Representatives Introduce Bill to Require Satellite and Internet Radio to Pay Royalties for Pre 1972 Music

May 29, 2014. Rep. George Holding (R-NC) and others introduced HR 4772 [LOC | WW | TLJ], the "Respecting Senior Performers as Essential Cultural Treasures Act", which comes close to producing the acronymal title of "RESPECT Act". This bill would amend the Copyright Act to address payment of royalties for digital performances of sound recordings made before 1972.

This bill would not confer copyright protection upon sound recordings that were fixed before February 15, 1972. Rather, this bill would provide that any transmitting entity that publicly performs digital sound recordings (internet and satellite radio) pursuant to the statutory licenses of 17 U.S.C. § 112 and 17 U.S.C. § 114 shall make royalty payments for transmission of pre-1972 sound recordings.

The bill would also create a cause of action in the U.S. District Court for failure to make such royalty payments.

The bill would not preempt current state laws that protect pre-1972 sound recordings. However, it would preclude certain actions to enforce those rights in state courts.

The bill would take effect immediately upon enactment.

What the Congress does regarding pre-1972 sound recordings will affect artists who recorded songs prior to 1972, copyright holders, and libraries and archives that want to make copies. However, the sponsors of this bill focused on the aging rock and country singers and musicians.

This bill was referred to the House Judiciary Committee (HJC). Rep. Holding is a member. Rep. Howard Coble (R-NC), a cosponsor of the bill, is Chairman of the HJC's Subcommittee on Courts, Intellectual Property and the Internet.

Rep. John Conyers (D-MI), the ranking Democrat on the HJC, is also a cosponsor of the bill. He stated in a release that "Digital radio stations that earn millions off Motown classics but fail to pay royalties to the artists who recorded them are withholding hard-earned profits from deserving musicians. Refusing retired artists royalties from digital radio stations is particularly unfair. The RESPECT Act keeps faith with these living legends of American music -- the famous greats and the less known musicians who supported them -- and makes sure they get a fair shake. At a minimum, that means getting fair pay from the digital radio stations who are marketing stations based solely of pre-72 music and profiting off the work of the men and women who inspired a musical revolution".

Rep. Holding (at left) stated in a release that "Due to a loophole in the law, digital services argue they don't have to pay under their federal copyright license because recordings made before February 15, 1972 are covered by state law. But they aren't paying these royalties under state law either -- claiming it doesn't apply to digital services at all. Currently, great recordings from the American Songbook -- including Sinatra, Motown hits, Country Classics, Jazz from North Carolina's own John Coltrane, and our Beethoven of Banjo -- Earl Scruggs -- are unfortunately losing out. America's legacy artists deserve to be paid for their work and their property as much as their peers who recorded from the mid 70's 'til today. This was never the intent of Congress; it goes against the nature of copyright and property rights generally.".

The other original cosponsors of the bill Rep. Marsha Blackburn (R-TN), Rep. Judy Chu (D-CA), Rep. Jim Cooper (D-TN), Rep. Ted Deutch (D-FL), Rep. Louie Gohmert (R-TX), and Rep. Hakeem Jeffries (D-NY).

Michael Huppe, P/CEO of the SoundExchange, stated in a release that "Based on their interpretation of state and federal copyright law, these multi-billion-dollar companies believe that they can use pre-1972 recordings for free, forever. SoundExchange estimates that this practice deprived legacy artists and record labels of more than $60 million in digital royalties last year alone."

The SoundExchange is a performance rights organization that collects royalties due under statutory licenses for non-interactive digital transmissions by satellite and internet radio on behalf of sound recording copyright owners and artists.

On August 26, 2013 SoundExchange filed a complaint [17 pages in PDF] in the U.S. District Court (DC) against Sirius alleging violation of the Copyright Act, and regulations thereunder, in connection with underpayment of royalties for its digital transmission of sound recordings in the years 2007 through 2012, by excluding pre-1972 recordings. See, story titled "SoundExchange Sues Sirius for Underpayment of Statutory Royalties" in TLJ Daily E-Mail Alert No. 2,589, August 26, 2013.

Jodie Griffin of the Public Knowledge (PK) stated in a release that the PK "supports protecting pre-1972 sound recordings under federal copyright law, but this bill fails to give pre-1972 recordings actual copyright protection and fails to solve the uncertainty created by a patchwork of state laws. Pre-1972 sound recordings should be addressed in a comprehensive approach that considers the many current issues in music licensing."

She added that "Pre-1972 sound recordings should be given actual copyright protection that lasts for the lifetime of the author", and which is subject to "robust statutory licensing". Moreover, there should be a delayed effective date. Also, "the windfall that results from new licensing requirements should go the actual artist, so the statutory splits that often currently give half of the collected royalty payments to record labels should be adjusted to increase artists' share of the royalties."

Four years ago the Congress directed the Copyright Office (CO) to write a report on this topic. See, HR 1105 [LOC | WW], an omnibus appropriations bill, which became Public Law No. 111-8. The CO published a notice in the Federal Register (FR) on November 3, 1010 that constituted a Notice of Inquiry (NOI). See, FR, November 3, 2010, Vol. 75, No. 212, at Pages 67777-67781, and story titled "Library of Congress Issues NOI on Extending Copyright Act to Pre 1972 Sound Recordings" in TLJ Daily E-Mail Alert No. 2,150, November 8, 2010. The CO released its report [214 pages in PDF], titled "Federal Copyright Protection for Pre-1972 Sound Recordings" on December 28, 2011.

The CO recommended "that federal copyright protection should apply to sound recordings fixed before February 15, 1972, with special provisions to address ownership issues, term of protection, and registration. This will improve the certainty and consistency of copyright law, will likely encourage more preservation and access activities, and should not result in any appreciable harm to the economic interests of right holders."

The CO also noted that "some webcasters are making royalty payments for the use of pre-1972 sound recordings as part of the statutory royalties they pay to SoundExchange in connection with the digital performance of sound recordings pursuant to sections 112 and 114".

(Published in TLJ Daily E-Mail Alert No. 2,666, June 3, 2014.)