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Songwriter teams hail ‘landmark victory’ as US Copyright Office points rule confirming how termination rights apply to streaming royalties

Jul 9, 2024 | blog

Plenty of organizations representing artists and songwriters within the United States have applauded the US Copyright Office’s ruling reaffirming termination rights underneath the Music Modernization Act (MMA).

The rule clarifies that songwriters are entitled to gather mechanical royalties generated from streaming platforms like have the proper ‘to terminate the exclusive or nonexclusive grant of a transfer or license’ after 35 years for works written after 1978 (or 56 years for works written/copyrights granted previous to 1978).

The ruling, which was revealed right this moment (July 9) and out there to learn in full right here, confirms that the so-called “derivative works exception” doesn’t apply to the blanket license underneath Section 115 of the Copyright Act.

The obligatory license within the US, often known as the 115 License (as a result of it’s stipulated underneath part 115 of the Copyright Act) is run by the US-based Mechanical Licensing Collective (The MLC).

The MLC was established by the Music Modernization Act of 2018, and is the only real entity approved to develop and administer a mechanical licensing system within the US.

In October 2022, the US Copyright Office revealed a discover of proposed rulemaking (NPRM) concerning the applicability of the spinoff works exception to termination rights underneath the Copyright Act to the statutory blanket mechanical license.

The USCO claimed that it launched the proceedings after the Mechanical Licensing Collective adopted a “termination dispute policy that conflicted with prior Office guidance and was based on an erroneous interpretation of how the Copyright Act’s derivative works exception to termination rights applies to the statutory mechanical blanket license”.

The MLC’s rule was based mostly on its interpretation of the “derivative work” exception detailed right here in Chapter 2 of US Copyright legislation devoted to Copyright Ownership and Transfer.

According to US copyright legislation, “a derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination.”

As defined right here by the Authors Alliance again in 2022, the coverage adopted by the MLC was that, “as long as a publisher had actively licensed the work and used it at least once before the termination date, the publisher would forever receive royalties from the MLC, and not the creator who terminated rights”.

The ruling revealed right this moment stipulates that songwriters who terminate their rights are entitled to be paid for post-termination makes use of of their works underneath the blanket license.

The Music Artists Coalition mentioned that right this moment’s choice is a “significant victory for songwriters and creators, ensuring they receive fair compensation when reclaiming their copyrights”.

The announcement issued by The MAC right this moment famous that The Copyright Office’s choice requires the Mechanical Licensing Collective to “implement a corrective royalty adjustment to remedy previous misapplications of the derivative works exception”.

It additionally supplies detailed steering on dealing with possession transfers, royalty payee modifications, and associated disputes within the context of terminations.

The rule is efficient August 8, 2024.

“This ruling from the Copyright Office is a landmark victory for songwriters and the entire music community.

Jordan Bromley, MAC 

Jordan Bromley, board member of the Music Artists Coalition (MAC), stated: “This ruling from the Copyright Office is a landmark victory for songwriters and the entire music community. By confirming how termination rights apply to the blanket license, the Office has affirmed the fundamental principle that creators should benefit from their work.

“The Music Artists Coalition has long advocated for this change, and we’re thrilled to see it come to fruition. This decision not only ensures fair compensation for songwriters who reclaim their rights, but also sets a precedent that strengthens the very foundation of copyright law in the digital age. It’s a clear message that in the evolving landscape of music streaming and licensing, the rights of creators must be protected and respected.”

“Black Music Action Coalition is proud to have worked with MAC, SONA and our fellow advocacy groups in helping to accomplish this landmark ruling from the U.S. Copyright Office.”

Willie “Prophet” Stiggers, BMAC 

BMAC Co-Founder, President, and CEO Willie “Prophet” Stiggers, mentioned: “Black Music Action Coalition is proud to have worked with MAC, SONA and our fellow advocacy groups in helping to accomplish this landmark ruling from the U.S. Copyright Office.

“BMAC’s priority is fighting for rights that protect Black music creators and that amplify the larger justice movement within the music industry, which makes this decision one that we are thrilled to celebrate.”

“Songwriters of North America applauds the U.S. Copyright Office ruling clarifying termination rights for songwriters.”

Jack Kugell, SONA 

SONA board member and advocacy committee co-chair, Jack Kugell mentioned: “Songwriters of North America applauds the U.S. Copyright Office ruling clarifying termination rights for songwriters.

“This much-anticipated decision is a huge victory and affirms existing copyright laws can be interpreted fairly and correctly. As an advocacy group led by and for songwriters, we sincerely thank the USCO for not only listening to, but for hearing songwriters.”

“We are very pleased that the Copyright Office has affirmed the MLC’s practice which ensures songwriters are properly and expediently paid post termination.”

“NSAI has been at the forefront of this issue for several years and is grateful for the time and effort of the USCO and the other organizations and individuals who have worked hard to reach this conclusion for American songwriters.”

The Nashville Songwriters Association International

The Nashville Songwriters Association International (NSAI) additionally issued an announcement, noting that it “loudly applauds the U.S. Copyright Office (USCO) ruling on songwriter terminations through the Mechanical Licensing Collective (MLC.)”.

It added: “The 117 page-document correctly, we believe, interprets copyright termination law to apply to the blanket digital mechanical license administered by the MLC allowing it to now pay any funds they have been holding to songwriters who have terminated copyright agreements with interest – and to retroactively correct payments made to pre-termination owners.

“Further, this rule confirms the MLC’s practice of paying the copyright owner of record at time of payment in most instances, which will ensure more dollars go to songwriters in the most efficient fashion.

“NSAI has been at the forefront of this issue for several years and is grateful for the time and effort of the USCO and the other organizations and individuals who have worked hard to reach this conclusion for American songwriters.”

 Music Business Worldwide

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