Music Modernization Act Looks to Bring Harmony to Copyright Disputes

CHICAGOLAWBULLETIN.COM WEDNESDAY, JANUARY 16, 2019

Volume 165, No. 11 Serving Chicago’s legal community for 164 years Music Modernization Act looks to bring harmony to copyright disputes

n the midst of political stag - Thus, owners of these recordings who must submit an LOD. Thus, nation in most respects, we now possess the same rights as IN THE LIMELIGHT the MMA allows producers and find progress in the Music every other sound recording engineers who worked on record - Modernization Act, which owner under the Copyright Act. ings created before Nov. 1, 1995, President Donald Trump This means that owners of pre- to submit documentation direct - sIigned into law on Oct. 11. The ’72 sound recordings will receive ly to SoundExchange so they law represents an essential step royalty payments in connection may receive their royalties even in modifying an antiquated Copy - with exploitation of their record - though no LOD was submitted. right Act, which has failed to ings on digital platforms such as JEFFREY To accomplish this, a produc - keep up with the constantly SiriusXM. BECKER er, mixer or engineer must sub - changing music industry. It should be noted that several mit to SoundExchange a written Understanding the MMA is companies, including SiriusXM, contract entered into with a critical for those who make their have been paying royalties for record company or artist con - Jeffrey Becker is chair of Swanson, living creating and exploiting their use of pre-’72 recordings Martin & Bell LLP’s entertainment cerning the recording, along with music. pursuant to settlements reached and media law practice group. Among a certification under penalty of The MMA represents the with copyright owners. These his clients are recording artists, perjury that he or she con - most comprehensive reform to settlement rates will stay in ef - screenwriters, filmmakers, record tributed to creation of the music copyright law in decades. fect for a time before being ad - labels and publishers, actors, recording at issue and made ef - Primary among these changes justed alongside newer sound theatrical producers and various forts to contact the artist for no are provisions that modernize recordings. entertainment-related businesses for less than 120 days in an attempt the way music is licensed by in - Finally, as a last-minute com - whom he provides comprehensive to obtain an LOD. counseling and litigation services. teractive streaming platforms promise to ensure this part of He can be reached at (312) 321-8425 or Following receipt of this certi - like Spotify, provisions that pro - the MMA passed the Senate, the [email protected]. fication, SoundExchange must vide copyright protection for statute will phase pre-’72 record - also attempt to notify the artist older sound recordings and pro - ings into the public domain over for at least 120 days. Assuming visions that recognize music pro - a period of time. For example, of direction, or LODs, from these steps are followed, ducers, mixers and engineers in recordings first published before artists, which instruct it to pay a SoundExchange will deduct 2 the Copyright Act for the first 1923 will enter the public domain portion of the artists’ revenues percent of all the receipts time in history. The law is Jan. 1, 2022. Recordings pub - directly to their producers, mix - payable to the featured artist for lengthy and complex and cannot lished in 1923 and after will enter ers and engineers. the recording, which will then be be fully explored in this article. into the public domain on a vari - SoundExchange is an organiza - paid to the qualified producer, We will, however, briefly discuss ety of dates based on their age. tion that collects and distributes mixer and sound engineer. several primary provisions of the Regardless of the date on which royalties related to the public Mechanical licensing MMA. a recording was fixed or pub - performance of sound recordings collective Pre-1972 sound recording lished, all pre-’72 recordings will played on noninteractive digital Every artist should become fa - protection have entered the public domain streaming platforms like Sir - miliar the new mechanical li - For context, sound recordings by Feb. 15, 2067. iusXM and Pandora. While censing collective, or MLC, being fixed before Feb. 15, 1972, have created to address an business - never been protected by federal wide problem caused by a com - copyright law. Instead, owners of pulsory mechanical license these “pre-’72” sound recordings The MMA represents the most comprehensive process that requires on-demand could only enforce rights avail - reform to music copyright law in decades. digital service providers like able to them under various state Spotify to license compositions laws. This created substantial on a song-by-song basis to legally confusion as to the actual scope Recognition of producers SoundExchange traditionally has exploit them. The MLC is de - of these rights, and in recent and engineers accepted LODs as a courtesy to signed to substantially stream - years, musicians and record la - The MMA incorporates legisla - featured artists, the MMA for - line this process. bels filed a series of class actions tion previously referred to as the mally makes this mandatory na - For context, everyone, from against companies like SiriusXM Allocation for Music Producers ture of this procedure. individual artists to international and Pandora in which they claim Act, or AMP Act, which statuto - Of course, implementing a law streaming platforms, must se - these platforms must pay for rily recognizes the contributions that requires SoundExchange to cure a mechanical license to re - their use of these pre-’72 record - of music producers, mixers and accept LODs from artists will not produce an audio-only version of ings pursuant to state law. engineers for the first time in the help producers or sound engi - a composition. Under the cur - The MMA brings pre-’72 history of the Copyright Act. neers who worked on older rent legislative landscape, this sound recordings within the Specifically, the MMA requires recordings, and who therefore must be done on a song-by-song scope of federal copyright law. SoundExchange to accept letters can no longer locate the artists basis.

Copyright © 2019 Law Bulletin Media. All rights reserved. Reprinted with permission from Law Bulletin Media. This is not terribly burden - for their exploitation. This re - procedure, the MLC must create with the MLC could eventually some when an artist or label sulted in a number of copyright and maintain a publicly accessi - lose the right to recover any rev - seeks to record one composition infringement actions against ble song database populated with enues generated through the in - and sell it in a physical format companies like Spotify. pertinent licensing information teractive streaming of their (say CD or vinyl record) or by To address these issues, the for every musical sound record - music. Of note, the MLC will hold digital download. In this case, the MMA calls for creation of the ing and composition, which onto royalties for unmatched licensor will secure a direct li - mechanical licensing collective, a should include the identity and songs that cannot be distributed cense from the song’s publisher, nonprofit entity operated by a 14- location of all persons who own into a royalty bearing account for or a compulsory license through member board comprised of or control an interest in these three years. It will then distrib - Harry Fox, and will pay a royalty music publishers, professional songs. ute unmatched royalties to own - that is currently nine-tenths of a songwriters and nonvoting rep - Thus, the MLC will establish ers based on their market share cent per digital download or resentatives from the National the largest and most comprehen - of royalties collected for the peri - physical pressing of the record - Music Publishers Association, sive database of music rights od in question. ing in which the composition is Digital Media Association and a holders that has ever existed, Also, publishers who receive embodied. songwriter trade association. which should benefit every facet distributions for unmatched roy - This becomes more complicat - On Dec. 28, the U.S. Copyright of the music industry. alties must pay or credit at least ed for on-demand streaming Office formally put out a request Many commentators and 50 percent of this money to their platforms, which must license for information to assist it in des - stakeholders disagree as to songwriters regardless of what hundreds of millions of composi - ignating members of both the whom the MLC should select to their publishing agreement says, tions to legally offer subscribers Mechanical Licensing Collective, manage the licensing process. which will put money in the access to their vast music li - or MLC, and the digital licensee Some companies, including pockets of songwriters signed to braries. Under the Copyright coordinator. This process will Harry Fox and SoundExchange, publishing deals even if their ac - Act, it is the streamers’ responsi - provide interested parties until have expressed interest in being count is unrecouped. bility to license and pay the me - March 21 to submit proposals as considered for this task, while The MMA demonstrates how chanical license fees required to to who should serve on the board some stakeholders argue that an positive change can be accom - stream these compositions, of these organizations, and until entirely new organization should plished when traditional adver - which is not a flat fee, but rather April 22 for the public to com - be formed. saries take a break from a percentage of the streamers’ ment on those submissions. There is also debate as to how attacking each another and in - monthly revenues. Once formalized, the MLC the MLC database should store stead collaborate to build some - To accomplish this, streaming must demonstrate to the copy - and update information, since thing beneficial to everyone. platforms retain the services of right register that it will have the compositions are frequently sold, It is the result of stakeholders third parties to secure the me - administrative and technological which will require the database from all ends of the music indus - chanical license on their behalf, capabilities to perform its re - to be able to easily track these try coming together to present a collect the streamers’ monthly li - quired functions before Jan. 1, changes. consensus bill to Congress, censing fee and distribute these 2021. Of great importance, composi - which voted unanimously in royalties to the copyright own - The MLC’s primary function is tion owners must register their favor of the law. It is not perfect ers. Spotify, for example, hired to administer blanket licenses to songs with the MLC or else they and represents compromises Harry Fox to serve as its licens - streaming platforms, which it risk losing the ability to be paid reached to address a variety of ing agent, whereas other plat - will do by selecting an organiza - for exploitation of their music. concerns voiced by all interested forms, like Amazon, use Music tion to act as the exclusive entity This is because streaming plat - parties, from songwriters to Reports Inc. to issue these licenses. The forms that properly secure blan - streamers. But this is not the end Unfortunately, this process is streamers will send this entity ket licenses in compliance with of the story. Rather, it is the be - plagued with issues, which re - monthly usage reports and royal - the MMA will be exempt from ginning of the next chapter in the sulted in the streamers’ failure to ty payments and the entity will copyright infringement actions ever-evolving music industry. properly license many composi - then identify and pay the pub - arising from their use of compo - And this author personally can’t tions and their use of other com - lishers and songwriters entitled sitions not contained within the wait to see what comes next. positions without accurate to receive a portion of these database. — I would like to thank Deidre information concerning the iden - blanket license fees. Thus, songwriters who fail to Davis for her excellent assistance in tity of those who should be paid To efficiently implement this properly register their music preparing this article.