Evolving technologies such as synchronization — matching music-sound to visuals, such as multimedia or video — are further pushing change for the music industry: Multimedia music production now has become easier, faster, and snappier. This also means that musicians and Entertainment lawyers must know more about important elements in draft license agreements and rights in synchronization of music. Hypebot.com, a blog-website dedicated to music business news, has put up some helpful suggestions and a scan of some case law highlights the challenges that musicians may confront if they fail to protect their rights.
Music license agreements are complex but sync issues must addressed. Artists and their counsel, in doing so, can avert the prospects of litigation, in which courts usually will uphold well-constructed contacts. In Bell v. Philadelphia International Records, the recording artist sued his recording company asserting breach of contract and fraud; there was nothing protecting the artist in the contract and the accord was not time-barred, leading the court to decline to find the contract unconscionable. Whereas, a well-drafted contract, may uphold itself in court. In Music Dealers v. Sierra Bravo Corp., a music licensing company sued a software development company for breach of contract and fraud. The court denied defendant’s motion to dismiss because the corporation failed to argue that the alleged contract breaches were not part of the contract. However, the court did allow a limit on damages to be recovered because of a limited liability provision in the contract. The point: It pays to ensure a contract is well drafted.
Here are a few other of the many contractual issues that counsel and music clients may wish to consider:
Before artists license away any of their music rights, there must be a value exchange and the creatives must have a sense of the value of their works. Artists are signing away an aspect of their copyright for consideration, and what are they getting in return? Compensation is always ideal, but artists also may find value in publicity. It’s key for counsel to ensure artists don’t sign away too much and that they limit control over their copyrights.
It’s key for counsel to ensure musicians understand the scope of any prospective agreement, meaning how and for how long the licensor owns rights in their works. Musicians must be aware that this might involve international use, as well as in markets across the U.S. so parties should be aware, too, if licenses provide for distribution of recordings. Moreover, attorneys drafting these agreements tend to push for limited periods, which put musicians in a strong bargaining position. If licensors want extended time of use, they must negotiate a higher value to musicians to get extension of those rights.
Before signing agreements, licensees should know what other third parties are connected with the license. For example, a song, might include a clip or sample of a another performer’s work; the producer may have permission for that use but was approval also granted by the songwriter? The licensor typically bears responsibility to track down all other third parties connected to music they want but counsel may wish to ensure licensors are upfront on this issue.
Most favored nations
It also becomes key to see that the licensor is not hiding liability on a musician, and, further that licensing agreements contain “most favored nations” provisions to ensure the client gets the best terms in any agreement. Attorneys commonly will use the broad term when drafting contracts for clients, whom they want to be optimal bargaining position. But under the “most favored” language, if another party connected with the music license is provided better terms — such as getting more pay – then the client will receive the same benefit. In U.S. v. Broadcast Music Inc., such a provision assured DMX was no worse off than its completion is setting a contract dispute.