Author: Gavin Law Offices

Continuing our coverage of the Music Modernization Act (MMA), this article explores Title II of the bill, the “Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society Act” or CLASSICS Act. (To read more about the bill generally and Title I, please visit our blog here.)

While Title I was concerned about contemporary songwriters and their publishers, Title II, as its name may suggest, is interested in the past. In particular, Title II allows for songwriters and record labels to obtain compensation for music sound recordings created before 1972. This is important because 1972 was the year that federal copyright protection was first extended to music sound recordings; as such, compensation claims for music sound recordings made before 1972 are only covered by state laws, and the states have been anything but consistent in this area.  The CLASSICS Act presents a clean solution to this problem by requiring digital music services to provide notice, track, and pay royalties, just as they would for music sound recordings made after 1972.

In addition, the CLASSICS Act will create “a digital performance right in favor of rights owners of sound recordings recorded before February 15, 1972 (and after January 1, 1923).” That is, in the event there is no separate voluntary license between the sound recording rights owner and the digital service, the royalties will be calculated and paid under the same system that is applied to works made after 1972. See IP Law Watch for more information.

The CLASSICS Act includes two final details that are relatively unique. First, the act provides protection for pre-1972 sound recordings as calculated by 95 years from initial publication. It is therefore possible sound recordings can gain an additional period of 3-15 years worth of copyright protection, depending on how recently the song was published. Second, and perhaps more peculiar, is that the CLASSICS Act provides an approach to “orphan works,” that is, music sound recordings for which an owner cannot be identified. The CLASSICS Act will permit “certain noncommercial uses of sound recordings that are not being commercially exploited,” so long as the person engaging in the use makes a good faith, reasonable search for, but does not find, the owner of such sound recording and notice is provided to the Copyright Office.

On September 25, 2018, the Senate unanimously approved the Music Modernization Act (MMA), now called the “Orrin Hatch Music Modernization Act” (H.R. 1551). Along with being unique for receiving unanimous approval from the House of Representatives and the Senate, the bill is notable as it provides a major update as to how artists are paid for their music; in fact, Keith Kupferschmid, CEO of the Copyright Alliance, has gone so far as to herald the bill as “the most significant improvement of music copyright law in more than a generation” and stated that he believes it will make it “easier for creators across the music industry to earn a fair living through their creativity.”

The unanimous approval of the bill has to do with how it achieves its goal of “moderniz[ing] copyright law” with regards to songwriters, publishers, record labels, digital providers, and all others involved in the creation and distribution of music in the 21^st century. The bill will modify Section 115 of the U.S. Copyright Act, by combining three prior pieces of major legislation and incorporating them as titles under the MMA as reported by The Verge:

• The Music Modernization Act, which streamlines the music licensing process to make it easier for rights holders to get paid when their music is streamed online.
• The CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act) for pre-1972 recordings.
• The AMP Act (or Allocation for Music Producers Act), which improves royalty payouts for producers and engineers from SoundExchange when their recordings are used on satellite and online radio. Notably, this is the first time producers have ever been mentioned in copyright law.

In a series of upcoming blog pieces, we shall discuss the importance of Title II (the “Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society Act”) and Title III (the “Allocation for Music Producers Act”). For now, the remainder of this piece will focus on Title I, the “Musical Works Modernization Act.”

The central focus of Title I is that it changes the way in which “qualified digital music providers”—iTunes, Spotify, etc—pay royalties to songwriters and their music publishers for reproduction and distribution of their musical work. As it currently stands, Section 115 of the Copyright Act has established a process in which one can obtain an automatic right to reproduce and distribute another’s previously recorded musical composition—this right is known as a “compulsory license.” To obtain a compulsory license, the service merely has to provide notice to the copyright owner (or the Copyright Office if the copyright owner cannot be located) of the composition and agree to pay a statutory rate set by the Copyright Royalty Board (CRB).

The MMA aims to make this process easier by creating a centralized “Mechanical Licensing Collective” (the “Collective”). Instead of notices and payments going to the Copyright Office, the Collective will manage all notices and collect and distribute royalty payment when a provider fails to locate a copyright owner. The Collective will also establish a process for dealing with unclaimed royalty payments and maintain a working database of eligible works. Of particular note, the Collective will allow digital music providers to pay for a “blanket license” that would cover the use of all works in the database.

Finally, and perhaps most significantly to songwriters, the MMA will modify the standard used by the CRB when determining rates to be paid for licenses and it is looking likely that this will result in increased royalty payments for songwriters.

For additional reading, please visit: https://www.iplawwatch.com/2018/10/a-modern-melody-for-the-music-industry-the-music-modernization-act-just-passed-congress-and-awaits-presidential-approval/

Happy October, friends of Gavin Law!  This month we want to educate you guys about something near and dear… to the heart of copyright law- the idea-expression dichotomy!  I see your eyes have glazed over.  Keep reading, there are pumpkins ahead, and a prize!

This Halloween, it’s likely that you and your friends and/or family will be carving pumpkins.  Maybe you are a very crafty person and are able to carve an elaborate parody of a movie that came out this year.  Maybe, like me, you’re going to stick with a modest challenge of a black cat or a spider.  Or maybe, you’ll go for the classic, a scary pumpkin face.  In copyright law, the idea of a cat, or a spider, or a face, cannot by itself be protected.  However, when the carver expresses their version of this idea onto the pumpkin, that design can be protected. 

The main concept to take away here is really that you cannot protect ideas, but rather how you express those ideas in a tangible way.  The reason for this is because humans are fascinating and can interpret one idea in millions of different ways.  If you want to write a story about the idea an orphan who saves the world, you could end up with Harry Potter or Star Wars.  

For Halloween, we are going to challenge you.  Our IDEA- the classic pumpkin face.  Give us your goofiest, most creative, scariest pumpkin and you will have the chance to win a $25.00 Amazon gift card.  That should buy you enough candy to restock your house after the trick or treaters come by.  We at GLO will vote on our favorite pumpkin and get back to you.  Send us those pictures!  Or ask us more about copyright law, if you want.