Copyhype

On April 25, the U.S. House of Representatives passed the Music Modernization Act, H.R. 5447, by a vote of 415-0. The comprehensive bill “updates music copyright laws by creating a new compulsory blanket licensing system for mechanical works, updating the rate standards applicable to music licensing, modifying the rate setting process in the Southern District of New York, providing copyright royalties to pre-1972 artists, and ensuring that producers, mixers, and sound engineers are able to receive compensation for their creativity.” ¹H. Rep. No. 115-651 (2018). The unanimous vote is a reflection of the extraordinary consensus among all parts of the music industry, including digital service providers.

Following passage, Stanford professor and Durie Tangri partner Mark Lemley tweeted:²“House unanimously passes copyright reform act that unfortunately includes term extension for sound recording performance rights for as long as 144 years.”

https://twitter.com/marklemley/status/989279882159931392

He was referring to Title II of the bill, an amended version of the CLASSICS Act (H.R. 3301), which would mandate royalty payments for sound recordings fixed before February 15, 1972, for certain digital performances. His point was echoed by Krista Cox, director of public policy initiatives at the Association of Research Libraries, who wrote in Above the Law, “The biggest issue is that CLASSICS extends copyright term for sound recordings beyond what a sound recording today would be granted.”

These statements are strikingly incorrect.

Pre-1972 Sound Recordings

First, a bit of background. There are two relevant copyrights involved in music: one for the musical composition—the “melody, rhythm, harmony, and lyrics, if any”³Compendium of U.S. Copyright Office Practices, Third Edition, 802.3. —and another for the sound recording—a recorded performance or production of a musical composition. It’s also helpful to identify the most relevant rights involved in the exploitation of each copyright: for the musical composition, those rights include reproduction and distribution, mechanical reproduction, and public performance; for the sound recording, they include reproduction and distribution, and digital performance.

The reproduction and distribution of musical compositions was protected under the original Copyright Act of 1790.⁴Musical compositions in printed form were protected as “books” under the 1790 Act. Congress recognized musical compositions as a discrete category beginning in 1831. The public performance right for musical compositions was added in 1897. A mechanical reproduction is a copy of the musical work onto an object or device that requires mechanical means to be perceived. The term originally referred to piano rolls, but also applies when a musical composition is “copied” onto a sound recording. The 1909 Copyright Act expressly provided for a right of mechanical reproduction for musical compositions.

Copyright protection for sound recordings took a bit longer, and that history creates the issue that the CLASSICS Act addresses. Unlike musical compositions, sound recordings were not initially protected by federal copyright law as part of any existing categories of works. The commercial market for sound recordings began to grow in the early 20th century, but efforts to expressly provide for federal protection of sound recordings in the 1920s and 1930s were unsuccessful.⁵Kevin Parks, Music & Copyright in America: Toward the Celestial Jukebox, pp 103-107 (ABA 2012). Recording artists and record companies turned then to state courts and legislatures for relief. Beginning in the late 1960s, several states passed criminal antipiracy statutes for sound recordings.⁶US Copyright Office, Federal Copyright Protection for Pre-1972 Sound Recordings, pg 20 (2011) (“Pre-72 Report”. During that time, Congress was engaged in a wholesale revision of the Copyright Act, which would include federal protection for sound recordings, but revision efforts stalled in the mid-1960s over unrelated issues. Rather than waiting (and for other reasons), Congress separately passed a bill to provide federal copyright protection to sound recordings, the Sound Recording Amendment Act of 1971. Most importantly, the bill only applied prospectively—that is, it only afforded federal copyright protection to sound recordings fixed after the bill’s effective date of February 15, 1972. It also did not provide for the protection of public performance of sound recordings.

Wholesale revision of copyright eventually did pass and became the Copyright Act of 1976. It retained the carve-out for pre-72 sound recordings and provided that state laws that applied to those works were not preempted.⁷17 USC §301(b). That meant that all copyrightable works were protected under the unitary scheme of the federal copyright law save for pre-72 sound recordings, which continued to receive whatever protections state and common law afforded them. That includes not only the criminal antipiracy statutes mentioned above, but also state civil statutes, state tort law claims such as unfair competition, misappropriation, conversion, and right of publicity, and common law copyright protections. At the same time, recognizing that many of these state and common law protections lasted in perpuity, Register of Copyrights Barbara Ringer recommended the Copyright Act include a cutoff date for any laws protecting pre-72 sound recordings, at which point the recordings would be protected under federal copyright law.⁸Pre-72 Report at 16. That cut-off date was extended along with the general term of copyright in 1998 and is currently set at February 15, 2067.⁹17 USC §301(c).

Congress created a narrow right to perform sound recordings publicly by means of digital audio transmission in 1995. It added the statutory license for that right found in Section 114 of the Copyright Act as part of the Digital Millennium Copyright Act in 1998. That license covers noninteractive internet services and satellite digital audio services. But like the rest of the federal copyright law, it is only applicable to sound recordings fixed after 1972.

In 2011, the U.S. Copyright Office, as directed by Congress through the Omnibus Appropriations Act of 2009, issued a study on “the desirability of and means for bringing sound recordings fixed before February 15, 1972, under federal jurisdiction.” In the report, the Copyright Office concluded that pre-72 sound recordings should be brought within federal protection, finding, among other things, that “Congress did not articulate grounds for leaving pre-1972 sound recordings outside the federal scheme and there is very little information as to why it did so.” It noted, however, that doing so would require resolving challenging, but not insurmountable, issues related to ownership, term of protection, and registration, among others.

The CLASSICS Act takes a narrower approach, tailored to the problem of pre-72 recording artists and owners being left out of the revenue their work generates as music consumption shifts from sales and downloads to digital streaming.¹⁰Ben Sisario and Karl Russell, In Shift to Streaming, Music Business has Lost Billions, New York Times, March 24, 2016. It is an open question whether pre-72 sound recordings have any performance rights under state and common law,¹¹See Zvi Rosen, Common Law Copyright (2016) for a thorough look at the extent to which common law copyright includes a right of public performance. and in recent years, there have been a number of lawsuits launched arguing they do. To date, the high courts in New York and Florida have resolved that question with a no; California has yet to decide in a separate lawsuit.¹²In March 2017, the Ninth Circuit certified the question for the California Supreme Court to decide. But that still leaves over forty states. The CLASSICS Act would subject pre-72 sound recordings to the existing Section 114 statutory license, so they would be treated the same as post-72 sound recordings in that context. That means legacy artists can share in the value of the works that they have created while streaming services benefit from a more certain legal environment.

Inventing an extension

With that background in mind, let’s look at the claim that the CLASSICS Act “includes term extension for sound recording performance rights” or “extends copyright term for sound recordings.” It does not. As discussed above, pre-72 sound recordings are protected under state and common law (protection which, again, is indefinite and potentially perpetual). Under 17 USC § 301(c), this protection lasts until February 15, 2067, at which point, the sound recordings are brought under federal protection and any state and common law rights are preempted. At that point, the term of copyright protection subsists for the duration provided by 17 USC § 303, which applies to all copyrighted works not published or copyrighted before the effective date of the current Copyright Act. That scheme was established in the 1976 Copyright Act (and the cutoff year was extended to 2067 as part of the 1998 Copyright Term Extension Act). Cox incorrectly asserts that the cutoff date is the creation of the CLASSICS Act:

Again, current copyright term in the United States is already too long, but CLASSICS would make this problem even worse. Think 95 years is excessive? How about 144 years? Yes, that’s right. In Congress’s infinite wisdom, in what some members of Congress claimed to be an effort to create greater equity, sound recordings fixed between 1923 and 1972 will claim copyright protection in 2067.

The CLASSICS Act does not change any of these provisions. Copyright protection in pre-72 sound recordings will subsist after the bill passes for however long it would subsist under current law.

But perhaps when Lemley and Cox say “term extension”, they don’t actually mean that the duration of protection would be prolonged. Rather, they mean that the right to receive royalties under the Section 114 statutory license provided by the CLASSICS Act could be considered an extension either compared to the current level of protection for pre-72 sound recordings, or compared to the term of protection for post-72 sound recordings. But neither of these arguments bear out.

As noted above, it is an open question whether pre-72 sound recordings have protection for digital performances under state and common law. If, on the one hand, we assume they do, then CLASSICS doesn’t “extend” protection, it merely shifts it from the state to the federal level (and in doing so, affords digital services of a statutory license and provides all users with fair use and other limitations and exceptions that are not available under state and common law). But if, on the other hand, we assume pre-72 sound recordings don’t currently have protection for digital performances and that CLASSICS creates a new right, then it is inaccurate to assert that they receive protection for a term beginning at their creation, or as far back as 1923 under the bill, and lasting until 2067—which is where Lemley and Cox arrive at the 144 year figure they mention (2067-1923=144). The new right is prospective, so sound recording artists and owners only get the benefit of it starting on the effective date of the legislation. Say, for example, CLASSICS passes this year and goes into effect at the beginning of 2019, that gives pre-72 sound recording artists and owners an effective digital performance right “term” of 48 years (2067-2019=48).

The second argument, that CLASSICS provides for a term of protection for pre-72 sound recordings that is longer compared to post-72 sound recordings is nonsensical for the reasons stated above: the respective terms of protection for pre and post-72 sound recordings was established in the 1976 Copyright Act and are not impacted by the CLASSICS Act.

In its report, the US Copyright Office said it “thinks it is unreasonable for the age of a sound recording to dictate whether royalties are paid on public performances by means of digital audio transmissions, so long as copyright subsists in that sound recording.” It arguably also cuts against the principles of copyright law to reward authors.¹³See Eldred v Ashcroft, 537 US 186, 212 n.18 (2003); see also Kirtsaeng v John Wiley & Sons, 136 S. Ct. 1979 (2016) (describing “the well-settled objectives of the Copyright Act” as enriching “the general public through access to creative works’ by striking a balance between encouraging and rewarding authors’ creations and enabling others to build on that work.”). The treatment of pre-72 sound recordings under the Copyright Act is a historical idiosyncrasy, and the fact that those recording artists can’t get paid for digital streams like their post-72 counterparts was probably not intended by Congress nearly half a century ago. At that time, the reproduction and distribution of records was the primary way artists commercially exploited their work. Now that that is being overtaken by digital streaming, it makes sense to update the law to reflect that change. The CLASSICS Act would do that and plays a key part in broader music licensing reform that is currently under consideration by the Senate.