Notice of Proposed Rulemaking and Inquiry Issued by the United States Copyright Office Concerning “Termination Rights and the Music Modernization Act’s Blanket License”
LIBRARY OF CONGRESS U.S. Copyright Office 37 CFR Part 210 [Docket No. 2022–5]. Comments of the Songwriters Guild of America, Inc., the Society of Composers & Lyricists, and Music Creators North America
I. Summary of Comments
Further to our prior comments on this matter submitted to the United States Copyright Office (USCO) in an ex parte letter from SGA outside counsel Charles J. Sanders dated June 26, 2020 (Ex Parte Letter of June 26, 2020), The Songwriters Guild of America (SGA), the Society of Composers & Lyricists (SCL), and the Music Creators North America (MCNA) coalition (together herein referred to as the Independent Music Creators), respectfully submit these Comments (as summarized immediately below) regarding the USCO’s Notice of Proposed Rulemaking dated October 25, 2022 (Proposed Rulemaking):
A. The Independent Music Creators are fully in accord with the determination of the USCO set forth in its Proposed Rulemaking that “based on the …analysis of the statute, Congress’s intent, and [other cited] authorities, the Office concludes that the [Mechanical Licensing Collective] (MLC’s) termination dispute policy is inconsistent with the law.” We further agree with the USCO’s assessment that because the MLC’s termination dispute policy is contrary to current jurisprudence, the Proposed Rulemaking must “require the MLC to immediately repeal its policy in full.”
B. The Independent Music Creators fully support the USCO’s determination in its Proposed Rulemaking that “the copyright owner of a musical work (or share thereof) as of the last day of a monthly reporting period in which such musical work is used pursuant to a blanket license, is entitled to all royalty payments and other distributable amounts (e.g., accrued interest), including any subsequent adjustments, for the uses of
that musical work occurring during that monthly reporting period.” This full support by the Independent Music Creators extends to the accurate USCO determination that “the derivative works exception contained in 17 U.S.C. 203(b)(1) and 304(c)(6)(A) does not apply to any blanket license and no individual or entity may be construed as the copyright owner of a musical work (or share thereof) used pursuant to a blanket license based on such exception.”
C. The Independent Music Creators, however, disagree with the establishment by the USCO of an exception to the above rules that permits the Mechanical Licensing Collective (MLC) to honor a general letter of direction by the reclaiming copyright owner directing the MLC to continue paying the prior copyright owner or to hold such royalties pending the resolution of a “dispute.” Rather, at minimum, we request that the USCO require that each such letter of direction or agreement between the parties: (i) be executed after the effective date of termination; (ii) set forth in plain language the fact that the signing party or parties acknowledge that the action being requested is contrary to the usual rules governing the distribution of such royalties by the MLC, and; (iii) include a clear statement stipulating to the MLC that the document has been executed without prejudice to the rights of either party, including but not limited to claims of copyright and/or royalty ownership under law.
D. The Independent Music Creators agree with the USCO that it has the full right and authority under law to mandate in rules the foregoing determinations (including the proposed amendment set forth above in (C)).
E. Moreover and of equal importance, we further ask the USCO to take note that the MLC’s “misinterpretation” of the current law governing the termination rights of authors is exactly the type of potentially willful bias that the Independent Music Creators have been warning of since the creation of the MLC as an entity whose board of directors is comprised of ten music publishers and only four music creators. We respectfully urge the USCO take steps to specifically address the pernicious effect on legal and administrative decision-making within the MLC that is resulting from the board’s uneven distribution of power between creators and corporate music publishing entities, and consider joining the Independent Music Creator community in making recommendations to the US Congress that it act expeditiously to establish a balanced MLC governing board comprised of an equal number of songwriters and composers on the one hand and of music publishing entities on the other.
