Judiciary Homepage
House Judiciary Committee
Subcommittee on Courts and Intellectual Property
Hearing on
La Cienega, Copyright Term Extension
And Music Licensing
June 27, 1997
Nashville, Tennessee
Statement of
Edward P. Murphy
President and Chief Executive Office
National Music Publishers' Association, Inc.
Thank you, Mr. Chairman and members of the Subcommittee. My name is Edward P. Murphy. I serve as President and Chief Executive Officer of the National Music Publishers' Association, Inc. ("NMPA").
NMPA appreciates this opportunity to present its views on a legislative issue of vital concern to songwriters and music publishers: the invitation to music piracy presented by the Ninth Circuit's decision in La Cienega Music Co. v. ZZ Top. The La Cienega problem is currently addressed in two bills pending before the Subcommittee, H.R. 1967, introduced on June 19 by Chairman Coble, and H.R. 1621, sponsored by Mr. Bono. My statement also briefly addresses the issues of copyright term extension and the impact of proposals to limit or eliminate the responsibility of certain commercial users of music to pay public performance fees.
NMPA and Its Members
NMPA is a trade association representing more than 600 U.S. music publishers businesses that own and administer copyrights in musical compositions. The Harry Fox Agency, Inc. ("HFA"), an NMPA subsidiary, serves as licensing agent for more than 17,000 music publishers in connection with the use of music in the United States in records, tapes, CDs and online delivery. HFA also licenses music on a worldwide basis for use in multimedia productions, films, commercials, television programs, and all other types of audio-visual applications.
Music publishers, generally speaking, are holders of copyright in musical works. They play a key role in making American music available to the public in the United States and around the world. Some music publishers are subsidiaries of large entertainment companies. Thousands more, however, are small and medium-sized businesses. In fact, it is increasingly common for established songwriters to serve as their own publishers, and to set up businesses for that purpose.
The music business has major hubs here in Nashville, in Los Angeles and in New York. But you can find active music publishing enterprises -- and successful as well as aspiring songwriters -- in Miami, Detroit, Atlanta, Austin, Chicago, San Antonio, and hundreds of other places big and small across the country.
La Cienega Music Co. v. ZZ Top Threatens Copyright Protection for Pre-1978 American Music
I am here today to explain why the business of our nation's music publishers and the life's work and livelihoods of the tens of thousands of songwriters they represent are at risk as never before.
What is the problem? Imagine for a moment that title to all of the real estate on Music Row here in Nashville is suddenly seized, without any compensation to the landowners. Imagine, too, the disruptions and hardship an action of that magnitude would cause for the businesses located there, for the people who would be sure to lose their jobs and their incomes, and for their families. And think of the ripple effect that would be felt across the community those businesses serve. Now imagine that disastrous impact multiplied a hundred times over, hitting innocent individuals and businesses across the country.
On January 10, 1995, the U.S. Court of Appeals for the Ninth Circuit, in a case called La Cienega Music Co. v. ZZ Top, leveled a blow that powerful at the music industry, and we're still reeling. The La Cienega decision is at odds with industry practice. It rejects long-established interpretations of the 1909 Copyright Act. And it ignores the views and registration practices of the U.S. Copyright Office. Nonetheless, it is the law in the Ninth Circuit, and a Federal District Court here in the Sixth Circuit recently embraced it.
For as long as La Cienega and decisions following it are allowed to stand, the very existence of copyright protection for American music produced before 1978 is in jeopardy. And more than one billion dollars each year in music publisher revenues is at stake. Today, American writers and music publishers are facing loss of their copyrights for having done nothing more than comply with the law as it was understood at the time.
How could this happen? The answer lies in understanding the "formalities," or technical requirements necessary to secure and maintain copyright protection that characterized the U.S. system under the Copyright Act of 1909, and the use of the terms "copy" and "publication" as they were applied under the old law.
Writers and Publishers Are Being Severely Penalized by New Interpretations of an Old Law
Under the 1909 Copyright Act, Federal copyright protection would be lost forever, and a work would fall into the public domain, if "copies" of the work were sold or offered to the public without copyright notice in the required form. Given the state of technology in 1909, the term "copy" was understood to mean a visually perceptible copy. For musical compositions, that meant sheet music, which enjoyed enormous popularity at the time. Music industry practice developed in accordance with the law. Copies of musical works sheet music were marked with copyright notice in the form required by the 1909 Act. Recordings typically bore no copyright notice for the music included on them, because it was accepted and understood that recordings did not have the status of copies. The industry followed this practice for 80 years.
In January 1995, the Ninth Circuit changed the law. It decided that selling recordings of musical compositions constituted "publication" of the recorded music under the 1909 Act. The real threat to our industry comes, however, because the court also said that recordings were "copies" under the 1909 Act and that, unless the recordings included copyright notice in the required form, the musical compositions lost copyright protection immediately upon the sale of the recordings to the public.
Our good faith understanding of the law, shared by the courts and the Copyright Office, was that recordings were not copies of musical compositions and that, therefore, they did not need to include copyright notice in order to preserve copyright protection for the work. In practice, recordings rarely bore copyright notice for the composition. As a result, La Cienega has the potential to punish the writer and publisher of virtually every song that was recorded in America before 1978.
And it must be remembered that neither the songwriter nor his or her publisher could dictate that copyright notice appear on recordings. Most recordings of music were (and still are) made and distributed pursuant to the compulsory mechanical license provisions of the copyright law. Neither the 1909 Copyright Act itself, nor related Copyright Office regulations, required recording companies to include copyright notice for musical works on recordings distributed to the public.
In a recent letter to Chairman Coble, our respected Register of Copyrights, Marybeth Peters,
stated the nature of the La Cienega problem clearly. She said:
This draconian forfeiture [of copyright in pre-1978 musical works] will occur because of new
judicial interpretations of a law no longer on the books, despite the fact that the copyright
owners have done nothing wrong, but complied with the law as it was understood at the time.
In our view, the new judicial interpretations are based on a lack of understanding of the
technical meanings of the concepts of "copies" and "publication" in the 1909 Act.
Needless to say, we believe the Register is correct.
The Rule in La Cienega Is Wrong and Should Be Promptly
Corrected
Congress did not directly address the question of whether fixations of music that could be heard, but from which the music could not be visually perceived, were "copies" for purposes of the 1909 Act. Provisions in the 1909 Act itself, and laws subsequently enacted by Congress, make clear, however, that recordings were not "copies."
Of course, in 1909, today's recorded music formats the vinyl LP, audio cassette and CD -- did not exist. In fact, the hottest technology for getting music into the home was the piano roll. The 1909 Copyright Act contained special licensing provisions relating to the manufacture of piano rolls, but the reproductions were referred to as "mechanical" reproductions not "copies."
When Congress extended Federal copyright protection to sound recordings in 1971, the law made clear that phonorecords constituted copies only of the sound recording, and not of the musical compositions on the recording. Consistent with this action, the 1976 Copyright Act required notice only on visually perceptible copies of works and on phonorecords of sound recordings. There was absolutely no requirement that a recording of a musical composition needed to include a separate copyright notice for the music.
Over the lifetime of the 1909 Copyright Act, publishers and songwriters did not merely rely on their own interpretation of the law to guide their practices. When questions concerning the concepts of "copy" and "publication" arose, they were litigated by our industry. And, we believed, they were resolved. In 1976, the Second Circuit squarely supported industry practice in Rosette v. Rainbo Record Manufacturing Corp., which held that the sale of recordings did not constitute publication of the musical compositions on those recordings under the 1909 Act, and that such recordings did not need to include copyright notice for the compositions.
Moreover, the registration practices of the U.S. Copyright Office fully supported the established view that recordings were not copies under the 1909 Act and that distribution of recordings did not constitute publication under the Federal statute. As the Register of Copyrights has explained in letters to the Subcommittee, the Office consistently refused to register copyright in a musical composition as a published work where the registration was sought based on a recording embodying the composition. The Office, instead, would advise applicants that, to be registered as a published work, visually perceptible copies of the work that is, sheet music copies had to have been sold or offered to the public. Where only recordings had been sold, the Office would suggest registration of the musical composition as an unpublished work.
The Ninth Circuit, in La Cienega, has chosen to ignore the intent of the 1909 Copyright Act, established legal precedent, industry practice, and the views and practices of the Copyright Office. If the result were merely bad law, that would be bad enough. But, as I said in the beginning of my testimony, the impact is far more profound. Hundreds of thousands of music copyrights -- from Gershwin and Irving Berlin to Motown, from the standards of the big band era to rock-and-roll, from contemporary classical music to jazz all are at risk unless and until this injustice is corrected.
La Cienega Punishes Only American Writers
There is an additional, and often-overlooked, element of unfairness in the impact of the La
Cienega decision. Only American music is faced with loss of copyright. Foreign works by
writers from countries that are members of the Berne Convention for the Protection of
Literary and Artistic Works ("Berne Convention"), even if threatened with public domain
status, are eligible for copyright restoration under provisions of the Berne Convention
Implementation Act of 1988. As a result, foreign authors and copyright owners will be
assured of continued protection, in spite of La Cienega, while their American counterparts
could have their property stripped away.
And, sadly, American writers could be deprived of their copyrights on a global basis.
American music accounts for 40 percent of the music heard and enjoyed around the world.
American music publishers and writers today earn more than half of their royalty income
outside the United States. Nothing in either of the major copyright treaties that serve as the
basis for foreign protection of U.S. copyrights the Berne Convention or the Universal
Copyright Convention requires other nations to protect American works that are in the
public domain here. Other countries are free to deny protection for works that are not
protected at home. And they can hardly be expected to do otherwise.
The La Cienega rule has the potential not only to destroy the value of important American
copyrights in the United States, but also to eliminate a significant portion of the positive
contribution to our nation's trade balance that global enthusiasm for American music
generates.
The La Cienega Rule Encourages Piracy and Disrespect for Copyright
NMPA is often asked who is on the "other side" of the La Cienega issue. The answer is no
one. Or at least no one who is likely to come forward. For now, the principal beneficiaries
of the conflict between the Second and Ninth Circuits are outright pirates and bootleggers.
It is only a matter of time before the thieves learn that the state of the law could greatly
reduce the risk of their illegal enterprises.
The La Cienega decision gives parties who would use music without authorization a new and powerful defense. Today, if a copyright owner pursues an infringement action against an unauthorized user of his work, at least in Ninth and now the Sixth Circuit, he runs the risk of losing his copyright. The alleged infringer can seek to have the action dismissed because the work alleged to be protected by copyright is in the public domain. And we have seen that the alleged infringer can win.
As a consequence, we are beginning to fear a chilling effect on the ability of copyright owners in pre-1978 music to bring enforcement problems to court.
La Cienega legislation needs to have been passed yesterday. I cannot over-emphasize the importance of prompt congressional action to so many innocent people. In the recent case of Mayhew Music Co. v. Gusto Records, Inc., pursuing an alleged infringer cost the plaintiff four copyrights and placed more than 30 others at risk. Widespread reliance by record pirates and other infringers of music copyrights is only a matter of time. It is fairer to everyone for Congress to correct the problem now.
The La Cienega Rule Advances No Rational Policy Objective
If new judicial interpretations of what constituted publication under the 1909 Copyright Act are allowed to stand, tens of thousands of American songwriters will lose the value and income from all or part of their life's work. Thousands of music publishers will see the assets of their businesses and catalogues depleted, and in some cases, devastated. And America will see some most renowned examples of 20th Century music and culture made available to be appropriated by others around the world, without recognition of the creator or compensation to the author and his or her family.
Even if it could be argued that the Ninth Circuit's rule in La Cienega makes some sense, what possible prospective public policy objective is served by depriving individuals and businesses of their property? There is no way that a writer or publisher whose work was made available on recordings prior to 1978 can go back in time and undo what was done. If the music was distributed on a recording that did not bear copyright notice for it, the Ninth Circuit says the copyright is lost. And at least for American works there is no means to restore it.
Over the past decade, Congress has repeatedly shown its desire to abandon copyright formalities and the severe penalties that could befall a creator or copyright owner for failure to comply. Most significantly, in 1988, in anticipation of the U.S. joining the Berne Convention, Congress eliminated the requirement that copies of works bear a copyright notice as a condition to maintaining copyright protection. It also eliminated the requirement of copyright registration as a prerequisite to filing an infringement action at least for foreign nationals of Berne Convention countries. And, in the Copyright Renewal Act of 1992, Congress ended the practice of requiring the filing of a renewal registration to secure the full term of copyright protection available under the law. Allowing retroactive judicial imposition of formalities is contrary to the direction in which Congress has taken the copyright law.
As the Register of Copyrights has noted, Regardless of whether or not [new judicial interpretations of "copy" and "publication"] are correct, however, they lead to unfair results when adopted retroactively today. The rationale [behind the new interpretations] is based on policy grounds relating to appropriate incentives for copyright owners' behavior but since the [1909] statute no longer applies to new acts, concepts of future incentive are meaningless.
We urge the Subcommittee, in the strongest terms, to reject a rule that can only hurt, not help, and to act with the greatest possible speed to remove this threat to our industry.
In closing my remarks on this subject, I must acknowledge the leadership Chairman Coble and members of the Subcommittee have already demonstrated in dealing with it. Last year, provisions identical to those in H.R. 1967, Chairman Coble's bill to correct the La Cienega decision, were approved by the Subcommittee as part of a copyright technical corrections bill. The full Judiciary Committee approved the language, and it passed the House of Representatives without objection.
As I said a moment ago, the La Cienega correction, to our knowledge, has no substantive opposition. We are aware, however, that some would seek to hold La Cienega legislation or any copyright bill, for that matter -- hostage to their demands for unrelated changes in the copyright law. We urge you to deal with the La Cienega issue alone, and on its merits. H.R. 1967 and other bills that would correct the La Cienega decision are not about new rights. They are not about extended rights. The bills simply assure creators and owners of music copyrights that they continue to own their property. The bills restore a long-established rule of law, nothing more. And they do so to no one's detriment and at no one's expense.
America's songwriters and music publishers need your help to preserve their copyrights, their incomes and their businesses. We urge the Subcommittee to approve a La Cienega correction at its earliest opportunity, and to support prompt enactment of this crucial legislation.
Copyright Term Extension
NMPA wishes to express its unqualified endorsement of the statements submitted by representatives of the songwriter community, the performing rights organizations, and other copyright industry groups in support of copyright term extension. We also wish to thank and commend Congressmen Bono and Gallegly for their leadership in this area.
As I said in my discussion of the La Cienega issue, American music enjoys enormous popularity around the world. According to figures compiled by the International Intellectual Property Alliance, of which NMPA is an active member, the core copyright industries, including music, in 1995 accounted for a staggering $53.25 billion in foreign sales and exports, surpassing every other export sector except automotive products and agriculture. With the world hungry for American music and other creative American works, it should be beyond question that the levels of protection here must keep pace with those of other copyright respecting countries.
The United States over the last decade has established itself as a leader in forging international consensus on strengthened norms for copyright protection. In the movement to extend the duration of copyright, however, Europe has taken the lead. And it has done so in a way calculated to deprive Americans of the benefit of extended protection.
The European Union's 1995 directive harmonizes the term of copyright among its member states at the lifetime of the author plus 70 years, and follows the Berne Convention's "rule of the shorter term." The rule is a notable exception to the Berne Convention's general policy of national treatment. In essence, it allows a country to protect a foreign work for only as long as it is protected in its country of origin.
International law provides that we must grant an extended copyright term if we wish to received the benefits of it in other markets. It is in the interest not only of the affected industries, but also of our overall trade posture, that Congress promptly enact term extension legislation.
Music Licensing
NMPA also fully supports the statements of our songwriter and performing rights organization colleagues who will describe for the Subcommittee the unfairness of the so-called "Fairness in Musical Licensing" bills.
The music licensing bills deal with commercial relationships between owners of property and users of that property. It should surprise no one that disputes will, from time to time, arise in this context. What is surprising, is that operators of commercial, religious music format radio stations, and other commercial enterprises that use music to attract and to satisfy their customers, should look to Congress to resolve business questions.
NMPA continues to hope that representatives of the music users will return to the bargaining table and work out reasonable license agreements with the various performing rights organizations. Congress can and should continue to encourage this process. But as we go forward, we should remember, once again, that the world is watching.
In testimony submitted for the record of a May 1996 Small Business Committee hearing on music performance rights licensing issues, NMPA warned that legislative proposals similar to those currently reflected in H.R. 789 could have serious implications for U.S. compliance with existing international obligations and for the ability of music creators and copyright owners to continue to receive fair treatment in foreign markets. We cautioned, in particular, that an expansion of the exemption from infringement liability contained in section 110(5) of the Copyright Act was likely to exceed the scope of permitted exceptions under the Berne Convention.
It appears U.S. trading partners share this concern. On June 11, 1997, the European Commission announced that its was launching an investigation based on a complaint by the Irish Music Rights Organization that the existing 110(5) exemption and any broadened exemption, such as that proposed in H.R. 789, adversely affect the cross-border licensing of Irish music, and violate U.S obligations under Article 9 of the World Trade Organization Agreement on the Trade Related Aspects of Intellectual Property Rights and Article 11 of the Berne Convention.
The U.S. more than any other country depends on strong and effective protection of copyrights worldwide. We cannot continue to lead in an area so important to our national economy if legal protections currently in place here are allowed to be eroded. We urge you to reject H.R. 789.
Thank you, Mr. Chairman and members of the Subcommittee for hearing NMPA's views on these important subjects. I am pleased to respond to your questions.