Other prevalent forms of mechanical reproduction license are strikingly similar to the MPPA long-form license, especially so far as the royalty schedule is concerned. Some forms, instead of merely referring to the "statutory rate" for certain types of records sold, specify 2 cents. Some forms set forth the royalty rate "for * * * records" of the licensed composition rather than "per selection, per side," but the former is given the same meaning as the latter. One form covers Canada as well as the United States, setting forth the same royalty schedule for records sold in either nation. Another form covers the United States and all countries of the Western Hemisphere where such rights are controlled by the licensor but provides that in Argentina, Brazil, Chile, Urguay, and Paraguay the licensee "shall pay the regular current royalty payable for such countries, computed and paid in U.S. currency at the rate of exchange prevailing at the time of payment." Following the usual royalty schedule, one form has added a provision for a royalty of one-fourth cent per minute of playing time (or fraction thereof) for all extendedplay and longplaying records of compositions of an extended nature, with a minimum royalty of 2 cents. In cases of musical compositions. from stage shows or motion pictures, a release date for recordings might be fixed. Where forms of license are used, the license determines the rights of the parties, and problems of construing the statutory compulsory license provisions, except to the extent that they are incorporated into the license, are avoided. If the availability of the compulsory license provision is doubtful, the possibility of its being available undoubtedly encourages the negotiation of licenses at royalty rates comparable to the statutory royalty. Thus the question of the applicability of the compulsory license provision to extended-play and longplaying records, tape and wire recordings, and motion picture sound tracks 249 has apparently never been litigated in this country.250 In sound motion picture films, music might serve several functions: (1) as background or thematic music to create audience mood; (2) as song or dance numbers in a musical comedy or revue; (3) as a musical narrative, such as in an operetta; or (4) as a title song (with advantageous promotional tie-ins). Motion picture producers, when using copyrighted music in sound tracks, negotiate for synchronization rights and do not invoke the compulsory license provision. Like motion picture producers, the broadcasting industry, in making records, electrical transcriptions,251 magnetic tape,252 sound motion 249 Even prior to Jerome v. Twentieth Century-Fox Film Corp., 67 F. Supp. 736 (S.D.N.Y., 1946), reviewed on other grounds per curiam, 165 F. 2d 784 (2d Cir. 1948), when it was assumed, at least in certain circles, that a sound track was within sec. 1(e). no one ever attempted to invoke the compulsory license provision. Dubin, "Copyright Aspect of Sound Recordings," 26 So. Calif. L. Rev. 139, 147, note 50 (1953). See notes 58, 59 supra. The foreign cases generally have held that sound-track use was not within the respective foreign-law compulsory license provisions invoked. 1 Ladas, op. cit. supra note 213. at 465-469. But see note 190 supra; cf. note 213 supra. 21 Electrical transcriptions, developed over the past 15 years, are essentially 16-inch. 33% revolutions per minute disk recordings, each side of which can contain an entire 15-minute program. They may be "processed records" or "instantaneous recordings" (taken off the line or off the air and ready for immediate playback). McDonald, "The Law of Broadcasting" in 7 Copyright Problems Analyzed 31, at p. 36 (1952). Much of the recorded program material now heard is from tape or from recordings of tape after final editing. Tape may be reclaimed, is easily edited, and has relatively no surface noise. There is also a system of wire recording largely confined in broadcasting to portable equipment used in man-on-the-street interviews and the like. McDonald, op. cit. supra. note 251, at p. 37. pictures,253 or kinescope recordings 254 involving copyrighted music for radio and/or television use, negotiates for the necessary recording rights.255 For example, it has been a longstanding custom to make special payment for recording a copyrighted composition by electrical transcription at the rate of 25 cents for each station expected to broadcast the composition. In the case of production numbers from shows or motion pictures, 50 cents per station has been paid; in the case of record libraries intended for repeated use, an annual fee is usually worked out.256 Lump-sum payments (e.g., $10) are made for the license to record musical compositions in sound motion pictures or by kinescope or tape recordings for television purposes. Motion picture films which are sold or leased usually bear the statutory copyright notice on the ground that the film is a copy of at least the visual elements involved and the sale or lease thereof constitutes publication.257 Such copyright notice functions to secure copyright in all the copyrightable components of the film, and to maintain any subsisting copyrights in the copyrighted components thereof. In the past, copyright notices have generally not been affixed to records, tape, wire or other recordings.258 In view of the recent trend of cases to the effect that the sale or lease of such recordings constitutes a publication of the recorded composition,259 the cautious practice now would appear to be to secure statutory copyright in the composition. Whether or not the copyright notice needs to be affixed to all such recordings sold or leased in the United States by authority of the copyright proprietor 260 is a very debatable point. Apart from the legal question there is the serious practical problem of inserting proper copyright notices on already overcrowded labels of phonograph recordings, especially in the case of extended-play and long-playing records containing several compositions of different proprietorships and/or copyright dates. Copyright proprietors when authorizing recordings of musical compositions have rarely requested the insertion of copyright notices. V. PROBLEMS IN EVALUATING COMPULSORY LICENSE PROVISIONS OF PRESENT COPYRIGHT LAW The fundamental question in any evaluation of the compulsory license provisions is whether the compulsory license principle should be retained or eliminated. 253 Made with motion picture cameras for general use or primarily for exhibition to paying audience, for television, or for rental for home use, education, promotion material, etc. McDonald, op. cit. supra note 251, at p. 37. 264 Kinescope recording equipment combines a tiny television receiver and electronically geared motion picture camera. From the negative kinescope recording made off the air or as a "dry run" (either in the "live manner" or by stop-and-start technique), positive prints are made for distribution to television stations for telecasting and file purposes. The use of kinescope recordings permits syndication of a program or transmission on a network basis without the expense involved in coaxial cables and radio circuits. McDonald op. cit. supra note 251, at p. 37. TV tape recordings of visual and audio elements are replacing kinescope recordings. 255 McDonald, op. cit. supra note 251, at p. 49. Recording may be for purposes of original broadcast, delayed broadcast, rebroadcast and/or file uses. 250 Ibid. Blanc v. Lantz, 83 U.S.P.Q. 137 (Cal. Super. Ct. 1949); White v. Kimmell, 94 F. Supp. 502 (S.D. Cal. 1950). Projection of a motion picture on a screen might constitute copying but not publication. DeMille Co. v. Casey, 121 Misc. 78, 201 N.Y. Supp. 20 (Sup. Ct. 1923); Patterson v. Century Productions, Inc., 93 F. 2d 489 (2d Cir. 1937), cert. denied, 303 U.S. 655, 58 Sup. Ct. 759, 82 L. Ed. 1114 (1938). 258 See note 74, supra. 250 See note 71, supra. 260 See note 74, supra. A. COMPULSORY LICENSE PRINCIPLE This principle was worked out in 1909 as a compromise between those interests which, fearing monopoly, favored continued nonrecognition of recording and mechanical reproduction rights, and those which, stressing the rights of composers and freedom of contract, urged absolute recognition. The resulting qualified recognition, based upon the compulsory license principle, emerged from some 3 years of pre-1909 controversy.261 The 1909 compromise provided for (1) continued access to compositions by manufacturers of phonograph records and piano rolls, and (2) payment by such manufacturers to composers (or their assigns) of what was then considered a reasonable royalty. Whether the 1909 compromise was sound in the light of the thenexisting situation has been much debated.262 Be that as it may, the situation today is substantially different. In 1909, the rights under consideration had been held nonprotectable and hence were available to all. The Aeolian Co. and the then major music publishers had allegedly made exclusive contracts which would become effective upon the recognition of mechanical reproduction rights by court decision or congressional enactment.263 This potential monopoly, whether real or imagined, was regarded as a serious threat at a time when effective antitrust regulation was still in its infancy.264 For almost 50 years now the recording industry has relied on the compulsory license principle. Forms of licensing arrangements, royalty rate schedules, and other industry practices have been predicated upon the compulsory license provision and have become practically standardized. The principal difference between a negotiated license and a compulsory license is that the former usually calls for quarterly rather than monthly royalty reports and payments, dispenses with the notice of intention to use, and prescribes a royalty scale below the statutory royalty of 2 cents per composition per side. Without the compulsory license provision, an exclusive license might be negotiated at substantially higher royalty rates,265 or even nonexclusive licenses might be negotiated at higher royalty rates in the absence of a statutory ceiling. Whether the royalty considered reasonable in 1909 is reasonable today is discussed below.266 Contentions that the compulsory license principle is unconstitutional obviously would, if sustainable, be sufficient reason for eliminating the principle. However, the principle was not incorporated in the statute to impair existing rights, but was inserted as part of the definition of rights then being recognized for the first time. Hence there would seem to be no deprivation of property without due 251 See pp. 2-12, supra. See pp. 21-36, supra. 283 See note 44, supra. 284 See note 6, supra. 295 Whether this would result in more or less aggregate recording royalties to composers has yet to be tested. The present arrangements for the exclusive recording services of outstanding artists and performers, being somewhat analogous, might offer helpful information in this respect. Interestingly, the royalty scales have tended to be the same for all compositions whether protected by common law copyright (not subject to compulsory license provision) or by statutory copyright. 20 See pp. 54-56, infra. 46476-60-5 process of law or taking of private property for private use without just compensation. Nor should the constitutional phrase, "the exclusive Right," preclude Congress from subjecting one aspect thereof to compulsory licensing, especially since such right is exclusive until exercised.267 To the extent that the present compulsory license provision is of doubtful application with respect to certain uses or operates unfairly under certain circumstances, improvement is possible, as discussed below, without necessarily abandoning the compulsory license principle. If the compulsory license principle is to be retained, certain subsidiary considerations become relevant. B. REPRODUCTION PERMITTED UNDER COMPULSORY LICENSE The framers of the compulsory license provision in 1909 obviously had in mind old-speed phonograph records and player-piano rolls, bands, and cylinders.268 These were the recording devices then known; they were the ones discussed at the hearings; they are the ones described or named in the statute; they are the ones to which the statutory royalty system was intended to apply. Whether the compulsory license principle applies to extended-play and long-playing records, tape and wire sound recordings, and other types of recordings, such as motion picture sound tracks, kinescope recordings, and television tape recordings, has not been resolved. Obviously the former are more closely analogous to old-speed phonograph records and piano player rolls and cylinders than are the latter. Any revision of section 1(e), then, should clearly differentiate between the various types of recordings, whether by means known in 1909, now or hereafter, and should specify which of such types of recordings, if less than all, are intended to be subject to compulsory licensing. Furthermore, the statutory royalty rates should be adjusted to reflect the different types of recording possible under compulsory licensing. The "similar use" 269 permitted by compulsory license should also be more clearly defined. Competition in the recording industry, especially as among different types of recordings, would undoubtedly be promoted if the authorization of a recording of one type subject to compulsory licensing, as above discussed, gave rise to a compulsory license with respect not only to that particular type of recording but also to the remaining types subject to compulsory licensing. Whether or not a compulsory license to record a composition impliedly includes the right to make necessary and proper arrangements of the same, and the limitations on such right of arrangement, require clarification. C. STATUTORY ROYALTY RATE Part of the 1909 compromise was the provision for the payment to composers (or their assigns) of what was then considered a reasonable royalty: 2 cents per part manufactured (e.g., per side of old-speed 207 See note 66, supra; pp. 4-5, 19, supra. 268 See notes 58, 59, supra. 309 See note 59, supra. record, piano roll), 2 cents being the then approximate equivalent of 5 percent of the manufacturer's selling price.270 Whether such royalty rate, assuming it was reasonable in 1909, remains reasonable today, would appear worthy of reexamination in view of the decreased purchasing power of money, the subsequently developed types of recordings (assuming the compulsory license provision be applicable to them), and the substantially increased manufacturer's selling prices. Obviously a royalty fixed by statute may be stated in terms of amount (as in the present statute), or percentage (possible bases: manufacturer's price, retail price), or a combination thereof (e.g., higher or lower of the two), or the rate fixed in the original negotiated license which activates the compulsory license provision. The fixed amount royalty has the advantage of simplicity but obviously should not be the same for longer and shorter recordings. A single flat royalty might have been sufficient for old-speed records and piano rolls (somewhat mollified in the latter case by negotiating royalties for the use of the words of the musical composition).271 A royalty schedule, with different amounts stated for different uses (per present practice), would appear desirable in the case of extended-play and long-playing records, tape and wire recordings, and other types of recording under compulsory license, or, in the alternative, a percentage-of-price royalty which would, in application, reflect the length of the recording since the length would be reflected presumably in the price. To base the royalty on that fixed in the original negotiated license might have to take into account such variables as the specific provisions of such original lisense and to provide an alternative basis where the proprietor makes his own recording. The royalty can, of course, be based on records manufactured in the United States, the present statutory method, or on records sold here, the present negotiated method, or both. The sales basis involves such problems as complimentary distributions to disk jockeys and the like and recordings sold and returned, and omits royalties on recordings manufactured in the United States but sold abroad. For the royalty on manufacture, the manufacturer is liable. As between the small record company, society, or other producer, on the one hand, and the contract pressing plant, on the other, the latter is often better established and more financially responsible. While both presumably would be liable for royalties to the copyright proprietor on parts manufactured, the former, as between it and the latter, should be primarily liable. However, because of the secondary liability of the pressing plant, the problem of loss of royalties through insolvency is minimized. Whether the royalty is per recording, or per side of recording, or allocable if more than one composition is involved, are matters requiring careful definition.272 If the royalty is not fixed by the statute, some machinery, either administrative or judicial, would have to be established (and sup 270 See p. 10, supra. See note 80, supra. |