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15A music licensing
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15A.1 — music synchronization (go there)
1909 Act: §§1(e), 25(3)
1947 Act: §§1(e), 101(e)
1976 Act: §§115, 801-810
CFR: § 201.18 Notice of intention to obtain a compulsory license for making and distributing phonorecords of nondramatic musical works;
§ 201.19 Royalties and statements of account under compulsory license for making and distributing phonorecords of nondramatic musical works;
§ 253.4 Performance of musical compositions by PBS, NPR and other public broadcasting entities engaged in the activities set forth in 17 U.S.C. 118(d);
§ 253.5 Performance of musical compositions by public broadcasting entities licensed to colleges and universities.
Circulars 73, 74a, 74b, 74c, 75
“Under the 1909 copyright law, the copyright owner of a musical composition had the exclusive right to make the first mechanical recording of the work. After the owner had initially recorded the work, he or she was required to submit to the Copyright Office a Notice of Use. The work could then be recorded by anyone for a fixed royalty fee or by negotiating a separate contract. … Under the current law effective 1978, a copyright owner need only register a claim to copyright to be entitled to receive royalties, so the Notice of Use file is no longer active.” (Information Circular 23)
Plaintiff Gene Buck was President of ASCAP. A hotel operator had made “copyrighted compositions available to guests through radio receiving sets and loud speakers”. Under these circumstances, “Reception of radio broadcasts and its translation into sound by instrumentalities under control of defendant is not mere audition, but essentially a reproduction of the original program.” This constituted infringement.
Copyrighted songs were received on the radio in George Aiken’s food shop (Pittsburgh, PA) from local station WKJF-FM, which was licensed by ASCAP to perform the songs, although Aiken had no such license. The Supreme Court ruled, “To hold that respondent ‘performed’ the copyrighted works would obviously result in a wholly unenforceable regime of copyright law, and would also be highly inequitable, since (short of keeping his radio turned off) one in respondent’s position would be unable to protect himself from infringement liability. Such a ruling, moreover, would authorize the sale of an untold number of licenses for what is basically a single rendition of a copyrighted work.”
(The license between ASCAP and the station had specifically stated, “Nothing herein contained shall be construed as authorizing LICENSEE [WKJF-FM] to grant to others any right to reproduce or perform publicly for profit by any means, method or process whatsoever, any of the musical compositions licensed hereunder or as authorizing any receiver of any radio broadcast to perform publicly or reproduce the same for profit, by any means, method or process whatsoever.”)
CBS argued that “the issuance by ASCAP and BMI to CBS of blanket licenses to copyrighted musical compositions at fees negotiated by them is price fixing per se unlawful under the antitrust laws.” The Supreme Court ruled that it wasn’t. (As antitrust is outside the scope of this web site, the reasoning that the Court used in reaching this verdict is not recounted here.)
“CBS operates one of three national commercial television networks, supplying programs to approximately 200 affiliated stations and telecasting approximately 7,500 network programs per year. Many, but not all, of these programs make use of copyrighted music recorded on the soundtrack. CBS also owns television and radio stations in various cities. It is ‘the giant of the world in the use of music rights,’ the ‘No. 1 outlet in the history of entertainment.’” The complaint: “CBS would prefer that ASCAP be authorized, indeed directed, to make all its compositions available at standard per-use rates within negotiated categories of use.”
In ruling that CBS could not succeed in their argument that ASCAP and BMI were engaging in illegal price-fixing, the Supreme Court noted that music rights could be obtained from individual composers, and “there are no practical impediments preventing direct dealing by the television networks if they so desire. Historically, they have not done so. Since 1946, CBS and other television networks have taken blanket licenses from ASCAP and BMI. It was not until this suit arose that the CBS network demanded any other kind of license.” ASCAP and BMI provide a valuable solution to the alternatives, for “it would be nearly impossible for each radio station to negotiate with each copyright holder separate licenses for the performance of his works on radio… .
“Finally, we note that Congress itself, in the new  Copyright Act, has chosen to employ the blanket license and similar practices. Congress created a compulsory blanket license for secondary transmissions by cable television systems and provided that ‘[n]otwithstanding any provisions of the antitrust laws, … any claimants may agree among themselves as to the proportionate division of compulsory licensing fees among them, may lump their claims together and file them jointly or as a single claim, or may designate a common agent to receive payment on their behalf.’ 17 U.S.C. App. 111 (d) (5) (A). And the newly created compulsory license for the use of copyrighted compositions in jukeboxes is also a blanket license, which is payable to the performing-rights societies such as ASCAP unless an individual copyright holder can prove his entitlement to a share. 116 (c) (4). Moreover, in requiring noncommercial broadcasters to pay for their use of copyrighted music, Congress again provided that ‘[n]otwithstanding any provision of the antitrust laws’ copyright owners ‘may designate common agents to negotiate, agree to, pay, or receive payments.’ 118 (b). Though these provisions are not directly controlling, they do reflect an opinion that the blanket license, and ASCAP, are economically beneficial in at least some circumstances.”
This concludes the summary of the reasons for the decision.
The background on the rise of licensing organizations, as recounted in the Court opinion, provides an understanding of how licensing procedures have come to be as they are:
“Since 1897, the copyright laws have vested in the owner of a copyrighted musical composition the exclusive right to perform the work publicly for profit, but the legal right is not self-enforcing. In 1914, Victor Herbert and a handful of other composers organized ASCAP because those who performed copyrighted music for profit were so numerous and widespread, and most performances so fleeting, that as a practical matter it was impossible for the many individual copyright owners to negotiate with and license the users and to detect unauthorized uses. ‘ASCAP was organized as a “clearinghouse” for copyright owners and users to solve these problems’ associated with the licensing of music. As ASCAP operates today, its 22,000 members grant it nonexclusive rights to license nondramatic performances of their works, and ASCAP issues licenses and distributes royalties to copyright owners in accordance with a schedule reflecting the nature and amount of the use of their music and other factors.
“BMI, a nonprofit corporation owned by members of the broadcasting industry, was organized in 1939, is affiliated with or represents some 10,000 publishing companies and 20,000 authors and composers, and operates in much the same manner as ASCAP. Almost every domestic copyrighted composition is in the repertory either of ASCAP, with a total of three million compositions, or of BMI, with one million.
“Both organizations operate primarily through blanket licenses, which give the licensees the right to perform any and all of the compositions owned by the members or affiliates as often as the licensees desire for a stated term. Fees for blanket licenses are ordinarily a percentage of total revenues or a flat dollar amount, and do not directly depend on the amount or type of music used. Radio and television broadcasters are the largest users of music, and almost all of them hold blanket licenses from both ASCAP and BMI. Until this litigation, CBS held blanket licenses from both organizations for its television network on a continuous basis since the late 1940’s and had never attempted to secure any other form of license from either ASCAP or any of its members… .
“This litigation and other cases involving ASCAP and its licensing practices have arisen out of the efforts of the creators of copyrighted musical compositions to collect for the public performance of their works, as they are entitled to do under the Copyright Act. As already indicated, ASCAP and BMI originated to make possible and to facilitate dealings between copyright owners and those who desire to use their music… .
“A middleman with a blanket license was an obvious necessity if the thousands of individual negotiations, a virtual impossibility, were to be avoided. Also, individual fees for the use of individual compositions would presuppose an intricate schedule of fees and uses, as well as a difficult and expensive reporting problem for the user and policing task for the copyright owner. Historically, the market for public-performance rights organized itself largely around the single-fee blanket license, which gave unlimited access to the repertory and reliable protection against infringement. When ASCAP’s major and user-created competitor, BMI, came on the scene, it also turned to the blanket license.
“With the advent of radio and television networks, market conditions changed, and the necessity for and advantages of a blanket license for those users may be far less obvious than is the case when the potential users are individual television or radio stations, or the thousands of other individuals and organizations performing copyrighted compositions in public. But even for television network licenses, ASCAP reduces costs absolutely by creating a blanket license that is sold only a few, instead of thousands, of times, and that obviates the need for closely monitoring the networks to see that they do not use more than they pay for. ASCAP also provides the necessary resources for blanket sales and enforcement, resources unavailable to the vast majority of composers and publishing houses. Moreover, a bulk license of some type is a necessary consequence of the integration necessary to achieve these efficiencies, and a necessary consequence of an aggregate license is that its price must be established.
“This substantial lowering of costs, which is of course potentially beneficial to both sellers and buyers, differentiates the blanket license from individual use licenses. The blanket license is composed of the individual compositions plus the aggregating service. Here, the whole is truly greater than the sum of its parts; it is, to some extent, a different product. The blanket license has certain unique characteristics: It allows the licensee immediate use of covered compositions, without the delay of prior individual negotiations, and great flexibility in the choice of musical material… .
“ASCAP does set the price for its blanket license, but that license is quite different from anything any individual owner could issue. The individual composers and authors have neither agreed not to sell individually in any other market nor use the blanket license to mask price fixing in such other markets… . The District Court found that there was no legal, practical, or conspiratorial impediment to CBS’s obtaining individual licenses; CBS, in short, had a real choice.”
Paul Whiteman was among the top bandleaders of the 1920s into the 1930s; live radio broadcasts he did for CBS in 1929 established radio as a premiere entertainment medium when radio was a struggling business. Such 1920s broadcasts made especially for radio, as well as authorized live broadcasts from New York City nightclubs, were the first experiences that many people outside of New York City heard which allowed them to hear a sampling of an evening at one of the “top spots.” (The preceding are EDITOR’S NOTES, not mentioned in the case.)
Whiteman learned that his commercial recordings for RCA were played on radio, and “such indiscriminate and unauthorized use of his records interfered with his common-law property right in and to his musical interpretations and renditions inscribed on such records; hindered his chances of obtaining contracts for the use of his services; forced him to compete with himself; curtailed his income based on royalties from such records…”
RCA also sought to curb the radio performance of these records, which “in the case of records manufactured after November 1932, constitutes a breach of contract resulting from a restrictive covenant accompanying the sale of the records and expressed in the legend on the label attached to the records. Furthermore, RCA contends that attempts by defendant, Whiteman, to license records for broadcasting and public performances, together with representations to the effect that he alone is entitled to grant such license, interferes with complainant’s exclusive right to control the use of its records, damages it reputation, good will and business, …” and amounts to Whiteman claiming as his own what are RCA’s property rights.
“Granting that the artist, Mr. Whiteman, has a common-law property right in and to his unique interpretation of musical selections it follows that he had the power to bargain away this right. This he did in his 1924 contract with RCA’s predecessor.”
The District Court determined: “The very nature of the phonograph record indicates the limited form of its publication. It was intended for listeners of a phonograph, not for a radio audience… . Broadcast stations can give their public Whiteman’s orchestra, by hiring the orchestra at a proper price, as some of them do.” The radio stations named in the suit were enjoined. (All quotes thus far are from the District Court decision.)
On appeal, it was established that RCA was entitled to remedies from the radio stations; this had not been at issue in the first trial.
The Appeals Court found that because radio announcers declare that what listeners hear on these broadcasts is a recording, there is not “a tort which Whiteman could enjoin. That would indeed be ‘unfair competition.’” Complaint dismissed.
In reaching its decision, the Court said that “we think that the ‘common-law property’ in these performances ended with the sale of the records and that the restriction did not save it; and that if it did, the records themselves could not be clogged with a servitude.
“Copyright in any form, whether statutory or at common law, is a monopoly; it consists of the power to prevent others from reproducing the copyrighted work. W.B.O. Broadcasting Corporation… merely used those copies which [Whiteman] and RCA Manufacturing Co., Inc. made and distributed. The putatively protected performances were themselves intended for that purpose and that alone”.
The requirement limiting use by “‘compulsory licensee’” of copyrighted musical compositions “in mechanical reproduction to the use originally made or granted by the [copyright owner] in the initial mechanical reproduction, has been liberally construed… to mean that the reproduction need not be identical, but that some latitude has been allowed to each manufacturer to prepare an individual instrumental or vocal arrangement of the composition.”
When the defendants recorded “a Spanish dance song” called Malaguen, “the said musical version and arrangement was made without the knowledge or consent of the plaintiff”. Nonetheless: “The defendants… admit that there is owing to the plaintiff a certain amount of royalties”. No infringement was found, only that royalties were due.
“To hold that the separate and distinct right to make a version and arrangement also existed in connection with the right of mechanical reproduction, would be to rewrite the section so as to add to subsection (c) the right to mechanical reproduction. This the Congress has steadfastly refused to do on the ground that to do so would be to create an opportunity for the birth of mechanical trusts… . The court may not create a right which the Congress has seen fit not to grant.”
The Appeal Court said that plaintiff “executed what it called its ‘Mechanical License agreement,’ which United Masters in turn also executed.” (Although the defendants accepted their loss in the District Court, the plaintiff had appealed, seeking a finding of greater wrong.)
Cases Summarized in Other Sections
|Foreign & Domestic Music Corp. vs Michael M. Wyngate, Inc., et al [includes Harbran, Inc., Jewel Productions, and Eureka Productions, Inc.] (launch this) concerned music incorporated into the 1933 movie Ecstasy.
Frank Music Corporation, Robin Wright, George Forrest, Anne Lederer (as Executrix of the Last Will of Charles Lederer), Lester Davis, and Edwin Lester vs Metro-Goldwyn-Mayer, Inc., MGM Grand Hotel, Inc., and Donn Arden (launch this) had the MGM Grand Hotel paying for the use of the music from the musical Kismet but believing that it did not have to pay a higher price to present the music within a story because the underlying story of the music had entered the public domain.
Goldstein vs California (launch this) was the Supreme Court ruling on a record-piracy law.
Edward B. Marks Music Corp. vs Seva Foullon, United Masters, Inc., and Bard Record Company, Inc. (launch this) concerned an unauthorized arrangement of a song.
Palladium Music, Inc vs EatSleepMusic, Inc. (launch this) concerned a seller of karaoke tracks for songs which it didn’t have authorization to adapt.
The 1976 Copyright Act (which went into effect 1978) added a distinction which had not been part of previous copyright law and which therefore affected some of the prior court decisions:
“To perform or display a work ‘publicly’ means—
“(1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or
“(2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or processs, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.” (§ 101)
Owners of copyright in music have gained rights to secure payment from venues which play recorded music, even though these venues (typically bars, retail establishments, etc.) already own and have paid for a retail copy of the music or are playing an unaltered radio broadcast paid for by sponsors whose payment for ad time to the station has already provided compensation to the copyright owners based on audience size (including those in venues being asked for additional compensation).
15A.1 music synchronization
The operator of the Arcade Theater in Louisiana was informed by ASCAP that movie-theater owners such as himself who had not yet signed up with a music-licensing firm were liable for a “license for the public performance” “at the annual price of 10 cents per seat”. Although the operator was already paying rentals for the films he played, this additional expense was for “Synchronization of copyrighted songs for use in motion pictures”. Apparently, although the movie studios paid to license the songs before they were “fixed” onto the film prints, exhibition of those prints was a matter to be settled by the theater owners. (ASCAP held the license for exclusive right to public performances for profit of many, but not all, of the musical compositions heard in movies.) The Court ruled that the theater was required to pay because it opened its doors, invited the public in, and collected the ticket price. It was deemed irrelevant that the owner didn’t know beforehand what songs were in what movie.
The background of this case is discussed under fair use. EDITOR’S NOTE: To understand why CBS might challenge a particular aspect of copyright as to the music of The Gold Rush, the reader should understand that this 1925 movie was copyrighted as a silent film the year of its release, and then a re-edited version—with a soundtrack—of the film was copyrighted in 1942. Only this later version contained music. When CBS argues that “the visual portion of the film is in the public domain”, it is because the 1925 copyright was not renewed. The 1942 copyright did get renewed, thus protecting the music beyond 1970 (the 28th year), a factor that seems to have been swept aside by CBS in their argument, as reported in the Appeals Court decision:
“CBS also challenges the $380. award for statutory copyright infringement of The Gold Rush on the ground that, since the visual portion of the film is in the public domain, its 1½ minute use of the music soundtrack was insubstantial as a matter of law, and thus plaintiffs did not make out a prima facie case with respect to The Gold Rush. However, plaintiffs’ copyright protects not only the right to use the soundtrack itself, but also the right to use it in synchronization with the film for which it is written. Schroeder v. William Morrow & Co., 566 F.2d 3, 6 (7th Cir. 1977); Hartfield v. Peterson, 91 F.2d 998, 1000 (2d Cir. 1937). In light of the evidence that the particular scene used (of Chaplin cooking and eating his shoe) was quantitatively important in the context of the entire film and that the music was important to the scene (Tr. at 1594-95), the jury, which saw both the CBS broadcast and The Gold Rush, could reasonably have determined that CBS’ use of the film was substantial.”
EDITOR’S NOTE: Although the silent version of The Gold Rush was considered to be in the public domain when the music-synchronization infringement occurred in 1977 and still so when the case was decided in 1982, the entry of the United States into URAA/GATT in 1994 has been regarded as placing the film (arguably) back into copyright. Chaplin, a British citizen, had copyrighted the film in his own name rather than in the name of his (California) corporation, so the Chaplin Estate has argued that the film can be protected by British copyright. A counter-argument is presented on the exercises page of this web site.
Maljack sued over an unauthorized homevideo release of the 1963 movie McLintock!. GoodTimes, the company which issued the unauthorized version, believed it had taken the proper steps insofar as underlying music rights were concerned.
“The ‘McLintock’ motion picture copyright expired in 1991, and the film itself is public domain work. The music in the film was separately copyrighted, however, and is still protected by copyright law. GoodTimes’ rights derive from United Artists (‘UA’), which owned the music copyrights.” GoodTimes had contracted with EMI, successor in interest to UA.
“MPI claims that it is the sole owner of the ‘synchronization rights’ to the film, i.e., the right to synchronize the music with the film. MPI bases its argument on its interpretation of the 1962 contract between Batjac and UA. Batjac, the producer of the movie, licensed the motion picture to UA for seven years. The section conveying the motion picture rights contained a ‘future technologies’ clause… .” After seven years, Batjac got back the film, but UA still had the music, minus the “future technologies”. “MPI relies heavily on the lack of a future technologies clause in the section of the contract granting music rights to UA. Although UA owned the music copyrights [which were renewed], MPI argues that Batjac reserved the rights to the music which was recorded ‘on the very soundtrack of the picture.’
“MPI’s theory, however, contradicts the plain language of the contract between Batjac and UA, which grants all music rights to UA, including the right to copyrights in ‘the music and musical compositions recorded or contained upon the sound track of the Picture.’ If the synchronization rights are part of the music copyrights, they do not belong to MPI.”
“MPI points out that while Batjac had the copyright to the motion picture, Batjac ‘owned the exclusive right to use the musical works in the picture.’ These rights, however, existed as part of the movie copyright, which expired in 1991.”
Taking note of the manner in which rights were organized, the court noted, “testimony shows that the parties intended for the motion picture copyright to protect Batjac’s interests; however, Batjac’s rights protected by the motion picture copyright expired when Batjac failed to renew the motion picture copyright.”
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