Chapter 15

1. Chapter 15
Copyright Basics

2. Publishing Overview
• Copyright – “a limited duration monopoly.”
• Purpose is to promote the sciences and useful
arts by giving creators exclusive rights to their
works for a period of time.
• If creators were not paid for their efforts, hardly
anyone ( I say no one!) would go through the
trouble of creating anything. Hobbies only go so
far.

3. What is Copyrightable?
• Work has to be original
• Of sufficient materiality to constitute a work
• This is decided on a case-by-case basis
• There’s no definitive test for materiality
• Even a series of notes can be copyrightable if they
are sufficiently unique as to be recognizable.

4. • Works are copyrighted from the moment of
creation.
• Must be in a tangible form: must be able to touch it.
• Can be :
• Written down
• Sung or played into a recorder
• (Even heard of a guy calling his house and singing to
his answering machine!)
• Can’t be all in your head
How to Get a Copyright

5. What rights do you get?
• The right to reproduce the work
• No one can record it, publish it, or copy it without your
permission
• The right to distribute copies of the work
• No one can sell copies of it to the public without your
permission
• The right to perform the work publicly
• Means either live, in clubs, by a DJ in a club, on the radio,
TV, etc.
• Performance rights societies help keep track of this
usually through blanket licenses bought by the clubs,
restaurants, etc.

6. What rights do you get?
• The right to make a derivative work
• Derivative is a work based on another work
• A parody lyric to the original copyrighted melody
constitutes a new separate work
• The right to display the work publicly
• More about paintings, statues, etc. Doesn’t
really apply to music.

7. Compulsory Mechanical License
• Mechanical Royalties – aka “mechanicals”
• Came from the 1909 Copyright Act.
• Referred to “devices serving to mechanically
reproduce sound”; name stuck.
• Now refers to the monies paid to copyright owners
for the manufacture and distribution of records.
• FYI – compulsory licenses grew from Congress’
concern that copyright holders could hold a gigantic
monopoly; meant to limit their control somewhat.

8. Compulsory Mechanical License
• Compulsory copyright license for records: Copyright Act
says that once a song has been recorded and released to
the public, the copyright owner must license it:
• To anyone who wants to use it on a phonorecord
• For a specific payment established by the copyright law
• However, owner is only required to do so if all these apply:
• The song is a non-dramatic musical work; AND
• It has been previously recorded; AND
• The previous recording has been distributed publicly on
phonorecords; AND
• The new recording doesn’t fundamentally change melody or
character of the song; AND
• The new recording is only used on phonorecords.

9. Compulsory Mechanical License
• Non-dramatic Musical Work
• All music other than opera, audiovisuals, and musicals
• Previously Recorded
• Can’t get a compulsory license for the first recording of a work.
• Owner controls who gets it first; called “first use”
• First Use must have been authorized by the copyright owner.
• Someone can’t sneak off and record it to trigger a compulsory license
• Public Distribution
• First recording must have been released to the public.
• If owner allowed recording to be made, but it wasn’t released,
you can’t get a compulsory license to make another recording.

10. Compulsory Mechanical License
• Phonorecord Use
• Defined by the 1976 Copyright Act mean audio-only recordings.
• Excludes home video devices from the definition of
phonorecords.
• Means there’s no compulsory license for DVD’s.
• Motion picture companies have to negotiate with every copyright
owner (publisher) for home video use of each song.
• Means that song owners are free to charge whatever rate they
choose so long as the buyer is willing to pay for it.
• 1995 – Copyright Act was revised to make clear that
compulsory licenses apply to digital phonorecord
delivery – such as a download of a song from iTunes.

11. Compulsory Mechanical License
• No Major Changes
• A compulsory license allows you to arrange the song to the
style or manner of interpretation of a performance
• Can’t change the basic melody or lyrics
• Ringtones
• After much flap, ringtones (if master recordings) are
subject to compulsory license, but at a much higher
rate than phonorecords.

12. Statutory Rate
• If all of the conditions for a compulsory license are
met, then anyone who wants to use a song in
phonorecords can do so by filing certain notices
and paying a set fee per record.
• Rate is set by Congressional statute and so is
referred to as the statutory rate.
• Current rate is 9.1¢ for a song running five
minutes or less (which means most of them,
typically)
• Price continued after Dec 31st, 2012*

13. Statutory Rate
• Current ringtone rate is 24¢
• Price was agreed upon in October 2008 and
instituted by the Copyright Royalty Board.
• CRB is made up of three administrative judges
who set and adjust rates for all compulsory
licenses
• Instead of yearly increases, mechanical rates
have stayed the same since 2006 – in no small
part due to the poor state of the music business.

14. Compulsory License
• Compulsory license is almost never used.
• Labels find it too burdensome.
• Owners would much rather give a direct license and be able
to keep track of it.
• However – the statutory rate is the benchmark for
setting mechanical royalties in the music industry.
• Once a song is recorded the statutory rate is the highest
mechanical royalty anyone is willing to pay for it.
• If the publisher wants more, the record company just gets a
compulsory license for it.

15. Foreign Mechanicals
• Most other countries outside the United States
and Canada use an entirely different copyright
royalty system.
• Foreign mechanicals are a percentage of the
wholesale price, which covers all songs on the
record; meaning same rate is paid for an album
with 8 songs as it is for an album with12 songs.
• Foreign mechanicals are usually paid to a
government-affiliated agency.

16. Foreign Mechanicals
• United Kingdom – mechanicals are currently 8.5% of
PPD (~£6)
• Rest of Europe, rates are set by the Bureau de
CkvloeduhursLe Ororstyrsebflippin-jc a’ cest
‘Drous….oh, just read it in the book!
• BIEM (pronounced ‘beam’) is a group of agencies in
each territory that collect mechanicals.
• Current BIEM rate is 9.009% of PPD

17. Copyright Basics
• Questions?