ANAND LAW assists entertainment clients in both transactional matters and litigation. We represent record labels, publishers, ad agencies, developers, galleries, content-creators, artists, writers, bands, DJs, producers and managers.
ASCAP / BMI / SESAC (American Society of Composers, Authors, and Publishers / Broadcast Music, Inc. / SESAC). The 3 U.S. “public performance organizations” (PROs). The PROs collect royalties on behalf of copyright owners of musical compositions for the public performance of their works. This includes the public performance of musical compositions on terrestrial radio (i.e., traditional AM/FM), and on digital radio (e.g., Pandora, iTunes, Spotify); and, in stores, amusement parks, malls, sports arenas, and concerts. A public performance royalty is owed to copyright owners when played over speakers, or performed live (if performed as a cover, a mechanical license is also needed).
The PROs distribute royalties to the copyright owners of the musical composition, typically the publisher and songwriter(s). There is no public performance right in sound recordings, meaning that a singer/rapper that performs on a song, but is not a writer, does not receive any public performance royalty when their song is played on traditional radio. If the song is played on digital radio, the singer/rapper will get a royalty for the public performance of their sound recording, which is collected by SoundExchange.
An implied license does not require any actual agreement—it arises solely from conduct and serves to allow others to use your intellectual property (“IP”). There is no requirement that even a verbal understanding was reached. Rather, an implied license is a legal concept that is created solely by the actions of parties and does not require any intention to allow such use.
The implied license originated as a concept in patent law, and was then adopted in copyright cases. It is now also applicable to the right of publicity.
Generally, an implied license will be found where the following occurred:
For singers, producers, songwriters, and artists, an implied license will allow others to use your most valuable IP, copyrights and rights to publicity (e.g., voice, image, likeness), without any compensation, or without further compensation. Moreover, if a payment is found to have been made, the license will be nonrevocable.
Not only can you license your IP without any agreement, unless you explicitly limit the extent to which your IP is licensed, a Court will find the contours of the license to be as broad as reasonably possible. In other words, unless there is evidence demonstrating that you limited the extent to which your IP may be used, an implied license will cover all uses reasonably anticipated, and without geographic limitation.
It is critical that creators understand the situations under which you may be found to have transferred rights, and to avoid the implied licensing of your work by having thorough, written agreements in place. Without a written agreement, you may be giving your rights away without compensation, without adequate compensation, and without knowing the parameters of the license that you have given.
There may be situations where it makes sense to work for a low amount or even for free—e.g., in order to build a reputation, make connections, learn and develop skills—but, this should not be done without careful consideration of the pros and cons of doing so in the context of your career, and you should never give away your IP without knowing that you’re doing so. Do it because you want and intend to, and because you are being fairly compensated in return (whether that compensation is monetary or otherwise). And always, know what your rights are, and what you can expect for allowing other to use them, whether that is a one-time “buy-out” payment, or it includes residual payments based on the performance of the product, or is an alternative arrangement.
There are exceptions to the implied license doctrine, including fraud. See e.g., Garcia v. Google, Inc., 743 F.3d 1258, amended by Garcia v. Google, Inc., 766 F.3d 929 (9th Cir. 2014). However, you do not want to rely on exceptions, as this will mean spending a lot more money on attorneys battling out the legal nuances of your situation, whether in or out of court. The far better practice is to make sure that you consult with an attorney prior to creating and handing over your work. If you are an author, producer, actor, musician, singer, artist, set designer, etc., be sure to have an attorney review your situation and draft or review a written agreement. The money you spend in legal fees to prevent fixing a bad situation will be a fraction of what it costs to remedy that situation.
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A mere idea is not protected as property in California (Desny v. Wilder). However, a promise to pay for the conveyance of an idea may be implied by the law from the circumstances surrounding the acceptance of that idea (Burtis v. Universal Pictures Co.).
In order to prevail on a breach of an implied-in-fact contract claim, it must be shown that the plaintiff not only conveyed an idea that was used by the defendant for a profit, but also that the idea was conveyed with the expectation that payment would be made if the idea were to be used. The plaintiff must show:
Formerly administered by the Harry Fox Agency, now owned by SESAC.
A MUSICAL COMPOSITION includes the music, and any accompanying words (“lyrics”). The author of a musical composition is generally the composer and/or lyricist, although the owner may be different (e.g., by virtue of a “Work Made for Hire” agreement).
A musical composition may be written (e.g. notes and lyrics), or in the form of a phonorecord (recording of the notes and lyrics). The owner(s) of the copyright to the musical composition may differ from the owner(s) of the copyright to the sound recording of that musical composition. A copyright in one is not the same as, or a substitute for, a copyright in the other. Compare with: sound recording.
SOUNDEXCHANGE collects and distributes royalties on behalf of sound recording copyright owners, using statutory licenses. SoundExchange is designated by the Librarian of Congress as the sole organization authorized to collect royalties due for the digital transmission of sound recordings, whether the transmission is made via streaming or by making ephemeral phonorecords (i.e., where copyrighted work is reproduced, but only for a short period). Prior to 1996, there was no digital public performance right.
Registration with SoundExchange does not necessarily eliminate the need for an artist/writer/producer to also affiliate with one of the PROs.
Compare with: ASCAP, BMI, and SESAC, the 3 U.S. public performance organizations (PROs) that collect royalties on behalf of copyright owners of musical compositions or the public performance of their works in “traditional” avenues (i.e., non-digital).
A SOUND RECORDING is the permanent fixation of music, lyrics, and sound in any medium (e.g. digital, CD, vinyl). The author(s) of a sound recording are the perfomer(s) whose performance is fixed and/or the producer(s) who fix music and sounds in the final recording, although the owner may be different (e.g., by virtue of a “Work Made for Hire” agreement).
The owner(s) of the copyright to the sound recording may differ from the owner(s) of the copyright to the musical composition that is being recorded. A copyright in one is not the same as, or a substitute for, a copyright in the other. Compare with: Musical Composition.
Section 101 of the Copyright Act (title 17 of the U.S. Code) defines a “work made for hire” in two parts:
A work prepared by an employee within the scope of his or her employment
A work specially ordered or commissioned for use