveland. Tolliver composed the music and lyrics for the song, but worked with McCants at his studio to record the song. McCants registered the song with BMI, giving songwriter credit to Tolliver. Years later, McCants granted licenses for use of the song, infringing on Tolliver’s copyright as songwriter and denying him his share of the royalties. Continue reading “Jury Awards DJ A Million Dollar Verdict Over “My Humps””
This post discusses some of the common ways in which music is used on the Internet and the types of licenses required. Please see my earlier post describing common music licenses. A chart summarizing the licenses required for Internet uses is avaliabe here. Continue reading “Copyright 101: Licenses Required for Common Uses of Music on the Internet”
Like any other property, music copyrights and the individual exclusive rights thereof, can be transferred, sold, licensed, and divided among several owners. In general, to use recorded copyrighted music, you will need permission from both the musical work owner (typically a publisher) and the sound recording owner (typically a record company). Note, however, if you re-record a song (instead of using a pre-recorded version), permission is only required from the musical work owner (since you are not using someone else’s sound recording).
Following are descriptions of common music licensing agreements. In a later post, I will discuss some of the specific ways in which music is used on the Internet and the types of licenses required. Continue reading “Copyright 101: Summary of Common Music Licenses”
People often assume lawyers just use “form books” for contracts. I’m sometimes asked questions like: Don’t you just have a form for that? Can’t you just send me the standard form agreement? Can you quickly look over this agreement I did myself on the internet?
The fact is that virtually every contract involves unique circumstances. In the case of copyright transfers and licensing, contractual language can be critical. Under the Copyright Act, a written and signed document is required to transfer ownership of a copyright or to transfer exclusive rights to a copyright.
A recent case from the Fifth Circuit Court of Appeals demonstrates the pitfalls of an ambiguously drafted copyright transfer. Continue reading “Whoomp! (There It Is): The Importance of Contract Drafting”
Recently, the United States District Court for the Southern District of New York ruled that publishers are not entitled to public performance royalties for mobile phone ringtones. See In re Cellco Partnership, 2009 WL 3294861 (2009). For the past few years, publishers have argued that mobile phone carriers should pay copyright performance royalties when ringtones are downloaded and used by mobile phone customers. Continue reading “Court Rules No Public Performance Fees for Ringtones”
So, here’s an interesting case pending in Federal Court in Texas: EsNtion, a dance music record label, has sued TM Studios, the maker and distributor of PrimeCuts, HitDisc, and other “Promotional Use Only” CDs, alleging copyright infringement for copying and distributing EsNtion’s songs (US District Court, Northern District of Texas, Dallas Division, Civil Case No. 07-CV-2027-L). Continue reading “Is “Promotional Use Only” A Defense?”