In June 2015, Canada extended copyright protection for sound recordings from 50 to 70 years. “So what?” you may say. Before the extension, many sound recordings from the early 1960’s fell into the Canadian public domain, including recordings by many prominent and profitable bands such as The Beatles, among others. Those that did fall into the public domain were not taken out of the public domain by the extended copyright protection legislation.
Prior to the extension, Stargrove Entertainment started making and selling CD’s containing public domain recordings, including The Beatles, “Love Me Do”. But not all was well. Stargrove recently filed a claim with the Canadian Competition Tribunal against Universal and Sony alleging interference with the sales of the public domain recordings.
It’s important to remember that there are two copyrights in every piece of music: the sound recording, and the underlying musical composition. For example, Otis Redding wrote “Respect” which became a hit for Aretha Franklin. Therefore, Otis (and/or his publishing company/record label representative) owns the musical composition copyright and the sound recording copyright for his recorded version. However, Aretha (and/or her record label representative) owns the sound recording copyright in her version of the song.
Although the sound recordings had entered the public domain, use of the compositions requires a license from the musical composition copyright holder. Usually, a compulsory mechanical license is obtained in exchange for a fee based on the number of units expected to be sold. Generally, the copyright holder has no right to prevent a mechanical license from being issued, as long as the correct payment is made to the rights holders.
Earlier this year, Stargrove applied for mechanical licenses for various recordings, including The Beatles “Love Me Do”, and Bob Dylan’s “It Ain't Me Babe”, among others. Stargrove paid the compulsory mechanical license fee and the recordings went on sale.
However, the music publishers then allegedly contacted the Canadian agency in charge of mechanical licenses to tell them to cease allowing Stargrove to use the mechanical license system.
Stargrove’s complaint alleges that the rights holders are withholding mechanical licenses in order to illegally extend the copyright term over sound recordings that should be in the public domain, as well as interfering with Stargrove’s contract with their distributor.
This case has the potential to affect not only worldwide rights for musical artists but for artists in other media as well. Can mechanical licenses be denied in certain circumstances in Canada? Can the same thing happen in the US? Only time will tell the effect this legislation and the Stargrove case will have on sales of sound recordings and musical compositions.
For more information, please see http://www.hollywoodreporter.com/thr-esq/beatlemania-returns-canada-time-public-819748.
Gary Laurie, Esq.