The following is a webicle I found. It is largely accurate, highly interpretive, with a few key points woefully left out, but which are actually contained in the US Copyright Act and the DMCA. The corrections are in blue. Things that have no relevance or are opinion have been struck out with line. And, in case you are concerned or wondering, the WIPO below completely covers our right to reprint this article in its entirety. Additional links below!
Digital Music and Copyright Law
The freewheeling nature of the Internet, combined with compressed digital audio formats like MP3 that can be easily copied, has led to an epidemic of copyright infringement. However, digital music on computers and the Internet is protected by the same laws that protect music on records, tapes and CDs, along with several laws that focus specifically on digital music.
Rights of Copyright Holders
Copyright law establishes rights for both copyright holders and for purchasers of copyrighted works.
A copyright holder has five exclusive rights:
· Reproduction: The right to copy, duplicate, transcribe or imitate the work in a fixed form.
· Modification: The right to modify the work or create a new work based on an existing work.
· Distribution: The right to distribute copies of the work to the public by sale, lease, rental or loan.
· Public Performance: The right to recite, perform or play the work in a public place or transmit it to the public.
· Public Display: The right to show a copy of the work in a public place or transmit it to the public.
Anyone who violates any of these exclusive rights is considered an infringer and is subject to civil and criminal penalties.
Copyright laws also uphold certain rights for purchasers of published works but invoke limitations on the use and reproduction of those works. For example, if you’ve purchased a CD, you may legally make a recording of it onto tape for use in your car, or for your boom box at the beach (no sense getting sand scratches on your original CD). You can record as many copies as you like, but only if the copies are for your own private, noncommercial use. Similarly, you may purchase and download an MP3 file and copy it onto your Rio player, as long as you don’t resell or give away any copies of that file.
Copyright protection arises automatically when an original work (song, book, etc.) is fixed in a tangible medium (tape, paper, etc.) of expression. No registration is required, but you must register before you can file a copyright infringement suit.
The term of a copyright varies depending on when the work was created, who created it and when it was first distributed commercially. For works created after January 1, 1978, the term is the life of the author plus 50 years. The term for works made for hire is 75 years from the date the work was first published (distributed commercially) or 100 years from the date of creation, whichever expires first.
A common legal myth is that a work needs to have a copyright notice to be protected. This is no longer true. For works created on or after March 1, 1989, the copyright notice is optional. Another common myth is that it’s okay to distribute copyrighted material without permission as long as you don’t charge for it. It doesn’t matter whether you charge for it or not. If you distribute unauthorized copies, it’s still copyright infringement. Some people assume that it’s OK to use copyrighted material without permission if their use would help to promote the work. It doesn’t matter; permission is still required.
Copyright Law and Consumers
Many people either don’t think about copyright laws or they make assumptions—such as these laws apply only to business use of copyrighted material, or they target only bootleggers and blatant pirates. Copyright laws apply to everyone, and they not only protect the rights of artists and creators of intellectual property, they also protect consumers and manufacturers. The following hypothetical case studies illustrate how copyright laws can affect users of digital audio formats such as MP3.
Case #1: Ripping CDs
Robert is a diehard Kiss fan. He owns every Kiss CD ever recorded and wants to listen to Kiss at work. So he ripped his Kiss CDs (copied them to his hard disk) and converted them to MP3 format, and then brought them to work to annoy his co-workers. Beth, who works in the cubicle next to Robert, likes jazz. She tried to turn off the noise from next door by telling Robert that his MP3 files were illegal.
Robert told Beth that since he purchased the CDs, he could copy them and use
them however he pleased, as long as the copies were for his own use. Beth did
some research and showed Robert a page from the RIAA’s Web site that maintains
that ripping songs from prerecorded CDs is illegal. Robert, afraid he was in
hot water, retained the law firm of Dewey Cheatum and Howe. After billing him
$400, they advised him not to worry. They told him that since the MP3 files
were for his own use, he was protected by the Audio Home Recording Act.
Who is right—the RIAA or Robert’s lawyers?
The legality of ripping depends on the interpretation of several laws. The Audio Home Recording Act protects consumers who use digital or analog audio recording devices to make copies of prerecorded music, as long as the copies are for noncommercial use. But, because computers are not considered recording devices, as defined by the Audio Home Recording Act, Robert is not protected by this law when he rips his CDs.
The drafters of the Audio Home Recording Act didn’t realize or consider that personal computers would ever be used to record and play high-quality digital audio. They also did not foresee the impact of the Internet on the recording and broadcasting industries. Several bills related to these technologies have been enacted to update the law. (See the end of this chapter for a summary of key copyright laws.)
Even though ripping is not specifically addressed by current laws, it turns out that Robert does have the right to rip his own CDs, according to Bob Kohn, co-author of the leading treatise on music licensing, Kohn On Music Licensing (Aspen Law & Business 1999). Kohn maintains that making an MP3 copy from your CD for your own personal use is clearly permitted by Congress.
In 1971, when enacting legislation that protected sound recordings under the Copyright Act, Congress stated, “It is not the intention of [Congress] to restrain the home recording, from broadcasts or from tapes or records, of recorded performances, where the home recording is for private use and with no purpose of reproducing or otherwise capitalizing commercially on it. This practice is common and unrestrained today, and record producers and performers would be in no different position from that of the owners of copyright in recorded musical compositions over the past 20 years.”
It is therefore clear, according to Kohn, that Congress believed that the Doctrine of Fair Use, which is now embodied in Section 107 of the Copyright Act, protects audio home recording from copyright liability as long as the MP3 file is for your own, noncommercial use and you do not distribute copies of it to anyone else.
The ruling, in June 1999, by the U.S. Court of Appeals in the RIAA vs. Diamond Multimedia lawsuit over the Rio portable MP3 player makes it even clearer that Doctrine of Fair Use allows consumers to “space-shift” and “format-shift” music by ripping it to their hard disk and converting it to MP3.
So Robert’s MP3 files are perfectly legal, (although for a different reason than he was told by his lawyers), as long as he purchased (and still possesses) the original CDs. However, he may not sell or give copies away, or use the copies for any commercial purposes.
Case #2: “I’m just giving a copy of the song to a friend; I’m not selling it!”
Justin purchased a CD recording of Grease Monkeys by the Bad Mechanics. His friend Bill also liked the album, so Justin burned a copy of it onto a CDR and gave it to Bill so he can listen to it while he works on his car.
Justin is generous, but he’s committed copyright infringement by violating the Bad Mechanics’ copyright on Grease Monkeys. Since he bought the original CD, he can copy it as many times as he likes for his own use. What he can’t do is give or sell copies of any of the songs from Grease Monkeys to his friend Bill or anyone else.
The First Sale Doctrine of the
1976 U.S. Copyright Act allows someone who purchases a recording to then sell
or otherwise dispose of that recording. But a person who sells or gives away a
recording may not keep, sell or give away any other copies. In other words, if
only one 
copy of a recording was purchased, then only one person should possess it and
any copies made from it.
Case #3: Free downloads of Top-40 songs?
Becky loves to download MP3 files off the Internet. One day, while surfing for new music, Becky found the site EmPeeFree.com, which offered free downloads of Celine Dion’s My Heart Will Go On. Since Becky saw the movie Titanic 10 times, she knew she “had to have” the song. Becky downloaded My Heart, only to find the copyright police knocking on her door the next day. Where did she go wrong?
Becky has unknowingly violated the law by downloading pirated music. Since Becky has no intention of distributing or selling the song, she probably won’t get a visit from the copyright police. But she still has the moral responsibility to avoid copying pirated files in the first place. The site offering pirated copies of My Heart Will Go On is also in violation of the DMCA (and other copyright laws) and is likely to face legal action from the RIAA on behalf of the copyright holders.
The U.S. Copyright Act of 1976 states that song owners have exclusive rights on copying and distributing their music. They may permit copying and distribution but are entitled to royalties for that permission. A more recent law is the Digital Millennium Copyright Act (DMCA), passed in 1998. The DMCA states that without permission from a song’s owner, it is illegal to make copyrighted music available online for distribution.
Typically, songs are covered by two copyrights. The first is for the actual notes and lyrics, or what is referred to as the musical work. Usually, copyrights on musical works are owned by the artist and his or her publicist. The second copyright is for the artist’s interpretation of the musical work and the actual recording, referred to as the sound recording.
Copyrights on sound recordings are typically the property of the record label (e.g., EMI, Warner Brothers). To offer downloads of copyrighted music, a Web site must have licenses for both the musical work (performance licenses) and the sound recording (mechanical licenses).
Currently, much of the online music in MP3 format by major artists is distributed without permission by unlicensed sites that allow unlimited downloading. However, many independent artists, who are not bound by recording contracts, welcome the opportunity to distribute their songs online in hopes of attracting an audience.
Case #4: Is it legal to download any songs for free?
Jim is the ultimate computer geek. He’s spent long hours ripping music from CDs and downloading MP3 files from the net. Recognizing these technological talents, his friend Mike asks him to create a CD using some free promotional MP3 songs he downloaded from BadNoize.com.
Jim’s computer skills are excellent, but he’s musically challenged, and he churns out a CD that can only be described as painful. Still, he feels he’s done Mike a service and charges him for the cost of a blank CD. Mike, upon listening to the CD and hearing songs like Bite My Toenails by the Bunion Peelers, wishes the CD was still blank.
Jim has displayed extremely poor taste, both in his choice of music and in charging Mike for the cost of the CD. Still, he’s broken no laws. Bite My Toenails is essentially shareware, free for anyone to download and distribute in hopes of making The Bunion Peelers a household name.
The Bunion Peelers own all copyrights on their songs—probably because no record company will sign them. But the group has declared their music to be public domain so it can be freely distributed to reach more listeners like Jim and Mike.
Sites offering the Bunion Peelers, or any music downloads, should—but are not required to—post a disclosure of the artist’s permission to distribute. Such a disclosure adds legitimacy to the site and helps consumers make educated decisions about which songs may be downloaded legally.
Many Web sites offer free downloads of promotional music authorized by the copyright holders. But just because an artist offers free downloads of a song, it doesn’t necessarily mean that the music is in the public domain. Music is only in the public domain if the copyright has expired, or if the copyright holder has explicitly declared the music to be public domain.
Case #5: Trading MP3 downloads
The downloads are flying at the Hedon IST (Hedon Institute of Science and Technology). The hottest rage on campus is the competitive MP3 download contest. Students get a point for each MP3 file they download and two points each time a music file is downloaded off their own site.
Students are cutting classes to amass points and, coincidentally, to get some of their favorite music for free. With everyone swapping MP3 files, the students have virtually eliminated the need to buy CDs.
Some of the Hedon IST pre-law students believe that the MP3 download contest is legal since the Audio Home Recording Act of 1992 protects consumers’ rights to copy songs for noncommercial purposes. Since bragging rights are the only prizes involved with their competition, the students have no qualms about trading the MP3 files.
These Hedon IST students have cut too many classes and misinterpreted the Audio Home Recording Act. Now they are music pirates and are violating several copyright laws.
Although they do not directly profit from the MP3 download contest, the contestants are eliminating the need for students at the school to purchase CDs. By copying and trading their music, the students are committing copyright infringement and depriving the artists of their rightful royalties.
The contestants are also violating the No Electronic Theft Act, which was an amendment to U.S. Copyright Law (Title 17 of the U.S. Code). The NET Act redefines the term “financial gain” to include the receipt of anything of value, including the receipt of other copyrighted works. In other words, the copyrighted songs traded during swap meets have commercial value. Students obtaining free copies of these copyrighted works are realizing a financial gain, and therefore are in violation of the NET Act.
The NET Act also sets penalties for willfully infringing a copyright: (1) for
purposes of commercial advantage or private financial gain; or (2) by
reproducing or distributing, including by electronic means, during any 180-day
period, one or more copies of one or more copyrighted works with a total
retail value of more than $1,000.
The Hedon IST students are also violating the Doctrine of Fair Use. By offering free song downloads and eliminating the need for fellow students to purchase CDs or MP3 files, their contest is affecting the market potential of the music.
Case #6: Downloadable music and Webcasting
Allison wants to distribute music online. She started her own Web site and makes over 100 new music downloads available to visitors each month. Allison only distributes music by independent musicians and doesn’t charge anything for downloads.
U.S. Copyright Law allows for distribution of copyrighted music—but only with the song owner’s permission. The Digital Millennium Copyright Act, states that without permission from the copyright owner, it is illegal to make music available online for unlimited distribution.
To distribute most popular music, Allison would have to contact each copyright holder individually for licensing rights. Instead, she’s chosen to offer only free downloads of fringe artists, like the Bunion Peelers, who encourage open distribution and don’t require payment.
Some sites, like EMusic.com, have the exclusive rights to sell the recordings offered on its Web site, so Allison could not offer any of these recordings without contacting EMusic. However, EMusic would welcome Allison’s linking to the EMusic.com Web site and will pay Allison a percentage of sales that result from customers using her link to the site.
What if Allison the webcaster wants to stream her favorite songs instead of offering them as downloads?
Webcasting (streaming audio) is used by Internet radio sites to transmit music and other types of audio over the Internet. Hundreds of Internet radio sites offer listeners a taste of every type of music available.
According to the Digital Performance Rights in Sound Recording Act of 1995, music copyright owners may authorize and be compensated for the digital transmission and distribution of their copyrighted work. Some artists and labels may be more flexible than others when it comes to allowing downloads and streaming of their music.
Like professional disc jockeys, Internet radio broadcasters must have permission to duplicate or transmit sound recordings. This requirement is mandated by the 1976 Copyright Act. Luckily, for webcasters and music fans alike, the Digital Millennium Copyright Act allows webcasters to obtain a statutory license for Internet broadcasts.
A statutory license is one provided by law instead of by individual copyright owners. With a statutory license, webcasters can stream all the music they want without acquiring separate licenses for each song. However, even with a statutory license, webcasters must still pay royalties on the songs they broadcast.
If Allison wants to become a licensed broadcaster and feels she can meet the criteria for a statutory license, she should contact the U.S. Copyright Office at the following address to request a statutory license:
Library of Congress, Copyright Office
Licensing Division
101 Independence Avenue, S.E.
Washington, D.C. 20557-6400
If Allison does not meet the criteria required for a statutory license, she must obtain licenses from each copyright owner for any sound recordings she wants to broadcast. Currently, there’s no organization that grants blanket licenses to webcasters who do not qualify for a statutory license. Therefore, Allison will have to contact each copyright owner individually or risk infringement liability.
Below is a list of the criteria webcasters must meet to qualify for a statutory license.
Case #7: Professional DJ using MP3 files instead of CDs
DJ Dan is one of the most popular DJs in New York City. He’s spent years building his business and his music collection and now owns over 1,000 CDs. Unfortunately, Dan has developed disc problems in his back and is restricted from heavy lifting. He’s read about ripping CDs and plans to convert the best hits of his CD collection to MP3 files. With his collection in MP3 format, Dan can easily tote his most popular songs on a lightweight laptop computer. Dan’s doctor will be happy, but what about his lawyer?
DJ Dan knows about the Audio Home Recording Act of 1992 and believes that since he purchased his CDs, there’s no problem with copying them into MP3 format. However, as stated in Cases #1 and #2, the AHRA only applies to copies made with certain types of recording equipment, and not to copies made with a computer. Some people believe that Dan would be covered under the Doctrine of Fair Use because he owns the CDs and is not distributing copies to anyone else.
If DJ Dan goes a step further and burns the MP3 files on to a CD-R, he may run afoul of the RIAA for not obtaining a mechanical license, even if the CDs are for his own use. But this may also be considered fair use. The RIAA has not gone after individuals like Dan in the past, so we may never find the answer to this, unless some Dan or some other DJ gets caught using MP3s burned on to CD-Rs and is sued for infringement.
Case #8: Professional DJ playing at a local catering hall
DJ Dan is celebrating because he just signed a five-month contract with a local catering hall. The facility hosts “all-you-can-eat” shrimp feasts through the spring and summer and wants Dan to provide entertainment. Dan is thrilled with the contract but isn’t sure whether he or the catering hall has the responsibility to obtain licensing for the music he plays. What are the responsibilities of the DJ and the catering hall?
Any time DJ Dan plays a song while in the catering hall, he is giving a public “performance” of that song. U.S. Copyright Law restricts the use of copyrighted music in public performances to individuals or businesses with proper licenses. The catering hall is responsible for obtaining permission to “broadcast” songs within their establishment.
Either the owner or DJ Dan must obtain permission for every song he plays. They could either contact each song artist and publisher individually or obtain blanket music performance agreements from the performance rights societies that collect royalties for owners of music copyrights.
The three performance rights societies in the United States are:
· ASCAP (American Society of Composers, Authors and Publishers) www.ascap.com
· BMI (Broadcast Music, Inc.) www.bmi.com
· SESAC, Inc. www.sesac.com
These organizations provide licensing rights for recording artists and publishers that own copyrights on songs. Portions of the fees collected from DJs and businesses go to artists and publishers in the form of royalties. Another site to visit for related information is the NMPA (National Music Publishers’ Association, Inc.) & Harry Fox Agency site at www.nmpa.org.
Case #9: Amateur DJ playing music at a friend’s party
Greg Brady has the most sought-after collection of TV theme songs and 70’s hits in town. He’s spent years collecting compilation CDs and browsing the racks at the local record store for vintage classics. Recently, he’s added to his 70’s collection by downloading tunes over the Internet. Greg’s friend Jan is hosting a 70’s revival party and wants him to provide music for the party.
Greg has acted as “DJ” at a few other parties in the past, so he’s comfortable with introducing the songs, taking requests and hosting music trivia contests. He dusts off his canary-yellow leisure suit and platform shoes, grabs his music collection and his Mr. Microphone, and heads for the party. Does Greg have to worry about copyright laws since he’s only playing music at a friend’s free, private party?
Greg may be the “official” DJ for the party, but since he's not giving a public “performance,” he is not violating any copyright laws. If he wants to be safe, he could obtain blanket music performance agreements from each of the performance rights societies that represent the copyright holders of the music he plays, but these agreements are only necessary for public performances, and in many cases the establishment already has them in place.
Case #10: Restaurant playing music from its own stereo system
George owns a Mexican restaurant/bar called WindBreakers Burrito Bar. His place isn’t big enough for a band, but he keeps the place hopping with his own CD collection and stereo system. Every Saturday night, WindBreakers is packed for a late-night disco dance party. What licensing precautions should George take to ensure that the music keeps playing at Windbreakers?
Like the catering hall and DJ mentioned in Cases #8 and #9, George needs a Music Performance Agreement to broadcast music in his place of business. The Digital Performance Rights in Sound Recording Act of 1995 allows for business owners to broadcast copyrighted music in, or in the immediate vicinity of, their place of business. This permission, however, must be granted by the copyright owners or agents. Blanket Music Performance Agreements from performance rights societies are the easiest way to obtain that permission.
U.S. Copyright Laws
These ten cases are only a few examples of people copying or broadcasting music owned by other people. If you plan to play copyrighted music in public, broadcast it or make copies in any format, keep the following laws in mind:
U.S. Copyright Act, Title 17
The Copyright Act states that song owners have exclusive rights on copying and distributing their music. They may permit copying and distribution but are entitled to royalties for that permission. This law limits public performance and broadcasting of copyrighted music by consumers, professional DJs and businesses.
First Sale Doctrine
The First Sale Doctrine is a portion of the U.S. Copyright Act: Anyone who purchases a recording may then sell or otherwise dispose of that recording. However, the seller may not keep, sell or give away any other copies. In other words, if only one copy of a recording was purchased, then only one person should possess the original and any copies.
Audio Home Recording Act
The
Audio Home Recording Act of 1992 allows consumers to record music for private,
noncommercial use. If you’re making money by playing or distributing
copyrighted music, you must have permission, in the form of licensing, from
the owner or owner’s agent.
No Electronic Theft Act
The No Electronic Theft Act of 1997 amends the U.S. Copyright Act to define “financial gain” to include the receipt of anything of value, including the receipt of other copyrighted works.
Digital Millennium Copyright Act
The Digital Millennium Copyright Act of 1998 states that without permission from a song’s owner, it is illegal to make copyrighted music available online for unlimited distribution. This law also puts specific limitations on the length of public broadcasts, the types of song and artist announcements and the frequency and sequence of songs played.
Digital Performance Rights in Sound Recording Act
The Digital Performance Rights in Sound Recording Act of 1995 provides copyright owners of sound recordings the exclusive right (with some limitations) to perform the recording publicly by means of a digital audio transmission. This is a departure from previous copyright laws, in which the owner of the musical work had exclusive public performance rights. This act also extends the provision for compulsory mechanical licenses to include downloadable music.
Doctrine of Fair Use
The Doctrine of Fair Use, embodied in section 107 of the Copyright Act, allows copies to be made without permission of the copyright holder under limited circumstances. Reproduction of copies for purposes such as criticism, news reporting, teaching and research is generally not considered infringement. Factors that must be considered in determining if a situation qualifies as fair use include the nature of the copyrighted work, the purpose and character of the use, the portion used in relation to the work as a whole, and the effect of the use on the market potential of the work.
