Compulsory licensing of musical works in the digital age: why the current process is ineffective & how Congress is attempting to fix it.

• Author: Hentoff, Jenna
• Position: Report

"Intellectual property law cannot be patched, retrofitted, or expanded to contain digitized expression..." (1)

Essayist John Perry Barlow made this statement in 1994. (2) His words are no less true today. As the use of computers and the Internet has grown since the mid-1990s, it has become increasingly clear that current copyright law is far from adequate in its application to this modern medium. (3) Amendments to the law have not proven as effective as Congress hoped or intended. (4) In no area is this truer than in the application of copyright law to the digital music industry.

Napster and Apple's iTunes brought the digital music industry into the mainstream with the creation of their music downloading services. (5) In 2005, the industry continued its assault on traditional music recording and distribution, including the traditional album format. (6) It does not appear that this stranglehold will release any time soon.

Despite its evident success, the digital music industry continuously faces problems with copyright law, causing it to become a major focus of Congress' efforts to amend the Copyright Act. (7) Congress' latest attempt to revise the statute to better handle the special issues arising out of Internet music sales comes in the form of the Section 115 Reform Act of 2006 (SIRA). (8)

This note evaluates whether the proposed SIRA will provide a better method of obtaining the rights required to sell music on the Internet than the method already in existence. Part II discusses the history of music copyright law, focusing on the current section 115 and its evolution since the inception of the compulsory license in 1909. Part III discusses the effect that music piracy has had on the digital music industry in recent years and how the current compulsory licensing scheme operates in the face of this piracy. Part IV explains how SIRA proposes to amend the current process while Part V assesses whether SIRA is actually the best solution and whether any other alternatives may propose a better answer to the issue of music piracy on the Internet.

11. The Current State of the Copyright Act

1. The Purpose of Copyright Law

   The purpose of copyright law, as derived from the United States Constitution, is "[t]o promote the Progress of Science and useful Arts" by reserving to authors certain exclusive rights in their works. (9) Congress has sought to provide authors with an incentive to create while avoiding the creation of monopolies. (10) To this end, it chose to allow authors to retain control over their works for a limited time period. (11) During this time, it was envisioned that authors would be compensated by allowing others to take advantage of one or more of their exclusive rights. (12) However, as the law has changed over the years, this purpose appears to have morphed from one focused on the creation and dissemination of works to one focused on the author's ability to control his works. (13) Nowadays, people care less about being paid and more about protecting their property from being stolen. (14)

2. A Brief Summary of the History of Copyright Law

   Over the past two hundred years, copyright law has evolved to meet the author's needs. Congress enacted the first copyright statute in 1790. (15) The law reserved to the author the right to control copies of maps, charts, and books. (16) This right lasted only 14 years. (17) Since then, the statute has been amended several times but has only been substantially revised twice: first in 1909 and again in 1976. (18) The 1909 Act extended the duration of copyright to 28 years and required the author to secure federal copyright notice before he received any protection. (19)

   The 1976 Act was the first major overhaul of copyright law in over 50 years. (20) It outlined the five exclusive rights reserved to the author in section 106. (21) Further, it extended copyright duration again, struck the notice requirement in the 1909 Act, and codified the fair use doctrine, a defense available for claims of copyright infringement. (22)

3. The Creation & Evolution of Section 115

   Two copyrights are implicated in a single song. They are the musical work, also known as the composition, and the sound recording. (23) The musical work consists of the notes and words written by a composer which is then used to make the sound recording. (24) Musical compositions were not originally included as part of copyrightable subject matter. (25) It was not until 1831 that copyright protection was extended to musical compositions. (26) In the 1800s, composers took advantage of their rights of reproduction and distribution by selling the copyright in their sheet music, which contained the musical composition, to a music publisher who would then sell it to the public. (27)

   This procedure was sufficient for many years, but when the new player piano industry gained momentum in the early 19th century, the rights afforded to copyright holders began to change. (28) In White-Smith Music Pub. Co. v. Apollo Co., the Supreme Court held that the perforated rolls of music used in player pianos did not constitute reproductions of the musical work, and therefore, there was no copyright infringement. (29) White-Smith sued Apollo, a manufacturer and distributor of player pianos and perforated rolls, for copyright infringement, arguing that the rolls were reproductions of the musical works in which they held copyrights. (30) The Court reasoned that because the perforated rolls were unreadable as musical compositions, they did not fall under the definition of a copy. (31) Instead, the rolls were functional parts of a machine and not copyrightable. (32)

   Congress responded to the Court's holding in White-Smith in the 1909 Act and granted the owners of musical works a copyright to control the mechanical reproduction of their work. (33) Under this new provision, the Court's holding in White-Smith became invalid: piano rolls were now considered copies of the musical work. (34) Additionally, Congress, in an effort to avoid the creation of an industry monopoly, subjected the right to a compulsory license. (35) Under the provision, as long as the copyright holder already licensed the musical work, any manufacturer of piano rolls could obtain a license for the mechanical work by paying a statutory fee. (36) Although acquiring the compulsory license was burdensome, composers and music publishers rallied for its inclusion in the 1976 redraft. (37) To respond to the complaints of the interested parties, Congress amended the compulsory license's provisions. (38) Congress also clearly stated that this section only applied to the mechanical reproduction, not the sound recording, of the same work. (39) All of these provisions still exist today in the Copyright Act, codified at section 115. (40) In addition to being widely used to create cover songs, section 115 is the provision of the Copyright Act applicable to the licensing of digital music for sale. (41)

   In 1995, Congress was well aware of the potentially detrimental impact of the Internet on existing copyright law. (42) The Internet was not a blip on the radar when the Copyright Act was amended in 1976, let alone when it was originally written. (43) The Digital Performance Right in Sound Recordings of 1995 (DPRSRA) was Congress' initial attempt to deal with issues arising from music distribution on the Internet. (44) In addition to allowing for a limited public performance right in digital sound recordings, it expanded the scope of the compulsory license in section 115 to include digital phonorecord deliveries (DPD), the method by which phonorecords are transmitted digitally. (45) To be considered a DPD, the DPRSRA states that the delivery or transmission must result in a "specifically identifiable reproduction. "(46) After enactment of the DPRSRA, under section 115, one could obtain a compulsory license to reproduce and distribute a musical work over the Internet. (47) Congress made sure, however, that the revised statute continued to apply only to the musical work. (48) The licensee was still required to obtain an additional license for the sound recording under section 114. (49)

   3. Music Piracy's Effect on the Compulsory Licensing System for Mechanical Works

      Just as Congress responded to the player piano industry and the Supreme Court's holding in White-Smith by enacting the Copyright Act of 1909, it has continuously responded to changing technologies and Supreme Court holdings by amending the current statute. (50) The Internet became available to the public in 1992. (51) During that same year, the International Organization for Standardization (ISO) approved use of the MPEG-1 Audio Layer3 or MP3. (52) The MP3 is a format for digitally storing music in which large audio files can be compressed into much smaller files, preserving the music's sound quality. (53) MP3s and the Internet were a perfect marriage because MP3s could be easily transmitted over the Internet, depending on the speed of connection. (54) The Internet was a low-cost means of distributing music as compared to traditional music formats, such as CDs. (55) The ease of transmission of MP3s over the Internet, however, brought concerns because the MP3 posed a potential threat to the rights of copyright holders as it allowed for easy reproduction and distribution of music by consumers. (56)

      The era of music piracy was born. (57) People, especially teenagers and college students, began taking advantage of MP3s by creating websites where they could upload music files for people all over the world to listen to and download. (58) Overnight, peer-to-peer file sharing programs emerged, allowing easy sharing of music files on the Internet. (59) No such program had more of an impact on the digital music phenomenon than Napster. (60) Napster was created in 1999 by a college student named Shawn Fanning. (61) This peer-to-peer program facilitated the sharing of copyrighted music files through their 150 centrally-located...