COPYRIGHT LAW: THE CASE OF THE MUSIC INDUSTRY Professor Fischer The Catholic University of America Columbus School of Law March 24, 2003

Music: Two Separate Copyrights Musical Work (both musical notes and lyrics – may be a joint work) Sound Recording – no federal protection until 1971 (though some states had protection) What’s the difference between a musical work and a sound recording?

Some Music Industry Players Performing artists Songwriters Music publishers Record companies Collective rights organizations (like Harry Fox Agency, ASCAP, BMI) Radio stations, concert venues, nightclub owners Trade associations (like RIAA)

We Will Look At 3 types of compromises in copyright law 1. Compulsory licenses 2. AHRA – royalty pooling system 3. CROs All reduce transaction costs

ALISON and s. 115

RIGHT TO MAKE/DISTRIBUTE PHONORECORDS What would Linda Ronstadt have to do to ensure that her recording of Alison did not infringe Elvis Costello’s copyright in the song?

RIGHT TO MAKE/DISTRIBUTE PHONORECORDS What would Linda Ronstadt have to do to ensure that her recording of Alison did not infringe Elvis Costello’s copyright in the song? Either comply with requirements under s. 115 to obtain or (more typical) contact the Harry Fox Agency (agent for music publishers) and obtain a Harry Fox Agency license. What does she have to do to get a mechanical license?

MECHANICAL LICENSE Primary purpose to distribute to public for private use Phonorecords must have been distributed under authority of copyright owner Can’t use for pirating of sound recordings Must serve TIMELY notice of intention on copyright owner Must pay royalty established now by ad hoc arbitration panels (Copyright Arbitration Royalty Panels or CARPS) (now 8c/song or 1.55 cents per minute of playing time whichever larger, slated to go up in 2004) Applies to digital downloads but may also violate sound recording copyright

CHANGING THE SONG To what extent can Linda Ronstadt validly change the song Alison in her recording of it under a compulsory license? Can she get a derivative work copyright in her new arrangement?

CHANGING THE SONG See s. 115(a)(2) - she can make a musical arrangement “to the extent necessary to conform it to the style or manner or interpretation of the performance involved, but the arrangement shall not change the basic melody or fundamental character of the work, and shall not be subject to protection as a derivative work” without Costello’s express consent. ;

HARRY FOX AGENCY What is the Harry Fox Agency?

THE HARRY FOX AGENCY The Harry Fox Agency is a organization by a trade association of leading music publishers (NMPA) to represent music publishers. For a fee, HFA issues mechanical (and synchronization) licenses and collects royalties due under those licenses from record companies. For a great book on the music industry, see Krasilovsky/Shemel, This Business of Music.

HARRY FOX LICENSE The HFA mechanical license has some special features, for example, the service of notice of intention to obtain a compulsory license is waived. Courts have held that this license is still a variant of a compulsory license and should be treated as a compulsory license rather than a private contract.

OTHER MECHANICAL RIGHTS LICENSING ORGANIZATIONS Harry Fox Agency is not the only mechanical rights licensing organization. Others include the American Mechanical Rights Agency (AMRA), Copyright Management, Inc., and Publishers Licensing Corp. They are all very small in comparison to Harry Fox Agency.

INT’L MECHANICAL RIGHTS ORGANIZATIONS Other nations have mechanical rights organizations, e.g. Canadian Musical Reproduction Rights Agency Ltd. (CMRRA), British Mechanical Copyright Protection Society (MCPS), French Societé pour l’Administration du Droit du Reproduction (SDRM), etc...

REPRODUCTION RIGHT IN SOUND RECORDING How does section 114 limit the rights of the copyright owner in sound recordings? Can sampling be copyright infringement – of a musical work? Of a sound recording? Why or why not? What is the test for infringement? See Jarvis at p Note that fair use may apply as a defense. Remember also that state law rights of publicity may apply – see, e.g. Midler v. Ford Motor Co., 849 F.2d 460 (9 th Cir. 1988)

LIMITS IN SECTION 114 Like section 115, 114 limits reproduction rights of the copyright owner but here the relevant copyright owner is the owner of rights in sound recordings. It only protects against reproduction of sound recordings that directly or indirectly recapture the actual sounds fixed in the protected recording.

PUBLIC PERFORMANCE RIGHTS AND CROS S. 106(4) a general right of public performance. Does this apply to musical works AND sound recordings? What is ASCAP? BMI? What do they do? What is a blanket license? How does a blanket license differ from a compulsory license or royalty pooling?

Another example of a compusory license – jukeboxes BCIA - Compulsory license available only if agreement is not reached Jukebox License Agreement (established by ASCAP, BMI, SESAC) – see

Fairness in Music Licensing Act What did this act do? Why did the EU allege that this violated the TRIPS Agreement? How did the WTO DSB rule?