Is Compulsory Licensing the Resurrection of Hip-hop?…

In the late 80s Public Enemy boldly declared “It takes a Nation of Millions to Hold Us Back”. They may have overestimated that number by a few million. See, it would take only one judicial decision to hold them and a whole movement back. The court’s decision in Grand Upright Music v. Warner Brothers Music mandated that hip hop artists wishing to incorporate sound recording samples must clear them. The court’s message was clear and unambiguous when it declared anything less would be outright theft. However, as one commentator has suggested, an unintended consequence (or intended I suppose based on one’s perspective) of the court’s decision has been that creativity in general, and in hip hop in particular, has suffered as a result of the burndensome sample clearance process that has emerged in the wake of the Grand Upright decision.

The current licensing process is onerous and often costly. A party wishing to clear a sample must first track down all of the copyright owners – no easy feat. Assuming a party wants to sample an existing master, he would have to secure the two separate licenses: one for the use of the sound recording, and one for the underlying composition (rarely are the owner of the sound recording and the underlying composition the same). To add to the complexity, there are often multiple owners of the same underlying composition, each of whom must give approval before a license can be granted. On top of that, there are no standard rates for such licenses leaving each party to name his own price or none at all. So after all the time and effort spent to track down the appropriate rights holders, a producer can ultimatley be left with nothing for his troubles.

Generally speaking, I believe sampling, at its best, demontrates tremendous skill and creativity. I also believe sampling can be beneficial to all parties involved. For example, some of hip hop’s seminal works borrowed from original songs that were cut, scratched, looped and flipped in creative ways to create something fresh and new. A generation of hip hop heads was raised and sustained by such artistry and creativity. At the same time, publishers benefitted and continue to benefit by reaping revenues from the licensing of not only well known hits, but also obscure cuts that would otherwise never see the light of day. These tracks buried deep in some catalogues were given new life after being discovered by a new audience leading to further opportunities for exploitation. Though sampling was never particularly encouraged, savvy publishers understood that hip would open new revenue streams.

It seems clear to me that there is more to gain by licensing the use of samples than there is to lose. It is equally clear that that the current system is becoming unsustainable. So it seems the process clearing samples should be as fair and simple as posible. To be sure, copyright holders’ rights should be respected, and writers and publishers should be compensated. However, that right to compensation should not serve to diminish the creativity of others. When the system is too inefficient, or when the prices for samples are too high, nothing gets licensed, and no new hits are created -the sampler and the samplee lose, as does listening public.

So what’s the alternative?

A compulsory license, that is, a provision requiring copyright holders to extend a license to any party wishing to incorporate the existing recording in a derivative work. Copyright law has already provided for such a compulsory license where it comes to so-called mechanical right. The compulsory mechanical license basically works like this: once a song has been recorded and released, the coyright holder must license the use of the song to anyone who wants to can record and release it himself. In exchange, the licensee pays the song’s copyright holder a statutorily-fixed royalty rate for each record sold. Most importantly, the copyright holder has no right to refuse the license, despite how repugnant the licensee may be.

When it comes to a compulsory license for samplers, there benefits immediately come to mind. First, a compulsory license to sample would inject a measure of predictability into the sample clearance process. Artists and their managers would know at the outset what portion of the budget to allocate for licensing. Drop dates could be firmer and less likely to be postponed due to licensing difficulties.

Secondly, because all of the variables affecting the sample clearance would be known at the outset, the process of securing the license would be quicker and streamlined. Accordingly, a process that can now span weeks or months could be reduced to mere days if not hours. At the same time, because it would be a much quicker process, it would be much less expensive transaction for the artist licensee.

Finallly, and arguably most importantly, producers would be freed up to create the music they feel, constrained only by their imaginations.

Hip hop is dead? Maybe not, if the compulsory license idea gains traction. Perhaps, until then, we shouldn’t believe the hype.

Julian Haffner is a partner at Richa Haffner, P.C. located in Bethesda, MD. He received his J.D. from Howard University School of Law and his B.A. from Swarthmore College. Julian counsels clients in the entertainment industry, focusing on forming and advising small to mid-sized entertainment entities, drafting and negotiating contracts related to music, television, and film, and dealing with trademark, copyright, and other intellectual property matters. His entertainment clients include recording artists, composers, music producers, music publishers, record companies, and independent film and television producers.

He can be reached at haffner@richahaffner.com


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