Music Copyright: Compulsory Cover License

Three different categories of parties have interests in this area:

• Composers
• Producers
• Performers

Each of these categories has different legal protection.

Are All Parts of the Sound Recording Able to Be Copyrighted?

There are two parts to a sound recording. First, there is the underlying musical composition. Then there is the actual sound recording. If the sound recording uses a composition, it is possible that it can be the work of more than one author, therefore becoming a joint work.

If the recording fixes other non-musical sounds, such as bird songs or ocean waves, the author of the recording would be deemed producer-only.

What Rights Do Owners of Sound Recordings Have?

They only have the right to stop literal copies. Therefore, they do not have the right to exclude others from performing the work publicly. The rights to exclude others from reproducing the work or preparing derivative works are limited to the production of literal copies.

What Is a Compulsory Cover License?

A compulsory cover license allows artists to legally sell their version or “cover” of another song based on a set royalty payment scale. A compulsory license is obtainable for any song that has already been formerly recorded and sold with the consent of the original musical composition copyright holder.

How Does a Compulsory Cover License Differ from a Traditional Music License?

Unlike a traditional music copyright license, the terms for a compulsory cover license are established by the U.S. Copyright office rather than the artist or record label. This includes set royalty percentages and payment schedules.

Also, a compulsory cover license does not require negotiations with the original musical composition copyright holder. In other words, you can get the right to sell a cover version of a song without ever having to gain the consent of the original artist.

What Is the Process for Establishing a Compulsory Cover License?

Getting a compulsory cover license is a four-step process that includes the following:

1. Identify the holder of the musical composition copyright of the song to be recorded: This can be done by personally searching the records of the U.S. Copyright Office. The Copyright Office can also search for a nominal fee.
2. Send a “Notice of Intent to Obtain a Compulsory License” form to the copyright owner 30 days before the sale of the cover song: This notice informs the copyright holder that you will be selling a cover version of their work, formally establishing a compulsory cover license. Note that a distinct letter must be used for each song, even if it’s the same artist.
3. Make royalty payments with accompanying account statements: Must be done on or before the 20th of each month.
4. File an annual statement of total sales of the recording: Must be certified by a public accountant.

It is necessary to highlight that a compulsory cover license does not need any action on the part of the copyright owner. Once a person fulfills the four steps above, they are legally allowed to sell their cover version of the song.

Does the Copyright Owner Have any Recourse against a Compulsory Cover License?

Yes, if the cover alters the original song in any significant way. The compulsory cover license only applies to covers that are consistent with the original rendition of the song. Thus, remixed or off-the-wall covers of songs may not be applicable under a compulsory cover license.

What Are Music Royalties?

U.S. copyright laws give all songwriters exclusive rights to their work. Music royalties are a percentage of gross or net profit or a fixed amount per sale or use to which a creator of a work is entitled. Royalties are determined by the contract between the creator and distributor.

What Are the Different Types of Music Royalties?

There are four different types of music royalties paid to songwriters:

• Mechanical royalties: Mechanical royalties are royalties paid from record companies for records sold based on exclusive rights to reproduce and distribute copyrighted works
• Public performance royalties: Public performance royalties are royalties paid by music users for songs in the operation of their businesses and broadcasts based on exclusive rights to perform publicly copyrighted works
• Synchronization fees: Synchronization fees are royalties paid by users who synchronize music with their visual images based on exclusive rights to reproduce and distribute copyrighted works and to prepare derivative works of copyrighted materials
• Print music income: Print music income is royalties paid by music printers for sheet music based on the exclusive right to reproduce and distribute copyrighted works

Who Gets What?

Songwriters and publishers get the bulk of royalties. For example, every time a song plays on the radio, the songwriter and publisher get a designated amount for use from the record company.

A musical performer usually gets royalties from the sale of their recordings on CDs and tapes. This practice is based on copyright law, and radio play generates more sales for the music performer.

What Is Music Sampling?

Music sampling is the process of taking one part of a pre-existing sound recording and reusing it to create a new sound recording. An example of sampling would be taking part of a guitar solo from a Beatles song and using it as part of the chorus in a modern hip-hop song.

How Does Copyright Play a Role in Music Sampling?

Music sampling generally involves the use of previously copyrighted works. In many circumstances, the point of sampling is for listeners to recognize the recording that is being sampled. The use of these generally recognizable samples warrants both the consent and compensation of the original copyright owner.

Does Owning a CD of the Original Artist Allow Sampling of their Work?

Owning a copy of the music itself, in any physical form, does NOT constitute ownership of the music’s corresponding copyright. A copy of a song only contains ownership rights relating to personal use.

In other words, while a person can play a song however they’d like at home, they cannot copy the song for neighbors or play the CD for public audiences.

What Is the Process for Gaining the Right to Sample Music?

When dealing with songs and other musical recordings, there are generally two types of copyrights one must deal with. First, there is the copyright for composition. The composition includes the original writing and arrangement of the song. Second, there is the copyright for the sound recording. Sound recording deals with the rights to the song as it has been performed and recorded.

How does one tell the difference between composition and sound recording? The simplest way to imagine composition is the songwriter’s rights, while sound recording is the rights of the singer/performer. Though music sampling appears only to involve sound recording copyright, it is equally important for an individual to gain composition copyrights.

How Can a Lawyer Help Me?

If you want to produce and distribute a cover version of a copyrighted song, you should contact an entertainment attorney to learn more about compulsory cover licenses.

A lawyer can help you create a proper “Notice of Intent to Obtain a Compulsory License” form and inform you about current royalty rates. An intellectual property lawyer may even be able to help you negotiate with the original artist for better licensing rights and lower royalty costs.