Copyright Rights Demystified: A Practical Guide to Copyright Licensing, The Final Act!

Alright copyright licensors and licensees!  By now, I hope you’re feeling pretty comfortable with the way copyright rights break down; or, at least, more comfortable than you were before.  We’re finally in the home stretch, and today we’ll be tackling the last two rights in the copyright owner’s “bundle”: public display & derivative works.  I’ve saved these for last simply because they are generally more specific and less utilized than some of the other rights, particularly in the world of music.  But they are still important, and I advise that you ignore them at your peril.

Public display somewhat functions the same in public performance, at least with regard to the “public” part.  Once again, in order to qualify as a licensable right, is must be displayed to more than mere family or close friends in a private gathering; it must be a place that is generally open to the public, even if the display in a particular instance is during a private event in public.  Please see my blog on public performance for more detailed information on what constitutes a copyrightable work being in “public.” 

Assuming your display of the work is in “public,” you must obtain a license from the owner.  As you can probably surmise, this really isn’t applicable to music because music isn’t visual (philosophical arguments aside); this right mainly covers works of visual art and sometimes literature.  With regard to works of visual art, it is the right that needs to be licensed and needs to be negotiated straight with the copyright owner via a private agreement (to the best of my knowledge, there is no licensing agency for these situations, except maybe the gallery housing the work… although they are often the licensee!).  Like music, where the finer points of audio and performance are often hotly debated, so the elements and aspects of the display of art is of great import.  Whether you’re a licensor or a licensee, must sure your agreement covers the most detailed description of display possible.  Some things to consider are:

1)    Angle of display;

2)    Size of wall (required and/or preferred/mandated);

3)    Framing (if applicable);

4)    LIGHTING, including natural light;

5)    Placement within an actual space (featured, grouped with paintings of similar theme/ origin, etc)

6)    Space conditions, including temperature, air pressure/quality (lighting comes into play here, too);

7)    Moral Rights

8)    Length of display and/or rotation;

9)    Insurance;

10) Transportation and storage of the piece(s) before and after, including liability and responsible parties depending on the location of the art

The last consideration is especially important, given that visual art is often VERY expensive and irreplaceable.  If you are an artist, you want to strive for FCA with regard to transportation; this means as soon as the piece arrives in the hands of a “common carrier” (i.e. UPS, USPS, Fed Ex), it becomes their responsibility.  In contrast, so-called FOB shipping means that liability doesn’t shift to the carrier until it’s actually loaded on “board” – so if something happens before that time, you (artist) could be left holding the bag.  Not a good thing.

If you’re an artist living in Massachusetts, you should familiarize yourself with MGL 104A, the consignment art law.  It was revised a few years ago and lays out detailed (and rather strict) requirements for anybody or anything holding your art on consignment (which is almost always the case with galleries). 

Another important right exclusive to fine art is the idea of “moral rights.”  Basically, moral rights gives the copyright owner extended creative control over their art, even after it leaves their hands.  It protects against destruction of the art (and not just total destruction), as well as misappropriation (either putting someone else’s name on your art or putting your name on art you don’t want to be associated with).  Moral rights has been an area of constant debate and contention, particularly here in the US, where moral rights are extremely weak as compared with some of the origin countries of these rights, including France and other European countries, and Mexico.  As the US is a signatory to the Berne Convention, many feel that we need to beef up our moral rights to meet European standards.  However, this is another blog for another time.  For now, here is some light reading on moral rights, including the US and global comparison.

If you are involved with visual, graphic or fine art, I would highly recommend aligning yourself with an attorney that specializes in this area of law.  I don’t mean merely copyright law, either; there are a myriad of considerations are both important and specific to visual art, ranging from transportation to estate planning. 

Alright, that’s my 2 cents on that!  On to our last right: derivative works!

As defined by the Act, a derivative work is: “a work based upon one or more pre-existing works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship.” (17 USC §101). 

So what the HECK does that mean in normal terms?  It means that you changed the essential “character” of a work; that is, more than a mere cover (which is covered by a mechanical license, remember?!), but, say a POLKA cover of Metallica’s “Enter Sandman.”  If you change the “heart” of the work, be prepared to license the right to create a derivative work.

If is also important to remember that even though you, new artist, is creating a “new” work with it’s own, separate copyright, you don’t have any sort of copyright ownership over the original content you used; only the “new” stuff you created.  So, for example, if you take a series of short stories from the 60’s, let’s say, you only hold a copyright over the “new” work.  Generally, that’s the arrangement of the stories (assuming it’s unique enough to qualify for copyright), and any new material such as a foreword, epilogue, annotations, etc. 

What constitutes a derivative work is often difficult to quantify, given that it often walks the line between statutory licensing and another beast of copyright law… the dreaded FAIR USE DEFENSE (*shudder!!*).  The simplest advice I can give is to err on the side of caution – if you think your new work might be so transformative as to create a new work out of an already-created work, get a license.  I know this can seem like a pain in the ass, especially if you don’t think your work will garner enough to expose to warrant the payment of licensing fees.  But I PROMISE YOU, copyright litigation is lengthy and expensive, not to mention a complete pain in the ass.  If you reach out directly to the copyright owner, depending on how “big”/”popular” the work is, they will often charge a nominal or reasonable one-time fee.  I can assure this will NOT be the case if your work makes it big and you didn’t get permission. 

I think that’s really the lesson overall with copyright licensing – in case of doubt, simply ask.  You may be surprised at what the copyright owner has to say.  At its core, copyright is designed to create of balance of artistic dissemination and artistic protection.  And, often, it’s the sense of fairness and respect for your fellow artists that is at the heart of copyright licensing.  In a time when no one wants to pay for copyrighted materials, it’s important for copyright owners and content users to pave the way for new licensing deals that respect both the value of artistic expression and the new free market.

I hope you’ve found this series interesting and educational!  If you have any questions, please do not hesitate to post them here on the blog (I check it often as do some other copyright nerds), or visit our site at www.newleaflegal.com and email info@newleaflegal.com.  And for more information and cool blogs specifically covering licensing deals and issues, visit my partner Steven Shapiro’s blog, Brand Licensing – YEAH!  Happy licensing!

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Copyright Rights Demystified: A Practical Guide to Copyright Licensing, Part Trés

Ok, my soon-to-be copyright gurus, we’re half way through our riveting discussion of the separate rights that come with each copyright!  Today’s amazing break down covers a right that is fairly new to the Copyright Act: the right to public performance via digital transmission. 

Though a newer addition to our law, since this new rights initial inception into the Act in the 1990’s, it has been the subject of constant debate.  The most memorable recent debate is one most of the public is actually familiar with; the settlement between webcasters and the RIAA.  Just in case you’re not into reading Congressional rulings, here’s the skinny: fees for public performance were wiping out webcasters left and right, basically making it impossible for them to exist profitably as a business.  This was because, before the settlement, a webcaster had to pay a fee each time a song was played, and for each user that was playing it.  Although that fee was mere hundredths of a penny, it adds up FAST.  Let’s do a quick math problem: 15 songs per hour (approx 4 minutes/song), and let’s say 100,000 people are listening to a webcasted station at a given moment.  I can’t remember the exact old fee, but let’s say it is .007 cents.  That’s a whopping $10,500 PER HOUR for a webcaster!!  Hell, even if I completely off and it is $1,500, that’s still astronomical.  According to this article, under the old fee arrangement, even giants like Pandora were sending about 75% of their revenue straight out the door for this licensing fee.  And to add insult to injury, we’ve officially approached a time in history where no one wants to pay anything for music, leaving webcasters to rely solely on advertising income to stay afloat.  The system was clearly broken.

Luckily, after years of negotiation, a settlement was reached.  I won’t get into the nitty gritty of the exact figures (truth be told, I’m having a bit of trouble finding them online), but the fees are now structured around a percentage of revenues that increases with revenue size (i.e. Pandora pays more than your local radio station that simultaneously webcasts).  Also, content providers should not that subscription stations have different rates – in fact, there are quite a few different rates based on the type of digital broadcast you’re providing.  I would highly recommend spending some time on Sound Exchange, particularly in the FAQ (for both content providers and content owners) and in the Service Provider and Owner sections, respectively. 

Besides the fees themselves, the most important thing to ask is: Who is getting paid?  Well, this particular right belongs to the owners of sound recordings – not the owners of the songs themselves, who get paid under the Public Performance Rights that we discussed last time.  Thus, it’s mostly record labels that are seeing the benefit of this moolah, although there are some artists that have retained the rights to their sound recordings, particularly in the hip hop industry.  Sound Exchange is basically the “PRO” of sound recordings; much like ASCAP, BMI and SESAC oversee payment directly to publishers and songwriters, so Sound Exchange oversees the payment of royalties to the owners of sound recordings. 

PLEASE NOTE: if you are an artist and your own your own recordings (most likely where you are NOT signed to a label), you should register with Sound Exchange here.  Much like the PROs, Sound Exchange has a complex system for tracking plays of recordings and may have money for you!!  So get on the ball, people.

As a final note, I would like to briefly address the Performance Rights Act, which would essentially extend the “digital” rights to terrestrial radio… aka “regular” radio.  It is currently stalled up Capital Hill.  You may have heard some PSAs (Public Service Announcements) regarding this possible amendment, which essentially threaten to start charging people for radio and incorrectly label it a “tax” on radio.  I am not taking an official position on this, but you should note two bias things here: 1) these commercials were paid for by the broadcast industry, who are the direct targets of these new proposed fees; 2) the original proposal regarding payment on sound recordings was meant to encompass both analogue and digital broadcasts, but as a result of a tremendous lobbying effort by the broadcasters, it was limited to “digital” transmissions.  On the flip side of the coin, here is an article opposing the Act, and some perfectly logical reason supporting the proposition.

So there’s your crash course in digital transmissions.  Hopefully I’ll be able to button it all up real nice for you later this week when we round out with the last two rights: public display and derivative works.  As always, please feel free to email me directly @ shannon@newleaflegal.com

www.newleaflegal.com                  

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Copyright Rights Demystified: A Practical Guide to Copyright Licensing, Part Duex

First and foremost, my deepest apologies for the untimely break in blogging…right in the middle of this series. Things at New Leaf (hyperlink) have been pretty nuts, and then I took a last minute trip to Vegas with my fiancé for a business trip, and, well, you know, there’s no excuse. Back I have returned!

Today we’ll be covering one more very important right in the copyright owner’s “bundle”: the right to publicly perform.

The right to publicly perform is actually a pretty sneaky beast in copyright law. First, let’s look at actual “live” performances, because this one is a TINY bit more straight forward. Basically, the Copyright Act says that if you’re performing for anybody more than your close family and friends in a private dwelling, it’s a public performance. So this excludes things like parties in a private residence (so no, Moms don’t have to get licenses for their kids’ birthday parties, and you don’t have to get one for this weekend’s frat party). However, this technically doesn’t exclude “private” parties in places that are generally open to the public, or which cater to events. So, if you have a birthday party, a wedding, or a bar mitzvah at a public event hall, even though the general public isn’t allowed at your event, a license needs to be obtained. Please note this also includes outside venues, such as parks with public stages.

But before you freak out about licenses, there’s good news! This is NOT your responsibility as an individual hosting the event; it’s the job of the commercial venue itself. Public performance licenses are issued by Performance Rights Organizations. Most countries only have one, but in the essence of true capitalism, in the US, we have three: ASCAP, BMI & SESAC. If you own a venue, ASCAP & BMI and absolute musts – each hold a huge catalogue of music, and each has active scouts in every area of the US that will check in on the venues regularly to make sure they’re up to date on their licenses. SESEC used to be somewhat optional because it was a private, for profit company that held a very small and somewhat obscure catalogue of music, mainly classical (and for you music nerds, by “classical” I mean the mainstream genre encompassing all orchestral music… not the classical period of music… all of which is now in the public domain ;) ). However, SESAC has been expanding its catalogue over the last decade or so, and I would now advise to play it safe and get a blanket license for all three organizations.

So how do you get a license? It’s relatively easy and can be done online for all three organizations - ASCAP, BMI & SESAC. I think the better questions are these, though: 1) How much will my license cost? And 2) Do I even need a license?

The fee for your annual license is based on a crazy complex calculation, which varies for each organization, based on a variety of factors such as square footage, number of speakers, number of events, how often you have live performances and how often you pump music through the speakers, etc. Thus, Madison Square Garden is going to pay TONS – not only are they a huge arena, but they basically play music all the time between concerts and sporting events. In contrast, a town park may only pay a little for summer chamber music concerts. However, the number one question I get from small businesses is ‘Well, I’m only a small business that plays the radio/CDs. Do I have to pay and, more importantly, WHY I have to pay?’ The Copyright Law is very specific on exceptions to licensing, including down to the square footage. If you’re considering foregoing a license, I would STRONGLY urge you to read the article I just hyperlinked, and understand your rights. (For example, playing the radio is different than playing CDs, etc) If a scout tried to tag you on it, the fines are be substantial and, if you truly understand you don’t need to pay, you want to be able to assert that with certainty.

One last thing that is important to remember if you’re a copyright owner: public performance rights belong to the owners of songs, not recordings; basically, songwriters and publishers – NOT record companies. This is generally why songwriting and publishing is actually more lucrative than the recording business; royalties are paid straight to these folks from the PROs without deducting overhead or other expenses. It’s something to keep in mind when you’re paying your license bill as well – in a way, you’re funding the source of music creation more directly.

Alright, I think that pretty much covers us on public performance. On Monday, we’ll hit up digital transmission: how it is different from “regular” public performance, and who needs to be concerned about it.


www.newleaflegal.com

Copyright Rights Demystified: A Practical Guide to Copyright Licensing

Are you an artist that is registered with BMI or ASCAP (or SESAC)? What about an artist with a publishing deal? A record deal? Is someone interested in placing your song in a movie, tv, etc.? If so, you are probably REALLY confused about how copyright works and exactly what you're getting paid FOR.

What the hell is a "mechanical" license? A "synch"? Over the next couple of blog entries, I'll be breaking down the maze that are the copyright "rights" and giving you a practical guide to managing and licensing them.

Ok, first and foremost, copyright is actually 6 different rights rolled into one, each of which can (and should) be licensed separately; that means, for each "right" someone needs to use your music, they should be paying a fee. Here's a run down of the rights:

1) right to copy (or "reproduce");
2) right to distribute;
3) right to publicly perform;
4) right to publicly perform via digital transmission;
5) right to create derivative works;
6) right to publicly display

Before we even get to those rights however, lets talk briefly about recorded music. Recorded music almost always contains TWO copyrights: one for the actual underlying song - this invokes so-called "publishing rights" - and one for the actual recording of that song - often referred to as a "master." So, for example, if you want to re-record someone else's song, you only have to licensing the song's copyright. In contrast, if you want to use a "sample" of a song, you're often dealing with the copyrights for both the song and master (which are often owned by different parties). This is often why you might hear a bit of a song that isn't the "original" recording you know and love, say, on a Television commercial. That is because there is often an additional (and substantial) fee for using the recording itself.

The difference between song rights and masters rights are VERY important, especially if you're a musician signed to a label. Often, you technically don't OWN the actual recording copyright; the label does. So you actually don't have the right to give out the recording or treat it in any way that isn't consistent with your contract (or with the label's consent). Something important to keep in mind.

Alright, let's get back to copyright in general. Let's look at the rights to copy and distribute first, which are normally licensed together.

The right to copy technically means any of the song. In the physical sense, this incorporates any burned copies of your work, any downloaded copies, and, technically any "streaming" (because the work is considered to be temporarily copies onto the listener's computer). Contrary to popular belief, people are not allowed to make additional copies of CDs they own, even for so-called "archival" purposes. That idea came from a judge in a very old case, BetaMax, but it was actually never enacted into law. So why can you put a copy of your CD onto your iPod? Well; from a strictly legal perspective, you can't. And back in the mid-late 90's, record companies tried to stop you by putting DRM ("digital rights management") onto the CD to prevent it. However, it also had the unfortunate side effect of crashing your FUCKING computer... so public policy forces this kind of copying to basically be "overlooked."

However, it is still faux pas - legally and ethically - to make copies of CDs for your friends or send them Mp3. That is why, for example, iPods can only synch to one iTunes account, and why Napster only let's you maintain your library on 5 computers. They are limiting your "license" to use the music.

Which brings us back to copying; as an artist, when you sell a CD, you're actually only selling a LICENSE to your listeners to listen to that one copy privately, or to sell that ONE copy as they see fit. Nothing more. If they want to make additional copies, they have to license that right from the owner of the song (usually the songwriter or a publishing company), and from the record company (if they want to use a particular recording).

Well, what if you want to do a cover of a song? This is where the "statutory" or "mechnical" license comes in. It's the right to copy and distribute a song, and it MUST be granted to anyone that agrees to pay the fee of 9.1 cents PER song, PER copy. These licenses are very easy to get and are administered through the Harry Fox Agency. Simply type in the song info, how many copies you're going to press and VIOLA! Instant license. Now it is important to note that there are TWO rights being licensed here; the rights to copy AND to distribute. Practically, one is really no good without the other.

In tandem with this, I would like to touch briefly on live performances of covers. Musicians, please note - it is NOT your responsibility to get or to pay for a license to do this IF you are playing in a venue. It is the venue's reponsibility to buy "blanket" licenses from BMI, ASCAP and SESAC. If they don't, THEY are on the line for it, not you. The only time this comes into play is if you are performing in a public place - but we'll get to that later.

Let's switch the to "other side" of licensing the rights to copy and distribute - for masters. This comes into play usually when musicians want to use a "sample" of a recording, or for compilation CDs (i.e. "Now that's What I Call Music 1,567!") If you want to use a sample, the first part is easy - just log onto Harry Fox and license the song. The second part is usually a bit more complicated because it's usually a label that owns the rights to the actual recording. However, if you're licensing a song from an indie artist, you can often call them right up and ask; usually they will grant it for a small fee, or sometimes for free if they really want the exposure. The most important thing to note here is that, unlike mechanical licenses, there is no absolute right to use a recording, nor is there a set fee. You have to go straight to the owner, who CAN tell you no and technically set any price they'd like. Neither will probably be the case, but just be aware.

So you've got to reach the record company; yes, I understand that can be a complete pain in the ass. However, many labels do have licensing departments and even with some of the bigger indie labels, you can send an email to customer service and get a response. After all, you want to give them money! They'll respond.

One small note before we stop for the day - all this counts for digital distribution too. So make sure if you are contacted to license music, you ask if the person wants to distribute it online; that's an expansion of right that has a value!

Until next time, then.

www.newleaflegal.com

REPO! The Genetic Opera: An American Original

Way back in the beginning of '09, my friends and I got wind of a little movie called "Repo! The Genetic Opera"; it takes place in the future, where a corporation called "GeneCo" has figured out how to manufacture synthetic organs and sells them to people on credit. However, if you can't make your payments... the Repoman comes and takes back whatever organ you've been given. Sounds like a bomb ass movie, right? But it gets better.

My friends and I had no idea what we were getting into when we drove out to a little theater in Worcester, MA that night. It was, in short, a complete and utter shitshow - in an amazing way. This "little" movie (with a mere $8MIL budget) became a completely enormous underground and cult success! I'm not kidding when I say that my friends and I were basically the only people in the entire audience not dressed up and who didn't know the word to every single song in the film. Since then, I have been schooled; I own the DVD and the soundtrack, and I am anxiously awaiting MY chance to dress up at the movies (yes, the movie is still touring and in theaters... 2 years after its release) and sing the songs at the top of my lungs.

However, while anxious cult fans such as myself wait, it seems big budget Hollywood has been busy developing Repomen, a bold and blatant rip off and complete copyright infringement of our beloved Repo! The Genetic Opera. When my fiancé called me just now and told me the plot of that movie, I thought he was joking. Sadly, he was not. So, I search the interwebs and found this article, which features a side by side comparison of the trailers and a blog written by Repo!'s director, Darren Bousman of the Saw series. He, too, is pissed off about what has gone down, as it is ABUNDANTLY clear that the Repo! intellectual property has been stolen from them right under their noses. What I want to know is, why aren't they fighting this??? If anything, they could at least get a settlement that could be used to tour the movie again and open up more people's eyes to the amazing cult experience that only Repo! can provide. So to Darren, I say this: I understand you want people to continue to celebrate Repo! but, from a legal perspective, you SHOULD fight this!! Repo! is an amazing project, and an incredible subculture I am proud to be a part of. You should fight for its rights! Ok - that's all I'm going to say about that, out of respect for Darren's request.

On a separate note, I would like to encourage anyone that knows about Repo! to tweet, blog, post, yell - WHATEVER - about Repo! and how amazing it is. The more noise we make, the more people will continue to love it and the more we can have the amazing experiences of seeing it in theaters, singing and dancing in the aisles. TESTIFY.

www.newleaflegal.com