Posted on October 31, 2010 by David Oxenford

Copyright Office Asks if Federal Protection Should be Extended to Pre-1972 Sound Recordings - What's the Impact on Internet Radio?

The Copyright Office has just released a Notice of Inquiry asking whether Federal protection should be extended to sound recordings recorded prior to 1972.  A sound recording is a song as recorded by a particular artist.  Sound recordings were first protected under Federal law in 1972.  Prior to that, unauthorized recordings or reproductions of an artist's recoding were policed under various state criminal and civil law.  While the Copyright Act has provided for the protection of pre-1972 sound recordings first registered in other countries, US sound recordings recorded prior to 1972, have not received Federal copyright protections.  Many have assumed that this also exempts pre-1972 sound recordings from royalty requirements under Section 114 of the Copyright Act - i.e. the royalties paid by Internet and satellite radio and other digital music providers under the statutory license.  How would a change in the law affect Internet radio operators?

That is one of the questions that is asked by the Notice of Inquiry.  Many Internet radio operators have not excluded pre-1972 recordings from royalty payments based on any exception that may exist for pre-1972 sound recordings, as the possibility has not been widely publicized.  Moreover, some copyright holders have suggested that the digitization of older songs may somehow bring pre-1972 recordings under the coverage of the Copyright Act, or that there may be state remedies that are somehow the equivalent of the Federal public performance right.  Others may just not want to go to the trouble of determining which copyrighted songs are subject to the Uruguay Round Agreements Act (making the non-US pre-1972 sound recordings subject to US Federal law).  The Copyright Office's Notice of Inquiry asks what impact the inclusion of pre-1972 sound recordings would have on many undertakings - including the archiving and restoration of sound recordings, and on the current benefits that copyright holders and others enjoy under state laws.  In addition, it asks about the benefits and issues that would arise under Section 114 of the Copyright Act - the section that sets out the statutory license under which most Internet radio companies operate.

This is a complicated issue, and Internet radio operators should carefully consider, with counsel, the issue of whether Section 114 royalties are due for pre-1972 sound recordings.  The issues raised in the Notice shows how complex this issue is, and the question of what to do with pre-1972 sound recordings cannot be resolved by the Copyright Office itself.  Any change in the Copyright Act to fully address the Federal laws that would apply to these sound recordings would have to be made by Congress.  The comments filed in this proceeding will help inform the record that will be created in connection with the Copyright Office making a recommendation to Congress about any suggested change in the law. Comments on this issue are due on December 20, with replies 30 days later. 
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Posted on March 18, 2010 by David Oxenford

David Oxenford Moderates Panels on Music Rights and Licensing at RAIN Summit North and Digital Music Forum East

In the last two weeks, David Oxenford has, at two different conferences, moderated panels on digital music rights and licenses.  At the Digital Music Forum East, in New York City on February 25, 2010, his panel focused on rights and licenses generally, featuring panelists from SoundExchange, BMI, the Harry Fox Agency, Rightsflow and MediaNet.  As a handout, David provided copies of Davis Wright Tremaine's Guide to The Basics of Digital Music Licensing, available here.  Discussion on the panel included the question of when there is a public performance versus when there is a reproduction of a copyrighted piece of music (see our post here), royalties for interactive streaming (see our post here), and the difference between a sound recording and a musical composition, rights to both of which are needed in most digital uses of music (see our post here).

At the RAIN Summit North, held at Canadian Music Week on March 12, David's panel discussed the music royalty structure for Internet Radio companies in Canada. Panelists included the CEO of  Re:Sound (the Canadian version of SoundExchange, collecting royalties for the public performance of sound recordings) and the head of CMRRA-SODRAC (CSI), the Canadian Rights Society that collects for reproductions of musical compositions.  In Canada, broadcasters and Internet radio companies pay not only to SOCAN, the Canadian equivalent of ASCAP, BMI and SESAC in collecting for the public performance of musical compositions, but also to CSI for the reproductions of musical compositions made in servers, buffers and other digital reproductions. 

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Posted on April 29, 2007 by David Oxenford

District Court Finds No Public Performance In Download - Could Affect Fees on Podcasts and Video Downloads

In a ruling released last week, a US District Court Judge issued a ruling finding that a download of a recorded musical work does not give rise to a "public performance" requiring a payment to ASCAP, BMI or SESAC.  If this decision is upheld on appeal, it could mean that one less fee would have to be paid in connection with on-demand downloads - which would also affect podcasts and video downloads made available by broadcasters on their websites.  However, there are many issues that must be understood about this ruling, so broadcasters should not impetuously rush to provide downloads and podcasts without first securing the bundle of rights necessary for such performances.

First, it is important to understand the issue that was presented in this case.  The case did not involve streaming of programming - so it has no effect on Internet radio royalties.  It involves only downloads - where a copy of a specific work is downloaded to a single consumer's computer at the request of that consumer.  This is what happens when a consumer buys a song from iTunes, or downloads a podcast made available by a broadcaster.  There is no question that, to provide such a download or podcast containing music, a service needs to get permission from the copyright holder in the "sound recording," the song as recorded by a particular artist.  This is typically received from the record company which holds the copyright.  In addition, there is a requirement that the rights to the composition must be obtained for purposes of the making of the making of a "reproduction" and a "distribution" of the underlying composition.  This is typically obtained from the publishing company or a clearinghouse such as the Harry Fox agency.  A service that provides downlaods of music can alternatively pay a statutory royalty for the composition, though that requires following a somewhat cumbersome process of filings set out by the Copyright Office and requiring specific notice to the copyright holder in the publication.

The question in this case was whether there was also an obligation to pay ASCAP (and, by extension, BMI or SESAC) for the right to "publicly perform" the composition.  The public performance right is the one that is implicated when a musical work is played to the public at large, as is the case if a song is played on the radio, streamed by an Internet radio station, played over the loudspeaker at a football stadium or played by a DJ at a dance club. The Performing Rights Organizations (ASCAP, BMI, SESAC) had claimed that the digital download of a composition was like the streaming of an Internet radio station (as the consumer could usually begin to immediately listen to the song that was being downloaded) and thus included a public performance just as streaming does, while the Internet service companies involved in the case argued that a download was just an electronic way of making a record or CD, which involve the reproduction right, but not a public performance.  These services argued that, in effect, the publishing companies would be paid twice (once for the reproduction right and then again for the performance) if the position of the PROs was adopted.  The Judge sided with the services.

Whether or not there is a public performance in a download has been a long debate.  Representatives of the Copyright Office have testified before Congress that they did not see the public performance, but the statutory language was ambiguous, so the debate has raged on.  Various legislative remedies have been proposed, though none had passed.  Even with the controversy, the PROs have made available license agreements for downloads and podcasts despite the dispute, and some services have signed them thinking that a royalty was due.  This Judge's decision may not end the dispute, as it would seem that an appeal would be likely, but the decision does at least bring this issue closer to an ultimate resolution.
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