European Union: EU Extension Of Copyright Term For Sound Recordings

"That's All Right"?

Many classic sound recordings from the '50s are now in the public domain in Europe. Take Elvis' seminal single, "That's All Right" – widely credited as the birth of rock 'n' roll – which entered the public domain in 2005.

That is all right by some, but not by the record industry – labels and artists alike. As EU law stands, evergreen hits of the early '60s (such as the Beatles catalogue) will soon lose copyright protection. The copyright term for sound recordings lasts only 50 years in EU member states, compared with 95 years in the US.

"Bridge Over Troubled Water"

This could all change, however, with a proposed extension of the copyright term for sound recordings from 50 years to 70 years. This was approved by the European Parliament on 23 April 2009.

The 70-year period would run from the date of first release (if the release occurs within 50 years of the date of recording). The extension would equally apply to performers' rights in their performances embodied in the recording, enabling them to continue to receive income from the performers' collecting societies.

While this falls short of the 95 years originally proposed by the European Commission (and leaves European labels at a competitive disadvantage when compared with US labels), it may prove to be an acceptable compromise for EU member states, which have so far largely resisted any extension.

If the extension becomes law, it would have prospective and retrospective effect. For existing copyrights, however, it would only apply to sound recordings that are less than 50 years old as at the new law's date of force at national level – i.e. no copyrights would be "revived" under the proposed legislation. Nonetheless, the new lease of life for those masters that are then still in copyright will be welcome to the labels, artists and industry organisations that have lobbied so hard over the past few years to achieve this result.

"Your Time Hasn't Come Yet, Baby"

But the extension has yet to become law, and may fail at the next hurdle.

The European Parliament voted in favour of amending the Copyright Term Directive (2006/116/EC) to give effect to the extension, but the European Commission's draft amending Directive (as amended during debate by the European Parliament) still needs to be considered by the EU Council of Ministers. The Council consists of ministers from each EU member state. There is a complex weighted voting system, but the new law would need to be passed by at least a 73.9% majority – and several states opposed the previously proposed extension to 95 years.

If the Council does approve all of the amendments made by the European Parliament, the amending Directive will be adopted. It is currently proposed that each EU member state will then have two years to implement the new legislation into national law. The implementation process is not likely to be quick: although it may be possible (as in the UK) for a government department to draw up secondary legislation to amend the relevant primary legislation without taking up much parliamentary time, interested parties are likely to be consulted first on the details of the draft amending legislation.

If, however, the European Parliament's amendments are rejected by the Council, there could be a long wait for the situation to be resolved as the legislation goes through a complex and lengthy parliamentary procedure. This could involve further debate and a number of readings by the European Parliament and the Council, in addition to consideration of any further proposals made by the European Commission. If no agreement can be reached, a Conciliation Committee will be appointed to consider whether the amending Directive should be adopted.

Even if the amending Directive is adopted, it contains three proposals that will not be so welcome to record companies:

• "It's Now Or Never" – The European Parliament has approved a "use it or lose it" provision. During the extension period an artist will have the right to terminate the artist's recording contract if, within one year of receiving notice of the artist's intention to terminate, the record company fails to release the recording (by both physical and digital distribution). Artists cannot waive this right of termination. Upon termination, the record company's rights in the sound recording will expire and fall into the public domain. Artists' rights in their performances will, however, continue for the extension period, allowing the artist to regain control of the performances and to release the performances themselves.

• "Spinout" – A dedicated fund will be set up for annual payouts to non-featured session musicians (i.e. those originally paid on a one-off, buy-out basis) and administered by the collecting societies that represent the interests of labels and performers (e.g. PPL in the UK or GVL in Germany). Record companies will have to contribute to the fund by setting aside, at least once a year, at least 20% of their gross revenues generated during the extension period from the exploitation of records (but excluding the labels' revenues deriving from equitable remuneration for communication to the public and rental rights or from fair compensation for private copying). Session musicians cannot waive this right to additional remuneration. Each member state may, in implementing the law at national level, exempt "micro enterprises" from contributions where it would not be cost-effective to collect and administer such revenues.

• "Playing For Keeps" – There will be a "clean slate" in the extension period: record companies will not be able to recoup unrecouped balances under existing contracts with artists from royalties arising during the extension period. In the case of royalty-based record contracts concluded before the proposed extension comes into force at national level, member states have the discretion (but are not obliged) to provide artists with a statutory right to renegotiate those contracts. Such right would be exercisable 50 years after first release of the recording.

"Unchained Melody"

There is another proposed amendment that will (if enacted) be welcome to composers of songs. Musical compositions and lyrics are currently treated as separate copyrights in certain EU member states – with separate terms of protection. It is now proposed that the term of protection of a musical composition with accompanying lyrics will expire 70 years after the death of the last to survive of (a) the composer of the composition and (b) the author of the lyrics (whether or not they are designated as co-authors), but only if both contributions were specifically created for the song in question.

The new period of protection would have prospective and retrospective effect. For existing musical compositions, however, it would only apply in the case of songs for which either the composition or the lyrics are still protected as at the new law's date of entry into force at national level. The copyright for a piece of music that has fallen into the public domain would therefore be "revived" if the lyrics (written for that piece of music) are still protected by copyright at that date (and vice versa).

"Suspicious Minds"

To become law, the amending Directive will require continuing political support. But there are influential critics of an extension of the copyright term for sound recordings. These have contended, for example, that an extension (even to 70 years) would benefit only the industry and the top 20% of performers, have a negative impact on consumers and even lead to reduced investment in new music. This lobby has its advocates at the highest level: in the UK, for instance, the 2006 Government-commissioned Gowers Review on Intellectual Property found no economic case to support an extension.

"It's A Matter Of Time"?

That said, the European Parliament's approval of the extension is, at least for now, a boost to the record industry at a time when it is facing many other significant challenges.

There are signs that the 70-year compromise may win over sceptical member states. For instance, the UK Government has recently indicated support for an extension to 70 years (having previously rejected an extension to 95 years).

It may then yet be true – at least for the later hits – that Elvis lives.

Article written for Entertainment Law Review.

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