When England enacted the first copyright law in 1710, the term "copyright" referred to one right - the right to copy. Things were simpler back then and, at that time, the law was concerned solely with protecting printed works (books, charts and maps) and giving authors the right to copy their written or printed works was sufficient protection. Over the 3 centuries of its existence, copyright law has gradually evolved, mostly in response to new technologies. As new types of works became prevalent and new ways of using and distributing creative works developed, additional rights were added.

Section 106 of the Copyright Act specifies the exclusive rights that a copyright owner has. These exclusive rights allow the copyright owner to control the use of his/her work.

The copyright owner can exercise these rights himself or allow others to exercise certain rights under certain circumstances. Generally, no one other than the copyright owner can exercise any of the exclusive rights without obtaining the copyright owner’s permission (although there are some limitations placed on the exclusive rights which allow some use without the copyright owner's permission). If someone other than the copyright owner exercises one or more of the exclusive rights without the copyright owner’s permission, that person has committed an infringement unless the use is subject to an exception by copyright law or there is an applicable legal defense which justifies the use (such as the fair use defense discussed in unit #8).

The Reproduction Right

Section 106(1) gives copyright owners the exclusive right to reproduce their copyrighted works and to authorize others to do so. Reproduction involves producing a material (physical) object in which the copyrighted work is contained or embodied. The reproduction right is commonly referred to as the right to copy and includes copying in any form - printing, recording, etc. Often authors will either transfer or license the reproduction right (as well as the distribution right) to a publisher.

Reproduction of Musical Works

An important limitation on the reproduction right is imposed on musical works (songs). In most situations, licenses to use copyrighted works are negotiated and if a copyright owner does not want to issue a license, it is free to decline to do so. However, section 115 of the Copyright Act says that once a song has been recorded and distributed in the United States with the copyright owner’s permission, anyone can make their own recording of the song. Section 115 establishes a compulsory mechanical license which applies only to audio-only recordings (not audiovisual recordings such as music recorded for use in television or film). Although the copyright owner's permission is not required to obtain a compulsory mechanical license, you must pay the copyright owner a royalty for each recording distributed. The current compulsory mechanical royalty is 8.5 cents per song or 1.65 cents per minute, whichever is greater. This rate is generally raised every other year and will increase to 9.1 cents per song or 1.75 cents per minute in 2006.

Although the reason for having a compulsory mechanical license is historical and does not have any modern relevance, the provision has remained a part of U.S. copyright law. Unlike the U.S. and Canada (which has a similar provision), other countries base mechanical royalty rates on a percentage of the sale price of the recording.  This approach makes better sense since there's no need to adjust the royalty rate (i.e., if prices go up or down, the royalty adjusts accordingly).

In practice, the compulsory mechanical license is rarely used since its accounting requirements are very strict and impractical (e.g., royalties must be accounted for and paid on a monthly basis, etc.). Instead, most mechanical licenses are negotiated between the party making the recording of a song (usually a record company) and the copyright owner of the song (a music publisher or an agency representing the music publisher). Most, but not all, of the terms contained in negotiated mechanical licenses are the same as the terms of compulsory mechanical licenses. For instance, royalties under negotiated licenses are usually paid on a quarterly (rather than monthly) basis and royalties are usually required to be paid only on records sold (rather than merely distributed). In some situations, the royalty paid under a negotiated mechanical license will be less than the statutory rate (usually 75% of the statutory rate).

Rather than issuing mechanical licenses themselves, many music publishers in the United States authorize a licensing agent to do so. Most publisher use the Harry Fox Agency which issues mechanical licenses on behalf of the publishers it represents. Harry Fox also collects royalty payments from record companies and pays royalties to publishers minus a small administrative charge. A publisher that receives a royalty payment from Harry Fox must then pay the songwriter or songwriters 50% of that royalty payment.

For additional information on mechanical licensing, see the Harry Fox Agency online licensing site.

What is a derivative work?

A derivative work is a work based upon one or more preexisting works. Copyright owners generally have the exclusive right to make derivative works based on their copyrighted works. The derivative right overlaps to an extent with the reproduction right since when you make a derivative work, you are reproducing part of an existing work, but at the same time altering the existing work in a way that results in a new, original work of authorship. The derivative right is therefore sometimes referred to as the adaptation right.

Section 101 of the Copyright Act defines a derivative work as "a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted."

Part of the reason for the derivative right is the belief that people should not be allowed to change the meaning of a work without the author's or copyright owner's permission. However, some derivative works such as parodies are allowed without the copyright owner's permission under the fair use doctrine (to be covered in unit #8).

Section 103(b) of the Copyright Act states that "[t]he copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material." In other words, the copyright in a derivative work covers only the original material added by derivative work's author, and does not have any effect on the copyright of the preexisting material used to create the derivative work (whether the preexisting material consists of a public domain work or a copyrighted work).

In the entertainment industry, derivative works are very common. This is especially true in the movie industry where movies are derivative works of screenplays which are often derivative works based on novels or other preexisting material. Screenplays usually include added dialog, staging instructions, etc. which are original material added to the preexisting work. The actual motion picture will also contain original copyrightable expression such as the director's choice of camera angles, etc.

Section 106(3) of the Copyright Act provides that the copyright owner has the exclusive right to distribute, and to authorize others to distribute, "copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending." It is important to realize that you can violate the distribution right by giving away (as well as selling) a copyrighted work without the copyright owner's permission. This makes logical sense since you can't really give away something you don't own in the first place. By giving copyright owners the exclusive right of distribution, copyright law allows copyright owners to prevent the distribution of unauthorized copies of their works.

The First Sale Doctrine

Section 109(a) of the Copyright Act provides an important exception to the copyright owner's right of distribution, providing that "the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord." This provision is known as the first sale doctrine and means that once the copyright owner sells or gives away a copy or phonorecord (a material object containing a copyrighted work), he has no further rights with respect to that particular copy or phonorecord. In other words, the copyright owner controls only the first public distribution of a copy or phonorecord containing a copyrighted work. The first sale doctrine is based on the idea that ownership of a material object is distinct from ownership of copyright.

However, the first sale doctrine is subject to an exception which says that both computer software and sound recordings cannot be rented without the copyright owner's permission. The exception for computer software and sound recordings was enacted due to the ease with which reproductions of those works can be made at a lower cost than the original with a minimal amount of degradation in quality.

It is important to understand that the first sale doctrine applies only to the distribution right and not to the reproduction right.

The performance right is probably of the most practical importance to songwriters and music publishers since songs are probably the most performed works, not only through live performances, but also through radio and television broadcasts. Since it would be very impractical for each individual copyright owner to license its songs to all of the many radio stations, television stations, and live performance venues and even more impractical for all of the various companies and venues which make performances available to the public to obtain licenses for every individual song, middleman are is used to facilitate the licensing of songs. These middlemen are called performance rights organisations (PROs). There three PROs in the United States are ASCAP, BMI and SESAC. The three American PROs as well as over 40 foreign PROs all operate in essentially the same manner. In order to get paid for performances of music, songwriters and publishers must join a PRO. Upon joining, the songwriter or publisher transfers the right to license non-dramatic public performances of its songs to the PRO. The performing rights organizations have three main responsibilities: (1) issuing licenses and collecting license fees; (2) monitoring public performances of music; and (3) paying songwriters and publishers based on the number of performances of their music.

The PROs issue licenses to businesses that make performances available to the public such as radio stations, television stations, live performance venues and retail businesses. Most of the licenses issued by the PROs are blanket licenses which give the licensee the right to publicly perform any music in the PRO's repertory an unlimited number of times for a set fee. The amount of a blanket license fee depends on several factors, but is essentially based upon the licensee’s potential audience size, gross revenues and the amount of music used. Performance licenses are obtained by the performance venue rather than the performer. In other words, if a band plays copyrighted music at a bar, it is the bar’s responsibility to obtain a performance license rather than the band.

Since there are an enormous amount of public performances of music which take place, it would be impractical to attempt to keep track of all performances. The costs of doing so would greatly exceed the license fees collected. Instead, the PROs use sampling procedures to estimate the number of times songs are performed. The majority of performances sampled are radio and television broadcasts. Live performances, other than at major concert venues, are not sampled. Instead, the performing rights organizations assume that live performances are generally the same as broadcast performances. Obviously, this assumption is a bit flawed since there are many live performances of music that is not performed on radio or television. This unfortunately results in some songwriters who perform their music in bars and other small venues not being paid royalties for these performances. However, the costs involved in sampling the huge number of live performances that take place in such venues would be disproportionate to the amount of income generated.

The performing rights organizations use formulas to assign a value or weight to different performances. Some of the factors taken into consideration by these formulas include the size of the potential audience (e.g., a network television performance would receive a greater weight than a local radio performance), the time of the performance (e.g., a performance at 5 p.m. would receive a greater weight than a performance at 2 a.m.), and the type of performance (e.g., a featured performance would receive a greater weight than a background performance). Based on these weights, different types of performances are assigned different values. For example, a radio broadcast which takes place at 5 p.m. might be worth five times the value of a broadcast which takes place at 2 a.m. (reflecting the size of the listening audience at the different times). The estimated number of performances of a song is then multiplied by the value of different types of performances to reach a dollar amount. The performing rights organizations pay 50% of the amount due for performances of a song to the publisher or publishers who own the copyright to the song and 50% to the songwriter or songwriters who wrote the song.

Limitations on the Public Performance Right

There are some instances when public performances do not have to be licensed. Section 110 of the 1976 Copyright Act provides several exemptions from the performance right for certain types of uses. Most of these exemptions apply to certain non-profit, educational or charitable uses. For instance, section 110(1) exempts the performance of copyrighted works in "face-to-face teaching activities which allows teachers and students to read aloud from copyrighted books, to play or sing musical works, and to perform motion pictures.

Section 110(3) provides an exemption for performances of nondramatic literary or musical works and dramatic musical works of a religious nature "in the course of services at a place of worship or other religious assembly." Although beyond what we will cover in this course, its important to note that there are specific conditions for these exemptions (e.g., the face-to-face teaching activities exemption applies only to performances made for teaching purposes so if a performance took place in a classroom strictly for entertainment purposes, the exemption would not apply).

Another important exemption is provided by the Fairness in Music Licensing Act which was enacted in 1998 and greatly enlarged the scope of a previous exemption. Under the Fairness in Music Licensing Act, certain businesses which perform music received from licensed radio, television, cable and satellite broadcasts are exempt from having to obtain public performance licenses (this exemption does not apply to live performances of music). There are three requirements which must be satisfied to fit within the exemption:

The Digital Performance Right in Sound Recordings Act

As mentioned above, the public performance right of section 106(4) is not applicable to sound recordings. However, in 1995, Congress amended the Copyright Act by enacting the Digital Performance Right in Sound recordings Act (DPRSRA) which granted a limited public performance right for sound recordings. The DPRSRA is very complicated so our discussion of it for this course will be very brief and oversimplified. The DPRSRA amended the list of exclusive rights specified in § 106 of the Copyright Act by giving copyright owners of sound recordings the exclusive right "to perform the copyrighted work publicly by means of a digital audio transmission" subject to certain conditions and limitations. Essentially, the DPRSRA says that copyright owners of sound recordings are entitled to a public performance right when sound recordings are transmitted in digital rather than analog form. So, for instance, the transmission of a sound recording over the Internet would be subject to this right and would consequently have to be licensed while a transmission of a sound recording in analog form such as a radio or television broadcast would not be subject to this right and no license would be required. There are many additional limitations dependent upon the specific type of performance being made, but are all ultimately motivated by a concern for protecting copyright owners of sound recordings from public performances of sound recordings that could be easily used by people to make high quality, digital copies of the recorded music without having to pay for them. The organization that issues licenses allowing digital performances of sound recordings in the United States is Sound Exchange.

The Public Display Right