Music Modernization Act of 2018 Signed Into Law by President Trump

Guest Alert by Eric Moran.  Mr. Moran is a partner at McDonnell Boehnen Hulbert & Berghoff LLP and Chair of the firm’s Trademark, Unfair Competition, Advertising Law & Copyright Practice Group. (His office used to also be right next to mine at the firm).  This post was originally distributed via MBHB snippets. — DC

On October 11, 2018, President Donald Trump signed into law the Orrin G. Hatch–Bob Goodlatte Music Modernization Act (“the Act”), which will significantly modernize copyright law to account for the digital delivery of content. The bill, as updated and passed unanimously by the Senate and then the House, revises the Copyright Act (17 U.S.C. § 115) in several major ways.

Title I of the Act, “Musical Works Modernization Act,” streamlines mechanical royalties for digitally distributed music by allowing streaming services to pay a mechanical licensing collective (“MLC”) for a blanket license to stream copyrighted material. The MLC has a board of directors of 14 voting members and 3 non-voting members, with 10 voting members being representatives of music publishers, while 4 voting members being professional songwriters. The MLC is responsible for a number of activities under the Act, including:

• the administration of blanket licenses;
• the collection and distribution of royalties from digital music providers to songwriters and publishers;
• the identification of copyrighted material embodied in sound recordings, locating the copyright owners of such material, and administration of a process by which copyright owners can claim such ownership; and
• assisting with setting of royalty rates and terms.

Helpful to copyright holders, the Act provides a mechanism for royalty rates to be raised to reflect fair market rates and terms—to account for changes in the market. And helpful to streaming services, the Act protects streaming services from infringement lawsuits for past infringements.

Title II of the Act, “Classics Protection and Access Act,” attempts to provide owners of pre-1972 sound recordings with copyright protection. Before this Act, pre-1972 sound recordings were not covered under U.S. copyright law (owners instead needed to rely on state and/or common law for protection). This Act brings pre-1972 sound recordings partially within federal copyright law by (i) providing federal remedies for unauthorized use of pre-1972 sound recordings for 95 or more years after first publication (which time may be extended depending on the year of first publication), (ii) providing a statutory licensing scheme for some digital streaming services, and (iii) providing a means of lawful, fair use of such recordings.

Title III of the Act, “Allocation for Music Producers Act” or the “AMP Act,” provides a means by which music producers can receive a portion of royalties distributed under the statutory license provided under section 114 of the Copyright Act.

The full text of the Act can be found here.