February 05, 2020 Feature

Who Owns That Tune? Issues Faced by Music Creators in Today’s Content-Based Industry

Adam J. Reis and Manon L. Burns

©2020. Published in Landslide, Vol. 12, No. 3, January/February 2020, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

Content is king, and his edict is inundation. If an artist or brand can saturate the market with content, and thus capture every possible click, like, and repost, it can increase its chance of being seen and, hopefully, paid. Content can be anything: a simple status update, a short film, a sponsored makeup tutorial, a new meme. And, of course, content can be music, along with every medium in which music can be incorporated.

One of the key issues inherent in the creation of music-based content is ownership. Is the owner the party who solicited the content and described exactly how it was to be done, or the creator-influencer who made it happen? The singer-songwriter who strummed the acoustic guitar, or the producer who provided feedback on the lyrics, the style, the melody? And, if all of these contributors are joint authors of the work, how are royalties divided among them? Because individuals are no longer limited from making contributions by physical or geographical barriers thanks to the magic of the internet, there can easily be dozens of contributions to a single instance of meme-able content. This can lead to headaches when attempting to assist clients who want to make sure that their rights in their content are protected against other parties.

Understanding the importance of content, and in particular videos, in today’s music market and the fundamentals of copyright ownership is only the beginning, as one of the biggest challenges faced by any lawyer representing creatives is ensuring clients enter into the agreements that will best protect them. The more we understand these processes as attorneys, the better chance we have of best representing our clients.

The Role of Video Content in Today’s Music Industry

Video streaming accounts for slightly more than half of all on-demand music streaming.1 YouTube dominates this industry, accounting for 47 percent of all time spent listening to on-demand music.2 These videos, and the music contained therein, are often created and posted by musicians themselves to gain recognition. For instance, Justin Bieber, Ed Sheeran, The Weeknd, and Alessia Cara all got their start on YouTube.3 Given the increased prevalence of streaming on YouTube, musicians are essentially required to have a YouTube presence to ensure fans listen to their music. On top of that, fans are encouraged to support their favorite artists and musicians by competing to see which artist’s fans can stream the artist’s music the greatest number of times. Indeed, the classic record deal is dying (if not dead already), and labels are looking for artists who have already generated a significant online following to sign in order to boost their chances of success.4

Everyone (and, potentially, every dog) is a brand. The internet has facilitated the curation of the “image,” or the narrative and the aesthetic that mobilize interest in the brand. The primary way to push this narrative is through the continual creation and posting of content in any form. But of course, YouTube videos are one of the most popular types of content. For instance, a marketing contract may require a musician who is promoting a product to post status updates to social media at certain intervals, create and upload one video a month, and even film raw footage to be used by the marketing agency.

Whether it is streaming or marketing, this video content requires music, and increasingly, the creation of music is being driven by the need for content. Licensing preexisting music can be cost prohibitive for smaller content creators. Not only is the cost prohibitive, but so is the risk, as a quick search will turn up countless videos, blog posts, and forum threads detailing the problems faced by many YouTubers for the music in their videos, such as punitive content removal, demonetization, and content alteration. (Many of these complaints assert that requests to have content removed or demonetized are often fraudulently filed by companies claiming to own rights to the music contained in the videos, a problem that YouTube recognizes.5) Add to the cost and risk the increased access to, and decreased cost of, high-quality music production equipment, and it is often preferable for content creators to simply pay someone to make music for them or work with a friend or colleague willing to do it for free. As one example, a content requestor or creator may approach a music producer or artist with a “sync catalog” and request that music be created for each of the identified uses, which could include commercials or videos for a marketing campaign, and set certain parameters for how the music should sound, i.e., by providing examples of a famous recording or classical artist. Or, a musician with a knack for sound engineering may sideline as an audio editor for videos created by others, working on dozens of videos a week.

Given the many moving parts involved in the creation of this content, understanding how the Copyright Act partitions ownership is vital to protecting the interests of content creators who may not be familiar with the nuances of, for example, when a contribution to a work makes that contributor a coauthor, or when a work is considered a work made for hire.

Fundamentals of Copyright Ownership

The Copyright Act grants the owner of a copyright certain exclusive rights, often referred to as the copyright “bundle of rights.” This bundle includes the exclusive right to reproduce, distribute, display, perform, and prepare derivative works.6 To be eligible for copyright protection, a work need only be “original” and “fixed in any tangible medium of expression.”7 The U.S. Supreme Court has clarified that the bar for originality is low, and it means only that the work originated with the author, not that the work is sufficiently new or creative.8 All “works of authorship” that meet these two criteria are eligible for copyright protection, which attaches the instant the work satisfies both requirements (i.e., as soon as the work is fixed).

For music, there are two fundamental works of authorship that are protected by the Copyright Act: musical compositions and sound recordings. The Copyright Act does not define what a musical composition is, but states that “musical works, including any accompanying words,” fall under the purview of copyrightable subject matter.9 Musical compositions are often referred to simply as the song. As a common example, a copyright in the musical composition protects the song “Over the Rainbow.” The second type of work, sound recordings, are expressly defined as “works that result from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other phonorecords, in which they are embodied.”10 Turning back to our example, a copyright in the sound recording also exists and protects each separate recording of “Over the Rainbow,” such as the recording performed by Judy Garland as part of The Wizard of Oz.

Transferring Ownership in a Work

Generally, copyright ownership vests in the author of the work, who is most often the creator of the work. But there are two instances that may alter this basic framework. First, ownership in a copyright may be transferred via a written assignment agreement.11 It is prudent to obtain a written assignment from anyone involved in the creation of content prior to the creation of the content, keeping in mind that assignments can be terminated after a certain amount of time has passed.12

The second category of transfers, known as a work made for hire, cannot be terminated by the person who actually creates the work. Under this doctrine, it is possible that someone other than the creator can be deemed the author, and thus the owner, if the work was either made by an employee in the scope of employment or commissioned by a written agreement that includes a specific type of work.13 The former may be shown by a variety of factors that are typically governed by agency law like control over the means, location, and goals of the artistic work, whether it is the party’s business to make such music, how the party compensates the artist or sets the artist’s hours, and any general factor that indicates that the party has control or the final say.14 If an artist is making content on a regular basis for his or her employer, the employer would be deemed the author of all content created by the artist. If the artist is making content as an independent contractor, or on a project-by-project basis, it is more difficult to determine whether the artist can be deemed an employee for purposes of ownership of the content.

A work made for hire, in the second sense, exists with a written agreement specially commissioning certain kinds of work specifically enumerated by the Copyright Act, such as an atlas, instructional text, compilation, or collective work. Musical compositions and sound recordings standing alone are not included in any of these categories. For that reason, creators wishing to play music in a video traditionally obtain two licenses for the synchronization of the music to the video: a sync license that covers the composition and a master use license that covers the sound recording.

Movies and audiovisual works, however, are included as a category as potential works made for hire, meaning that any music created with the intention of being contributed toward a video could be within the purview of a work made for hire agreement. Given the demand for high-quality videos in today’s market, this is arguably the most applicable of all of the categories to musicians, as every aspect of a copyrightable contribution to a video can be wrapped into a work for hire agreement, making the hiring party the author of the video. If it is your client’s intention to own the final product, best practices would include securing a work for hire agreement prior to the creation of any contributions to the video (in addition to an assignment for safe measure). If you represent the musician, advising the client on the effect of this agreement beforehand can help prevent any issues down the line.

Unfortunately, in the real world, working artists, and those working with artists, often forget to secure the written agreements they need to ensure complete ownership of their work. Further, if the elements of a work made for hire are not satisfied, a written work made for hire agreement will not be enforceable. For example, if a musician entered into a work made for hire agreement for the creation of a song, but it is not clear from the agreement whether that song is to be used as part of an audiovisual work, the work made for hire agreement might not be enforceable, since musical compositions and sound recordings are not enumerated works eligible to be works made for hire. Best practices would dictate always including an assignment in all contracts as a fallback, but many work made for hire agreements omit this critical step. Thus, we would be left with a situation in which the party requesting the music and hiring the artist falsely believes it is the owner of that music because the music was contributed to its content.

While written agreements are required to effectuate assignments and work made for hire arrangements, they also help delineate the parties’ intent regarding who should own the work. Without agreements from everyone involved in the creation of the content, there could be certain individuals who have contributed to the content to the point of making them a joint author of the finished work.

Joint Authorship

Under the Copyright Act, a joint work is “a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.”15 Each of these joint authors is entitled to fully exploit the copyrighted work, subject only to the duty to provide all other joint authors with an accounting of profits.16 Perhaps the most crystallized exposition on how to determine if someone is a joint author in the absence of a contract comes from the Ninth Circuit’s decision in Aalmuhammed v. Lee.17 There, relying on other cases involving issues of joint authorship, the Ninth Circuit held that joint authorship depends on the following three factors: (1) whether an author “superintend[s] the work by exercising control,” i.e., whether the person is “the inventive or master mind”; (2) whether the “putative coauthors make objective manifestations of a shared intent to be coauthors”; and (3) whether “the audience appeal of the work turns on both contributions and ‘the share of each in its success cannot be appraised.’”18 If any author in a group alleged to be coauthors lacks the intent, then the work is not a joint work.

The Woes of Determining Authorship without an Agreement

A recent case from the U.S. District Court for the Central District of California, Stiletto Television, Inc. v. Hastings, Clayton & Tucker, Inc., demonstrates the importance of having every member involved in the creation of content sign an agreement and the issues raised by the failure to do so.19 Plaintiff Stiletto and defendant Hastings were involved in the coordination, creation, and distribution of two films capturing various live concerts performed by artist Barry Manilow. Stiletto was formed by three producers, Kief, Grove, and Queen. One of those three producers, Kief, separately formed and managed Hastings. Manilow, the director of the films, and the producer that oversaw the physical production of the films all assigned whatever copyright they had in the films to Hastings. Stiletto then sued Hastings asserting, among other things, that Stiletto was a joint author of the films based on the contributions of Grove and Queen.

Focusing on the first two prongs of the Aalmuhammed test, the court found for Hastings. As for the intent factor, there was no agreement evidencing an intent to be joint authors for either of the two films. The creative control of Aalmuhammed likewise did not fare well for Stiletto. With respect to the first film, Stiletto was involved with operating logistics, financing, behind the scene footage, and assistance in editing. Similarly, for the second film, Stiletto was involved with pitching the project and negotiating an agreement, logistics and financing of the production of the film, and providing feedback and overseeing important aspects of editing. The court found these contributions insufficient to constitute the creative control necessary to satisfy the Aalmuhammed test, as the undisputed evidence demonstrated that Manilow was the creative mastermind behind the films, coordinating and approving all major aspects of the concerts, filming, and editing.

The parties in Stiletto were saved by written agreements evidencing an intent that Hastings be the owner and proof that Manilow himself exercised creative control. Absent a written agreement, as is often the case, it is easy to imagine a scenario in which a party with limited to no involvement in the actual creation of the music asserts it is an author of the finished product. Perhaps this party was involved in the conceptualization of the content or editing of the finished product. Believing one is an author and owner of the finished content could lead one to believe he or she is also an author or owner of the underlying music, perhaps registering the copyright in the music or granting a license to the music contained in the video. Without a signed work made for hire agreement, the issue of joint authorship is not clear-cut, thereby creating problems concerning the rights involved in the continued use of the content. To further complicate things, circuits are split on whether each author’s contribution must be independently copyrightable to be considered a joint author.20 Without an agreement clarifying the intent of the parties, musicians contributing music to videos may find themselves facing issues of ownership with people they never thought could be considered authors.

What Does This All Mean?

Plain and simple, a failure to secure ownership in content, and especially the music contained in the content, places that content at risk of losing its value. Perhaps the most salient reason to delineate content ownership is that content creators can face swift repercussions from those claiming to be copyright holders. A Digital Millennium Copyright Act takedown notice, for example, provides a fast, rather sweeping mechanism for a copyright holder to have content removed from an internet service provider. The process is started with a rather boilerplate letter or notice,21 which many service providers offer via a fillable form on their websites. YouTube itself has exacting policies regarding copyrighted material—referred to by YouTube as content ID claims—which can include removal and demonetization of content by a party claiming to be the copyright holder.22 Failure to secure ownership via a written agreement may result in a claim of unauthorized use by a party claiming to be a copyright holder, which could result in drastic consequences with little options for the content creator. For instance, if one fails to obtain a written agreement from a party hired to create music for a video, the author of the music may assert that the video is infringing and could take action to have it quickly demonetized or removed. A written agreement would provide an easy, dependable piece of evidence to respond to such a claim.

These issues surrounding the creation and ownership of music for content are as important as those controlling the traditional creation of music, although they are often overlooked. Best practices include ensuring that there is a written agreement in place between all content creators clearly delineating the parties’ intent and ownership of all aspects of the content, including how royalties will be divided among the parties. Further, all contracts, especially those entered into with content requestors, should be reviewed thoroughly to make sure they are enforceable. Given the increased applicability of the work made for hire doctrine to music created as part of a video, artists should be fully consulted on the implications of creating music for such purposes. The demand for content has created a never-before-seen market for music that supports this content, which, for better or worse, is likely here to stay for the foreseeable future. Practitioners should prepare themselves to address these issues and hope that the increased demand means increased renown and compensation for their musician clients.

Endnotes

1. Int’l Fed’n of the Phonographic Indus., Music Consumer Insight Report 13 (2018), https://www.ifpi.org/downloads/music-consumer-insight-report-2018.pdf.

2. Id.

3. Corey Gittleman, Musicians Who Became Famous through YouTube, Vocal: Beat (2017), https://vocal.media/beat/musicians-who-became-famous-through-youtube.

4. Odell Mitchell III, How to Get Signed: A Path to the Modern Record Deal, Address Before the Chicago Bar Association Intellectual Property Law Committee (Sept. 24, 2019).

5. How YouTube Fights Fraudulent Copyright Claims and Takedowns, YouTube (Mar. 26, 2019), https://www.youtube.com/watch?v=ddS_vmEbUwY.

6. 17 U.S.C. § 106.

7. Id. § 102(a).

8. Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991).

9. 17 U.S.C. § 102(a)(2).

10. Id. § 101.

11. Id. § 204.

12. Id. § 203.

13. Id. § 101.

14. See Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) (discussing factors considered in agency law when determining whether or not a person is an employee).

15. 17 U.S.C. § 101.

16. Thomson v. Larson, 147 F.3d 195, 199 (2d Cir. 1998).

17. 202 F.3d 1227 (9th Cir. 2000).

18. Id. at 1234 (footnotes omitted); see also Caffey v. Cook, 409 F. Supp. 2d 484, 499 (S.D.N.Y. 2006) (discussing indicia of joint authorship, which include “how a collaborator regarded herself in relation to the work in terms of billing and credit, decisionmaking, and the right to enter contracts”); BTE v. Bonnecaze, 43 F. Supp. 2d 619, 624–25 (E.D. La. 1999) (stating that factors relevant to the intent inquiry include “(i) the contributor’s decision making authority over what changes are made and what is included in a work, (ii) the way in which the parties bill or credit themselves with regard to the work, (iii) any written agreements with third parties, and (iv) any other additional evidence”).

19. No. 2:18-cv-03911 DSF (PLAx), 2019 WL 3249603 (C.D. Cal. June 17, 2019).

20. The majority rule regarding joint authorship, sometimes referred to as the Goldstein rule, requires a coauthor’s contribution to a work to be independently copyrightable in order for the work to be considered a joint work. See 1 Paul Goldstein, Copyright: Principles, Law, and Practice § 4.2.1.2 (2d ed. Supp. 2004); see also Thomson, 147 F.3d 195. This rule has been adopted by courts of appeals that are arguably the most significant for entertainment lawyers, the Second and Ninth Circuits. See Childress v. Taylor, 945 F.2d 500, 506–07 (2d Cir. 1991); Aalmuhammed, 202 F.3d at 1231. A few circuits, on the other hand, have embraced the minority viewpoint, known as the Nimmer rule, which does not require that a contribution by a coauthor be independently copyrightable; rather, the contribution must simply be more than de minimis. See 1 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 2.01[B] (2007); see also Brown v. Flowers, 297 F. Supp. 2d 846, 851–52 (M.D.N.C. 2003), aff’d, 196 F. App’x 178 (4th Cir. 2006).

21. 17 U.S.C. § 512(c)(3).

22. What Is a Content ID Claim?, YouTube Help, https://support.google.com/youtube/answer/6013276?hl=en (last visited Dec. 10, 2019).

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Adam J. Reis is an associate at Irwin IP LLC in Chicago, Illinois. He specializes in intellectual property litigation and artist representation.

Manon L. Burns is an associate at Irwin IP LLC in Chicago, Illinois. She specializes in intellectual property litigation.