A number of organizations representing artists and songwriters in the United States have applauded the US Copyright Office’s ruling reaffirming termination rights under the Music Modernization Act (MMA).
The rule clarifies that songwriters are entitled to collect mechanical royalties generated from streaming platforms like Spotify, Apple, and Amazon after their termination rights have been invoked (i.e., when they reclaim their rights from another party, in this case, a music publisher).
In the US, songwriters have the right ‘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 prior to 1978).
The ruling, which was published today (July 9) and available to read in full here, confirms that the so-called “derivative works exception” does not apply to the blanket license under Section 115 of the Copyright Act.
The compulsory license in the US, also known as the 115 License (because it is stipulated under section 115 of the Copyright Act) is administered by the US-based Mechanical Licensing Collective (The MLC).
The MLC was established by the Music Modernization Act of 2018, and is the sole entity authorized to develop and administer a mechanical licensing system in the US.
In October 2022, the US Copyright Office published a notice of proposed rulemaking (NPRM) regarding the applicability of the derivative works exception to termination rights under 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 policy was based on its interpretation of the “derivative work” exception detailed here in Chapter 2 of US Copyright law dedicated to Copyright Ownership and Transfer.
According to US copyright law, “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 explained here by the Authors Alliance back in 2022, the policy 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 published today stipulates that songwriters who terminate their rights are entitled to be paid for post-termination uses of their works under the blanket license.
The Music Artists Coalition said that today’s decision is a “significant victory for songwriters and creators, ensuring they receive fair compensation when reclaiming their copyrights”.
The announcement issued by The MAC today noted that The Copyright Office’s decision requires the Mechanical Licensing Collective to “implement a corrective royalty adjustment to remedy previous misapplications of the derivative works exception”.
It also provides detailed guidance on handling ownership transfers, royalty payee changes, and related disputes in the context of terminations.
The rule is effective August 8, 2024.
“We welcome the Office’s guidance on this important topic for rightsholders.”
MLC spokesperson
In a statement issued to MBW, an MLC spokesperson said: “We welcome the Office’s guidance on this important topic for rightsholders.
“With the long-awaited final rule now issued, The MLC can begin working to implement its requirements, including the release of monies we previously placed on hold pending the rule, in accordance with the timelines the Office provided.”
“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, said: “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 said: “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.”
NMPA President & CEO David Israelite, said: “We are very pleased that the Copyright Office has affirmed the MLC’s practice which ensures songwriters are properly and expediently paid post termination.
“Having clear guidance on this issue will make the MLC and larger industry even more efficient as it gives a clear roadmap to those who have decided to reclaim their copyrights. The songwriter groups deserve much credit for working with the Copyright Office and music publishers to push for this decision.”
“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) also issued a statement, 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