MORE Indie Invaders / POSTED BY: KINGSOFAR

I was having dinner with my friend Mark Mazzetti, former A&R at our mutual employer A&M Records, and who is now putting the finishing touches on his new label, R&M Artist Records that will launch shortly. Mark is a very knowledgeable record person, but had some issues he wanted to talk over regarding co-writes for some artists he’s interested in signing. From that conversation, I thought it might be useful for KOAR readers to have some guidelines for co-writes.

Co-writing with your producer, friends, band mates or [other] professional songwriters is a good thing. But remember–you’re creating a piece of property when you write a song (or record a master for that matter, but that’s another subject). This time that property is intellectual property. Like any other form of property, intellectual property has certain rules of the road that can have some twists, turns and dangerous shoals. You wouldn’t build a house with a partner if you didn’t understand at least the basic legal issues of co-owning real estate, and neither should you create a piece of intellectual property with someone without knowing at least a bit about intellectual property law, and particularly the law of copyright.

The other thing you should be clear about is that when you record a song, the recording consists of two separate and distinct copyrights: the sound recording copyright in the recording (registered in the U.S. with the Copyright Office on a Form SR) and a separate copyright in the song (registered in the U.S. with the Copyright Office on a Form PA). Different people can own the two separate copyrights. For example, if you are an independent artist and you record your own performance of a song you co-wrote, you would probably claim ownership in the sound recording 100% for yourself, but each writer would claim their own share of the song. If there are two writers of a song, the assumption usually is that they each own an undivided 50% interest, although this is not necessarily the case. A writer of the song would not get a share of the sound recording just by virtue of having written the song, and the performers on the sound recording would not get a share of the song (unless by coincidence one of the writers is also a featured artist).

When you write a song with someone else, each of you have the right to license the part of the song you contribute–called your “contributory share” of the work—unless you agree that you will each get the other’s permission or that there will be special rules that you will each live by (called an “administration agreementâ€?). This all sounds fine and way egalitarian.

Some of you may have heard about something called a “Creative Commons” “deed” or “license” to give away your songs. This “license” has achieved some notoriety but is actually poorly thought out if you are trying to make a living at being a songwriter or recording artist. The first thing you should do is read the license. The way Creative Commons sets up the user interface on their webpage, it’s entirely possible that you could release some works without ever having to read the actual license itself.

You should make sure that anyone you co-write with DOES NOT use or intend to use a Creative Commons license, as this will have some big problems that I will identify. The general point is that Professor Lessig and his fellow travelers in the anti-copyright movement have come up with what they think will be a music industry equivalent of a “free software” license (aka the “GPL”) without having any experience in the music industry or knowledge of how we work. So it’s fair to say that this Creative Commons world is fine for academics and amateurs, but has no role whatsoever in world of the professional musician. Plus–if you really do want to give your work away, you don’t need Creative Commons to do it.

The first problem with Creative Commons is there is no Creative Commons “legal code” for a song. Given that Creative Commons and their fellow travelers the Electronic Frontier Foundation, Public Knowledge and other groups don’t have a clue about the music business for one thing and what a song is for another, this is not surprising. Next time you come across one of these people, count how many times they use the word “song” when they mean recording, and vice versa.

Another of the many problems with Creative Commons is that there is no concept of co-writers. Reading the license, you will see a reference to “Original Author”. That’s Original Author singular. In the Creative Commons world, there are no co-writers, and they gloss over what happens under their “deedâ€? if one co-writer doesn’t want to grant the rights in the “deedâ€?. Dealing with co-writers would make it a bit complicated, as what if one author wanted to give their share of a song away and others didn’t? What would that mean exactly? Confusing, to say the least. This is yet another reason why you are better off not to co-write with anyone who wants to use a Creative Commons license for their share of a work.

There is also a rule of copyright law in the United States that is similar to rules regarding real estate. If two or more people own an undivided interest in a piece of land, then any one of them can grant non-exclusive licenses in the entire piece of property, so long as the terms of the license are “reasonable” and the co-owner granting the license accounts to their other co-owners for their share of the license fee. The same applies to copyrights. So if you have one writer who grants a Creative Commons license in the entire song….What does that mean? I have no idea, but do you really want to take a chance?

Fast forward to the day you sign your first record deal (indie or major). You will be asked to grant a “mechanical” license to the record company, i.e., a license to mechanically reproduce the song in the records you make. This concept of “mechanical reproduction” also includes digital downloads. The mechanical license is usually a hotly negotiated part of the record deal.

Even if the rights you are going to be asked to grant stopped right there, you would have a problem if you don’t control 100% of the song. If the recording you make of the song is the first time that the song is released on a record (or a “phonorecord” as defined in the Act), then that use requires the consent of all the writers. Once the song is released on a phonorecord, the song is subject to the compulsory mechanical license (and just the mechanical license is compulsory) under Section 115 of the Act. That means that your co-writer—technically–can make it difficult for you on the initial recording, but no recording after that. As a practical matter, this rarely happens, and to my knowledge has never been part of a lawsuit. It’s good to keep in mind, though.

If you sign a major label record deal, you will be asked to agree to a controlled compositions clause. This is a contract provision that says the label doesn’t care what the Act says, here’s your deal on mechanical royalties. That statutory rate in the Copyright Act? Not for you. Your rate is going to be 75% of that rate. You want to put 17 songs on a CD? Fine–but the label will be paying you for 12 (or more likely 11). Free goods? The label doesn’t get paid, so you don’t get paid.

And that co-writer? If the co-writer insists on full statutory calculated outside of the controlled compositions rate, that’s fine–but the label will take the excess out of your mechanicals.

If you have a few co-writes and they account for 25% or more of the songs, you really start to feel that dip. And it’s all in the control of your co-writer.

Your co-writer can, however, refuse to take a reduction in the statutory royalty rate provided under Section 115 of the Act, and your co-writer can also demand pretty much whatever they want in the way of a fee for any other use of “your” song. That means that if you have a falling out with your co-writer, they can make your life miserable.

This problem is most likely to arise with band members who have been ejected from the band, or co-writers who are not in the band. If a band gets a big advance from a major label, the non-member writer may feel that since the non-member got no piece of an advance, there’s no reason to help you out on the controlled composition rate. You could find that your co-writer is suddenly indier-than-thou and does their nut because you took the king’s shilling. Or, worse yet, if your co-writer should happen to die or fail to be compos mentis, your co-writer’s heirs may suddenly be making those decisions–enter the crazy spouse problem.

 Let’s say that you have an opportunity to get tens of thousands of dollars plus much more in promotional value by having a song in the end titles of say Miami Vice. Let’s say your co-writer (or the crazy spouse) hates mohair. It’s all over as a practical matter, because the film will require 100% of the copyright in order to issue a license and if they get wind that there’s a mohair hater in the wings, they’ll move on.

Another problem–splits. What if you thought that you wrote the song 50/50, but oops…turns out it was 75/25 in the mind of your co-writer when there’s money to be made. Or at least that’s what he told ASCAP when you checked the song registration a year or so after you wrote the tune. Not fun.

And what if you put a work out into the world under a Creative Commons license? Just in case the only hit you ever write is the one you gave away under the Creative Commons license, better to avoid those people altogether. This is assuming you can figure out which of the Creative Commons licenses apply to songs only, and if you do, please let me know because I’m not smart enough to figure it out.

It would be very easy for your record company to argue that since one of your writers gave the work away under a Creative Commons license, the label doesn’t have to pay you anything, depending on which Creative Commons license was used.

So how do you avoid all this stuff as an artist-writer? It’s actually pretty simple but it requires a bit of discipline and some attention to detail. You sign a simple co-writer agreement that covers some basic points:

1. Say what the splits are–in writing–and divide up music and lyrics;

2. If you get a record deal, your co-writer agrees to take your controlled compositions rate, subject to an obligation to pay your co-writer or arrange to have her paid;

3. If you want to license for a film (or one of your own music videos), you have the right to negotiate and contract for 100% of the song, subject to an obligation to pay your co-writer or arrange to have her paid;

4. You get to record the song first; and

5. Never write with anyone who wants to use a Creative Commons license.

Note that if your co-writer already has a publishing deal, you will need to get that co-writer to get their publisher to approve whatever the co-writer is agreeing to, since the co-writer has way more than likely given up those rights to their publisher.

There are some other bells and whistles that should go into one of these documents, which is why you really should consult your lawyer to come up with the form for you.

If you take a little bit of time to get this done when your relationships with your co-writers are all warm and fuzzy, you will be so glad if it all falls apart later, but you can continue to use your songs.

Chris Castle is a music attorney in Los Angeles where he represents artists (including KOAR fav 10 Years), producers, music industry executives, songwriters, independent publishers and record companies, and technology companies. Chris is a contributing editor to Entertainment Law & Finance and writes the Music-Tech-Policy blog (http://music-tech-policy.blogspot.com/). He is on the board of directors of the Austin Music Foundation and moderates the digital panel at SXSW. Before law school, he was the drummer for Jesse Winchester, Long John Baldry and Yvonne Elliman

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