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January 19, 2013

Figuring who owns a 1978 recording can be complicated

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The Daily Star

---- — For most of us, the start of a new year is a time for reflection on the past and planning for the future. For the music industry, this new year of 2013 provides a dramatic scenario that may change the fortunes of some of the most famous recording artists and record companies in the world.

Who are some of the famous recording artists and albums in this drama? 

Billy Joel’s album “52nd Street,” released in 1978, sold more than 7 million copies. 

Van Halen’s album “Van Halen,” released in 1978, sold more than 10 million copies.   

Both these artists were signed to contracts in the 1970s specifying that their record companies owned these hit recordings. Why are these and other artists now saying that the record companies may no longer own them?

The answer to this question lies in the United States copyright law. In 1976, the copyright law was updated to say that authors and composers who granted ownership of their original works, such as their songs, to someone else could regain ownership of their music 35 years after the grant had been made. If the author is no longer alive, the law specifies which heirs have the right to re-capture ownership. 

That 1976 law became effective in 1978.  Thirty-five years after 1978 is the year we are just entering, that is, 2013.

If, however, the song was written or the recording was made as a “work for hire,” there is no possibility to re-capture that work. The laws governing ownership of these recordings will affect anyone whose album was released in 1978 or later.   

What is a “work for hire”? According to section 101 of the copyright law, a work for hire is an original work created by an employee within the scope of his employment. If there is no employer/employee relationship, a work for hire might also be one of several categories of works listed in the law, if there’s a written agreement that the work has been made for hire. For this reason, if there is a written agreement between the artist and the record company that the recording was created as a work for hire, the record company says that it owns the recording of the song from the moment the recording was made.   

Recording contracts typically specify by contract that an artist’s recording is made as a work for hire. As part of the contract, the artist and record company also agree that if the recording is not a work for hire, the artist grants ownership of the recording to the record company. The artist usually receives an advance to pay for the recording process. After the recording is made available for sale, the artist is paid a royalty that is a percentage of the sale of each album. Artist royalties are first used to recoup or pay back the recording advance. After that advance has been paid back, the artist can keep all additional royalties although the record company owns the recording made by the artist. If the artist is also the songwriter, the record company will pay a license fee for each recorded copy of the song.

The big question in the American music business is whether artists can regain ownership of the recordings they made many years ago. It’s important to remember that the artist signed a contract saying the recording was a “work for hire,” meaning the artist agreed by contract that the recording was owned by the employer from the moment the recording was made. The issue to be decided in 2013 is whether the recording actually IS a work for hire. It’s an interesting legal question, since recordings are not mentioned in the copyright act as being eligible to be works for hire.   

If a recording IS a work for hire, the recording company owns it, and the artist does not have the right to any ownership. If a recording is NOT a work for hire, the artist, or perhaps the producer, DOES have the right to take ownership away from the record company after 35 years. If the law doesn’t include recordings as works for hire, does that mean a recording CANNOT be a work for hire? Who will decide ownership of these valuable recordings?

If the ownership of recordings must be decided by interpretation of the law, there are two logical ways of doing so. Either the courts can interpret the law, or Congress can write new law. 

At this time, no court has reached a decision as to whether a recording can be a work for hire, and Congress has not addressed the issue by writing new law.

“Darkness on the Edge of Town,” recorded in 1978, is one of Bruce Springsteen’s most memorable albums. Who owns that recording? If someone in your family recorded songs for a record company in 1978 or later, should you be asking about ownership of those recordings? This will be an interesting year in the music industry as Congress or the courts move to answer those questions. 

Dr. Janet Nepkie is a member of the music industry faculty in the music department of the State University College at Oneonta. Her columns can be found at www.thedailystar.com/musicbeat.