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the right to make phonorecords

Notes:
    Under s114 a later producer can use the same musical talent to produce a new version of a song that has already been recorded (e.g. a cover version), but the later producer cannot rerecord the original sound recording without permission (e.g. sampling).

    It is not contributory copyright infringement to sell devices that enable home copying of sound recordings. A small royalty is paid on blank tapes and recording equipment and distributed to copyright owners. Some sound recording technology fixes the number of second generation recordings that can be made from the original source (e.g. digitial audio tapes). This approach of the Audio Home Recording Act of 1992 was not followed with respect to home taping of television programs.

    Note the difference between a "captured performance" and the underlying musical composition which may be fixed in published lyrics and sheet music. Note also the difference between the right to capture a performance and distribute phonorecords and the right of public performance.

    The right to distribute phonorecords of a particular song is subject to a compulsory license as per s115. The impetus for the compulsory licensing system was in part the fear that a small number of music studios might establish a monopoly in the field of sound recordings by capturing artistic performances before competition could emerge. Even though underlying economic conditions have changed and no single studio dominates the recording industry, the industry supports compulsory licensing because it gives stability to financial transactions.
    DZ: Compulsory licensing probably inhibits industry growth overall.

    Producing new music by digitally sampling a prior work is distinct from capturing a new performance of the underlying composition. Because a sound recording is not a copy of the underlying composition, the music fixed on a phonorecord is perhaps the only thing protected from later producer.

    The license fee to reproduce a sound recording is not individually negotiated; it is standardized by statute and the revenue generated by compulsory licenses go to copyright owners.

    The availability of compulsory licenses to make sound recordings conflicts with international copyright regimes and the Berne Convention.

    Sound recordings for a limited audience, like Musak in an elevator, is not covered by the compulsory license of sound recordings.

    A sound recording licensee may make minor changes in reproduction, but cannot change the underlying melody radically as to parodize the original. In CAMPBELL v. ACUFF-ROSE MUSIC, for example, 2 Live Crew's version of "Pretty Woman" is not entitled to a compulsory license because the arrangement changes "the basic melody or fundamental character" of the original, footnote 4.

    Note the passage of the Digital Performance Rights in Sound Recordings Act of 1995. It raises possibility that recording studios might bypass retail stores as sell to consumers directly over a digital network or "celestial jukebox." Under Act, direct digital delivery does not require a compulsory license.

    Owner of copyright in sound recording must receive notice that his work will be reproduced under compulsory license before the new work is published.

    Another area where reproduction is subject to compulsory licensing fees is the retransmission of cable television broadcasts.

    Each distribution of fees collected by the Copyright Royalty Tribunal for compulsory licenses has generated a great deal of litigation.



Issues:
    Should an artist have the opportunity to avoid the compulsory licensing schemes if he does not want others to reproduce his sound recording?

    How should the compulsory license fee be established? In part, it's an empirical matter of setting the proper incentives for artistic production. It's a hotly debated aspect of the Copyright Act. How responsive should the compulsory fee be to changes in consumer prices? Should Congress encouage greater use of royalties?



Illustrative Cases:
    Palladium Music, Inc. v. Eatsleepmusic, Inc. (10th Cir. 2005) (Full Text - PDF)
    Plaintiff is not entitled to sue for copyright infringement of its karaoke products because it did not obtain permission to make new recordings of underlying compositions. The original authors have the right to make derivative works.

    ABKCO Music, Inc. v. Stellar Records, Inc. (2d Cir., 1996)
    Compulsory license does not allow manufacturer of karaoke CD ROM to add video display of song lyrics.