INTRODUCTION
When it comes to music industry “Music Licensing” is something which has a vast utility. The use of music license agreement begins in situations where music is send to a music distributor to make it available in all the stores, when the owner of music wants to add collaborators in it, or while signing a music deal in the film industry to sync it in a film. In simple words, music license agreement is a kind of agreement which takes place between the licensor and Licensee to use such music.[1] This process is regulated by Copyright Act of 1967.
In this article, Team YLCC gives you an overview on a Music License Agreement. Read on!
WHAT IS THE NEED OF MUSIC LICENSE AGREEMENT?
Over the time music industry has gained a major popularity in the sector of entertainment, with this agreement the creator can use it to enhance the work, gain popularity and even earn money. It gives the ownership rights to the creator of its work and reduce the chance of getting it copied, stolen or repeated by someone else. According to section 63 A of the Copyright Act in case any person or entity who infringes on copyrights or other rights and is repetitive in breaking the law is held liable for the following penalties: A term of imprisonment of at least one year and extendable up to three years, A fine of not less than One Lakh Rupees and up to Two Lakh Rupees can be imposed.
HOW DOES THIS AGREEMENT WORK?
Copyright protects the owner from unauthorized use of his work to third party without his permission. A copyright in music work is valid for sixty years from the date of publication or for the author’s lifetime, plus sixty years after his death. With the help of music license agreement, the owner or the creator of its music work can enter into an agreement for the use of such composition in exchange of money, which is done through royalty. Royalty is a recurring payment made by the asset’s user to the asset’s owner or creator in exchange for its use.The amount of royalty is decided based on various circumstances such as creators popularity, available alternatives, competitiveness and so on. For a creator to do all the formalities individually it may be time consuming, so they register with “copyright societies,” which grant licenses to third parties on a collective basis, and pay the artists.
Copyright societies is mentioned under Section 33 of Copyright act 1957, The license can be issued by the Copyright Society for any copyrighted work, moreover after deducting their own share the collected fees by them can be distributed among the authors. Copyright Society’s registration can be revoked by the central government.
TYPES OF COPYRIGHT THAT PROTECT MUSIC
A song consist of two components : the music composition that is created by the composers which consist of lyrics and music notes and the music recording which is done by artist. There are situations where artist and composer can be one person only and therefor there are two types of copyright that protects recorded music:-
- Master Rights or music recording
- Publishing Rights or music composition
MASTER RIGHTS
It is a right that protects from recording of a music without permission. Such permission is also known as master lease or master rights. Before advanced technologies came into existence music was recorded in physical form such as CD’s, Tape, Cassettes etc, during that time it was referred to as “Master Recording”. So, even after the introduction of digital world the word master is still being used. To take such rights royalty is paid to the master i.e the owner of such work. Therefore, a master license agreement is needed when someone wants to use the recording of the creator.[2]
PUBLISHING RIGHTS
It is a right that is not recognized in law but is a general practice done in the music industry. Publishing right protect the music compositions and lyrics. It consist of a split between a “writer’s share” and a “publisher’s share”.[3] There are several other agreements made with respect to publishing rights such as the Co-publishing agreements in which the author holds copyright ownership while the publisher authorizes the rights, The administration agreements under which the writer retains copyright ownership while the publisher authorizes the rights and co-administration agreements under which the writer retains copyright ownership while co-administering the rights with the publisher.[4]
CHECKLIST AND ESSENTIALS OF MUSIC LICENSE AGREEMENT
Grant of license
Grant of license consist of the nature of such agreement and the license granted to the licensee. A well drafted agreement clarifies the extensivity of such agreement and prevents the further licensing of work. Certain limitation or terms and conditions can be laid to prevent from licensing of work in different platforms as well as the geographical limit within which the license can be deemed to be effective.
PAYMENT AND ROYALTY
The licensee is obligated to pay a certain sum of money either on lump sum or royalty basis to the licensor. The time period within which such payment has to be initiated also needs to be mentioned.
RIGHTS AND OBLIGATIONS
Under this clause the ownership rights with regards to promotional activities are covered and the rights which are not granted to the licensee can be also get reserved.
INDEMNIFICATION
In an indemnity claim, the “Indemnifier” promises to protect another party “Indemnity Holder” from any loss, damage or other legal consequences resulting from the Indemnifier’s or any third party’s or event’s act or omission. Thus here, it indemnifies the licensor against all damages and expenses incurred due to the licensee’s use of such musical work.
TERMINATION
The termination clause mentions the date of the start and the end of such agreement.
EFFECT OF TERMINATION
Certain conditions with respect to termination of agreement and the clauses that can still termed to effective are mentioned.
DISPUTE RESOLUTION
This clause covers the referring of any dispute that may arise with respect to this agreement to court in accordance with applicable law, in accordance with applicable national or international Acts and regulations. The dispute mechanism mode in case of arbitration must provide on details such as the location, the method as well as the other necessary information.
MISCELLANEOUS
Several other clauses such as Entire Agreement, Amendment, Severability, Confidentiality, Section Headings, Waiver of contractual rights, Applicable laws must also be added to make it a well drafted agreement.[5]
CONCLUSION
The basic idea to make a music license agreement is to make the work remunerated and copyrighted for the benefit of the creator. The first thing that has to be decided while framing a music license agreement is to identify the type of copyright governing it then frame all the relevant clauses that can clarify the ownership, royalty, requisite permission, payment and the time period. A well drafted agreement will keep in mind the competitiveness of the market, which may open several opportunities for the creator.
[1]Shubham Borkar & Vaishvi Khare, Online music licensing in India (Plus) and how is this a revolutionary change?, MONDAQ (May 01, 2019) https://www.mondaq.com/india/music-and-the-arts/802398/online-music-licensing-in-india-plus-and-how-is-this-a-revolutionary-change.
[2] Music license agreements: don’t fear them, it’s time to be aware of them, VAMPR (June 1, 2021), https://www.vampr.me/music-license-agreements/.
[3]What Are Music Publishing Rights?, ALTER KENDRICK BARON, https://akbllp.com/introduction-and-copyright-overview/what-are-music-publishing-rights/#:~:text=The%20broad%20bundle%20of%20rights,based%20in%20practice%2C%20not%20law.
[4]Music license agreements: don’t fear them, it’s time to be aware of them, VAMPR (June 1, 2021), https://www.vampr.me/music-license-agreements/.
[5] Suprateek Neogi, Everything you need to know about music license agreement, IPLEADERS (Feb. 22, 2017), https://blog.ipleaders.in/music-license-agreement/.
YLCC would like to thank Anam Khan for her valuable contribution in this article.
