The long and winding road to extend copyright protection in Europe for sound recordings finally came to an end in September, as the European Council voted in favour of extending the protected term from 50 to 70 years.

The change in the law, the result of a 10 year campaign by musicians, producers and record companies, has been welcomed by many in the industry and will bring a sigh of relief to those record companies who own recordings which are close to falling out of copyright and into the public domain, and those artists and producers who performed and worked on those recordings and who rely on the royalty income stream therefrom.

The decision has come just in time for a number of household names from the sixties - from The Beatles to Abba, The Rolling Stones, Shirley Bassey and Cliff Richard (who has already had a number of his earlier hits go out of copyright) - as some of their biggest songs have been rapidly approaching the 50 year threshold.

What Does it Mean?

• Previously sound recordings were protected from being exploited by certain means without the copyright owner's permission for 50 years from the end of the calendar year in which they were created or released to the public (whichever was later). In a nutshell, this term is now 70 years.
• The copyright owner would generally be the record company that paid for the recordings to be made (or their successors). However, the EU has introduced a 'use-it or lose-it' provision - if a record company does not market a recording despite a performer's request, the performer will get their rights back and can then market the recording themselves.
• A mandatory 20% fund, to be shared amongst session musicians but paid for by the copyright owners, has been established - this means that musicians who sold their rights for a one-off flat fee obtain their share of the payments from the additional 20 year term.
• A 'clean-slate' provision will be introduced, preventing copyright owners from deducting any further development costs from the royalties collected during the additional 20 year term. This draws a line under the recoupment of advances by record companies and means the practice of withholding royalty payments for this purpose will not continue into the new, additional term.

Why was the Extension Necessary?

During the period in which a sound recording is copyright protected, the copyright owner and the artists performing and producers working on the tracks were entitled to certain remuneration for use of such recordings. Many people struggle to understand why wildly successful acts such as The Beatles or The Rolling Stones need protecting in this way. The reality, however, is that whilst the superstars will benefit from the change, it was really aimed at helping the numerous musicians in the industry who are not millionaires. The EU estimated that if the change had not been made then some 7,000 performers in the UK alone would lose all of their airplay royalties over the next ten years . The performers we are talking about are well into retirement and so the loss of this income stream, often a substantial part of their monthly pensions, would have been dramatic and very difficult to cope with. As life expectancies increase, it was felt a change needed to be made.

Furthermore, the extension brings the protected term for sound recordings more in-line with international jurisdictions and, indeed, with other types of copyright within the EU. For example, the literary copyright in the lyrics and music of a song lasts for the life of the author plus 70 years and sound recordings in the US are protected for 95 years (though the US is not without it's own headaches in this area - see below).

The EU has also taken the chance to harmonise the provisions relating to co-authors of compositions. Previously, EU states had varying rules between them and, given the large volume of co-authored work, this was becoming problematic. The EU has formally established that the copyright in a composition (as opposed to a sound recording) will expire 70 years after the death of the last surviving co-author, regardless of the extent of that co-author's contribution to the composition.

The Future?

Unfortunately, though the above changes are binding on all EU Member States, the wait is not completely over. A 2 year implementation period has been granted to give national parliaments time to reflect upon and pass the necessary domestic legislation. This is potentially problematic - the EU has a chequered history when it comes to implementation timetables, and in this case there is not even a definite 'achieve-by' date specified. Consequently, there is a real possibility that by September 2013 the EU will be a patchwork of nations offering different term protections. In the meantime, as each day passes even more songs slip into the public domain. The music industry, therefore, needs to be proactive in pressuring governments to give them their hard-won protections.

The American Perspective

Just as the EU looks to have solved its main copyright debate, another problem is cropping up across the pond. Whilst the US protects the copyright in sound recordings for 95 years, a 'time bomb' is quickly approaching that would allow authors (or their heirs) to terminate copyright grants, or at least renegotiate them on more favourable terms. Previous attempts to circumvent the problem - there was an ill-fated amendment attempt in 1999 - have failed and crunch time is approaching fast. Copyrights bought in 1978, for example, will be terminable by artists from 2013 and those bought pre-1955 can already be terminated.

These valuable termination rights were introduced to give creators suffering under the burden of a badly negotiated deal a 'get-out' clause, with the justification being that at the start of their careers, creators desperate for a platform for their work would agree to any deal offered. After suffering the consequences of this for 30 years the US government felt these artists should be given the power back, and have the chance to renegotiate accordingly. It should also be noted that when these post-1978 copyrights were bought purchasers were fully aware that they were only buying a guaranteed 30 year period (there is a different, longer rule for copyrights purchased pre-1978).

Whatever the reasoning behind it, the 30 year rule is about to bite. It applies to all types of copyright - though work 'made for hire' is specifically excluded - and it is likely to erupt into a very public conflict as 2013 draws closer. To date, the music industry seems unsure how the record labels will combat the provision, or indeed if they can. With the New York Times reporting that acts such as The Eagles, Bruce Springsteen and Billy Joel are already putting the termination paperwork in place, time is running out. Look out for more on this in due course.

13 October 2011