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Proposed new law aims to fix America’s pre-1972 copyright quirk 

By | Published on Thursday 20 July 2017

US Congress

Two American politicians yesterday introduced bipartisan legislation into US Congress seeking to extend the digital performing right to all sound recordings still in copyright rather than just those released since 1972. This has been an American copyright quirk of much debate in recent years, of course.

US-wide federal copyright law is unusual in that it doesn’t provide a general performing right as part of the sound recording copyright, meaning that AM/FM radio stations – while paying royalties to songwriters and music publishers – don’t pay any royalties at all to artists and record companies for the music they play.

However, federal law does provide a digital performing right for recordings, meaning that online and satellite radio stations, and personalised radio services, do have to get a licence and pay royalties from and to the record industry. They can either do this via collecting society SoundExchange or via direct deals with the record labels.

However, for reasons of history federal copyright law only applies to sound recordings released since 1972 – earlier recordings are protected by state-level copyright laws, which don’t say anything about digital performing rights, most being written long before anyone talked about digital media. With that in mind, many of the services paying royalties to artists and labels for post-1972 recordings argued that they didn’t have to hand over any money whenever they played tracks that pre-dated that year.

Legacy artists and their labels weren’t very impressed with that get-out, resulting in a bunch of lawsuits where said artists and labels tried to find a way to force online and satellite radio services to pay royalties on pre as well as post 1972 catalogue.

In the main that involved arguing that, while state copyright laws might not talk about a digital performing right, there was – in fact – a general performing right for sound recordings in at least some states, which meant that online and satellite radio stations did need to pay royalties on pre-1972 recordings too. Though by that logic, so would AM/FM radio stations, and they never had.

Nevertheless, legal action led by musicians Flo & Eddie – formerly of 1960s outfit The Turtles – enjoyed some success in both California and New York.

A judge in the latter state specifically ruled that the fact AM/FM radio hadn’t paid any royalties on golden oldies all these years wasn’t any reason to say that a general performing right hadn’t been hiding in state copyright law all this time. Though on appeal other judges decided that actually it was.

On the back of Flo & Eddie’s initial success in court there were a number of settlements between artists and labels on the one side and online and satellite radio on the other, over the past and future playing of pre-1972 tracks. Though the matter is far from resolved at a state law level, given that aforementioned appeal ruling in New York and the fact the matter is still working its way through the appeal process in California.

A simpler fix for the music industry, certainly in terms of securing future royalties, would be to amend federal law to say that all recordings still in copyright, oblivious of release date, are covered by the US-wide copyright system, and therefore benefit from the digital performing right.

And that’s exactly what Republican Darrell Issa and Democrat Jerrold Nadler are hoping to do with their somewhat clumsily named Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act. It’s the CLASSICS Act see. Though technically the proposed legislation is about compensating legacy artists for their recordings not their songs, where they are already compensated. The CLARSICS Act doesn’t work though I guess.

The proposed legislation has been unsurprisingly welcomed by various groups within the US music industry, though also Pandora, one of the companies sued for not paying royalties on pre-1972 catalogue. Which might seem odd, except that, from its perspective, having already done a deal with the majors on pre-1972 tracks, it would prefer a clear resolution on this issue so that it’s on a level playing field with competitors.

Pandora’s General Counsel Steve Bené said yesterday: “For decades, the artists that gave the world Motown, jazz, and rock n roll have been hampered by antiquated and arbitrary laws – until now. While many heritage artists are compensated through direct licensing deals, including by Pandora, it’s the independent musicians that this bill rightly protects. We commend Representatives Issa and Nadler for bringing pre-1972 recordings into the modern era, and ensuring that our most cherished artists are finally on equal footing with their modern peers and paid for their record streams”.

Meanwhile the boss of the aforementioned SoundExchange also welcomed the legislative proposals, while also name-checking the previously reported Fair Play Fair Pay Act which seeks to introduce a wider general performing right for recordings Stateside, meaning AM/FM stations would also have to start handing over some cash.

SoundExchange chief Mike Huppe said: “America’s music creators are short-changed on many fronts by our copyright policy. This legislation addresses one of those fronts, creating fair treatment for artists and creators of sound recordings made before 1972. It represents another step forward in our efforts to enact comprehensive copyright reform including the Fair Play Fair Pay Act”.

He went on: “Taken together, these efforts attempt to fix broken, antiquated policy and ensure that all creators are compensated fairly whenever their work is used on all radio services. We are grateful to Representatives Issa and Nadler for their ongoing support of America’s music creators across all platforms”.

While the music industry would like both this new CLASSICS Act and the Fair Play Fair Pay legislation to go through Congress, the latter is arguably much more contentious in Washington circles, with the powerful radio industry lobby campaigning against it. However, it is hoped the CLASSICS Act has more chance of being passed, so at least that one issue can be resolved sooner rather than later.

Anyway, here’s some more quotes, from the backers of the act and from US record industry representatives…

Congressman Jerrold Nadler: “For years, we have been working to ensure royalty payments for artists who recorded many of our great musical classics before 1972. The Fair Play Fair Pay Act set down a clear marker on the need to resolve the dispute over pre-72 music, as we worked toward a long-term solution that benefits multiple stakeholders. The bill we are introducing today updates this pre-72 provision, once and for all guaranteeing royalty payments for our great legacy artists while providing certainty for digital music services”.

Congressman Darrell Issa: “This an important and overdue fix to the law that will help settle years of litigation and restore some equity to this inexplicable gap in our copyright system. It makes no sense that some of the most iconic artists of our time are left without the same federal copyright protections afforded to their modern counterparts. This bill is the product of a great deal of work to build consensus across party lines and varying interests all-over the music and entertainment landscapes on how to best resolve this long-standing problem. I’m very proud of the work we’ve done here. It will go a long way helping bring music licensing laws into the twenty-first century”.

Recording Industry Association Of America CEO Cary Sherman: “This bipartisan legislation helps close, once and for all, the loophole in federal law that has short-changed legacy artists for decades. If enacted into law as we hope it will be, music’s founding generation of iconic performers and creators will finally share some of the value generated by the music that is the backbone of digital radio. It’s the right thing to do, and that’s why a growing chorus of voices throughout the music community support this effort. We commend Representatives Issa and Nadler for their leadership on this important issue and encourage its swift passage”.

musicFIRST Executive Director Chris Israel: “Recordings made before the arbitrary date of February 15, 1972, are among the most popular and valuable in the world. And yet, because of an anomaly in US copyright law, the creators of those sound recordings have had to endure years of litigation simply for the right to be paid, and the litigation continues to this day. It’s time for Congress to fix this injustice so legacy artists are paid when their music is used by digital radio. The musicFIRST coalition thanks the bipartisan co-sponsors of this legislation for their unwavering support for music creators whether they be ‘legacy’ artists, those performing today or those yet to be discovered”.

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