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Chapter 6 Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Start Thinking... 1. A composer is commissioned to write a piece of music for a film. Who owns the copyrightthe 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 stores sound system. Are they infringing copyright? Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Chapter Goals Acquire a clear understanding of copyright terminology. Learn which authors and composers rights are protected under the copyright statutes. 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. Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Background Author of work may reap fruits for limited period First U.S. copyright law passed in 1790 Current copyright revision enacted in 1976 International copyright not automatic Universal Copyright Convention 1955 Berne Convention 1989 Goal of Congress: seek balance of interests between copyright owners and users Ultimate authority in copyright law = U.S. Constitution Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Essential Provisions The 1976 statute preempts nearly all other copyright lawsboth statutory and common law The duration of copyright has been lengthened over the years: generally, life of author + 70 years Performance royalties: sound recordings digital transmission musical works Public broadcasters, cable systems, jukebox operators, schools, colleges to pay for use of copyrighted music Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Essential Provisions Congress codified the principles as to what constitutes the fair use defense to otherwise infringing activity Policies and rates of music use licenses were to be periodically reexamined Some formal procedures, such as copyright notice and renewal, were treated more permissively, and others were eliminated Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Key Terms audio visual works best edition collective work compilation copies copyright owner (proprietor) created derivative work device, machine, process Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Key Terms digital phonorecord delivery display establishment fixed food service or drinking establishment perform phonorecords pseudonymous work publication Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Key Terms publically place open to the public transmit or otherwise communicate to the public registration sound recordings transfer of copyright ownership transmission program transmit work made for hire Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Coverage Key principle of copyright protection: Does not extend to ideas only expression of ideas allows normal development of musical forms Protection granted to original works of authorship Protection also for lawful compilations and derivative works but not new protection for preexisting material No copyright on publications by the U.S. government Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Exclusive Rights The owners bundle of rights includes these rights: 1. to reproduce the copyrighted work in copies or phonorecords 2. to prepare derivative works based on the copyrighted work 3. to distribute copies or phonorecords of the copyrighted work to the public 4. to perform the copyrighted work publicly 5. to display the copyrighted work publicly 6. to perform the copyrighted work publicly by means of a digital audio transmission Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Fair Use of Copyrighted Material Copyright owners versus legitimate nonprofit entities Since 19th century certain uses are fair within reason: criticism, comment, news reporting, teaching, scholarship, or research Four criteria incorporated in new law: 1. the purpose or character of the use 2. the nature of the copyrighted work 3. the amount and substantiality of the portion used 4. the effect of the use on the potential market for or value of the copyrighted work Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Fair Use of Copyrighted Material First Amendment versus fair use doctrine conflict with dissemination of information expression of ideas allows free speech to flourish Certain performances are not considered infringements Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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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 Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Copyright Ownership Ownership limitation not in material object Collective works separate contributions versus collective work Film music synchronization license blanket copyright Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Transfer or Assignment Any or all exclusive rights may be transferred Recordation of transfer written agreement filed with Copyright Office Termination or recapture excludes work made for hire writers and publishers may negotiate shorter term Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Work Made for Hire Employer = author = owner of copyright Section 101 conditions: 1. work prepared by employee 2. work specifically ordered or commissioned Disputes center on language of first condition Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Musical Arrangements Arrangements = derivative works permission must be obtained from copyright owner mechanical license allows minor changes Arrangers rights one-time fee based on AFM scale arrangers receive no rights, royalties, or income Public Domain arranger may receive half mechanical royalties payment for performance and printed music sales Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Sound Recordings Musical work different than sound recording recording company = owner of sound recording publishing company = owner of musical work Owner of sound recording has exclusive right: to duplicate the sound recording in reproduction to prepare derivative works to distribute phonorecords to perform by digital audio transmission Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Sound Recordings Performance rights exclusion Far less performance rights income compared to many countries The Digital Performance Right In Sound Recording Act of 1995 Imitation exclusion imitations that mimic original recording permitted marketing restrictions Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Compulsory Mechanical License After first recording of nondramatic music licensing to others compulsory fixed statutory royalty Special conditions: transcriptions excluded pirates and counterfeiters excluded only minor changes allowed copyright proprietor must be given notice of intent Compulsory license bypass Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Royalty Payments (Section 115[C]) Royalty rates set by statute Owner must be identified in Copyright Office records Payment for phonorecords made and distributed distributed ambiguity not liable for returns still receive payment for giveaways Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Duration of Copyright Before 1978: 56 years Under Copyright Act: 50 years after authors death After Sonny Bono Copyright Term Extension Act (1998): 70 years after authors death Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Duration of Copyright Subsisting copyrights in their first term on January 1, 1978 (Section 304) Renewal registration Subsisting copyrights in their renewal term After 75 years After January 1, 1978 Works in the trunk (Section 303) Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Formalities Formalities = actions a claimant must take to validate claim to copyright Notice on printed music Notice on phonorecords (Section 402) Notice errors or omissions Deposit (Section 407) Registration (Section 408) Fees (Section 708) Copyright Royalty Board Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Infringement, Remedy Copyright infringement assessment Remedies: Injunction Impoundment Destruction Damages If copyright not registered before infringement: no statutory damages no attorney fees Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Record Counterfeiting, Penalties Piracy and Counterfeit Act of 1982 piracy and counterfeiting a felony maximum penalty of a $250,000 fine and jail terms o 180-day period o at least 10 copies or phonorecords o or one or more copyrighted works with a retail value of more than $2,500 Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Changing Laws Two economic coalitions: creators and users First sale doctrine The Audio Home Recording Act of 1992 The Digital Performance Right in Sound Recording Act of 1995 The Digital Millennium Copyright Act of 1998 Revival from Public Domain Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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Rights in Names and Trademarks Not covered under copyright law in United States U.S. Patent and Trademark Office Selection of a name research to avoid duplication and confusion Rights in a name performing groups should draw up written agreement Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners

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For Further Thought... 1. Who is the author of a sound recording released by a major label? Why do you think so? 2. Discuss how copyright laws affect the following groups of people: authors publishers schools authors working under work-for-hire agreements lyricists Music Business Handbook and Career Guide, 10th Ed. 2013 Sherwood Publishing Partners