by J. Scott “Skip” Rudsenske, Attorney, MusicContracts.com
There are two reasons why an artist needs to enter into written contracts with the other creatives they hire to help them create recordings, songs or artwork: to make sure the terms are clear about the services provided and payment terms; and, to address who will own the results of the work created. This article will focus on the ownership aspects of the work created and how an artist can own the results of the creations by their collaborators they have hired and how to legally solidify that agreement.
The copyright laws are clear: whoever creates the vocal and musical sounds on the master recording (e.g., artist, producer, side artist, etc.), owns those sounds, together, as co-authors. Likewise, graphic artists who create the artwork associated with your recordings or merchandise own that art as soon as it is created. The photographer who takes your photo for your album cover or website, owns those photos. Just because you collaborated, hired them or paid them does not automatically give you the sole rights to those collaborations or creations. The only way that an artist obtains the rights to the thing created with or by other people is in a written contract. If you do not obtain those rights in a written contract, all those people have equal or sole rights to those things that were created with or for you. It doesn’t matter if the other person tells you that you don’t need a contract with them. It doesn’t matter that you hired them. It doesn’t matter that you paid them. They will be a co-owner of the work with you unless you get a written agreement that says you are the sole owner. Of course, if two artists get together with the intent to write a song, they will be coauthors; or if a band records an album together, then the band will own the recording as co-owners as most likely was intended.
If you prefer not to follow along with the legal reasoning and the supporting the Copyright Law, behind the acquisition of rights by way of “work made for hire” or transfer of copyright, you can scroll down to the Legal Summary and Practical Tips section below to get the summarized version of the law and practical tips for acquiring the rights of those providing services on a master recording. The sections of the Copyright Law can be accessed using the links in bold throughout the article if you want to read the legal provisions that support this article.
Upon creation, the work is protected by copyright law for all who created it.
The first thing to understand is when an original work is considered created for the copyright law to apply. Section 102 Subject Matter of Copyright: In General provides when a musical work (song), graphic design or photograph, or a master recording are fixed in a tangible medium of expression, the thing created is given copyright protection under the law (even if you don’t register it-but please do register it as discussed in another blog post titled How to Protect Original Musical Works from Copyright Infringement).
A fixed medium of expression is something that can be seen or perceived directly or with the aid of a machine or device. For instance, a graphic design, photograph, or sheet music created or printed on a piece of paper will qualify for protection when printed. In the case of recordings, perception requires a record player, computer, or handheld device to hear it. Once created in a form where the recording can be heard, it is also protected. In the case of computer-generated technology, once the thing is saved in a computer file, it is protected. Copyright protection under the law means that the person or persons who created it get to claim ownership in the original thing created and are now afforded all the rights under the law including the right to make copies and sell it and to prevent others from copying it or using it without permission.
Whoever creates a copyrightable work, is/are the owner(s).
Section 201 (a) Initial Ownership provides the copyright in a work vests initially in the author or authors of the work. The authors of a joint work are co-owners of copyright in the work and each enjoy the rights to use the work equally. This is the important part. While you are collaborating with others in the creation of a copyrightable work, once that work is fixed in a tangible form, it is owned by everyone that have worked on it together. In the case of a song, if two or more people get together and write lyrics and a melody to a song, with or without the aid of musical instruments, and write those lyrics down on a piece of paper, then those persons own that completed song together equally. And the elements are melded together so that each person has equal share in the entire song-not each having ownership in only what they created. In the case of an artist recording a song, all of the persons that came together to create the sounds that appear on the recording (e.g. the singers, musicians, producer) will all have equal rights to that completed master recording.
Though a work has been created by two or more persons, it is not always the intention of those who are creating it for the copyright ownership to be shared. This idea that a person hired to collaborate will be paid for the services and rights to their creation, is a main business foundation for the music industry. To support this, the copyright law provides two ways for this acquisition of rights to be achieved: “work made for hire” and transfer of copyright. In both cases the law requires that the acquisition of rights be obtained through a written document.
One way an artist hiring another person to provide services can own the work created as a “work made for hire” and be considered the sole author.
Section 101 Definitions provides for both the definition and requirements for a “work made for hire”. A “work made for hire” is (a) a work prepared by an employee in the scope of his employment (a traditional employer/employee relationship) or (b) a specially commissioned work for use in 1 of 9 listed categories if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. Section (a) of the definition is the provision in the law that the music industry relies upon to obtain the rights of a person who works as a producer, musician, backup singer or to a master recording (or other work) as if the artist (or record lable) had created the intellectual property themselves. There are two requirements to this law for it to apply: (1) the work performed must be in 1 of the 9 categories and (2) the agreement must be in writing. The 2nd provision has been through the courts and ruled upon. Basically, if there is no written contract and the magic language “work made for hire” is not in that written agreement, then the person who created the work that was paid, still owns an equal share in the work regardless of intent. Case closed. End of story. As in most legal cases, it’s not a problem till it’s a problem. The law provides that joint authors have the right to release, sell, license the work (non-exclusively) without their co-authors permission, but you have to let them know and pay them their fair share of any profits. Which means that if you don’t get a written agreement, you can still release the recording, but the collaborators are entitled to an equal share of the profits. And they have just as much right to the work as the artist (or label) does. While most professional studio musicians wouldn’t try to enforce this, if your recording was purchased by a major record label for a lot of money, your “friends” who played on your recordings just might. In the least, if you go back to them to get their signature on a contract before you sell it to the major, they may ask for more money.
There is legal uncertainty related to this provision of the law ,related to sound recordings, that has not been resolved by the courts yet. The fact is that “sound recordings” is not listed as one of the nine categories. Record labels (and other master recording owners) have been relying upon the second category of “contribution to a collective work” to rely upon services provided on recordings that are part of an EP or Album. But, what if that recording is not part of a compilation type recording and is just a stand-alone single? Therefore, it’s still legally unclear if work performed by a musician on a “sound recording” meets the requirements of a work made for hire. Which means that even if you have a written agreement that says the work by a musician is a “work made for hire”, the musician may still be considered a co-author. Entertainment lawyers for years have been waiting for the Supreme Court to settle this matter. However, no legal case has reached that level yet. However, the next category of acquisition of rights provided in the Copyright Law can be used as a solution to include in an agreement alongside “work made for hire” terms.
The transfer of ownership of a copyright is the second way to acquire the rights to intellectual property created by another person.
Section 201 (d) (1) states that “the ownership of copyright may be transferred in whole or in part by any means of conveyance or operation of law . . . .” Section 204 (a) states that “a transfer of copyright ownership, other than by operation of law, is not valid unless . . . it is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.
An original work of copyright can be transferred to another person. Just like an acquisition for rights by way of a “work made for hire”, in order for a transfer of copyright to be legally binding, the transfer must be in writing and signed by the person transferring the rights. There is no category requirements for the transfer to be valid. Therefore, any original work that is created under the copyright law, may be transferred to another person.
As discussed above related to works made for hire, there is a potential problem with the copyright law as to whether the “works made for hire” provision of the law applies to master recordings. That is why an agreement for the acquisition of rights should also contain a provision for that the copyrights to the work are conditionally transferred if the services provided under the written agreement are ever determined (by the Supreme Court) not to be a “work made for hire” under the Copyright Law. If that were to happen, at least the rights are transferred with limitations. Otherwise, if the conditional transfer of copyright language is not in the agreement, then that would mean the hired musicians would now be co-owners of the master recording with rights to share in the profits.
There is a significant legal difference between a “work made for hire” and transfer of copyright.
The reason that the music industry, and specifically record labels, want to rely upon an acquisition of rights as a “work made for hire”, instead of through a transfer of copyright, is because Section 203 allows an author that has given up their rights through a transfer of copyright to be able to terminate those transfers after 35 years and get the rights back. This is the standard way the music publishing industry operates and songwriters that transfer their rights to their songs to a publisher have the right to terminate those agreements after 35 years and get the rights to their songs back.
However, there is no similar provision in the law that provides for a person who gives up their rights as a “work made for hire” to be able to get those rights back. Consequently, that means the owners of master recordings such as record labels keep those rights for 100 years before they go into the public domain. As you can see, if all the producers, artists and musicians associated with a recording could ask for their rights back from a recording there would be a major disruption to the business of the recording industry as well as a bit of chaos around the control and use of those recordings.
Legal Summary and Practical Tips.
The Copyright Law provides that once an original work has been fixed in a tangible form, the creators of that work are considered co-owners of the work and are afforded all the rights of ownership and protection under the law. The law also provides that persons hiring others to provide services related to the creation of such works can acquire those rights. The acquisition of those rights is either done as a “work made for hire” or through a transfer of copyright.
Acquiring rights as a “work made for hire” means the person doing the hiring owns the work as though they created it themselves. Under the law, the person doing the hiring, acquires the rights to that work for the life of the copyright after which it goes into the public domain. Under a transfer of copyright, the person who transferred their copyrights can terminate those transfers after 35 years and get their rights back. While transfers of copyrights are common in the music publishing business, owners of master recordings prefer to acquire the rights through a “work made for hire”. For both types of acquisitions to be valid, there must be a written agreement.
While there may documents titled Work for Hire Agreements or Transfer of Copyrights, typically these are just paragraphs in the underlying contract between two parties. For example, when an artist hires a side artist to perform on a recording, a Side Artist Agreement is entered into between the parties. The acquisition of the rights of the recorded performances appearing on the recording by way of a “work made for hire” or transfer of copyright is just one set of terms in the agreement. The parties still need to address what services the side artist is providing, the dates of service, how much they will be paid, etc. Consequently, if you are looking for contracts for the services of collaborators who will work on a master including side artists, featured artists, or producers, it is vitally important to make sure that those contracts address the acquisition of the rights. Further, as discussed above, related to “works made for hire”, there is a potential problem with the copyright law as to whether the “works made for hire” provision of the law applies to master recordings. That is why a proper agreement for the acquisition of rights should contain a provision for the rights to be acquired both as a “work made for hire” or conditionally, as a transfer of copyright. Having the conditional transfer of copyright will protect the owner of the recording should it ever be determined (by the Supreme Court) that master recordings are not covered as a “work made for hire” under the Copyright Law.
One final professional tip: when an artist or record label is hiring third parties, the best time to get the contracts executed are before any work is performed and before any money is paid. The hiring artist or label needs to know if anyone who is going to work on the master recording, or other intellectual property, is willing to sign an agreement giving up their rights. It can be problematic after a collaborator has provided the services, been paid, but won’t agree to give up their rights. At that point the hiring party has no recourse.
MusicContracts.com provides the necessary production contracts for an artist or record label contracting with third parties for the creation of recordings that include the protective terms discussed in this article: Music Production Contracts