Transcript Copyright & The Music Industry

• There are two copyrights in any recorded piece of music:
1) The copyright in the musical work (notes and lyrics); and
2) The copyright in the sound recording.
• Sound recordings were not granted copyright until 1971.
• Whereas most protected works are fixed in “copies”, sound
recordings are fixed in “phonorecords”:
“material objects [vinyl albums, cassettes, CDs, digital files…]
in which sounds, other than those accompanying a motion
picture or other audio-visual work, are fixed by any method
now known or later developed, and from which the sounds
can be perceived, reproduced, or otherwise communicated,
either directly or with the aid of a machine or device.” (17
U.S.C. §101)
• There are also a number of players in the music industry:
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Songwriters
Music publishers
Recording artists
Record labels
The Harry Fox Agency, SoundExchange
Collective rights associations (ASCAP, BMI, SESAC)…
• “Mechanicals” (compulsory licenses for mechanical
reproductions of musical works) date back to player-piano rolls,
and make use of standard royalty fees (9.1¢/song or 1.75¢/min,
whichever is greater).
• These allow recording artists to record and distribute
“covers” through physical phonorecords and through
“digital phonorecords delivery” (but does not cover realtime transmissions).
• “Covers” in these cases must not change the “basic
melody or fundamental character of the work” (otherwise,
a derivative work is being created).
• Recording artists may also contact a representative for the
music publisher (usually, the Harry Fox Agency) to negotiate a
rate lower than the license detailed in the Copyright Act.
• Copyright owners of sound recordings have an extremely “thin”
reproduction right:
• This right does not protect against “sound alikes” (i.e.
imitated but not simply duplicated).
• To qualify as a “derivative work” upon a sound recording,
“the actual sounds fixed in the sound recording [must be]
arranged, remixed, or otherwise altered in sequence or
quality” (17 U.S.C. §114).
• Music “sampling” may involve two copyrights—that of the work
itself and that of the recording sampled.
• Newton v. Diamond
338 F.3d 1189 (9th Cir. 2004)
• Bridgeport Music, Inc. v. Dimension Films
410 F.3d 792 (6th Cir. 2005)
• The Audio Home Recording Act (AHRA) was enacted in 1992 to
address digital audio tape (DAT) technology, though this tech is
largely out of date.
• Nevertheless, the AHRA is instructive.
• The AHRA has three key parts:
1) Manufacturers of DAT recorders and tapes agreed to
embed in DAT tapes technology that allows for a firstgeneration copy, but not subsequent copies (because DAT
tapes do not naturally degrade with each generation of
copying).
2) DAT manufacturers are required to pay a 2% royalty for
each recording device and 3% on each tape sold, which are
then pooled and distributed among copyright owners in
musical works and recordings.
3) Personal, non-commercial use of DAT technology to copy
copyrighted works was not subject to action (however,
general-purpose computers are exempted from the AHRA’s
bounds).
• As case-law determined that personal computers, MP3
players, and the like do not qualify as DAT devices, the literal
application of the AHRA seems to be pretty much a dead
matter when it comes to digital copying today.
• The copyright owners of musical works enjoy a general right to
publicly perform the works (the owners of copyright in the sound
recordings do not).
• ASCAP was formed in 1913 to address problems of how royalties
could be collected for performances of copyrighted works (in live
venues and as “performed” recordings).
• A business can obtain a blanket license to play any song in the
ASCAP catalogue (some 8.5 million works), with the sort of license
and royalties determined by the type of business.
• When ASCAP introduced exorbitant fees for radio broadcast, radio
broadcasters formed their own collective rights organization in
1939, BMI, which eventually lured in a number of performers (and
today has a catalogue of some 6.5 million works).
• A third organization, SESAC, was established in 1940.
• In 1998, Congress passed the Fairness in Musical Licensing Act
(FIMLA), which outlined requirements about square footage and
equipment type for businesses to play musical works without
having to pay licensing fees (by way of radio and television
broadcasts).
• FIMLA and its exemptions got the U.S. into some (still
unresolved) hot water with the EU, which accused it of violating
the TRIPs agreement (resulting in loss of revenue to European
copyright owners).
• Since sound recordings aren’t (generally) protected by a public
performance right, no license is required of their copyright
owners to perform them.
• In 1995, however, Congress passed the Digital Performance
Right in Sound Recordings Act (DPRA), giving copyright owners
of sound recordings control over public performances occurring
“by means of a digital audio transmission” (with various
exemptions and statutory licenses), with degree of control
determined by how likely transmissions are to harm
phonorecords sales.
• In 1998, the DPRA rules were folded into the Digital Millennium
Copyright Act (DMCA):
 If performance of a recording can be controlled by the
user, for instance, they are deemed “interactive” and
permission is fully under the control of the sound
recording owner, so permission is required.
 In other cases, it may be that there are no restrictions
(non-subscription transmission, like a radio station), or
that a statutory license fee must be paid through
SoundExchange (a sort of parallel to ASCAP) (subscription
but non-interactive).
Arista Records, LLC v. Launch Media, Inc.
578 F.3d 148 (2d Cir. 2009), cert. denied, 130 S. Ct. 1290 (2010)