Entertainment Law

Copyright Basics for Musicians

March 2009

By Jon M. Garon*

The Musician's Law and Business Guide

Copyright rules define much of the music business, shaping the practices that drive recording and touring deals. Washington understands the importance of the music business, passing and amending copyright laws to benefit and manage the music industry for well over a century. Despite this importance, many artists have very little information regarding copyright, or worse, rely on knowledge about rules that have changed dramatically in the past quarter century. This column provides an overview of essential copyright issues that every musician should know.

For a new song or other work, copyright begins at the moment of fixation — when the music and lyrics have been set down on paper, recorded, or stored on a computer. Copyright protects the musician even if the song is never registered with the Copyright Office. Mailing a copy of the work to yourself provides no additional legal protection and is unlikely to prove useful evidence for establishing the date a song was written.

The copyright in the composition is distinct from the copyright in the sound recording. Generally speaking, the sound recording can be thought of as the master — the recorded performance of the composition. When registering a newly published song, the musician should be sure to protect the copyright in the composition separately from the copyright in the sound recording.

While not required, registration of published music or recordings has a number benefits. Copyright registration provides the right to seek attorneys' fees and statutory damages. Registration will be required prior to filing a lawsuit to enforce the copyright.

Registration is also simple. Until recently, a musician would file a Form-PA with the Copyright Office. While this is still possible, the Copyright Office has removed the Form-PA from its website (www.copyright.gov) to encourage users to file electronically. Registration should be done on Form-CO. This form is used for both the composition and the sound recording. The cost of filing is $35.00 for electronic filing or $45.00 for paper filing. Paper filing also takes the Copyright Office significantly longer to complete. In addition to the registration, two copies of the published composition must also be deposited with the Copyright Office.

There is little or no value to registering a composition until it has been published. This typically means selling or distributing copies of the song to the public. Posting a new recording or video to YouTube will constitute publication. Live performance of a song does not publish the song.

By industry tradition, the copyright in the composition is managed by music publishing companies while the sound recordings are managed by the record labels. Music publishers may provide value for composers because these companies seek to promote the use of compositions in their catalog for use in films, television, advertising, ringtones and video games in addition to sheet music and music books. The publisher generally receives fifty percent of the composition revenue in exchange for these services. The publisher will manage the sales of the composition and typically handle all the copyright registration and deposit requirements.

The copyright will continue to protect the composition for seventy years beyond the life of the author. If the composition is created by a corporation, the term will be ninety-five years. When the song is jointly authored, the seventy years will run from death of the last living author. In most situations, the author of a song will be the individual composer or team of composer and lyricist. But situations occur where the members of the band have arranged to work as employees for the band as a corporation or limited liability company. In this case, band members would be creating the work as a work-for-hire, and the corporation/LLC would be the author. There are a few other situations where the composer will be asked to sign a work-for-hire agreement, but in all but rare cases, musicians should resist these arrangements.

For over a century, Congress has recognized that musicians are particularly vulnerable in market negotiations for the rights to their music. For songs written after 1978, a copyright contract can be terminated by the author 35 years following the date of the copyright transfer or grant. This right is unavailable to any composition made as a work-for-hire, so the musicians should protect their second chance to benefit from their music by avoiding work-for-hire transfers.

Cover songs reflect the limited exclusivity provided by copyright. The original copyright owner has an exclusive right to publish or release the first sound recording of a song. After that, all other performers have the right to cut their own version of the song.

To release a cover version of a song, a musician must pay the compulsory or government-set rate for use of the song. Known as mechanical rights, the payment gives the musician the right to use the music in its own sound recording or master. Cover songs can be released on CDs or digital downloads. The statutory right to make a cover song does not extend to movie soundtracks, video games or other audiovisual works. For these uses, a license must be obtained from the copyright holder.

Under the law, the compulsory fee is paid through the Copyright Office to the copyright owners of the composition. Presently, the rates are the higher of 9.1 cents per song or 1.75 cents per minute of playing time. To better streamline the process, a nonprofit organization, the Harry Fox Agency, provides an easy to use website that provides a much simpler licensing system than licensing through the Copyright Office. For small runs of under 2,500 CDs or digital downloads, Harry Fox provides an online service called Songfile which makes for easy licensing of any of the 2 million songs in the Songfile database.

The version of the song can vary quite a bit from the original song. It can be arranged as needed to fit the performer, "but the arrangement shall not change the basic melody or fundamental character of the work." More importantly, the arranger of a cover cannot receive a copyright on the new version without the express permission of the original copyright owner.

Unlike the mechanical royalty, the public performance royalties are not determined through congressional action. Instead, the three performing rights societies — ASCAP, BMI and SESAC — license the venues where music is performed publicly. Public performances include live shows at public venues such as bars, restaurants, and auditoriums as well as performances of pre-recorded music on radio, television, the Internet and at public venues.

For a musician, membership in a performing rights society provides a revenue stream that will be based on the popularity of the music. The funds earned by the performing rights society are distributed to the members based on record sales and airplay. Because copyright also protects the public performance rights of digital sound recordings, the organization SoundExchange serves to collect public performance fees owed to the copyright holder of the digital master — the record labels — based on a statutory license rate which continues to be the subject of great controversy and ongoing negotiations.

By registering the with the Copyright Office when works are published and working with Harry Fox Agency and a performing rights society, the composer can maximize the opportunities to earn revenue from the compositions. Record labels — including independent labels — have the additional opportunity to earn royalties through the SoundExchange collections. Through these various organizations, an independent artist can be positioned to earn revenue from all of the sources created by copyright law. Through these organizations and through the rights of termination granted by Congress, copyright law provides many tools to enhance the livelihood of composers and artists.

Jon M. Garon is an attorney with the Concord, NH, law firm, Gallagher, Callahan & Gartrell, and is a professor of law at Hamline University School of Law.

Additional articles by Professor Garon can be found at www.lawbizbooks.com. He also writes a blog, Entertainment and Entrepreneurship. To suggest a topic for a future column, send an e-mail.

* Jon Garon is admitted in New Hampshire, California and Minnesota.

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Jon Garon at
800-528-1181.