Copyright and licenses, law and its limitations

The exclusive rights of copyright owners are narrowed by the limitations and exceptions under the Copyright Law. One such limitation is the compulsory licenses and the effect on the copyright holder. However the fact that a compulsory license does not need to be negotiated but is preset has proven to assist with the dissemination of copyrighted works.

Under 17 U.S.C. Section 102 the subject matter of copyright is enumerated. The requirements of copyright include that the work of authorship must be “original” and the work must be fixed in a tangible medium. The 1976 Copyright Act generally gives the owner of copyright the exclusive right to do and to authorize others to: (1) reproduce; (2) adapt; (3) distribute; (4) perform and (5) display their copyrightable works. These rights are fundamental under copyright law and have become “bundle of rights”, because they have a tendency to overlap. However, more importantly, these enumerated rights are subject to the limitations and exceptions enumerated in 17 U.S.C. Sections 107-120 that includes the fair use defense as well as the exceptions for libraries and the use of compulsory licenses.

How are mechanical licenses obtained for the use of another’s music?

There are two routes to obtain a mechanical royalty. One is by the use of a compulsory license which already has a predetermined royalty rate that will be published directly to the music publisher and requires no negotiation or transactional costs. The other manner for obtaining permission is to negotiate directly with the music publisher or the Harry Fox Agency for a license. However the fact that a compulsory license cannot be denied and no permission is required may be a reason to go ahead and inform the publisher of the recording and pay a license fee set by law.

What are the terms that a compulsory license can be obtained under Section 115?

A compulsory license may be obtained if the purpose of making the phonorecords is to distribute them to the public for their private use. Compulsory licenses are not available for the use of these phonorecords in providing music for public use including the use of jukeboxes, broadcasting systems, and background music systems. A compulsory license becomes available when “phonorecords of a nondramatic work have been distributed to the public in the United States under the authority of the copyright holder.”

The transaction costs of negotiating licenses are avoided by the use of provisions indicating the use of compulsory licenses. Due to these compulsory licenses, entities that are seeking to obtain these licenses are not required to obtain lawyers to negotiate these licenses which would result in nonuniform licenses being given to different entities who would be ultimately paying different licensing fees. The entities that are affected by the use of compulsory licenses are aware of exactly how much they must compensate the copyright holder and the requirements and procedures to obtain these compulsory licenses. Therefore there are uniform licensing fees being charged for securing these licenses. Therefore transaction costs and the uncertainties of obtaining these licenses is avoided and therefore the copyrighted works are being facilitated.

Should compulsory licenses govern webcasting online as more streaming audio appears to be prevalent?

Compulsory licenses could end up being used to permit the streaming of webcasting online. The debate about the use of digital music has been a continuing debate in which the payment of royalties has been discussed. However, whether small webcasters are forced to pay the same rates as other webcasters will be a continuing issue. Legislation has been proposed to deal with this situation and will be examined and debated in further detail. The use of compulsory licenses would be applicable since the music is being provided to the public for the private use on their personal computers.