COPYRIGHT
Record labels

After a longish silence in Europe, the idea of copyright term extension for sound recordings was suddenly well and truly back on the agenda in Europe and the extension of the copyright term for sound recordings from 50 years 70 years was agreed by the EU on the 12th September, following an earlier meeting of the European Union’s Committee of Permanent Representatives.

The European record industry has been lobbying for some time for the sound recording copyright term to be extended, noting the difference between European and US copyright terms (the US has a potential 95 year term for sound recordings), and difference with the term enjoyed by music publishers and songwriters  – the copyright term in the melody and lyrics of a song is life of author plus 70 years.

Andrew Gower’s 2006 Report on IP was seemingly unconvinced by the arguments put forward by the record labels but the last (Labour) Government seemed to support term extension, mainly based on pleas to protect the pensions of ‘aging session musicians’ – and Cliff Richard. The matter moved to Europe with mixed results and whilst both the European Commission and European Parliament backed an extension, in 2009 the Council Of Ministers failed to finalise arrangements with some states (notably Denmark) blocking term extension beyond 50 years. Under Hungary’s presidency of the EU, the debate on Europe wide term extension was reignited and pro-extension lobbyists are now delighted with the new Directive. The EU term of protection Directive was proposed by the European Commission in 2008 and voted on by the European Parliament in 2009. The Directive was adopted by the EU Council of Ministers in Brussels on the 12th September 2011. The legislation will be implemented by Member State Governments within two years from publication in the Official Journal.

There have been a number of comments on any potential extension – and some of the most interesting came from the Music Managers Forum who wanted term extension to actually benefit musicians (rather than record labels) and suggested a number of very pithy proposals, some of which must have horrified the major record labels who usually get the lions share of profits from the sale of back catalogue and, with unrecouped artistes, get one hundred percent of all income even at 50 years. The MMF suggestions included a ‘use it or lose it’ framework return to unused copyrights to recording artistes, statutory guarantees of royalty revenues, a fiduciary duty placed on labels to account for (equitable) royalties, a potential veto rights over how music is used, or, even, complete control for the artist after a period of time with a reversion of all rights to the original creators (the recording artistes) after 50 years – or even after 25 years. Some, but not all, were adopted: A ‘use it or lose it’ provision after 50 years was included where the copyright in a recording can revert back to the recording artiste where the label does not make it for sale in ‘sufficient quantity’ or available to the public; a 20% levy on record labels revenues (before deducting costs) for session (non-featured) musicians who were paid a ‘one off’ non-recurring payment/fee was agreed: and for artistes on royalty deals (recurring payments) at the end of 50 years, provisions such as the recoupment of any outstanding advance and ‘contractually agreed deductions’ will no longer apply and the next twenty years will be treated as a ‘clean slate’ for the purposes of royalty payments.

Needless to say the record label’s trade body, the IFPI, welcomed the move to extend saying “The international recording industry welcomed today’s decision by the European Union to extend the term of copyright protection offered to performers and producers from 50 to 70 years. The decision was applauded by Plácido Domingo, chairman of IFPI, which represents the recording industry worldwide: “The decision to extend the term of protection for recordings in Europe is great news for performing artists. Artists at the start of their careers will benefit from an increased pool of revenue that will be available to invest in new talent. Established artists can benefit from their work throughout their lifetimes.  This is especially important today when licensed digital services make music widely available online.  “Extension of protection also reflects the important role performers play in the success of songs by narrowing the gap between the protection offered to recorded performances and that offered to compositions.”

Frances Moore, chief executive of IFPI, added: “This is a victory for fairness. With this decision, the European Union is giving artists and producers in Europe the fair treatment they deserve. The extension of the term of protection to 70 years narrows the gap between Europe and its international partners and improves the conditions for investment in new talent. “Over 38,000 artists and performers petitioned for this extension, supported by right holders from across the European music sector. Their calls have been heeded, and we thank the European Commission for having the vision to table this Directive, the European Parliament for giving it resounding support and the Member States, led on this occasion by the Polish Presidency of the EU, for making term extension a reality.”

This Simkins’ early warning from Ed Baden-Powell
EU enhances copyright protection for sound recordings and songs

After a delay of over two years since the European Parliament’s original approval, the EU Council of Ministers voted on 12 September 2011 to amend the Copyright Term Directive.[1]

The amending Directive has been eagerly anticipated by labels and artists alike, following their pleas to extend the life of sound recordings from the late ’50s and early ’60s, many of which have already fallen (or are otherwise due to fall) into the public domain.The amendments address two main areas:

1  Sound recordings and performers

*Extension of term for sound recordings:  The copyright term for sound recordings will be extended from 50 years to 70 years.  The 70-year period will run from the date of first lawful publication or (if none) first lawful communication to the public (if the publication or, as the case may be, communication occurs within 50 years of the date of recording).  If neither occurs within 50 years of the date of recording, the term of copyright will expire at that point.  The extension will have prospective and retrospectiveeffect.  For existing copyrights, however, it will only apply to sound recordings that are less than 50 years old as at the date falling two years after the date of force of the amending Directive.  In other words, nocopyrights will be “revived” under the new law.

*Performers’ rights:  The extension will apply equally to performers’ rights in their performances embodied in sound recordings, enabling them to continue to receive income from the performers’ collecting societies.

*”Use it or lose it”:  During the extension period an artist will have the right to terminate the artist’s recording contract if, within one year of receiving notice of the artist’s intention to terminate, the record company fails to release the recording (by both physical and digital distribution).  Artists cannot waive this right of termination.  Upon termination, the record company’s rights in the sound recording will expire and fall into the public domain.  Artists’ rights in their performances will, however, continue for the extensionperiod, allowing the artist to regain control of the performances and to release the performances themselves.

*Fund for session musicians:  A dedicated fund will be set up for annual payouts to non-featured session musicians (i.e. those originally paid on a one-off, buy-out basis) and administered by the collecting societies that represent the interests of labels and performers (e.g. PPL in the UK or GVL in Germany).  Record companies will have to contribute to the fund by setting aside, at least once a year, at least 20% of their gross revenues generated during the extension period from the exploitation of records (but excluding the labels’ revenues deriving from equitable remuneration for communication to the public and rental rights or from fair compensation for private copying).  Session musicians cannot waive this right to additional remuneration.  Each member state may, in implementing the law at national level, exempt “micro enterprises” from contributions where it would not be cost-effective to collect and administersuch revenues.

*Recoupment in the extension period: There will be a “clean slate” in the extension period: record companies will not be able to recoup unrecouped balances under existing contracts with artists from royalties arising during the extension period.  In the case of royalty-based record contracts concludedbefore the proposed extension comes into force at national level, member states have the discretion (but are not obliged) to provide artists with a statutory right to renegotiate those contracts.  Such right would be exercisable 50 years after the recording’s first lawful publication (or, if none, first lawful communication to the public).

2 Musical compositions and lyrics:

*Term of copyright protection for musical compositions with lyrics:  This term of protection will (as long as the music and lyrics were specifically created for the relevant work) expire 70 years after the death of the last of the composer of the musical composition and the author of the lyrics (whether or not those persons are designated as co-authors).  Previously, the musical composition and the lyrics were treated as separate works for the purposes of calculating the duration of copyright protection, which had the effect that the musical composition might be in copyright but the lyrics not (or vice versa).  These provisions will apply to all musical compositions with words of which at least the music or the lyrics are protected in at least one Member State on the date falling two years after the entry into force of the amending Directive.  This will be without prejudice to any acts of exploitation performed before the entry into force of such Directive, and Member States will be obliged to adopt provisions that protect rights already acquired by third parties.

Each EU member state now has two years to implement the new legislation into national law.  The implementation process is not likely to be quick.  Although it may be possible (as in the UK) for a government department to draw up secondary legislation to amend the relevant primary legislation without taking up too much parliamentary time, interested parties are likely to be consulted  first on the details of the draft amending legislation.
[1] Directive 2006/116/EC.

This update is © Michael Simkins LLP. This update is for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to court decisions facts referred to are those reported as found by the court. Simkins website is at http://www.simkins.com

http://www.independent.co.uk/arts-entertainment/music/news/cliffs-law-gives-ageing-rockers-a-pension-after-copyright-ruling-2351636.html and

http://www.cityam.com/news-and-analysis/music-industry-claims-victory-eu-extends-copyright-laws and

See Extending The Term, Music Law Updates (March 2006) under ‘Articles’

and see the full reasons given by the European Council herehttp://ec.europa.eu/internal_market/copyright/docs/term/2011_directive_en.pdf

See this somewhat critical article by Bob Stanley on the Guardian website herehttp://www.guardian.co.uk/music/2011/sep/15/copyright-extension-cliffs-law-beatlesand further comment on the 1709 blog here http://the1709blog.blogspot.com/2011/09/guest-contribution-comments-on.html and from the IPKat herehttp://ipkitten.blogspot.com/2011/09/good-news-for-record-companies-bad-luck.html

And two more articles that might interest readers – one pointing out the disadvantages of term extension, and one the fallacy that session musicians might benefit and again highlighting Andrew Gower’s view that term extension was not a good idea

PristineAudio, who runs a label specialising in out-of-copyright recordings, explained the ruling had far-reaching implications for classical music as well. “One major release of ours earlier this year illustrates well something this new act most certainly will kill off. A historic concert given in 1960 by British conductor Leopold Stokowski with the Philadelphia Orchestra … fell into the public domain in Europe [in 2011], and we were able to transcribe the conductor’s own copies of the master tapes, prepared for him by the radio station, and release in the highest quality a concert that has long been of great interest to collectors” …. “
http://www.techdirt.com/articles/20110927/09045616109/how-copyright-extension-is-harming-classical-music.shtml

“In a careful lobbying effort, the record labels have claimed that their motivation for the change has not been to safeguard Richard, but the incomes of jobbing session musicians, such as Raphael Ravenscroft, who played the saxophone solo on Baker Street, and Sheila Bromberg, who played the harp on the Beatles’ She’s Leaving Home. Bromberg faced losing her royalty income for the song after 2017 and, as she says in a heartrending quote, helpfully supplied by the industry: “It may not be huge sums of money but to an OAP as I am, it is welcome”. In fact, there are only two groups of people who will receive huge sums of money as a result of an extended term: the record labels and the multi- millionaire mega-acts …..”
http://www.guardian.co.uk/media/organgrinder/2011/sep/25/copyright-term-extended-music-recordings