By Jeffrey E. Jacobson, Esq.

Music is a bit unusual because there are two Copyrights involved for every master recording that is produced. There is a Copyright in the song, which consists of the underlying music and lyrics, and a Copyright in the sound recording itself. Lyrics and music are protected on the PA Copyright form. The “C” in the circle (©) is the appropriate notice. The SR form is used to register the Copyright in the sound recording. The appropriate notice is a “P” in a circle (). It comes from the International Phonogram Convention. “Phonogram” and “videogram” are two terms used in the international entertainment industry. The term “phonogram” is used when reference is made to any sort of audio master, while the term “videogram” refers to any sort of video master.

There are five exclusive rights conferred on the owner of a Copyright. The five exclusive rights are: the right to reproduce, (which is the mechanical reproduction in music, e.g., CDs, downloads, and vinyl), the right to distribute, the right to prepare derivative works, the right to perform, and the right to display.

The Berne Convention, an international agreement on Copyright, relieves a creator from having to comply with any sort of formalities in order to register or receive their Copyright. The Berne Convention gives the highest level of protection to creators in Copyright law. The United States Copyright Act was turned upside down, and its formalities loosened, so that the United States could join the Berne Union. Previously, in addition to required registration, you also had to put a “C” in a circle and display proper notice or you could lose your Copyrights. Now, it is unnecessary to adhere to any formalities under post-Berne Convention U.S. Copyright Law.

Jeffrey’s two “cocktail party rules” are rules that actually have been reviewed and discussed by everybody from the former Register of Copyright on down to law school professors. To illustrate the first rule, suppose that you are at a cocktail party and somebody says, “You know, you don’t need to put a notice on anything to claim Copyright protection,” and you say, “You’re right–you don’t need to put on a notice, but if you don’t, an infringer can use lack of notice as a defense to your Copyright infringement action.” An infringer can say that they were not notified that the work was protected and thereby reduce recoverable damages. Without using the notice you really do not get the full protection of the United States Copyright Act. Although you do not have to put on a notice, Copyright experts know the best practice is to do so.

The Second Rule is the notion that you do not have to register your Copyright in order to protect your rights. However, despite legislation pending on an annual basis to the contrary, you cannot file suit for Copyright infringement without a Copyright certificate. Additionally, without the Copyright registration you are not entitled to all of the statutory damages. In a Copyright infringement action, so long as you have the Copyright notice and the Copyright certificate, you can recover court costs, attorney fees, and have an election of whether you want to receive statutory damages or whether you want to receive actual lost profits. Courts have held that attorney’s fees are recoverable in Copyright infringement litigation against an infringer and can exceed actual damages.

This reflects the legislative intent behind the Copyright Act, which permits the recovery of attorney’s fees in order to encourage lawyers to provide continuous legal service to poor, downtrodden musicians. You do not need a notice and you do not need to register, but if you fail to do these things, then you will not receive the full benefit of the Copyright. However noble Congress’ intentions, because registration is required before allowing creators to fully utilize all copyright protections available, they are effectively keeping the United States from complying with the Berne Convention, which requires that member countries grant full copyright protection without formal registration. In our lifetime there might come a time when the United States is sued at the International Court of Justice because its national Copyright law failed to comply with the Berne Convention. When that time comes, you will remember this day and say you heard it was going to happen. The United States was required to take additional steps to amend its Copyright law in order to join the Berne Convention, but they have only claimed to do so.

Copyright in the Music and Lyrics

Let’s say somebody writes a song. Sometimes two people write it–one is the composer who creates the music and the other is the lyricist who writes the words. They merge into an inseparable unit of this creative new musical composition, an unpublished work. All of a sudden, a publisher likes it. The songwriter and composer assign their copyright to the publisher in exchange for receiving songwriting royalties. Publishing has a standard, similar to anything in the music business which can be defined as a “standard.” The Copyright is generally split in half, even though the publisher collects all of the money. Fifty percent (50%) of the gross income goes to the publisher, and the other fifty percent (50%) of the net is split between the composer, the lyricist, the songwriter, the arranger, the translator, etc. In the music industry, we call the fifty percent (50%) that goes to the “publisher,” the one hundred percent (100%) “publisher share,” and the fifty percent (50%) belonging to the songwriters, the one hundred percent (100%) “songwriters share.”

Under the 1976 Copyright Act, the Copyright is infinitely divisible. As co-owners of a Copyright, unless there is an agreement to the contrary, each co-tenant or tenants in common (legal terms for the different types of co-ownership) can license the full Copyright to a third party subject to an accounting to their co-author and paying over their share of the royalties. People perk up and say, “Wait a minute! What does that mean?” That means when John, Tom, Bob, and Harry get together and make a band with no agreements and co-write all the songs together and then split up, leaving two bands out there, each band may end up releasing records with the same songs. However, since these people co-wrote it as co-owners they are entitled to license the full work. The entire song is subject to an accounting, and if one band does better, they will have to pay the other one a portion of the money earned from the songs. These are all very basic rules and each one has an amazing scope of application.

The right of reproduction is the right to mechanically reproduce the underlying musical composition on phonograms or sound carriers. In order to make records, downloads, tapes, and CDs you need a mechanical license. The songwriter and publisher have complete control over the first release of the musical composition. After the initial release, anyone else can release their version of the song by paying statutory fees and obtaining a compulsory mechanical license. A “compulsory license” is one that cannot be refused by the songwriter, i.e., it does not require the songwriter’s permission or consent for you to record his song.

One must also understand the political and philosophical influences that are coming into play. Copyrights are really a monopoly in an exclusive right. However, by permitting compulsory licensing, the copyright owner no longer has an exclusive monopoly, even though there is compulsory licensing for mechanical reproduction. Public small performing rights are also subject to compulsory licensing.

Other areas of Copyright law do not provide for compulsory licensing. Examples of this are translations and sample clearances. The publisher has exclusive rights to authorize a translation. Thus, anyone who translates the work without permission cannot own a Copyright in that translation because it is an unauthorized derivative work. The other fascinating issue here is sampling, to which we will dedicate an entire article.

With regard to mechanical rights licensing organizations in the United States, a major administrative burden arises because every commercial release of music requires a mechanical license. Consequently, mechanical rights societies have emerged all over the world.

In the United States, the Harry Fox Agency, Inc. is the foremost mechanical rights agency and was created by the National Music Publisher Associations, Inc. The Harry Fox Agency does most of the mechanical licensing in this country. There are also other minor organizations such as American Mechanical Rights Association as well as various others that also issue mechanical rights licenses. As a law firm, we acquire mechanical licenses and represent publishing companies who are members of the Harry Fox Agency.

“Synchronization licenses” are the rights to synchronize the underlying musical composition with visuals. We all know about videos today, but going back historically you are talking in terms of motion pictures, television, and commercials, all of which are not subject to compulsory licenses. However, the Harry Fox Agency had, at one time, issued most of the synchronization licenses in the United States.

Derivative rights are one of the most fun-filled areas of Copyright law. In music, this term refers to variations in a song. You have a song and then you make sheet books. In these sheet books you do various arrangements for everything from accordion to piano. All of these arrangements are independently copyrightable. However, the publisher has an absolute right over the authorization of these derivative works. Each derivative work may only be prepared after approval from the publisher.

The right of display (i.e., sheet music being projected, sheet music in store windows) has a much lesser value in the area of music in comparison to other areas such as motion pictures.

With respect to performing rights, there are small performing rights and grand performing rights. Small performance rights are the rights to use the music on television, radio or at live performances. ASCAP, BMI, and SESAC in the United States administer the small performing rights. Grand performing rights are the rights to make a dramatic use of music. This is much more clearly seen in a Broadway show. Consequently, a Broadway theater does not get rights to have a dramatic rendition of music on their stage by merely getting an ASCAP, BMI, or SESAC blanket license–it needs a different license for this stage production. These dramatic versions of the music, whether it be on Broadway, off Broadway, off-off Broadway, school, amateur, community group, non-profit theatrical productions, or road companies, all require grand performing rights licensing.

Copyright of the Sound Recording

Copyright in a sound recording is sometimes called a “bastard,” because it is not a “pure” Copyright. When I say a “pure” Copyright, I am referring to those Copyrights that confer each of the five exclusive rights to the owner. The owner of a Copyright in a sound recording only has about four of the five exclusive rights normally granted to a Copyright holder. You have the right to reproduce the sound recording, which includes a master license agreement and is executed independently with each deal. You also have the right to synchronize the master recording with a visual, such as a video, motion picture, T.V., etc. A motion picture requires two synchronization licenses–one for the underlying musical composition, and one for the master sound recording. Because anyone can “cover” or record a song once it is released, there could be many different sound recordings and versions of the same musical composition, and different people or business entities can own each particular master recording.

Users of sound recordings include radio stations, TV stations, night clubs, juke boxes, cable stations, satellite stations, among others so that when you turn on the radio and you listen to music, you are hearing two copyrights; the copyright in the underlying musical composition where ASCAP, BMI and SESAC are licensing the small performing rights and the sound recording.

Historically, sound recordings were not copyrightable until the nineteen seventies. Originally, mechanical licenses were issued for the player roll piano. These player rolls would permit the piano to mechanically reproduce the underlying musical composition. Sound recording copyrights for records were a much later development. The Goldstein decision in California and other similar judicial pronouncements demonstrated the problems that the government and the industry had with counterfeiters when copyrights for sound recordings didn’t exist. Consequently, the Copyright Act was amended in the nineteen seventies so that sound recordings would gain protection under copyright law. However, this protection does not include public performance rights of a sound recording created and copyrighted in the United States.

Under international copyright law, you have the same right of public performance in the sound recording as the producer. Despite political and public interest debates, performance rights were not expressly included in the Copyright Act amendments (I have a suspicion that the radio industry might have defeated the performing right for the sound recording in Congress). Several academic and legislative attempts to introduce a performance right for sound recordings into the law have been taken in order to reconcile this lack of recognition in United States Copyright law.

The omission of performing rights in the U.S. Copyright Act hurts our country from an international perspective because the producer of a sound recording receives performance rights throughout the world. Since this right exists in Australia and England, but not in the U.S., when American sound recordings are performed in these other territories, under the concept of comity or reciprocity, these countries do not pay American owners of sound recordings for this right because we do not pay their artists for this right. If a performing right in sound recording existed in this country, then we would have to pay the foreign producers for use of their sound recordings. However, we would also receive this money for the use of American produced sound recordings overseas.

This is why the sound recording copyright is sometimes labeled as a “bastard.” It is the illegitimate child of copyright because it does not incorporate all the full powers, abilities and attributes that the copyright has to offer.

(c) 2011, 2015 The Jacobson Firm, P.C.

About the author

Justin M. Jacobson, Esq. - Vice-President, The Jacobson Firm, P.C. - Attorney Specializing in Entertainment, Sports, Esports, Fashion and Art Law. In particular, The Jacobson Firm, P.C. handles Trademarks, Copyrights, Contracts, Estate Planning, Music Business and Brand Development on behalf of creative talent and lifestyle brands.

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