Fairness in Music Licensing Act of 1998

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Fairness in Music Licensing Act
Great Seal of the United States (obverse).svg
Long titleTo amend the provisions of title 17, United States Code, with respect to the duration of copyright, and for other purposes (Title II)
Enacted bythe 105th United States Congress
EffectiveJanuary 25, 1999
Citations
Public law Pub. Law 105–298
Statutes at Large 112 Stat. 2827 (1998)
Codification
Titles amended17 (Copyrights)
U.S.C. sections created17 U.S.C. § 512
U.S.C. sections amended17 U.S.C. §§ 101, 110, 504
Legislative history
  • Introduced in the United States House of Representatives

The Fairness in Music Licensing Act increased the number of bars and restaurants that were exempted from needing a public performance license to play music or television during business hours. The bill was companion legislation passed along with the Copyright Term Extension Act in 1998.

Contents

Background and passage

United States copyright law gives copyright owners the exclusive right to publicly perform their works. [1] Performance rights organizations (PROs), such as ASCAP, BMI, SESAC and Acemla, administer public performance rights for songwriters and composers, providing blanket licenses to venues allowing them to play music for their customers.

Section 110(5) of the Copyright Act of 1976 exempted the need for a public performance license for music played on "a single receiving apparatus of a kind commonly used in private homes" and without a "direct charge" made to listen to the performance. [2] In the years following, courts have interpreted the provision in widely divergent ways, leading to uncertainty for bar and restaurant owners who played music on their premises. [3] Many restaurant and bar owners also complained about "disruptive" and "coercive" tactics employed by field agents of the PROs investigating unlicensed establishments. [4]

As a result, the National Restaurant Association, the National Licensed Beverage Association, and similar interest groups began lobbying for a more favorable exemption in the early 1990s. [5] Their legislative attempts were strongly opposed by the PROs, who argued that music played in bars and restaurants draws customers in and songwriters deserve to be compensated for the use of their works in this manner. [6]

Despite the opposition, the bill was ultimately successful, after having been attached as an amendment to the Copyright Term Extension Act, and was signed into law on October 27, 1998. The new provision kept the 'homestyle' exemption of the original provision but added specific exemptions based on the type of establishment, size of establishment, and type of equipment used to play music. Several studies have concluded that the Act exempts around 70% of eating and drinking establishments. [7]

WTO Dispute

Shortly after the bill went into effect, the European Communities began dispute proceedings against the United States in front of the World Trade Organization, claiming the new exemption violated the Berne Convention's protection of an author's exclusive public performance right. On July 27, 2000, the WTO's Dispute Settlement Body sided with the EC and held that the exemption violated Articles 11bis(1)(iii) and 11(1)(ii) of the Berne Convention (1971) as incorporated into the TRIPS Agreement by Article 9.1. The US and EC announced a temporary settlement arrangement on June 23, 2003, though the Fairness in Music Licensing Act remains in effect. [8] Under the Temporary Settlement, effective June 23, 2003 through December 20, 2004, the US paid $3.3 million to a fund established in the EU for the benefit of rights-holders. [9] As of May 7, 2010, the US continues to file required status reports with the WTO stating that "The US Administration is working closely with the US Congress and will continue to confer with the European Communities in order to reach a mutually satisfactory resolution of this matter." [10]

Related Research Articles

A copyright is a type of intellectual property that gives its owner the exclusive right to copy, distribute, adapt, display, and perform a creative work, usually for a limited time. The creative work may be in a literary, artistic, educational, or musical form. Copyright is intended to protect the original expression of an idea in the form of a creative work, but not the idea itself. A copyright is subject to limitations based on public interest considerations, such as the fair use doctrine in the United States.

<span class="mw-page-title-main">American Society of Composers, Authors and Publishers</span> Non-profit performance-rights organization

The American Society of Composers, Authors, and Publishers (ASCAP) is an American not-for-profit performance-rights organization (PRO) that collectively licenses the public performance rights of its members' musical works to venues, broadcasters, and digital streaming services.

The Berne three-step test is a clause that is included in several international treaties on intellectual property. Signatories of those treaties agree to standardize possible limitations and exceptions to exclusive rights under their respective national copyright laws.

Copyrights can either be licensed or assigned by the owner of the copyright. A copyright collective is a non-governmental body created by copyright law or private agreement which licenses copyrighted works on behalf of the authors and engages in collective rights management. Copyright societies track all the events and venues where copyrighted works are used and ensure that the copyright holders listed with the society are remunerated for such usage. The copyright society publishes its own tariff scheme on its websites and collects a nominal administrative fee on every transaction.

A performance rights organisation (PRO), also known as a performing rights society, provides intermediary functions, particularly collection of royalties, between copyright holders and parties who wish to use copyrighted works publicly in locations such as shopping and dining venues. Legal consumer purchase of works, such as buying CDs from a music store, confer private performance rights. PROs usually only collect royalties when use of a work is incidental to an organisation's purpose. Royalties for works essential to an organisation's purpose, such as theaters and radio, are usually negotiated directly with the rights holder. The interest of the organisations varies: many have the sole focus of musical works, while others may also encompass works and authors for audiovisual, drama, literature, or the visual arts.

The Public Domain Enhancement Act (PDEA) was a bill in the United States Congress which, if passed, would have added a tax for copyrighted works to retain their copyright status. The purpose of the bill was to make it easier to determine who holds a copyright, and to allow copyrighted works which have been abandoned by their owners, also known as orphan works, to pass into the public domain.

<span class="mw-page-title-main">Copyright law of Canada</span>

The copyright law of Canada governs the legally enforceable rights to creative and artistic works under the laws of Canada. Canada passed its first colonial copyright statute in 1832 but was subject to imperial copyright law established by Britain until 1921. Current copyright law was established by the Copyright Act of Canada which was first passed in 1921 and substantially amended in 1988, 1997, and 2012. All powers to legislate copyright law are in the jurisdiction of the Parliament of Canada by virtue of section 91(23) of the Constitution Act, 1867.

A compulsory license provides that the owner of a patent or copyright licenses the use of their rights against payment either set by law or determined through some form of adjudication or arbitration. In essence, under a compulsory license, an individual or company seeking to use another's intellectual property can do so without seeking the rights holder's consent, and pays the rights holder a set fee for the license. This is an exception to the general rule under intellectual property laws that the intellectual property owner enjoys exclusive rights that it may license – or decline to license – to others.

Music licensing is the licensed use of copyrighted music. Music licensing is intended to ensure that the owners of copyrights on musical works are compensated for certain uses of their work. A purchaser has limited rights to use the work without a separate agreement.

<span class="mw-page-title-main">Uruguay Round Agreements Act</span> US free trade law with implications for intellectual property

The Uruguay Round Agreements Act is an Act of Congress in the United States that implemented in U.S. law the Marrakesh Agreement of 1994. The Marrakesh Agreement was part of the Uruguay Round of negotiations which transformed the General Agreement on Tariffs and Trade (GATT) into the World Trade Organization (WTO). One of its effects is to give United States copyright protection to foreign works that had previously been in the public domain in the United States.

<span class="mw-page-title-main">Copyright Act of 1909</span>

The Copyright Act of 1909 was a landmark statute in United States statutory copyright law. It went into effect on July 1, 1909. The 1909 Act was repealed and superseded by the Copyright Act of 1976, which went into effect on January 1, 1978; but some of 1909 Act's provisions continue to apply to copyrighted works created before 1978. It allowed for works to be copyrighted for a period of 28 years from the date of publication and extended the renewal term from 14 years to 28 years, for a maximum of 56 years.

<span class="mw-page-title-main">Copyright Term Extension Act</span> United States copyright law

The Sonny Bono Copyright Term Extension Act – also known as the Copyright Term Extension Act, Sonny Bono Act, or (derisively) the Mickey Mouse Protection Act – extended copyright terms in the United States in 1998. It is one of several acts extending the terms of copyrights.

<span class="mw-page-title-main">TRIPS Agreement</span> International treaty on intellectual property protections

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement between all the member nations of the World Trade Organization (WTO). It establishes minimum standards for the regulation by national governments of different forms of intellectual property (IP) as applied to nationals of other WTO member nations. TRIPS was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) between 1989 and 1990 and is administered by the WTO.

Under the law of United Kingdom, a copyright is an intangible property right subsisting in certain qualifying subject-matter. Copyright law is governed by the Copyright, Designs and Patents Act 1988, as amended from time to time. As a result of increasing legal integration and harmonisation throughout the European Union a complete picture of the law can only be acquired through recourse to EU jurisprudence, although this is likely to change by the expiration of the Brexit transition period on 31 December 2020, the UK having left the EU on 31 January 2020. On 12 September 2018 the European Parliament approved new copyright rules to help secure the rights of writers and musicians.

On January 26, 1999, the European Community (EC) and its Member States requested consultation with the United States concerning a dispute over discrepancies between the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and Section 110(5) of the United States Copyright Act amended by the Fairness in Music Licensing Act. The dispute was over the legality of "the playing of radio and television music in public places without the payment of a royalty fee" (World). The disputed parties worked through the existing process of WTO Dispute Settlement. First the EC lodged a complaint against the US with the Dispute Settlement Body (DSB) and requested consultation over the dispute. Then the parties requested a panel leading to the body's eventual formation, followed by the circulation of the panel report. The parties accepted the Panel Report without appeal and the dispute ended in arbitration over implementation of the panel's recommendations. Australia, Brazil, Canada, Japan, and Switzerland acted as third parties in this dispute (World).

<span class="mw-page-title-main">Digital Millennium Copyright Act</span> Copyright law in the United States of America

The Digital Millennium Copyright Act (DMCA) is a 1998 United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization (WIPO). It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures that control access to copyrighted works. It also criminalizes the act of circumventing an access control, whether or not there is actual infringement of copyright itself. In addition, the DMCA heightens the penalties for copyright infringement on the Internet. Passed on October 12, 1998, by a unanimous vote in the United States Senate and signed into law by President Bill Clinton on October 28, 1998, the DMCA amended Title 17 of the United States Code to extend the reach of copyright, while limiting the liability of the providers of online services for copyright infringement by their users.

The copyright law of South Africa governs copyright, the right to control the use and distribution of artistic and creative works, in the Republic of South Africa. It is embodied in the Copyright Act, 1978 and its various amendment acts, and administered by the Companies and Intellectual Property Commission in the Department of Trade and Industry. As of March 2019 a major amendment to the law in the Copyright Amendment Bill has been approved by the South African Parliament and is awaiting signature by the President.

Twentieth Century Music Corp v. Aiken, 422 U.S. 151 (1975), was an important decision of the United States Supreme Court, out of the Third Circuit, that questioned whether the reception of a copyrighted song on a radio broadcast constitutes a copyright violation if the copyright owner has only licensed the broadcaster to "perform the composition publicly for profit".

In 1996, the European Community and United States filed complaints with the WTO against Japan concerning their distribution and protection of sound recordings that originated in their respective states. Both disputes accused Japan of violating numerous articles of the TRIPS Agreement. Both disputes were settled in December 1997, with the involved parties finding mutually agreeable solutions. DS28 was the first case ever brought to the WTO's dispute settlement body based on the TRIPS Agreement.

<span class="mw-page-title-main">Music Modernization Act</span> United States copyright law

The Orrin G. Hatch–Bob Goodlatte Music Modernization Act, or Music Modernization Act or MMA is United States legislation signed into law on October 11, 2018 aimed to modernize copyright-related issues for music and audio recordings due to new forms of technology such as digital streaming. It is a consolidation of three separate bills introduced during the 115th United States Congress.

References

  1. 17 U.S.C. § 106(4)
  2. Copyright Act of 1976
  3. Nimmer, David, Codifying Copyright Comprehensibly, 51 UCLA Law Review 1233, 1280 (2004).
  4. See "Oversight Hearing on Fairness in Music Licensing, Before the Subcommittee on Courts and Intellectual Property of the House Judiciary Committee, 105th Congress, 1st Session (July 17, 1997)
  5. "ASCAP - Legislative Timeline". Archived from the original on 2010-02-10. Retrieved 2010-02-06.
  6. Music Licensing in Restaurants and Retail and Other Establishments , Before the Subcommittee on Courts and Intellectual Property of the House Judiciary Committee, 105th Congress, July 17, 1997
  7. Graeme B. Dinwoodie, The Development and Incorporation of International Norms in the Formation of Copyright Law, 62 Ohio State Law Journal 733, 752 (2001).
  8. "WTO | dispute settlement - the disputes - DS160".
  9. Landau, Michael (Summer 2007). "Fitting United States Copyright Law into the International Scheme: Foreign and Domestic Challenges to Recent Legislation". Georgia State University Law Review. Georgia State University. 23: 847–892, at 887. (23 Ga. St. U.L. Rev. 847, 887).
  10. "WT/DS160/24/Add.65". May 7, 2010. Retrieved May 25, 2010.[ dead link ]