Thoughts on the Transparency in Music Licensing and Ownership Act

There has been increasing talk recently concerning H.R. 3350, the Transparency in Music Licensing and Ownership Act, which picked up two new co-sponsors earlier this month, and which has as its purpose the establishment of a copyright information database for music. Specifically, the Act seeks to have the Register of Copyrights create and maintain "a database of nondramatic musical works and sound recordings to help entities that wish to publicly perform such works and recordings to identify and compensate the owners of rights in such works and recordings, and for other purposes." However, while most people would support the the general idea of making it easier for rights holders to be located and compensated for their music, a closer examination of the Act reveals some aspects that are quite consequential for music copyright holders.  

As background, the Act, if passed, would represent a step in the government attempting to achieve what the music industry has so far been unable to accomplish: the creation of a unified and comprehensive database of copyright information for sound recordings and musical works. And as someone who has represented various companies in the music industry, I can say that there's no dispute about the importance of copyright data. So regardless of the specific provisions of the Act itself, the need that it purports to serve is real. Sure, there are various publicly available databases that contain certain music copyright information (for example, PRO databases and the Copyright Office's own database), but there is no consolidated and complete database (and note that PROs and the Copyright Office only make available information for works registered with the relevant entity). 

The government would have its work cut out for it. As an optimist, I don't want to say that the government would be doomed to fail if it attempts to establish the database, but know that there are some very intelligent, dedicated and committed people within the music industry, and the industry has thus far not been able to solve this problem on a collective basis. 

What is clearly the most controversial part of the Act, provides that:

"[I]n an action brought under this title for infringement of the exclusive right to perform publicly, reproduce, or distribute a nondramatic musical work or sound recording, the remedies available to a copyright owner that has failed to provide or maintain the information described in subsection (b) shall be limited to...(A) an order requiring the infringer to pay to the copyright owner actual damages for the public performance, reproduction, or distribution of the infringed work; and (B) injunctive relief to prevent or restrain any infringement alleged in the civil action."

This means that artists who do not register the relevant works in the new database (or keep their information up to date therein) will not have the right, as part of an infringement claim, to pursue statutory damages or attorney fee awards against certain infringing parties (which are described in more detail in the Act, but which represent a quite substantial class of actors) for unauthorized performance, reproduction or distribution of the artists' works. This is a very, very significant point. 

Now, any fair and objective analysis of the Act would certainly note that even under the current legal regime, song owners must take certain affirmative actions in order to receive certain benefits. For example, while a copyright comes into existence the moment a copyrightable work is embodied in fixed form, the owner must actually pay a fee and obtain a copyright registration in order to obtain certain benefits under law. You cannot claim statutory damages, or attorney fees, nor can you even bring a copyright infringement lawsuit, unless the work was properly registered (and there are rules about the timing of the registration as well). As another example, Section 115(c)(1) of the Copyright Act requires that, to receive royalties pursuant to the compulsory license provisions of the Copyright Act, the copyright owner must be identified in the registration or other public records of the Copyright Office. In addition, for songwriters and music publishers who license their music, registering with a PRO is the only way to receive certain public performance royalties. 

But how many artists will actually take the time to register and maintain their data in the new database? Perhaps more significantly, how many artists will actually even know about this requirement (or the consequences of failing to meet it)? And let's look at some of the information required as part of registering for this new database: (1) The title; (2) The copyright registration date, if any; (3) An identification of each owner of the copyright of the work or recording; (4) An identification of any entity, including a performing rights society, music publisher, or record label, through which the work or recording may be licensed; (5) The international standard musical work code or the international standard recording code; (6) The name of each recording artist featured on the work or recording; (7) Each album title containing the work or recording; (8) Each catalog number and each label name used on phonorecords of the work made and distributed to the public; and (9) Any other information the Register of Copyrights determines to be appropriate or necessary. 

In summary, the Act would, among other things, place an additional burden on music copyright holders (which includes songwriters who own their music). It also, in effect, creates a quasi safe harbor for certain entities who use music in the case where the music was not registered with (or where the relevant data was not maintained in) the database. To be sure, a claimant who fails to comply with the registration and maintenance requirements would still be able to pursue injunctive relief and actual damages, but when you remove statutory damages (which help compensate rights holders in instances where actual damages are difficult or impossible to measure) and attorney fee awards, you're removing significant tools that rights holders have available to them, the existence of which helps to provide leverage in ensuring that others don't violate their rights. 

I don't dispute the noble nature of the goal. Accurate and complete data is profoundly important to companies seeking to license music, and I think we ought to be doing as much as possible to help companies obtain licenses. Music licensing can seem very complex at times, and it takes place in the context of a highly idiosyncratic industry. I know many, many individuals and businesses who want to do right thing, and who only ask that the rules be fair and equitable, and that the process be workable. This perspective should not only be heard, but also reflected in our legal regime. We just need to make sure that in effectuating any new legal rules, we don't place unreasonable burdens on other important stakeholders, which I fear this Act may do.