The Journal of The DuPage County Bar Association

Back Issues > Vol. 21 (2008-09)

Current Legal Trends and Issues for Illinois Musicians
By Jay B. Ross

One of the most important rights a musician has is the right of publicity, protected in Illinois by the Right of Publicity Act.1 This law currently provides that a person has the right to exploit their own publicity until death, when the right is passed on to their heirs for a period of fifty years.2 The only exceptions are for First Amendment usage (news stories, public affairs, political campaigns), non-commercial uses, or identifying the person as the creator of the music or live performance.   To prove a claim for violation of the right of publicity, the person must prove: 1) an appropriation of his name and/or likeness; 2) without consent; and 3) for the commercial benefit of another.3  Obviously, for the struggling musician, the right of publicity can be a double-edged sword.  A musician does not want someone using his name or likeness for that someone’s commercial gain, but the musician obtains financial success when his name reaches the public.   The value to the musician comes from the financial benefit he receives though, not the benefit to a third party. 

Currently, there is a pending class-action suit against a major supplier of celebrity photos. This company believes it has the right to issue photo copies of various celebrities without paying the celebrity, or their estates. They do, however, manage to pay the photographers, commonly known as the “feared” paparazzi. The photographs become available for the public for various uses, for a fee to the company. The first attempt to limit the damages was to encourage the company to at least insert a disclaimer for their purchasers to seek a right of publicity release from these celebrities or their estates. If the company can manage to pay the fortuitous photographers, such companies should pay the celebrity, relative to their usage of these photos. To permit otherwise allows the company to obtain a financial benefit by exploiting the celebrities’ rights to their own publicity and promotion. The company argues that most of their photographs have been picked up by newspapers that have a First Amendment privilege. This First Amendment privilege does not transfer to the selling company because they will sell the photographs to whomever for whatever.4  The trouble for the musician or other celebrity is the additional requirement that they must also prove damages, either actual damages from the unauthorized use, or gross revenue or profits attributable to the unauthorized use.5  If a person spends a lifetime to create a persona that helps the general public receive enjoyment from that persona, why should they not benefit from it? Sadly, those damages can be hard to prove, resulting in the statutory minimum damages of $1,000.00.6

With iTunes, Rhapsody, and other digital downloading companies, as well as the growth of satellite and internet radio, the music business will never be the same. Sadly, our copyright laws still lag behind these technological advances.   Fortunately, Congress, with the passage of the Copyright Royalty and Distribution Reform Act of 2004, has made some advances in bringing the law up-to-date with the technology  Replacing the outdated Copyright Arbitration Royalty Panel, the Act provides for 3 full-time Copyright Royalty Judges (CRJs), each appointed for a six-year  term by the Librarian of Congress in consultation with the Register of Copyrights.  Among the duties expressly conferred upon the CRJs is the authority:

• to make determinations concerning reasonable terms and royalty rates for
• specified statutory licenses according to delineated standards;
• to authorize distribution of specified royalty fees and adhere to specified
• procedures where appropriate distribution is in controversy;
• to accept or reject royalty claims and rate adjustment petitions;
• to arbitrate disputes over whether manufacturers, importers, and
• distributors are required to pay royalties under the Audio Home Recording Act, 17 U.S.C. § § 1001- 1010;
• to incorporate, or, where appropriate, decline to incorporate negotiated
• agreements as the basis for statutory terms and rates and distribution of
• royalty payments; and
• to make necessary procedural and evidentiary rulings.7

Recently, the question of mechanical royalty rates (rates paid to songwriters and music publishers) for CDs, physical recordings, and digital downloads came before the 3-member Copyright Royalty Judge panel (“CRJ”).  On October 2, 2008, the CRJ decided to maintain the rate for physical recordings at 9.1 cents for each track, payable to the songwriter or publisher. The CRJ also set the same rate for permanent digital downloads.  The panel also set for the first time a mechanical royalty rate for master tones, ring tones made from a snippet of music from a full recording. That rate is 24 cents. Until now, copyright holders had negotiated royalty payments with users. The new rates will be in effect through 2012.  This was a much-argued issue, as music publishers wanted a 66% percent increase to compensate for the changing nature of music distribution, while labels and retailers sought a royalty rate based upon a percentage of wholesale revenue.  This may be a benefit to the major entities in the music industry, but somehow the artists are left in the dust.

With respect to interactive streaming services and limited download services, the Digital Media Association, the National Music Publishers Association (NMPA), the Recording Industry Association of America (RIAA), Nashville Songwriters Association International, and the Songwriters Guild of America reached an agreement on royalty payments, which was also submitted to the CRJ. Under the agreement, limited download and interactive streaming services will pay a mechanical royalty of 10.5% of their revenue, less any amounts owed for performance royalties (through ASCAP, BMI, etc.) In certain instances, royalty-free promotional streaming is allowed, subject to the goal of encouraging payment for the full music.  Because of the involvement of songwriter groups, this agreement appears to have the interests of musicians at heart as well.

Another interesting area for musicians to be aware of is the right to terminate the copyright in sound recordings held by recording companies and reclaim ownership of these sound recordings.  As the Copyright Act came into effect in 1978, the original artist or his heirs could exercise the termination organization.  Unfortunately, appropriations for these programs have not yet been made as of the date of this article and may be delayed until October 2009 because of the elections and related changes in our government. 

However, in the new HEA provisions termed the Harkin provisions (named for the original sponsor of the bill, Senator Tom Harkin), loan repayment assistance is authorized for those full-time attorneys employed by eligible employers.  Eligible employers are nonprofit organizations that provide free legal assistance to low income individuals in civil matters and protection and advocacy.  The loan assistance is limited to $6,000 a year with a lifetime maximum of $40,000. If a loan recipient works up to three years for an eligible employer, the first year’s loan is forgiven. The obligation for service on the remaining one year loans, if any are taken, will be made clear through subsequent regulations.

The HEA John R. Justice Prosecutors and Defenders Incentive Act of 2008 allows for loan repayment assistance for state and local prosecutors and public defenders, and certain federal public defenders.  That assistance is limited to $10,000 a year with a lifetime maximum of $60,000 and is provided in the form of one year loans.  The same uncertainty exists about what service obligation is required for subsequent loans in the following years of employment.

For attorneys who work in areas of national need, up to $2,000 in federal loans may be forgiven each year up to a maximum of $10,000 for five years of service. Areas of national need can be public interest legal services or legal advocacy in low income communities at a nonprofit organization.

Part-time attorneys will not be eligible for the federal loan assistance programs and experienced attorneys will have less eligibility because their loans are usually from a private source.  Attorneys with five or more years experience have a lower priority in the newest HEA legislation.

Other Federal loan forgiveness programs were instituted with the College Cost Reduction and Access Act (CCRAA) which created two new programs: the Income Based Repayment Program (IBR) and the Public Service Loan Forgiveness (PSLF), both laws which affect the existing Income Contingent Repayment Program (ICR).  The IBR goes into effect on July 1, 2009, but attorneys serving the public interest may find the provisions in the PSLF of special application to them.  There is a dire need for state loan repayment assistance programs.  Illinois SB 1923, the Public Interest Attorney Assistance Act, which was introduced in January 2008, would provide loan repayment assistance through the Illinois Student Assistance Commission to Assistant State’s Attorneys and Public Defenders, as well as civil legal assistance attorneys, Assistant Attorney Generals and Assistant Public Guardians.  The bill was re-referred to the Rules Committee on July 1, 2008.

Details of each act is beyond the scope of this article, but it can be said that all these programs leave gaps and only partially address the challenge of attracting and retaining attorneys to this area of the law.

1 Neil MacFarquhar, Abused Muslim Women in U.S. Gain Advocates, N.Y.Times, January 2, 2008.

Jay B. Ross is the principal at Jay B. Ross & Associates.   He has practiced for over 40 years in the field of entertainment law, representing various musical clients, including the “Godfather of Soul” James Brown.   He has written countless articles for the Daily Law Bulletin and for the National Academy of Recording Arts & Sciences Foundation.  In January 2008, he was given the Lifetime Achievement Award at the Chicago Music Awards.

 
 
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