Abbott’s article, one of four runners-up in the tenth annual GRAMMY Foundation® Entertainment Law Initiative writing competition, was published in the Vanderbilt Journal of Entertainment and Technology Law. Her article warned the music industry about problems on the horizon related to copyrights in sound recordings, problems that will reach a boiling point in 2013.
Copyright law in the United States allows musicians to assign some or all of their copyrights in a sound recording to another entity or person. Because musicians typically have very little leverage when negotiating their first contract with a record label, they generally do assign all or most of their rights in their sound recordings to the record company.
Recognizing this imbalance in negotiating power and the unique interests a creator has in his or her creative works, U.S. copyright law also provides creators an opportunity to terminate copyright assignments 35 years later. The right to terminate an assignment of copyrights cannot be waived by contract, though many recording contracts attempt to do so.
To circumvent the termination rights of their recording artists, record labels typically include language in recording contracts purporting to confer “works made for hire” status upon all sound recordings created by the artist. Two types of works fall into the “works made for hire” category: works created by an employee in the course of his or her employment, and works specially commissioned pursuant to a written contract. If a sound recording can be considered a work that the musician “made for hire,” the record label will be considered the “author” for copyright purposes. (And, thus, the record label would not have to worry about the author’s right to terminate any copyright assignment, because the label itself would be the author.)
The question then becomes whether a sound recording can be a work for hire. Musicians are not employees of the record label, so the first category of “works made for hire” does not apply. As for the second category of “works made for hire,” the Copyright Act limits the kinds of works that can be specially commissioned as works for hire by contract. Those works are limited to motion pictures, translations, supplementary works, compilations, instructional texts, tests, or atlases. Sound recordings, notably, are not listed as a work that can be “made for hire” pursuant to a specially commissioned, contractual engagement.
Record labels, therefore, are in a pickle. The termination provision of the Copyright Act took effect in 1978, so musicians will have their first opportunity to terminate and/or renegotiate their copyright assignments beginning in 2013. Because artists must give written notice of termination of any copyright assignments at least two years before the termination takes effect, the problem is ripe for consideration.
For an in depth analysis of authorship and termination rights in sound recordings, see Get Ready Cause Here They Come: A Look at Problems on the Horizon for Authorship and Termination Rights in Sound Recordings, 31 Hastings Comm. & Ent. L.J. 127 (2008).