Chris Castle discussion of Eight Mile Style lawsuit against Spotify under Music Modernization Act (driving with dogs series, a One Take Wonder Production)
[Editor Charlie sez: Where is the olive branch from MLCI to AMLC?]
Under the Music Modernization Act (MMA), we now have a new system for licensing musical works that should help ensure the songwriters behind our favorite tunes can be properly identified and paid. And as part of the implementation of this historic law, just last week, the Copyright Office designated the Mechanical Licensing Collective, Inc. (MLCI) as the approved entity to implement key aspects of this new system, and the Digital Licensing Collective, Inc. (DLCI) to represent the interests of digital music services. Pursuant to the MMA, the MLCI will receive notices and reports from digital music providers, collect and distribute royalties, identify musical works and their owners for payment, and develop and maintain a publicly available database of musical works.
In designating the MLCI, the Office highlighted the support for the entity among musical work copyright owners and the organization’s projected ability to carry out the administrative and technological functions necessary to implement the law. The Office also highlighted the MLCI’s commitment to diversity in carrying out its duties. As part of its submission to the Office, the MLCI offered a detailed operational framework, reflecting substantial planning with respect to organizational structure, vendor selection, and collection and distribution procedures of royalties. At the same time, the Office appreciated the important submission of the other entity seeking to be designated, the American Music Licensing Collective (AMLC), and recommended that the MLCI consider whether aspects of the AMLC’s proposal should be incorporated into the MLCI’s future planning. Now that the designation process has been completed, the expectation is that the MLCI will fairly and equally represent the interests of all parties, including those who did not previously endorse it, and that key players such as the DLCI and the MLCI will build upon the cooperative spirit facilitated by the MMA’s passage to work together to make the implementation of this historic new licensing scheme a success.
Following designation, the Copyright Office will now turn toward ensuring that the proper regulatory procedures are in place prior to the upcoming license availability date of January 2021, when the new system will be fully operational. Over the next several months, we will begin rulemakings relevant to the MMA, as well as substantial public outreach, including a tutorial explaining the basics of the new law, a webinar, updated educational circulars, and presentations at music industry conferences. We encourage interested parties to check back on our website regularly for updates.
Songwriters Guild of America Lauds US Copyright Office’s Announcement of Strict Oversight Approach to the MMA Music Licensing Collective
Independent Music Creator Organizations Look Forward to Working with Copyright Office in Protecting Songwriter and Composer Rights
July 8, 2019, New York City–The Songwriters Guild of America, Inc. (SGA), the nation’s largest and longest established advocacy organization run solely by and for music creators, has announced its support for the strict oversight approach adopted by the US Copyright Office this week in naming the consortium led by the major, multi-national music publishers as the official Music Licensing Collective (MLC) under the Music Modernization Act. The Copyright Office made clear, as requested by SGA in recently filed comments, that it intends to take an active role in reviewing the activities of the MLC in light of the potential conflicts of interest inherent within a board of directors that will include major music publisher representatives.
Under the Act, the MLC is charged with identifying the rightful owners of hundreds of millions of dollars in unmatched streaming royalties. Those royalties that cannot be tied to particular owners, according to the law, will eventually be distributed to music publishers on a market share basis.
“Obviously,” according to songwriter and SGA president Rick Carnes, “under such circumstances you need an independent, outside overseer to make sure that those potentially conflicted board members who would benefit from the MLC doing a lax job in identifying the proper copyright owners do not utilize their positions to pursue unjust enrichment of their companies, despite the best efforts of songwriters, composers and truly independent music publishers on the board to achieve equitable results.”
In specifically citing SGA’s comments that meaningful oversight is an imperative under the law, US Register of Copyrights Karyn Temple concluded that “[t]he Copyright Office has been provided with ‘broad regulatory authority’ to conduct proceedings as necessary to effectuate the statute with the Librarian’s approval. In addition to the regulations that the Office is specifically directed to promulgate, the legislative history contemplates that the Office will ‘thoroughly review’ policies and procedures established by the MLC….The Office intends to conduct its oversight role in a fair and impartial manner; songwriters are encouraged to participate in these future rulemakings.”
SGA had noted in its comments that it was “far more concerned with ensuring that music creator rights are fully protected against conflicts of interest and impingements upon the rights and interests of songwriters and composers under all circumstances, than in supporting one or the other candidate vying to be selected as the Mechanical Collective.” The organization is satisfied with the Registers’ recognition of the Copyright Office’s oversight opportunities and obligations, and very much looks forward to working side by side with the Office on various issues concerning MLC policies and actions.
Carnes closed by stating, “for over 85 years, SGA has operated with a two-word mandate: ‘Protect Songwriters.’ And that applies to the rights of both American and foreign music creators. Congress intended, and the president’s signing statement confirmed, that the Copyright Office is to play a key role in pursuit of that same protective mandate. The Copyright Office’s stated willingness and obvious ability to accept that challenge is very encouraging, and SGA –with the welcome participation of many of its fellow songwriter organizations in the Music Creators North America (MCNA) alliance and MCNA’s affiliated, global music creator advocacy groups– intends to do all within its power to assist it in doing so.”
Carnes also noted that in the event that it proves necessary to take further appropriate action, for example, to make certain that proper diligence is exercised by the MLC in attempting to identify copyright owners of unmatched royalties prior to distributing “permanently” unmatched royalties, or to ensure that contractual royalty splits with songwriters and composers are honored by publishers after receipt of unmatched royalties, “SGA is ready, willing and able to do that.”
SGA is also studying the issue of whether the statutes’ placement of limitations on damages for those plaintiffs who bring copyright infringement lawsuits after January 1, 2018 against digital music distributors is actually violative of the Fifth Amendment’s “takings clause,” rendering that section of the Music Modernization Act unconstitutional and unenforceable.
“SGA and the entire, independent music creator community have our work cut out for us,” he said. “But we are fully prepared to do whatever is prudent to protect the rights and interests of songwriters and composers and look forward to working closely with the US Copyright Office and the entire music creator community in doing so.”
The member organizations of Music Creators North America, of which SGA is a founding member, have endorsed this statement.
Songwriters Guild of America, Inc.
210 Jamestown Park Road
Brentwood, Tennessee 37027
Since there was no advance commitment or agreement on the budget for the Mechanical Licensing Collective (MLC) under Title I of the Music Modernization Act, it appears that the clock is ticking on an agreement before the parties have to go before the Copyright Royalty Judges to be told what the budget (or the “assessment”) is to be. The Copyright Royalty Board has beat the July 8 deadline for noticing the proceeding and has posted the notice and the rules for the hearing.
The “Notice announcing commencement of Initial Administrative Assessment proceeding and requesting Petitions to Participate” can be found here:
The regulations require the participation of the MLC and the Digital Licensee Coordinator (DLC) in the proceeding and permit the participation of copyright owners, digital music providers, and significant nonblanket licensees. 37 CFR 355.2(c)–(d).
The Judges hereby announce commencement of the proceeding, direct the MLC and the DLC to file Petitions to Participate, and request Petitions to Participate from any other eligible participant with a significant interest in the determination of the Initial Administrative Assessment…
Any participant that is an individual may represent herself or himself. All other participants must be represented by counsel….
Petitions to Participate and the filing fee are due on or before July 23, 2019.
The CRJ’s rules relating to the proceeding can be found here and have some relevant language relating to who can participate in addition to the MLC and DLC:
[T]he Judges believe that the views of other participants may be helpful, and perhaps essential, for the Judges to determine whether good cause exists to exercise their discretion to reject a settlement. The Judges, therefore, have modified [the regulations for the settlement negotiations and proceeding] to clarify that participants other than the MLC and DLC may participate in settlement negotiations and may comment on any resulting settlement.
Editor Charlie sez: You have to love this:
In other news, Rep. Zoe Lofgren, [D-Google]., wants the Copyright Office to study if the ASCAP and BMI consent decrees should be modernized. Lofgren noted that the Department of Justice had reviewed the decrees just a couple of years ago and wondered, “What has changed since the last time?”
Aside from the DOJ dreaming up the insanity of 100% licensing and ignoring all other recommendations from songwriters as they did in the last review under a former Google lawyer working for the Antitrust Division, you mean?
And aside from the fact that the DOJ is reviewing 1,200 legacy consent decrees but only the songwriters get attention from Congress?
Chris Castle writes a high level summary of the new rules regarding statutory damages for pre-72 recordings.
[Editor Charlie sez: Food fight in the cafeteria…]
While the two applicants vying to be named the group that will build the Mechanical Licensing Collective created by the Music Modernization Act (MMA) have thus far engaged in mudslinging at their competitors, in the comments to the Copyright Office filed Monday and posted Tuesday evening, each group let loose with both barrels in appraising the other’s proposal.