The Copyright and Duration of Rights in Performances Regulations 2013 (the “Regulations”) came into effect on 1 November 2013.
The Regulations extend the term of copyright protection for sound recordings from 50 years to 70 years (which runs from the date on which the sound recording is published/made available to the public), and the term of protection for performer’s rights in a sound recording from 50 years to 70 years (which runs from the date of release).
The 20 year extension will apply to all sound recordings released from 1 January 1963. This is good news for those artists who are still alive today and whose copyright protection was due to expire in 2013 or 2014 (a notable example is the Beatles’ first number one single, ‘Please Please Me); their rights will now be protected until at least 2033.
Many famous artists, most notably Cliff Richard, have been strongly in favour of an extended copyright term (indeed, the legislation has been dubbed “Cliff’s Law”).
But what does it mean for record labels?
Use in or Lose It
The Regulations introduce a “Use It or Lose It” mechanism, which allows performers and musicians to reclaim their rights in any sound recording that has been assigned to their record label if that label fails to produce (physical) copies of that recording in “sufficient quantities” and make it available for customers online. This “Use It or Lose It” provision will only apply in respect of a record label’s rights within the EU; rights in any non-EU territories will remain with the label.
It is unclear what exactly a label will have to do in order to meet the requirement that it produce “sufficient copies” of a sound recording; this threshold may be met if the label simply offers to make copies available on demand. Making a sound recording available online includes making it available on Spotify or i-Tunes. In most instances, labels should be able to meet these exploitation requirements without too much difficulty.
Problems may arise where one performer decides to reclaim their rights in a sound recording but other performers on the same sound recording do not. In such an instance, the “non-terminating” performers’ rights in the sound recording will remain with the label. This means that the “terminating” performer will still need to clear the rights of the other performers in that sound recording before they can exploit it, which could mean having to ask the record label for those rights. In such an instance, the label may be reluctant to accommodate the “non-terminating” performer.
The Regulations also introduced a “Clean Slate” provision, which prohibits record labels from making deductions from royalties to recoup advances once the 50-year period of protection has passed. This applies irrespective of what the terms of the recording agreement might say.
The “clean slate” mechanism should apply to advances agreed before the 50-year period, but not to any new advances made after that 50 year period.
The Regulations have also introduced a “Session Fund” for session musicians who performed on a sound recording in return for a one-off fee. The Regulations require record labels to make an annual payment of 20% of gross revenues earned each year during the extra 20 year protection period into a “Session Fund” from which session musicians who played on those sound recordings will be paid. This initiative is likely to cause real headaches for record labels, and the Regulations do not provide any clear guidance on how the session fund should be administered.
Nonetheless, whilst the Regulations may initially cause some inconvenience for record labels, they too will benefit from the new copyright extensions and, indeed, the record industry has been very much at the forefront of the campaign for change.
At the time the Directive was adopted, Commissioner Michel Barnier stated that the decision to extend the term of protection meant that “performers can still receive remuneration when their music is played once they have retired”. Now that “Cliff’s Law” has been implemented, perhaps it’s time for Sir Cliff to consider his retirement options?