BY:Neil J. Rosini
In late October, President Clinton approved two important amendments to the United States Copyright Act: The Sonny Bono Copyright Term Extension Act (which extends the term of U.S. copyright by twenty years) and the Fairness in Music Licensing Act of 1998 (which exempts small business establishments from paying public performance royalties). Summaries of each follow below. (Bear in mind that the actual legislation is detailed and lengthy, and these summaries are not intended as a substitute. The original texts should be consulted in all instances.)
The Sonny Bono Copyright Term Extension Act
The principal effect of the Act is to extend the duration of copyright by 20 years for works protected by copyright as of October 27, 1998, the date of enactment.
For works created on or after January 1, 1978, copyright now endures for a term consisting of the life of the author plus seventy years after the author’s death, instead of fifty as previously provided. In the case of joint works, copyright endures for a term consisting of the life of the last surviving author plus seventy years after his or her death. And in the case of anonymous works, pseudonymous works, and works made for hire, copyright now endures for a period of 95 years from the date of first publication or a term of 120 years from the date of the work’s creation, whichever expires first.
Works created and not published or copyrighted before January 1, 1978 are generally treated (as they were treated before) as if created after January 1, 1978 for purposes of determining the term of copyright. The new Act, however, extends the minimum term of copyright by 20 years for any such works published on or before December 31, 2002; the term of such works will now endure at least until December 31, 2047 instead of 2027, as previously provided.
For works published or copyrighted before January 1, 1978, those still in their first 28-year term of copyright now have renewal terms of 67 years instead of 47 years; and copyrights in their renewal terms as of October 27, 1998 shall enjoy copyright terms of 95 years from the date copyright was originally secured.
As before, in the case of any copyright (other than works for hire) subsisting in either its first or renewal term on January 1, 1978, authors of works and certain statutory successors (including an author’s widow or widower, children, grandchildren and others, under varying circumstances) have a right to terminate the exclusive or nonexclusive grant of a transfer or license of the renewal copyright (other than by will), or any right under it, executed by the author or the statutory successors prior to January 1, 1978, and recover the balance of the renewal term. Since 1978, these parties have had the right to terminate these grants effective during a five-year window beginning at the end of the 56th year of the copyright. That right continues. If that right expired before October 27, 1998, however, without being exercised, the author or the author’s successors now have an opportunity to recover the new 20-year extension period by effecting termination during a time window of five years beginning at the end of 75 years from the date copyright was originally secured.
The list of such statutory successors, moreover, has been expanded under both termination scenarios. Now, if the author and the author’s widow or widower, children and grandchildren are not living, the author’s executor, administrator, personal representative or a trustee shall own the author’s entire termination interest.
For all works, whether created before or after January 1, 1978 (other than works for hire), the exclusive or nonexclusive grant of a transfer or license of copyright (other than by will), or any right under it, executed by the author on or after January 1, 1978, may be terminated by the author or the same statutory successors as above. The time window for terminating such transfers and licenses is still the five year period beginning at the end of 35 years from the date of execution of the grant or, for a grant covering the right of publication, at the end of 35 years from the date of publication or the end of 40 years from the date of execution of the grant, whichever is earlier.
During the last twenty years of any term of copyright, a library or archives, including nonprofit educational institutions that function as such, may create and make use of facsimile or digital copies or phonorecords for purposes of preservation, scholarship or research, provided the work is no longer subject to normal commercial exploitation a copy cannot be obtained at a “reasonable price,” and the copyright owner has not given notice that either of these conditions is not met.
The new law also includes an unusual provision relating to audiovisual works for which the term of copyright has been extended. It expresses “the sense of the Congress” that screenwriters, directors and performers who helped create audiovisual works should negotiate in good faith with copyright owners to reach a voluntary agreement with respect to the establishment of a fund or other mechanism for the amount of remuneration to be divided among the parties for the exploitation of those works. No mechanism is provided should the parties fail to reach a voluntary agreement.
The Fairness in Music Licensing Act of 1998
The principal effect of this Act, which takes effect January 25, 1999, is to exempt certain small business establishments from the need to obtain public performance licenses respecting nondramatic musical works.
It has long been the case that playing the radio or a television receiver in a commercial establishment did not require a public performance license provided there was a “single receiving apparatus” of the sort commonly found in private homes, assuming no direct charge was made to see or hear the transmission and the transmission was not further transmitted to the public.
The new law extends this exemption in the case of (a) restaurants or bars of less than 3,750 gross square feet of space (excluding parking space), and (b) most other retail shops of less than 2,000 gross square feet of space (excluding parking space) without regard to the type of “receiving apparatus” they use. The exemption also extends to a third category — larger restaurants, bars and retail shops – if the audio is communicated by no more than six loudspeakers with no more than four in a single room; and in the case of audiovisual works, the visual portion is shown on no more than four devices with no more than one in a room, each with a screen no greater than fifty-five inches diagonally measured. All three categories of establishments may perform nondramatic musical works intended to be received by the general public originated by a radio or television broadcast station and, in the case of audiovisual works, by a cable system or satellite carrier as well, without paying public performance royalties.
Despite these new exemptions, performing rights societies did not go home empty handed. In all instances, essentially as before, the exemption is lost if the establishment makes a direct charge to see or hear the transmission in question or the transmission is further transmitted beyond the establishment where it is received. And in any case where the court finds that a proprietor of an establishment who claims an exemption does not have reasonable grounds to believe that such an exemption exists, the plaintiff will be entitled to an additional award of double the amount of the license fee that the proprietor should have paid for such use during the preceding three years.
The Act also gives individual “proprietors” who own or operate fewer than seven non-publicly traded establishments in which nondramatic musical works are performed publicly, a means of challenging fees charged by performing rights societies that are thought to be unreasonable. The definition of “proprietor,” however, excludes operators of radio and TV stations, cable systems, satellite carriers, providers of online services or network access, telecommunications companies, and other audio or audiovisual services and programmers, commercial subscription music services and owners or operators of other transmission services.