Interesting Case Regarding Royalties for Digital Downloads

The case is FBT Productions v. Aftermath Records, 09-55817 (9th Cir. 2010). The appeals court reversed a lower court decision (FBT Productions v. Aftermath Records, 07-3314 (C.D. Cal. 2009). The original suit sought damages for royalties on the sale of ringtones and digital song downloads of Eminem's music. The record company argued a standard royalty applied for the downloads, the same as for CDs. FBT argued that the digital downloads were more like third party licenses, and a much higher royalty rate under a "masters licensed" clause in the recording contract applied - in this specific case, a 50% royalty. The lower court agreed with the record company, but the 9th Circuit panel - based on its review of the "broad but unambiguous" language of the contract - reversed and sent the case back to the jury to calculate damages. The court stated that the transaction was a license under US copyright law.

The bottom line is that not only will Eminem possibly receive millions of dollars in revenue from the court's decision, but all music artists are probably reviewing their contracts to see how this decision might apply to them, and making sure to put similar provisions in their future contracts.

Your comments always welcome. Have a great week!

Publication of Songs and Sound Recordings

Following up on my post yesterday, the question was asked "what is publication?" My answer was distribution to the public - for example by making your music available on the Internet - constitutes publication. I also explained that it might not be a distribution - for example if you are only making your music available to a certain group of people, and not the general public. However, it is best to assume that publication has occurred if you are making your music available on the Internet, and/or selling (or giving away) a few CDs at public performances. When that happens, you should be thinking that the "clock is ticking" on your 3 month safe harbor to get a copyright application filed.

Here's what the statute (17 USC § 101) says about publication:

“Publication” is the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending. The offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display, constitutes publication. A public performance or display of a work does not of itself constitute publication.

Comments welcome. Have a great day!

It's on!

First post to the musicnlaw blog, and that's what I'm talking about - music and law. My name is Michael Hoisington, and I'm an attorney at Higgs Fletcher & Mack LLP (HFM) in San Diego, California. I'm in my 10th year of practice, devoted exclusively to intellectual property and entertainment law. You can find my bio here:

http://www.higgslaw.com/apg_a32_Michael_J_Hoisington.html

The information and opinions expressed here are my own, not HFM's, and I take responsibility for everything posted here. Comments always welcome, but please be professional.

I'm also a musician - undergrad degree in music composition from UCSD (a great music department). I'm a songwriter, electric/acoustic guitarist, and performer. You can check out my myspace site here:

www.myspace.com/mikemichaelsband

I'm a co-chair of the Entertainment and Sports Law (ESL) section of the San Diego County Bar Association, and have been a member of the section for the past 10 years. Our website is here:

www.sdesl.com

Welcome to my blog, and I hope you find it informative and useful. My hope is that it will appeal to attorneys, musicians, songwriters, people in the entertainment industry and maybe even just plain folks interested in the subject matter.

I want to make a quick comment about copyright registration. I spoke at a seminar hosted by the San Diego Songwriters Guild about a week ago, and one question I got was about how the 3 month safe harbor rule in Section 412 of the Copyright Act (17 USC § 412) works. In most cases, you have 3 months from the date of publication to file a copyright and obtain the benefits of the Copyright Act- statutory damages (17 USC § 504), costs and attorney's fees (17 USC § 505). If the work is unpublished, you only get the benefits of the statute if you registered your work before the infringement began. What does this mean? If you register your copyright within 3 months of publishing the work, for example, 60 days after you publish the work, if someone infringes the work within that 60 day period, statutory damages, costs and attorney's fees will be available to you (even though you did not have a registration yet).

What you should take from this is - REGISTER COPYRIGHTS EARLY AND REGISTER OFTEN. As soon as you complete a work, register it as soon as you can. Protect your hard work. You can register copyrights online at http://www.copyright.gov/eco/.

Comments welcome, and have a great day!