Copyright Law Blog: Exclusive Rights

Category Archives: Mechanical royalties

What constitutes a fatal error on a notice of intention to use a compulsory license?

Shourin Sen - 1 April 2009 – 9:00 am

Filed under Compulsory License, Mechanical royalties

EMI Entertainment World, Inc. v. Karen Records, Inc., 2009 WL 805264 (S.D.N.Y. 2009)

Judge Richard J. Holwell of the Southern District of New York issued an order this past Friday that addressed what is a fatal mistake on a notice to use a composition under the 17 U.S.C. § 115(b) compulsory license provision. The bottom line? Don’t send a permissions request if you’re actually sending a notice.

Karen Records, a Latin recording label, attempted to give notice that it planned to use four different EMI songs under Section 115(b). After a series of disputes concerning unpaid royalties, EMI brought suit for copyright infringement, alleging, among other things, that Karen’s notice filings were invalid.

Nonfatal errors

Karen’s attempted notice for three songs featured:

Karen’s name and contact information
the names and authors of the compositions for which Karen sought licenses
the publishers that owned the rights to the compositions
the album the songs would be included on
the notation “Please issue and release license from 7/6/99”

Judge Holwell found that while Karen’s letter didn’t fulfil all of the requirements set forth in 37 C.F.R. 201.18, the errors weren’t fatal:

True, Karen’s form requests did not comply with § 201.18′s requirements to the letter. They were not, for example, signed by “a duly authorized officer or agent of the corporation,” § 201.18(e)(1), nor were they entitled “Notice of Intention to Obtain a Compulsory License for Making and Distributing Phonorecords,” § 201.18(d). But as already noted, such errors are not fatal to a notice unless they “materially affect[ed] the adequacy of the information required to serve the purposes of [17 U.S.C. § 115(b) ].” 37 C.F.R. § 201.18(g). Karen’s notices clearly indicated its intent to acquire mechanical licenses to EMI’s works, specifically identified the compositions it sought licenses for (as well as the albums those compositions would appear on), and identified Karen with enough specificity for EMI to easily enforce its rights (witness this suit). The purposes of § 115(b) were served.

Fatal errors

A forth song was requested using a letter that was different than the previous notice in three respects:

the letter was titled “Request for Mechanical License”
the request contained a line for “publisher[']s approval” that Harry Fox never countersigned
the form didn’t contain the “Please issue and release …” language

Judge Holwell found that the notice was defective and no compulsory license was granted:

The Court next turns to La Colegiala. The form Karen faxed to Harry Fox for this song differed in important ways from the forms it sent to Harry Fox for Cuando Acaba el Placer, Corazón Partío, and Fuiste Mia un Verano. Unlike the earlier forms, the La Colegiala form explicitly requested a license. Furthermore, it did not contain the earlier forms’ “Please issue and release …” language, and thus never expressed a clear intent to make use of La Colegiala. The Court concludes that as a result of these differences, Karen never acquired a license for this composition.

Krishnamurthy: The Statutory Mechanical License in India: Whose Version [of the Law] is Correct?

Shourin Sen - 29 November 2008 – 10:38 pm

Filed under Academia, Foreign, India, Mechanical royalties, Music

Nikhil Krishnamurthy, everyone’s favorite Indian practitioner/flamethrower, recently posted an article on the compulsory license in musical compositions. I wrote about one of Mr. Krishnamurthy’s other papers last week.

Apparently, Indian courts have split on whether an artist can cover a song under the Copyright Act’s compulsory license provision without first obtaining permission from the original author (provided that an authorized version of the song has been released for two-years). The relevant part of Section 52(1)(j) of the Indian Copyright Act states as follows:

The following acts shall not constitute an infringement of copyright, namely: (j) the making of sound recordings in respect of any. . . musical work, if . . .(ii) the person making the sound recordings has given notice of his intention to make the sound recordings, has provided copies of all covers or labels with which the sound recordings are to be sold, and has paid in the prescribed manner to the owner of rights in the work royalties in respect of all such sound recordings to be made by him, at the rate fixed by the Copyright Board in this behalf[;] Provided that. . . (iii) no such sound recording shall be made until the expiration of two calendar years after the end of the year in which the first sound recording of the work was made. . .

Mr. Krishnamurthy contends that permission of the original author isn’t required for a subsequent musician to record a cover, provided that an authorized version of the original was released two-years earlier. First, Mr. Krishnamurthy’s argues that Section 52(1)(j) would be redundant if permission were always required. Secondly, Mr. Krishnamurthy makes the historical argument that Indian copyright law has featured a compulsory license provision since the Copyright Act of 1957 incorporated the scheme of the English Gregory Report (report of the Copyright Committee of 1952). Mr. Krishnamurthy’s states that, absent any evidence to the contrary, there should be a presumption that Parliament didn’t intend “drastic” changes to a policy the Indian Copyright Act has contained since its foundation.

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I find the idea that it would be financially advantageous for the Indian recording industry to limit covers interesting, even if it’s only for a period of two years. There is no comparable holding-period under American copyright law. This seems like the type of limitation that the American recording industry could have pushed Congress to enact years ago if there was any impetus. This brings us to my favorite topic: how it may be beneficial for individual countries to have differing copyright structures, and inversely, how differing copyright structures may foster varying performance practices.

I can think of a number of reasons for why the Indian recording industry might want a two-year exclusivity period, when it wouldn’t be called for in the U.S.:

First, as suggested by Mr. Krishnamurthy in his article, the Indian music industry is centered around Bollywood musicals. Given that film is central to marketing, it’s not unreasonable to think that songs in India are more important to a recording’s success than they are in the U.S. I.e. in India, songs are the stars; in the U.S., performers have a comparatively larger effect than songs on album sales.
The absence of a performance right in sound recordings under U.S. copyright law provides a disincentive for American musicians to make cover recordings. Unless an American musician records songs that they write, they are closed out of radio related royalties. Indian copyright law grants performance rights to both composers and performers so that, even if an Indian performer records a song they didn’t write, they still receive some royalties for radio play.
Perhaps there are segments of the Indian market that give less credence to branding and are more accepting of sound-alike albums than many segments of the American market.
It may be more costly to track sales of cover recordings for royalty collection in India than it is in the United States. It may make more sense for Indian labels to limit all covers rather than spending money trying to track cover sales.

These are just my best guesses. If any of this blog’s Indian readers would like to evaluate or add to the potential rationales, I would love to hear any comments.

Nikhil Krishnamurthy, The Statutory Mechanical License in India: Whose Version [Of the Law] is Correct?, Manupatra Intellectual Property Reports, MIPR, Vol. 1, p. A-115 (March 01, 2007).