US Copyright Office on “full-work” licensing – Concerns Regarding 100-Percent Licensing

Mandatory 100-percent licensing of jointly owned works would contravene the basic rule adopted in the 1976 Act that ownership of copyright, and the exclusive rights comprised in a copyright, are divisible without limitation. The Act provides that a copyright may be transferred to another person “in whole or in part,” and that exclusive rights, “including any subdivision of any of the rights,” may be transferred and owned separately. Thus, as one court has described it, a copyright may be “chopped up and owned separately, and each separate owner of a subdivided exclusive right may sue to enforce that owned portion of an exclusive right, no matter how small.”

To interpret the consent decrees as requiring ASCAP and BMI to license complete rights to publicly perform any jointly created work in their respective repertoires, regardless of whether that work is wholly or only partially controlled by that PRO’s member(s), would effectively override copyright owners’ choices to separately own and manage their copyright interests as they are entitled to do under the Act. By reconsolidating public performance rights that copyright owners have chosen to divide, it would effectively reimpose the indivisibility of rights that Congress rejected in 1976.

While as a theoretical matter one might assume that compositions with multiple authors always or almost always constitute joint works under the Copyright Act, this is not the reality. Some musical works have multiple authors and owners because they build upon or incorporate preexisting material (e.g., an earlier song); these works may instead be derivative works or compilations. In such a case, while each of the contributors may both have a copyright interest in the new work, no one owner has the right under the Copyright Act to license the whole work absent an agreement or other authority to permit it.

In some instances, it could be difficult to ascertain whether a particular musical work is a joint work versus a derivative work or compilation without a full understanding of how it came to be created. A 100-percent licensing policy that presumptively treated all works with more than one author as joint works would therefore be problematic and could lead to infringement claims.

A regime that compels ASCAP and BMI to issue 100-percent licenses when their songwriter and publisher members have transferred only partial rights to them would abrogate rights afforded to other authors under the Copyright Act, as well as rights of foreign authors under foreign law. The Copyright Act provides authors not only the exclusive right to exploit a work (e.g., to publicly perform, reproduce or distribute it), but also the exclusive right to authorize others to do the same. To require a single PRO to grant a 100-percent license to any work in its repertoire, irrespective of the underlying division of rights, would effectively eliminate the exclusive right of any non-member co-owner to authorize the public performance of his or her work.

A 100-percent licensing rule would operate as a de facto compulsory license by subjecting non-members of ASCAP or BMI to rates, terms, and distribution policies to which they never agreed. Moreover, such a requirement would be inconsistent with foreign law; as previously explained, many foreign jurisdictions require the consent of all co-owners to license jointly created works. The Copyright Office is aware of no authority by which the antitrust consent decrees governing ASCAP and BMI could operate to supplant Congress’ constitutional prerogative to establish the nation’s copyright law, or to override exclusive rights granted under that law or by foreign law.

It appears that neither ASCAP nor BMI has in place a mechanism that would allow the PRO to track and account for payments to non-members on a broad basis, and that there would be significant obstacles to achieving this. In many cases, the PRO may not have current or reliable information concerning the current co-owners of a particular song, including how to contact them – let alone heirs or assignees.

A 100-percent license requirement could expose music users who obtain ostensibly “100-percent” licenses from ASCAP or BMI to copyright infringement claims by non-member co-owners. For example, a non-member co-owner might claim that a license was improperly issued because he or she has an exclusive right by contract to administer part of a song, or that a song is not a joint work (e.g., because it incorporates a sample) and is therefore not subject to 100-percent licensing under the default copyright rule.

To exploit a song without obtaining all necessary rights could expose a putative licensee to infringement liability, regardless of whether the licensee believed it had obtained sufficient authorization from a licensing organization. This is because “someone who infringes a copyright unintentionally, and even without reason to believe that he is infringing, will be liable nonetheless.”