DOES REGISTERING MULTIPLE WORKS IN A SINGLE APPLICATION LIMIT REMEDIES FOR COPYRIGHT INFRINGEMENT?

Much confusion surrounds the issue of whether one can register multiple works in a single copyright registration application.  One theory is that if an author of creative works such as photographs or songs, registers more than one work in the same application, her entitlement to statutory damages may be compromise   ed. For example, I recently spoke to a colleague specializing in art law whose understanding was that if a visual artist registered ten paintings using a single application, and only one of them was infringed, the artist’s remedy may be limited to one-tenth of the maximum statutory damage award of $150,000.  Fortunately for visual artists, as well as other creators, this is not true. If a single application for more than one work is properly completed, visual artists, writers, composers, recording artists and other creators can retain all the legal remedies afforded by the Copyright Act while saving money by avoiding multiple registration fees ($35 for each on-line application and $65 for each paper application).

This article explains the rules pertaining to filing registrations for multiple works. We also explain special rules that Congress passed and the Copyright Office implemented to make it easier for creators, such as illustrators, freelance writers, cartoonists and others, who usually publish their works in different magazines and newspapers on different dates, to register their works in groups. Then we will discuss another special rule for photographs that was specifically designed to make it easier for owners of copyrights in photographs to register their work in groups.  Finally, we will discuss mistakes to avoid, and circumstances under which it advisable   to file separate registrations for individual works.  

Why Registration Is Important

Before exploring the rules regarding how to save money by registering multiple works in a single registration, it is useful to review why registration is important. Under the Copyright Act of 1976, a copyright comes into existence as soon as a work is fixed in a tangible medium of expression, and registration is not a condition of copyright protection. So why bother to register?  Even though registration is not a requirement for protection, the copyright law provides several inducements to encourage copyright owners to register their works.  The Copyright Office’s Circular entitled Copyright Basics (http://www.copyright.gov/circs/circ01.pdf) outlines those advantages as follows:

   
-  Registration establishes a public record of the copyright claim.

 

-  Before an infringement suit may be filed in court, registration is necessary for works of U. S. origin.

 

-  If made before or within five years of publication, registration will establish prima facie evidence in court of the validity of the copyright and of the facts stated in the certificate.

 

-  If registration is made within three months after publication of the work or prior to an infringement of the work, statutory damages and attorney’s fees will be available to the copyright owner in court actions. Otherwise, only an award of actual damages and profits is available to the copyright owner.

 

 -  Registration allows the owner of the copyright to record the registration with the U. S. Customs Service for protection against the importation of infringing copies.

Of the reasons to register set forth above, the most important are that (i) a copyright owner cannot start a lawsuit for copyright infringement before registering, and (ii) cannot secure statutory damages or attorneys’ fees without registering. Copyright law provides for statutory damages of up to $150,000 per infringement, but if the work has been published (see the discussion below on the meaning of publication), statutory damages are only available if registration occurred prior to the infringement.  Otherwise, the plaintiff must prove actual damages, which can be difficult to quantify, or may equal a negligible amount unless the defendant earned a significant amount of money from the infringing work.  Also attorneys’ fees are only available for published works that are registered prior to the infringement. Similar to other litigation, a lawsuit for copyright infringement can take a great deal of work and time on the part of the attorney. It would be difficult to retain the services of an experienced copyright litigator without the potential for recovering attorney’s fees.

 

 

Basic Rules for Registering Multiple Works in a Single Application

 

 

The basic rules pertaining to copyright  registration, are set forth in the Copyright Office "Basics" circular as follows:

              Basic claims include (1) a single work; (2) multiple unpublished works if the elements are 
              assembled in an orderly form; the combined elements bear a single title identifying the 

              collection  as a whole; the copyright claimant in all the elements and in the collection as a

              whole is the same; and all the elements are by the same author or, if they are by different

              authors, at least    one of the authors has contributed copyrightable authorship to each

              element; and (3) multiple published works if they are all first published together in the same

              publication on the same date  and owned by the same claimant.  

 

These rules, which are based on Section 408(c) of the Copyright Act and codified in the Code of Federal Regulations Title 37, Part 202.3(b)(4)(i), are clear: registration of multiple works in a single application is fine, so long as all works were created by the same person,[1] and (i) if the works are unpublished, all of them may be registered in a single registration even if they were created at different times, (ii) if the works were published, those that were published for the first time in the same publication by the same claimant at the same time may be registered in a single registration.

In my practice as a music attorney, I often register groups of songs and masters. For instance, if a client wrote and recorded his own songs for an album, I would register the entire album at the same time for one payment to the Copyright Office of $35. This saves time and money. And the registration protects each song and the recording of each song.[2]      

With regard to the concept of publication, which distinguishes rule (2) from (3),  if the album were not commercially released I would register it as an “unpublished work,” or if it had been released commercially I would register it as a “published work.” The 1976 Copyright Act defines publication as “the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” 17 U.S.C § 101. For instance, a photograph is “published” if it is sold, mere public display is not publication. A musical recording is published if it is offered for sale. If the recording contains a new song, selling the record will cause the song to be published. So in reference to the example discussed above, if one of the songs was commercially released prior to the release of the rest of the album, I would register the “published” recording containing that song in a separate application and register the rest of the album as an “unpublished work” in a separate application.

Special Rules Applying to Creators who Publish their Works in Periodicals

In addition to the rules set forth in the Copyright Basics Circular, Section 408(c)(2) of the Copyright Act directs the Register of Copyrights (i.e., the Director of the U.S. Copyright Office) to establish regulations “permitting a single registration for a group of works by the same individual author, all first published as contributions to periodicals, including newspapers, within a twelve-month period, on the basis of a single deposit, application, and registration fee, …” Pursuant to this provision in the Copyright Act, the Copyright Office issued the following regulation: "…a single registration, on the basis of a single application, deposit, and registration fee,  may be made for a group of works if all of the following conditions are met:

   
                (A)  All of the works are by the same author;

            (B)  The author of each work is an individual, and not an employer or other person for     whom the work was made for hire;

            (C)  Each of the works was first published as a contribution to a periodical (including newspapers) within a twelve-month period; This does not require that each of the works  must have been first published during the same calendar year; it does require that, to be   grouped in a single application, the earliest and latest contributions must not have been  first published more than twelve months apart.

The purpose of 408(c)(2), is to make it easier for creators who publish their works in different newspapers and magazines, such as freelance writers, photographers, cartoonists, illustrators, etc., to register groups of their works that were published in different periodicals during any twelve month period. Suppose, for instance, that a cartoonist publishes fifty different cartoons in several different magazines and newspapers in one year. Under the basic rules set forth in the Copyright Office website, she would be forbidden from filing them all in one application. But under 408(c)(2), she is authorized to file all of them in one application thereby saving time and $1,715 (49 x $35).

Special Rule for Published Photographs

In addition to 408(c)(2), there is yet another rule designed to make it easier to register groups of photographs. That rule allows for registration of any number of photographs if they were taken by the same photographer and published within the same calendar year. This means that the photographer can register not only all his photos that were published in different periodicals, but also all the photos sold during any given twelve month period on one registration.  Special deposit rules apply as well as instructions for filling out the form (GR/PPh/CON). The application has to be done by snail mail, and the fee is $65.

Limitations on Registering Multiple Works in a Single Application

In registering multiple works in a single application, the applicant must be careful to follow the rules carefully.  It is important to note that with regard to the first rule set forth in this article concerning published works,

                (3) multiple published works if they are all first published together in the same publication on the same date and owned by the same claimant         

all the works must be published as a “single unit.” As interpreted by courts, this criterion requires that all of the published works must have been first published together in a single unit of publication. Courts have invalidated registrations of groups of published works violating these principles. See e.g., L.A. Printex Industries v. Aeropostale, 2010 U.S. Dist. LEXIS 46951 (C.D. Cal. May 5, 2010) (invalidating registration of a group of fabric designs because one design was sold prior to and independently of the others), reversed, 466 Fed. Appx. 590 (9^th Cir. 2012) (reversing grant of summary judgment based on material issue of fact, but upholding relevant legal standard); Olander Enters., Inc. v. Spencer’s Gift, LLC, 812 F. Supp. 2d 1070 (C.D. Cal. 2011) (adopting rule that “group of published works must be first published together in order to qualify as a ‘single unit of production’ for purposes of a ‘single work’ registration” in a case involving belt buckles); McLarens v. Chico’s F.A.S., Inc., 2010 U.S. Dist. LEXIS 120185 (S.D.N.Y. Nov. 9, 2010) (same).[3] 

As a caveat to this concern, groups of unpublished items must only include unpublished items. Inclusion of published materials could invalidate protection of the entire group. See Banco Populaire de Puerto Rico v. Latin American Music Co., 685 F. Supp. 2d 259 (D.P.R. 2010).
Finally, in cases of complex works, such as a motion picture, that involve “the co-existence of [multiple] elements in a single self-contained work included in a single unit of publication, only one registration is appropriate to cover all the elements.” Nimmer, On Copyright, § 7.18[C][3].  

Conclusion

Group registrations can save creators a great deal of time and money provided that they follow the rules set forth by the Copyright Act as implemented by the Copyright Office. [4]

Steve Gordon  wishes to thank Ariel Greenberg (2L Cardozo), Emily Borich (2L Pace) and  Kevin Park (3L NYU) for their assistance in writing this article.

---

[1] See Muench Photography Inc. v. Houghton Mifflin Harcourt Publishing, 712 F. Supp. 2d 84 (S.D.N.Y. 2010) (protection of individual components in a registered group may only attach when the author of the individual component is the same as the author of the group).  

[2] See Ocasio v. Alfano, 592 F. Supp. 2d 242, 244-45 (D.P.R. 2008) (holding that registration for a group of unpublished songs protected the individual songs listed in the registration under 37 C.F.R. §202(b)(4)(i)(B); King Records, Inc. v. Bennett, 438 F. Supp. 2d 812, 841 (M.D. Tenn. 2006) (noting that “other courts have found that registration of a collection extends copyright protection to each copyrightable element in that collection” in a case involving a collection of published songs); see also Masterfile Corp. v. Gale, 2011 U.S. Dist. LEXIS 114638 (D. Utah Oct. 4, 2011) (finding that copyright in a collection of photographs protected the individual photos). Courts have found that a copyright registration of a group of works can also protect individual components not specifically listed in the copyright application if the materials sent to the copyright office include the unlisted material. See Szabo v. Errison, 68 F.3d 940 (5^th Cir. 1995) (extending copyright protection to unlisted songs because the songs were included on the tape sent to the Copyright Office for registration of the group).

[3] However, the single publication criterion does not require all items within that publication to be eligible for registration within the group. See Design Ideas, Ltd. v. Things Remembered, Inc., 2009 U.S. Dist. LEXIS 13114 (C.D. Ill. Feb. 20, 2009) (upholding validity of registration of three designs included in a book containing material that was not part of the group).

              [4] There are other rules for registering works in groups for specific kinds of works such as automated databases and periodicals. They are beyond the scope of this article which deals with multiple works created by individual creators such as visual artists, songwriters and writers. But you can learn more about the other rules by reading Nimmer, On Copyright, § 7.18[C] discussing 37 C.F.R. §202.3(b).  

Why Sony/ATV's Direct License with Apple's New Music Service Could be a Catastrophe for Writers

I recently published an article that the the blog, Digital Music News, titled “Songwriters May Never See a Dime from Apple’s New Music Service. . .”  To incorporate my thoughts after reading the comments on  the article, I revised the article  to demonstrate that, while songwriters may continue to receive royalties from ASCAP and BMI for Apple’s new service, it is likely that they will see much less money than they have in the past.

If Apple wants to launch their much anticipated, Pandora-like music service, they must negotiate directly with Sony/ATV for public performance rights.  That's the word on the street, and if true, could prove to be a dangerous turn of events.  The reason is that, until recently, performing rights organizations—ASCAP, BMI, and SESAC (the "PROs")— offered blanket licenses on behalf of almost all the publishers, including all the majors.  Sony/ATV’s plan to license its music directly to Apple dramatically changes that practice, with severely negative repercussions to follow for songwriters.

So why is Sony/ATV—now the largest publisher after taking over the administration of EMI Music Publishing—doing this?  After chatting with chairman Marty Bandier, the New York Times reported that the decision is "simply an effort to obtain a higher royalty rate for [Sony/ATV] writers."  Bandier was quoted as saying, "This wasn't us not wanting the service.  We want the service.  It's like oxygen.  We just want to be paid fairly, no different than the NFL refs."

The truth, though, is that 1. songwriters signed to Sony/ATV and EMI Music Publishing will probably may never see a dime from the monies that Sony/ATV receives from Apple, and 2. The monies that they receive from the PROs will be dramatically reduced. Here's why:

I. Publishers Generally Don't Share Negotiated Advances

Individual music publishing contracts vary depending on the bargaining power of individual writers or the negotiating skills of their lawyers (among other reasons), but almost all agreements have a provision similar to this one:

            "In no event shall composer be entitled to share in any advance payments, guarantee payments or minimum royalty payments which Publisher may receive in connection with any sub publishing agreement, collection agreement, licensing agreement or other agreements covering   the Composition."

This clause was taken from a book of model entertainment agreement forms.  Under this provision, if Sony/ATV extracted an advance from Apple, none of those monies would be payable to their songwriters.

II. Publishers Don’t Pay Income from Performing Rights

Because Publishers expect that songwriters will be paid directly by the PRO with which they are affiliated, most songwriter agreements contain a provision precluding songwriters from sharing in any monies paid to the Publisher for performing rights.  The following clause from a model agreement is exemplary:

“Writer shall receive his public performance royalties throughout the world directly from the performing rights society with which he is affiliated and shall have no claim whatsoever against Publisher for any of the so-called publisher’s share of public performance royalties received by Publisher from any performing rights society which makes payment directly (or indirectly other than through Publisher) to writers, authors, and composers.”

If Sony/ATV avoids the PROs altogether by licensing its entire catalog to Apple directly, under the contract, the songwriter would have no right to share in the proceeds. 

III. Absence of Catch-All Provisions

Another way in which typical songwriter agreements make it possible for Sony/ATV to avoid paying its songwriters is the absence of a so-called “catch all” provision.  These provisions detail the royalties to be paid to songwriters, generally at the rate of 50 percent, on a number of other rights, including mechanical, transcription, reproduction, and synchronization rights.  Many contracts explicitly exclude public performing rights from the list.  Consider the following example:

“Fifty percent (50%) of any and all Net Income (less applicable foreign taxes) derived from the exploitation of the Compositions by Publisher in respect of mechanical rights, electrical transcription, and reproduction rights, motion picture and television synchronization rights, print rights and all other rights (excepting public performing rights) therein.”

This language obviously negates the possibility of songwriters receiving royalties from the Publisher on their performance rights.  However, even if the contract is not this explicit, the list of rights is generally interpreted to be a closed list.  So, if the songwriter does not specifically negotiate for a catch-all provision stating that he is entitled to 50 percent of all other monies not specifically referred to in the agreement, performing rights will be excluded. 

IV. Many Writers are "Unrecouped"

Writers do not receive royalties from publishers until they earn enough money to pay back the advances that they received from the publisher.  In reality, most writers, especially those at major publishers such as Sony/ATV, are unrecouped because they never earn enough money to repay their advance.  In fact, many writers never see another dollar from the exploitation of their songs except for the checks they receive from ASCAP, BMI, or SESAC.  That's because the PROs pay the writers 50 percent of every dollar that comes in after deducting a relatively small administration fee (generally around 10 percent), and they pay that percentage DIRECTLY to the writers.  If they paid the money to the publisher, the publisher would use that money to pay itself back for unearned advances.

It is worth noting that ASCAP, the oldest PRO, was founded by powerful writers, including Irving Berlin, to create a system that would guarantee fairness to writers and avoid precisely these types of issues.

V. Sony/ATV’s Deal Could Hurt All Songwriters

It gets worse.  Although they will probably never see a dime from the big advances Sony/ATV will try to extract from Apple, writers affiliated with Sony/ATV or EMI (who are now de facto Sony/ATV writers), will still receive their share of royalties from the PROs for monies that ASCAP, BMI and SESAC collect from Apple's new service. This is because these writers will still be members of the PROs.  Just because Apple is paying Sony/ATV for the public performance rights for Sony and EMI songs doesn't mean Apple doesn’t have to pay ASCAP, BMI and SESAC for all the other songs represented by other publishers.  When ASCAP, BMI and SESAC receive the money from Apple, they will probably allocate the prorated share of those monies to ALL of their writers, including those affiliated with Sony/ATV and EMI.

Notwithstanding this, songwriters affiliated with any publisher could be hurt by Sony's deal with Apple, and here's why.  Apple may well be able to reduce the amount of money payable to ASCAP, BMI and SESAC.  Right now, the rates are 1.85% of gross income for ASCAP, 1.75% for BMI, and a smaller amount for SESAC.  But Apple may balk at paying the PROs approximately 4% of their gross income if the PROs are no longer able to license songs represented by Sony/ATV and EMI.  In effect, the value of the blanket licenses afforded by the PROs is reduced because they will not cover EMI and Sony songs, which represent approximately one-third of the market.  The amount payable to the PROs may be reduced by private negotiations with Apple, or Apple (or some other digital service) could initiate a proceeding in the "rate court," which governs what ASCAP and BMI can charge.  In that event, all the songwriter members of ASCAP and BMI will suffer.

VI. Conclusion

A major reason, if not the only reason, that Sony/ATV is withdrawing from the PROs in regard to digital licensing appears to be avoiding paying its writers; not, as they claim, to make more money for the writers.  EMI already withdrew its digital rights from the PROs, and Sony/ATV will follow suit, effective January 1, 2013.  If this becomes the standard operating procedure for all the major publishers (Universal, Warner/Chappell, as well as Sony/EMI) with other digital music services such as Pandora and Spotify, it could result in a major blow to the livelihood of many songwriters and composers.

Imagine the Financial Recovery of the Recording Industry. Imagine if You Can! by Steve Gordon with Research Assistance of Aleeia Abraham

In 1999 the record business achieved all time highs in income; approximately 14.5 billion in the U.S. and 38 billion worldwide. By 2007 that amount of money had precipitously declined to 7 billion in the U.S., and 16.5 billion worldwide. Some blame piracy. Some believe this was exacerbated by increasing sales of single downloads displacing sales of CD albums, which are more expensive and brought in more money for the labels, but included songs that fans didn't really want. Whatever the reason, there may be a way for the record industry not only to stem the tide of devastating financial set-backs, but in fact make a full recovery! And that hope can be summed up in one word "mobile", or two "smart phones."

80% of the world's population now has a mobile phone. The number of mobile phones in the world is 5 billion. Of that number more than a billion are smart phones. In the U.S. there are approximately 100 million smart phones alone. Now imagine that for each smart phone in the world the service provider or the device manufacturer was paying the record industry 2 dollars to carry a music service such as Spotify or Muve. That would mean 24 billion dollars payable to the copyright owners -- record companies and indie artists. That would fully make up for lost sales.

Sound like a dream? Perhaps, but the future is already happening: Billboard reported in last week's edition ("Turn On, Tune In, Pay Up") the following deals: On Sept. 2, Cricket Wireless began putting digital music into the hands of its new subscribers. Muve Music, previously an opt-in service, become a standard feature on all new Android smart phones. "In a few months we expect Muve to become the NO.1 subscription music service in the U.S." Muve senior VP Jeff Toig says. Cricket is helping popularize and refine a concept that exists all over the world. Deezer has partnered with mobile carrier Orange in France. Spotify has teamed up with mobile carrier/ISP Telia in Sweden. Rdio has paired with mobile carrier Oi in Brazil. MOG has partnered with mobile carrier Telstra in Australia. There are many other examples ( see story on page 21), but each represents ways to offer better bundles of service and improved billing options. Also Nokia has launched its own service available on its new smart phones. Although sales are weak in the U.S. Nokia continues to be a major player in the smart phone market abroad.

Up to now the most popular business model for interactive streaming was "opt-in" systems where consumers were invited to pay more if they want mobile service. Spotify, for instance charges $10. But so far best estimates are only 5 million have subscribed to Spotify's mobile service. If on the other hand, the service or some device manufacturer offer Spotify or other music service like Muve Music "free" then you would have an indefinite number of new subscribers. If the service or device manufacured just charged a couple of extra bucks a month (payable to the owners of the recordings), the recording industry could make a complete discovery and then some!

GROUP COPYRIGHT REGISTRATIONS: DOES REGISTERING WORKS AS A GROUP LIMIT REMEDIES FOR COPYRIGHT INFRINGEMENT?

The following is a summary of an article that will appear in Volume 23, Number 3 of the Entertainment, Arts and Sports Law Journal (Fall/Winter, 2012), a publication of the Entertainment, Arts and Sports Law Section of the New York State Bar Association. EASL has given me special permission to publish this summary.

Much confusion has surrounded the issue of group registration of copyrighted works. One theory is that if an author of a creative work such as a photograph or song, registers more than one work in the same application, her entitlement to statutory damages may be compromised. For example, I recently talked to a colleague whose understanding was that if a visual artist registered ten works in the same application, and only one of them was infringed, the artist’s remedy may be limited to one-tenth of the maximum statutory damage award of $150,000. Fortunately for authors of creative works, this is not true. If a group registration is completed properly, visual artists, or any other creators of works including photographs, songs, musical recordings, etc., can retain all the legal remedies afforded by the Copyright Act, while also saving money by avoiding paying for multiple registrations ($35 each for on-line registration and $65 each for paper applications).

This article explains the rules applying to group registrations and the circumstances under which creators can register their works in groups. We also explain the special rules that the Copyright Office has issued that are designed to make it easier for creators, such as illustrators, freelance writers, cartoonists and others, to register their works in groups, even though their work us usually published in a number of different magazines and newspapers on different dates. Finally we discuss another special rule that only applies to published photographs and was intended to help owners of photo copyrights register their works in groups.

Basic Rules for Group Copyright Registration

The basic rules pertaining to group registrations, which are set forth in the Copyright Office website at http://www.copyright.gov/circs/circ01.pdf are as follows:

Basic claims include (1) a single work; (2) multiple unpublished works if the elements are assembled in an orderly form; the combined elements bear a single title identifying the collection as a whole; the copyright claimant in all the elements and in the collection as a whole is the same; and all the elements are by the same author or, if they are by different authors, at least one of the authors has contributed copyrightable authorship to each element; and (3) multiple published works if they are all first published together in the same publication on the same date and owned by the same claimant.

These rules are clear: group registrations are fine, so long as all works were created by the same person, and (i) if the works are unpublished, all of them may be registered as a group even if they were created at different times, (ii) if the works were published, those that were published in the same publication by the same claimant at the same time may be registered as a group.

In my practice as a music attorney, I often register groups of songs and masters. For instance, if a client wrote and recorded his own songs in an album, I would register the entire album at the same time for one payment to the Copyright Office of $35. This saves time and money. And the registration protects the entire album.

In regard to publication, if the album were not commercially released I would register it as an “unpublished work,” or if it had been released commercially I would register it as a “published work.” The 1976 Copyright Act defines publication as follows: “’Publication’ is the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” However, the rules in regard to publication vary to some extent with respect to each kind of work as we discuss in regard to photographs below.

Special Rules Applying to Creators who Publish their Works in Periodicals

In addition to the rules above Section 408(c)(2) of the Copyright Act directs the Register of Copyrights (the director of the United States Copyright Office within the Library of Congress) to establish regulations “permitting a single registration for a group of works by the same individual author, all first published as contributions to periodicals, including newspapers, within a twelve-month period, on the basis of a single deposit, application, and registration fee, …” Pursuant to this provision in the Copyright Act, the Copyright Office issued the following regulation:

 …a single registration, on the basis of a single application, deposit, and registration fee, may be made for a group of works if all of the following conditions are met:

              (A)  All of the works are by the same author;

             (B)  The author of each work is an individual, and not an employer or other person for whom the work was made for hire;

            (C)  Each of the works was first published as a contribution to a periodical (including newspapers) within a twelve-month period; This does not require that each of the works must have been first published during the same calendar year; it does require that, to be   grouped in a single application, the earliest and latest contributions must not have been first published more than twelve months apart.

The purpose of 408(c)(2), and this rule (http://www.copyright.gov/title37/202.html) is to make it easier for creators who publish their works in different newspapers and magazines, such as freelance writers, photographers, cartoonists, illustrators, etc., to register groups of their works that were published in different periodicals during any twelve month period. Suppose, for instance, that a cartoonist publishes fifty different cartoons in several different magazines and newspapers in one year. Under the basic rules set forth in the Copyright Office website, she would be forbidden from filing them all in one application. But under 408(c)(2), she is authorized to file all of them in one application thereby saving time and $1,715 ($49 x $35).

Special Rule for Published Photographs

In addition to the 408(c)(2), there is yet another rule designed to make it easier to register groups of photographs. That rule allows group registration of published photographs taken by the same photographer published within the same calendar year. This means that the photographer can not only register all his photos that were published in different periodicals, he can register all the photos sold during any given twelve month period on one registration. Public display of photos, though, does not constitute publication. Special deposit rules apply as well as instructions for filling out the form (GR/PPh/CON). The application has to be done by snail mail, and the fee is $65. For more details click here.

Conclusion

Group registrations can save creators a great deal of time and money provided that they follow the rules set forth by the Copyright Act.

Article by Steve Gordon, Esq., with the assistance of Ariel Greenberg and Emily Borich

Can Smartphones Save the Record Business?

In a recent post in Digital Music News, Tom Silverman, founder of Tommy Boy Records and The New Music Seminar, was quoted as stating that smart phones may be the key to reviving the recording industry which has drastically declined from a peak of 38 billion dollars in 1999 to a 16 billion dollars in 2011. Tom was quoted as stating:

“The number I've heard recently is that there are about 200 million music buyers in the world. And    there are about 7 billion people in the world … if we can make that 200 million grow to 250 million, we can make a little bit more money. But that would only take the net world music business from $16 billion to $20 billion. It won't take it back to its peak in 1999. It will just make it a little bigger.

"But none of this will take us to a $100 billion worldwide business. The only way we'll get there is by finding a way to monetize “passives” [people who are not paying for pre-recorded music] ... there are 1.2 billion smartphones activated now, which means smartphones that are actively being used, with active subscriptions that have been paid for. The trend everywhere is moving towards smartphones. The entire world is going to open up to that level of accessing music.”

What I perceive to be the key to the future of the music business is whether mobile carriers will include services such as Spotify in their basic plans. Then people will not have to feel that they are paying "twice," once for the mobile service and again for the music service. For instance, Spotify requires you to pay for mobile service beyond a free trial period. I used the trial on vacation and loved it but was not inclined to pay once I returned home because I get Spotify for free on my PC and dont usually listen to music on my smart phone.

Why would a mobile service pay Spotify to include it on their basic plan? I was deciding recently whether to go with AT&T or Verizon for my new iPhone. I chose AT&T for 4G. But if Verizon was offering "free" mobile Spotify I may have signed up with them instead of AT&T.

If the mobile services offered authorized music services as part of their basic plans, those services would be far more successful by making money from the carriers (getting a split of subscription revenues) and would have more money to pay music owners. Of course there would still be the issue of whether indie artists would see more money, but the big labels and music publishers certainly would.

Lawyers Are Getting One-Third of Sony's $8 Million Legacy Artist Settlement...

The following article was originally published in Digital Music News.com

Wednesday, March 14, 2012

Lawyers Are Getting One-Third of Sony's $8 Million Legacy Artist Settlement...

In fact, they may be the only real winners in this class action settlement!  A brief history: earlier this month, Sony Music Entertainment agreed to pay its legacy artists $7.95 million to settle a number of digital royalty disputes.  Specifically, these older artists ― led by the Youngbloods and Shropshire (of "Grandma Got Run Over by a Raindeer" fame) ― have been arguing that digital downloads should be classified as licenses instead of sales, a change that modifies the payout from a few cents per download to 50 percent.
But unlike previously thought, the Allman Brothers and Cheap Trick already settled their cases, leaving this settlement for 'everyone else'.  "The notice of settlement will be sent out to all Sony and Arista artists," music industry attorney Steve Gordon told Digital Music News. "They then can opt to join the settlement if they qualify, or opt out if they want to pursue a separate action."And it's really not that juicy of a payout.  Here's a complete breakdown of the settlement - and what it means for artists, Sony, and the lawyers - by Gordon.   

"While this sounds like a lot of money, it's probably not a great deal for artists..."
First, some background.

The settlement comes a year after rapper Eminem won a court case that concluded that music downloads from iTunes are licenses, not sales. The distinction is crucial because, in the case of licenses, labels have to give artists 50 percent of revenues and not the 10-20 percent rate artists receive from record sales.   

"The decision in the Eminem case has inspired a slew of lawsuits by iconic artists seeking similar results. However, Eminem was not the first to bring suit..."


 Previously, the Allman Brothers and Cheap Trick filed suit against Sony on the same grounds but their claims settled (and the settlements are confidential).  In fact, it's also worth noting that most superstar artists used their leverage to increase their percentage of income or get big advances against digital sales years ago!
  
"So here's the breakdown..."

Sony pays a total of $7.95 million to settle the case, if the court approves everything.  However, the plaintiffs' attorneys will take $2.65 million of that off the top (or one-third), leaving $5.3 million for the artists.
Of that $5.3 million, $5 million is reserved for artists who sold at least 28,500 total downloads on iTunes between the inception of iTunes on January 9, 2001 and December 31, 2010 including current class members Youngbloods and Shropshire.  Qualifying members would split that $5.3 million pro rata to the number of downloads of their records. However, these two artists may ultimately receive a lot less than splitting the $5 million between themselves because any artist who was signed to Epic, Columbia or Arista Records who sold more than 28,500 is eligible to join the class if they entered into agreements dated between January 1, 1976 and December 31, 2001. According to a trusted source there may well be over 100 artists would qualify for membership. The balance of the money, only $300,000, is reserved for all Sony artists with fewer than 28,500 total downloads on iTunes.
The proposed settlement also provides for a prospective 3% bump in artists' royalty rates with respect to permanent digital downloads and ringtones sold in the US after January 1, 2011. The 3 percent is against Sony Music Entertainment?s gross receipts. This amounts to 3% of 70 cents (the amount Sony received for 99 cent downloads) and that is only 2.1 cents.
   
"Which means Sony and the lawyers the big winners..."

The beauty of this is that Sony now has an efficient means of avoiding additional suits. If the judge approves the deal, it will be legally binding on Sony artists who qualify as class members, who must either file a claim or expressly opt out.  And artists who may otherwise have brought suit may be tempted to take a sure thing and avoid legal fees.
Oh, and if artists have a "red balance" (that is, still owe the record company for unrecouped advances, recording costs, indie marketing and video costs), they will not receive cash. Instead their accounts will be "credited."Which brings us to the lawyers: Digital Music News cooked up this headline, but it must be said in the lawyers' defense their share of 2.6 million will come out to significantly less than their hourly rate.  Initially there were four firms working on behalf of the plaintiffs and more than one lawyer at each form worked on the case.
Steve Gordon, Attorney.

LICENSING MUSIC FOR FASHION SHOWS

The Fashion Institute at Fordham Law School recently asked me to speak on a panel about licensing music for fashion shows.  The Fashion Institute is the world’s first center dedicated to fashion law.  This article incorporates my presentation.  It provides a legal roadmap for designers and producers of fashion shows who wish to use music for live shows, TV programs and the Internet including uploading footage to YouTube.

Music Licensing Primer

In order to understand music licensing for any project, it is necessary to know that every piece of recorded music contains two copyrights -- one is the underlying musical composition or song, and the other is the recording itself. The copyright in the song is usually controlled by the songwriter or the writer’s representative, a music publisher.  The copyright in the recording is usually controlled by the artist if unsigned or and by a record company if the artist is signed.  Songwriters and music publishers have an exclusive right to publicly perform their songs.  If you sing a song in the shower, you don’t need a license. That’s a private performance.  But permission is required to publicly perform music on any radio or TV station, Internet radio and streaming on demand, and in bars, nightclubs, restaurants, arenas, stadiums, bowling alleys, amusement parks, and any other place or venue where music is publicly performed. 

However, if songwriters tried to license each venue and place that publicly performed their music they would never have time to write music.  Even large music publishers do not have the resources to do this job.  Instead songwriters and publishers use performing rights organizations or “PROs” to license their music and collect the fees payable from the licensees on their behalf.  The vast majority of countries in the world each have one PRO.  For instance, England has PRS, Japan has JASRAC, Germany has GEMA, Australia has APRA and France has SACEM.  In the United States we have three: ASCAP, BMI and SESAC.  They all have the same function: to license and collect monies on behalf of their members, the songwriters and music publishers, from anyone who publicly performs music.  And each provides a “blanket” license that allow the licensee to play any song in their repertoire. Together ASCAP, BMI and SESAC represent almost every commercially successful song in the U.S., and through their reciprocal relationships with foreign PROs, they represent almost all commercially successful songs in the world.

Owners of “sound recordings” are also protected by copyright law. Only the owner of the copyright in a recording of music has the right to make copies of that record and sell it because the exclusive right to make and distribute copies is one of the rights afforded by the copyright law to copyright owners.  However, in the U.S., unlike owners of copyrights in songs, owners of copyrights in sound recordings do not have exclusive public performance rights.  When the Copyright Act was amended to protect sound recordings in the early 70’s the broadcast community heavily lobbied Congress to carve out this right. They argued that broadcasters, especially radio, promoted record sales and they should not be forced to pay for a service that they were providing for the artists and the labels. They also pointed out that record companies not only encouraged them to play their records, they often paid DJs to play them, a practice known as “payola.” Congress agreed with the broadcasters perhaps because the politicians needed radio’s good particularly during their campaigns for re-election, and they needed the good will the record companies far less.  In any event, because owners of copyrights in sound recordings have no exclusive right of public performance, anyone can publicly play a record without permission. There is one exception -- the Copyright Act was amended in the 90’s to provide an exclusive right to perform sound recording via digital transmission.  I will describe the impact of this exception when we discuss transmitting fashion shows on the Web.

Licensing Music for Live Fashion Shows

Applying the above rules to fashion shows, the designer or producer of live shows can play CDs or hook up an iPod to speakers without having to worry about clearing the records.  But it is necessary to clear the underlying songs.  So, for instance, you can play Lady Gaga’s recording of “Bad Romance” without permission, but you will need to clear the underlying song by Gaga and Nadir Khyat who are represented by Sony/ATV.

Some venues where fashion shows take place, including most nightclubs, will already have ASCAP, BMI and SESAC licenses. So the producer of the show doesn’t have to worry about getting a license to play songs.  However, some venues won’t have a license. For instance, the temporary structures set up for Fashion Week in NYC at Lincoln Center.  Also venues such as schools, museums or galleries will usually insist that the designer or producer secure a PRO license.  Each PRO has different licenses that apply to the many different places that publicly perform music, and each has a license that would apply to fashion shows. Here are the rates that apply to fashion shows:

SESAC:  The rate is $74 per day for a show that runs 1-10 days, and $67 per day for shows that run from 11-30 days.  The rate continues to decrease the more days the show runs.  (Note that although SESAC is the smallest of the three U.S. PROs, its repertoire has grown a great deal in recent years in every genre of music. 

BMI:  The rate is based on seating capacity -- for shows that don’t charge admission the fees are $16 for venues with 250 seats or less, $19 for 251 to 750 seats, and the fees rise gradually as seating capacity rises.  However, to use this license you have to pay a minimum of $222 which covers an entire year.  For shows that charge admission, the fees are based on % of gross ticket sales starting with 8/10ths of 1% (.8%) for venues with 250 seats or less, and 6/10 (.6%) for venues with 2501-3500 seats. Thereafter, the fee decreases for larger venues.

ASCAP:  If the fashion show is designed to raise money for charity then, like BMI, the fee is aligned with seating capacity:  $10 for venues with 5,500 seats or less; $48 for venues with 5,501 seats to 10,000 seats; $99 for venues with more than 10,000 up to 20,000 seats, and the rates continue to increase as the seating capacity increases.  Similar to BMI, ASCAP charges a minimum fee ($126) which covers a full year.  If the live fashion show is not designed for charity and pre-recorded music is used, then the fee is $97 per day.  If a live band plays and there is no admission charge, then the fee is 1% of “Live Entertainment Costs.” Such costs include paying the band, instrument rental and booking agent fees.  If the show charges admission, the fee is 1.75% of Live Entertainment Costs.

Fashion Week License

ASCAP has a special license for IMG, the major talent/modeling  agency which produces a lot of shows during Fashion Week in New York, but the rates are confidential.

How to Avoid PRO Licenses

If the venue is not licensed, and the designer or producer wants to play music at a live show, they can still avoid having to secure the PRO licenses and paying the accompanying fees by hiring a live band that writes its own music.  Even if the members of the band who wrote the music are signed to one of the PROs, they retain the right to permit any third to publicly perform their music.

Licensing Music for Fashion Shows that Play on TV

Last fall the “Victoria's Secret Fashion Show” raked in record ratings at CBS. The 2011 broadcast of the annual underwear parade saw its highest ever showing in adults 18-49 and the largest audience since 2002. Aside from the models and sexy lingerie, the show featured an abundance of music including songs by Kanye West , Jay-Z, Rihanna, Maroon 5, Nicky Manaj, Lady Gaga and Beyoncé.  Victoria Secret’s lawyer did not have to worry about PRO licenses for the public performance of the songs, however.  CBS, like all other networks and indeed cable TV services, already have licenses from ASCAP, BMI and SESAC in place.  Moreover, the lawyer didn’t have to be concerned that pre-recorded music was performed on the show. As discussed, owners of sound recordings do not have the exclusive right to publicly perform their recordings at live shows or on standard radio and television broadcasts.   

However, since the TV program was pre-recorded (as opposed to broadcast live), the music had to be “fixed in time relation” to the visual images contained in the program. In regard to songs, a synchronization or “synch” license for each musical composition was required.  In  addition, since some of the original master recordings were used in the  is show, a “master use” license was required from the record company which owned those sound recordings. 

Synch Licenses for TV

Unlike PRO licenses, there is no pre-set rate for synch licenses.  Every synch license is subject to negotiation. The fees for synch licenses can vary wildly from very cheap for a music documentary to extremely expensive for national TV commercials.  Synch licenses for network television fall somewhere in between.  In order to secure a license, the producer must negotiate with the songwriters’ representative, usually a music publisher such as Warner/Chappell, Sony ATV, or EMI music, although there are thousands of publishers and sometimes the songwriter is self-published.  The fee for use of music in a TV program will vary depending on a number of factors including:

-          The identity of the broadcaster. For instance, network is more expensive than cable and the fee may be cheaper if the TV station has a limited audience such as a local station or one only available to an audience with special devices such as satellite TV. Note that a producer does not have to acquire a synch license if the show is performed on public broadcasting stations because PBS has a blanket license to use musical compositions in its programs.

-          The nature of use.  For instance, you may pay more to use a song over the credits as opposed in the body of the program. You also may have to pay more for a “visual vocal” use, that is when a performer is depicted performing the song, rather than a background use.

-          Duration:  You may be able to get a discount if you use only brief excerpts of a song.

-          Term:  A producer may want a long term such as 3-5 years because the TV service may want to repeat the program.  But a 5 year license will cost more than 1 year.

Another important factor is the song itself.   A song written by Mick Jagger and Keith Richards, or Lennon and McCartney may be much more difficult to secure than a song written by an obscure songwriter or a new songwriter.  Their representatives, the music publishers, may deny permission because they do not want the songs associated with a particular brand such as Victoria’s Secret.  If the show has already been recorded, and the publishers refuse to license a song, the producer must  bear the expense of replacing the song with other music or face the disaster of cutting the footage containing the song if an artist is depicted performing the song. The best way to avoid these problems is to try to clear the music BEFORE production.  If there is denial, the producer can choose a different song without any economic loss.  Generally the rates applying to network synch licenses can range from $1500 to $3000.

Master Use Licenses for TV

If the producer used the original recordings of songs such as the Rihanna’s recording of “Umbrella” he has to go the record company to use the recording.  In this case, Def Jam.

All the same factors that we talked about for synch licensing apply to negotiating  master use licenses.  But generally a label will go along with the quote provided by the music publisher for the song. However, just like songs, the owner of the copyright in a master may just say “no” EVEN IF the copyright owner of the song gives permission.  For instance Sony Music may not want a recording made by Tony Bennett to be included in a fashion show featuring lingerie even if the publisher had no problem with the use of the underlying song. Again, the best way to avoid this potential disaster is to clear the music before taping the show.  

Licensing Music for Fashion Shows for the Web

Public Performance

If the producer uploads footage containing music on YouTube or Vevo there is no need to secure licenses from ASCAP, BMI or SESAC.  These sites already have licenses from the PROs.  But if the producer plays the footage on its own site,   public performance licenses will be required.  These are the current minimum fees:   

                        SESAC:  $225 (semi-annual)

                        BMI:  $335 (annual)

                        ASCAP:  $340 (annual)

Also if the website has advertising, sponsorship, or subscription revenues, the PROs require a share of   that money.  SESAC’s Internet license agreement requires payment of .0057 (.57%) multiplied by revenues generated by the site.   BMI requires payment of 1.75% of gross revenues.  ASCAP’s rate card for interactive streaming is the greater of 3% of the site’s revenues or .0009 multiplied by the number of “service sessions” defined as an individual visit to the website up to one hour.  Any excess to an hour counts as an additional hour. Both BMI and ASCAP also offer alternative fee structures for websites in which music is contained on a limited number of pages. Details on all these licenses can be secured at the websites of each PRO. 

As we reported above, owners of the copyright in sound recordings do not have public performance rights for live performances and normal broadcast, but they do for digital transmission.  But if the producer uploads the show to their own website, and the show includes pre-recorded music, they will usually negotiate the public performance of the master as part of the master use license. 

Synch and Master Use Licenses for the Web

Since the songs will be synchronized to a visual image the producer must negotiate a synch license for each song – just like a TV show.  The prices will depend again on many of the same factors we discussed in connection with a TV show including how the song was used, the term of the license, etc.  My recent experience is that one can expect a quote of approximately $1,000 for one year. Again most record companies will go along with the music publisher’s quote.  However, the producer should pre-clear the songs and the masters because the publisher or label can refuse to license the music for any reason.