Digital Copyrights

The laws related to digital recordings is continuing to evolve. As a result of recent changes in the Copyright laws, the owner of copyright has the exclusive rights to do and/or authorize another, in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission. This provision was added to the Copyright Act by the Digital Performance Right in Sound Recordings Act of 1995 (DPRA).

The digital performance right only applies to “public” performances. Under the Copyright Act, “public” performance is defined broadly to include even situations where works are performed to individual members of the public in different places and at different times. The digital performance right is limited to public performances by means of a “digital audio transmission.” For copyright purposes, a performance is transmitted when “sounds are received beyond the place from which they are sent.” A “digital audio transmission” is any transmission of a sound recording made in whole or in part in a digital format; the transmission of an audiovisual work is not a digital audio transmission. Accordingly, while traditional analog radio broadcasts are public performances, they are not covered by the digital performance right because they are not made by means of a digital audio transmission. However, digital radio broadcasts and transmissions by digital cable audio services and music services using the Internet all implicate the digital performance right.

Exemptions

The DPRA provides exemptions from the digital performance right for various specific types of performances, so long as they are not part of an “interactive service.” The DPRA divides these exemptions into three groups: certain nonsubscription transmissions, certain retransmissions of nonsubscription transmissions, and certain other exemptions. There is an additional exemption for certain retransmissions made as part of an interactive service.

Application of Exemptions

In applying exemptions from the digital performance right, it is important to recognize that these exemptions distinguish between initial transmissions and retransmissions. Thus, an initial transmission and any retransmissions of it must be analyzed separately when applying the exemptions. The delivery of a performance only is exempt from its inception through to the listener if an exemption covers each initial transmission or retransmission in the process of delivering the performance.

Availability of Statutory Licenses

If a performance would implicate the digital performance right and not be exempt, a “statutory license” may be available for the performance. A statutory license permits a transmitting entity to render a performance if it pays an established royalty in accordance with established terms. A statutory license is available for a subscription transmission only. To qualify, a subscription transmission must meet certain conditions that are generally designed to disqualify transmissions made under circumstances that facilitate illicit taping of sound recordings.

World Intellectual Property Organization

The World Intellectual Property Organization (WIPO) sought to harmonize the myriad international agreements and conventions, as well as to update copyright laws in anticipation of changes caused by new technologies. Negotiations resulted in the WIPO Performances and Phonograms Treaty of 1996 (WPPT). The treaty is largely prescriptive in that it allows member nations to determine the specifics about the enforcement of the treaty’s terms within a more general framework that seeks to maintain a basic level of harmony in copyright among participating nations. The treaty provides that performers and producers of phonograms be compensated for the public broadcast of their works. Additionally, the treaty provides that, in the absence of agreement in the proportion of compensation divided between the performer and producer, national legislation may be enacted to set the terms by which the parties will abide. WPPT defines broadcasting as both by wire and wireless means, which includes all traditional radio broadcasts as well as cable, satellite, and other digital networks, such as the Internet.

Digital Millennium Copyright Act

Subsequent to the development of the WPPT, the Clinton administration initiated the WIPO Copyright Treaties Implementation Act, later renamed the Digital Millennium Copyright Act (DMCA). The DMCA, passed in 1998, implemented the WPPT treaty and amended the 1995 digital performance right. The DMCA created a new statutory license for the creation of an “ephemeral recording” of a sound recording by certain digital broadcasters. The DMCA also revised the language of the DPRA to clarify that the digital sound performance right applies to non-subscription audio services such as webcasting. In addition, it directed Copyright Arbitration Royalty Panels to use specific standards for judging royalty rates for digital transmissions, which are different than those that are applied to determining other copyright royalties.

Miscellaneous Provisions

The DPRA also added provisions limiting the digital performance right. The DPRA specifically addressed subscription-based, interactive transmissions, while omitting non-interactive, digital subscription transmissions. These rights addressed the concerns of distributors of copyrighted works who believed that on-demand digital transmissions could decrease sales of recorded music. DPRA granted distributors the right to collect royalties on certain transmissions to allay the concerns of copyright holders.

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