So You Think That You Own Your Masters and Demos?

by David Crow on September 1st, 2008

Some fundamental issues pertaining to sound recording copyrights are not widely understood by some lawyers and the public at large. At the outset, it is important to distinguish between ownership of the physical property (e.g. , a CD or hard-drive on which the intellectual property resides) and ownership of the intellectual property embodied on the physical property (i.e. , the sound recording copyright). It is also important to distinguish between the copyrights in the musical compositions embodied on the sound recording (i.e. , the song) and the copyright in the sound recording itself (i.e. , the performance of the song). Most music industry professionals would agree that when a consumer purchases a CD at Wal-Mart, the consumer owns a piece of physical property (the CD), but the consumer does not own the intellectual property embodied on the physical property [the consumer merely has a statutory right to use the sound recording in certain limited ways]. However, many people do not realize that if you are a publisher and you pay to have a demo of one of your songs recorded in a recording studio using independent contractor musicians (who are not your employees acting within the scope of their employment or otherwise governed by the musicians’ union collective bargaining agreement), you may not own the sound recording copyright in the absence of work-for-hire agreements with the musicians and producer. Oh, but you paid for the demo session and you hired the musicians and told them what to play, so surely you own the sound recording copyright in the demo, right? Not necessarily-if the session was not done “on the card” through the musicians union (or by “employees” acting within the scope of their employment) or if there are not work for hire agreements with the musicians, you may merely own the physical property on which the demo is recorded as opposed to the intellectual property (the sound recording copyright) embodied in that piece of physical property.

Many people assume that if they pay for a recording session and if they have the right to control the outcome of the session, then they own the copyright created at the recording session. As a general rule, that analysis would be true if the 1909 Copyright Act still applied. However, the 1976 Copyright Act dramatically altered the presumption of ownership of copyrighted works and it also altered the requirements for a copyrighted work to be deemed a work made for hire. While it is beyond the scope of this article to explore the nuances of “works made for hire” under the 1976 Copyright Act, it is important to understand that the philosophical presumption under the 1976 Copyright Act is that the actual creators of a work retain ownership of the copyright in their contributions unless they evidence an intent to transfer their copyright interest (or unless the work meets the statutory requirements for an employer-employee relationship).

Once you understand that merely paying for the recording session may not confer ownership of the copyrights created at the session, the next question

becomes “who does own the copyright?” The answer to this question depends on the facts surrounding the creation of the sound recording in question (which can ultimately be decided by a judge or jury). In general, in the absence of written agreements (e.g. , a union session card, a work for hire agreement, a producer agreement or an assignment of copyright), the copyright in a sound recording is owned jointly and equally be all session participants that make a copyrightable contribution to the recording. To be copyrightable, each contribution must meet the Copyright Act’s standard for originality and it must be fixed in a tangible medium. In a typical recording session, musicians, vocalists, arrangers and producers often have a copyrightable interest in the sound recording. It is interesting to note that engineers are not generally considered to have a copyright interest because Congress opined, in the House Committee Report that accompanied the 1976 Copyright Act, that engineers are merely following instructions from the producer.

If you are creating sound recordings and you want to make sure that you own the entire copyright in the sound recording, you have several options for

ensuring that the copyright is vested in you and not the musicians, vocalists and/or producer(s). With respect to musicians and vocalists, you can use union musicians or vocalists and have the session recorded “on the card.” In this case, the unions’ collectively bargaining agreements make it clear that the musicians’ or vocalists’ contribution is a work for hire for the session contractor (meaning that you are deemed to own the sound recording copyright created at the session). As an alternative for musicians and vocalists and as a primary tool for producers, you can have each session participant sign a work for hire agreement prior to rendering services at the session. Such a written agreement (if properly drafted and signed by the session participant) will have the desired effect of divesting the musician/producer/vocalists/arranger of his/her copyright interest in the sound recording copyright. Lastly, you can use “employees” performing services within the scope of their employment to record the album, in which case the work will be deemed to be a work made for hire for the employer. If the contribution is deemed a work made for hire, the employer is deemed to be the author and owner of the copyright interest. These options are not exclusive-you can mix and match them. It is not unusual to have the musicians covered through the union, the producer covered by a producer agreement (that includes work for hire language) and the album artwork to be covered by a work for hire agreement, an assignment or, at the very least, a license.

Sound recording copyrights are a critical asset to most entertainment companies. Individuals and companies creating sound recordings (including demos) should carefully analyze whether or not they actually own the copyrights that they are paying to create. The determination of whether or not a copyrightable contribution by a session participant can be deemed to be a work for hire is a complicated factual and legal analysis. To the extent that you have concerns about whether or not any particular sound recording copyright is a work for hire, you should consult with an experienced entertainment attorney.

First published in Music Row Magazine, www.musicrow.com.