US Copyright Office on “full-work” licensing

The Office believes that an interpretation of the consent decrees that would require these PROs to engage in 100-percent licensing presents a host of legal and policy concerns. Such an approach would seemingly vitiate important principles of copyright law, interfere with creative collaborations among songwriters, negate private contracts, and impermissibly expand the reach of the consent decrees. It could also severely undermine the efficacy of ASCAP and BMI, which today are able to grant blanket licenses covering the vast majority of performances of musical works – a practice that is considered highly efficient by copyright owners and users alike.

A song may incorporate samples of, or remix, preexisting works. In such a case, the song could be a derivative work or compilation, rather than a joint work, for purposes of copyright law. Moreover, much contemporary music, particularly of the pop and urban genres, is created by assembling contributions from various sources – the “beats,” “hook,” instrumental track and melody or “topline” may be sourced from different creators working independently, and combined by another author into a single work. Whether the resulting work is a joint work as opposed to a derivative work or compilation cannot be determined without assessing the intent of the various authors involved in preparing their individual contributions, including whether they sought to merge them into “inseparable or interdependent parts of a unitary whole,” as required under the Act.

In the case of joint musical works, songwriters often enter into understandings to define their respective ownership shares and provide for separate licensing of what would otherwise be undivided interests in the whole work. Works that incorporate samples or are the product of multiple contributions are also the subject of agreements that specify the respective interests and rights of each creator. Music publishers’ agreements with songwriters, in turn, typically reflect the songwriters’ fractional and separately licensable shares.

It is important to understand that the impact of such understandings extends beyond the contracting parties themselves. A failure to abide by an agreement to divide and separately manage copyright interests in a work may affect not only the parties to that agreement, but anyone who uses the work at issue. This is because the Copyright Act provides that the owner of any share of any exclusive right in a copyright is “entitled … to all of the protection and remedies accorded to the copyright owner.” Thus if ownership of a copyrighted work is divided among multiple parties, with each agreeing to license only his or her own share, a third party may face infringement liability if it uses a work without obtaining permission from all of the owners.

Agreements between songwriters and music publishers also attest to the pervasive understanding in the music industry that copyright interests are split among co-owners and that the particular writer signed by a publisher typically is not in a position to grant 100-percent licenses for co-authored songs. Both songwriting agreements and co-publishing agreements generally reflect the fact that, for co-written songs, the songwriter is granting the publisher rights only to the extent of the writer’s fractional ownership of the work.

Because the consent decrees were amended after 1978, the definition of repertoire in each should be construed consistently with the 1976 Copyright Act, which allows for divided ownership of exclusive rights, including the right of public performance. Even setting aside the express mandate of the Copyright Act, the decrees – like any contract – must be interpreted in light of the prevailing customs of the industry. Thus, while the consent decrees require ASCAP and BMI to license users to publicly perform their respective “repertoires,” each consent decree describes those repertoires in a manner that can, and should, be read consistently with the practice of fractional licensing.

The PROs’ practice of fractional representation is consistent with the basic legal precept that one cannot validly convey rights to more than what one owns or controls. A PRO’s members cannot grant to the PRO the ability to license more than what they have, and the PRO, in turn, is not able to license to users more than what it receives.

Reciprocal agreements between U.S. and foreign PROs – through which writers and publishers collect for the exploitation of their works in foreign territories – are also predicated on a system of fractional licensing. Outside of the United States, a single PRO may administer all rights necessary to authorize the public performance of a song throughout a particular territory. Within the United States, however, it cannot be assumed that a single PRO has the rights to license use of an entire foreign work, because foreign writers individually designate which U.S. PRO will collect for their works or shares thereof. The foreign writer is then paid for performances in the United States by the chosen U.S. representative via the writer’s home PRO.

Accordingly, in the case of foreign works licensed through reciprocal agreements, a PRO could not safely rely on the default joint authorship rule of U.S. law to issue 100-percent licenses. Ownership interests in such works – as well as some works jointly created by U.S. and foreign authors – will be governed by foreign law, and many countries require the consent of all co-owners in order to obtain the right to publicly perform a work.