A Possible Solution for Music Artists to Better Leverage Their Bargaining Power
Thomas Jefferson School of Law Class of ’24
A copyright is a form of intellectual property that protects an original work of authorship fixed in a tangible medium.1 Musical compositions and sound recordings are examples of the works protected under this area of law. An owner of a copyright has exclusive rights including, (1) to reproduce the copyrighted work; (2) to prepare derivative works; (3) to distribute copies or phonorecords to the public; (4) to perform the copyrighted work publicly; (5) to display works publicly, and (6) in cases of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.2 Music artists striving for fame can go independent, while some opt to contract with record labels to target a vaster audience. While there is much more control an artist may possess with their creativity and exploitation of their music going independent, the ample resources and deeper financial pockets of record labels are very alluring. But deeper financial pockets of record labels mean record labels having stronger bargaining power than the music artist, and unconscionability within the contract may occur, leaving the artist disadvantaged.
Defined under California Civil Code §1670.5, if a court finds a contract or any clause of the contract to have been unconscionable at the time it was made, the court may refuse to enforce the contract or enforce the remainder of the contract without the unconscionable clause(s).3 The main, or arguably the ambiguous issue, is what is deemed unconscionable or unfair. This gray area lends itself to potential loopholes for record labels to use to their advantage. The other issue is it may be unlikely for a California court to find unconscionability within these contracts, for these types of contracts are hardly litigated, and when in doubt, both the labels and artist will opt to modify, or renegotiate the contract terms. Some cases within California jurisdiction will settle outside of litigation. Thus, unconscionability is likely displaying itself behind closed doors.
First and foremost, the artist is the talent, and they are providing those skilled talents to record labels. For the artists who, in fact, contract with these labels; there is no secret that everyone needs to make money. One way to earn income rests within the intellectual property rights of the artists’ works and other provisions provided throughout the contract. One provision to pay close attention to is the works-for-hire provision because it makes the label the owner. In terms of this article — a works-for-hire is a work commissioned (created at the request of someone) under a written agreement that specifies it is a works-for-hire and designed for either a motion or audiovisual work, a collective work, a compilation, translation of foreign work, or a supplementary work.4 Generally, record labels will weave in this provision to gain intellectual property rights to artists’ works (i.e., masters). The ownership of a works-for-hire rests in the commissioner of the work — not the actual creator of the work.5 Thus, any works considered as works-for-hire, artists will not have ownership here.
Further, for any works not considered works-for-hire, such as a sound recording, artists contract to assign these rights away to the record labels, which should not be given away. A sound recording consists of a series of musical, spoken, or other sounds fixed in a tangible medium. There is still controversy about whether a sound recording should be considered a work-for-hire. To date, it is not viewed as one. In terms of ownership, this is crucial because there are rights to terminate an assignment after a statutorily determined term of the assignment has run its course.6 This gives an open opportunity for the ownership rights to revert to the music artist. This will also provide them with control over the work they have produced over the months or even years, especially for how they earn income from those works. Artists could advocate for themselves by arguing that termination rights are “inalienable.”7 This stems from Congress granting termination rights to ensure authors have an opportunity to recapture the value of their works without being prevented by contractual agreements.8 With this leverage, artists will not only be able to take their power back, but it is also one way to mend the unconscionability issue from occurring in the first place.
Although there are some benefits to having the support of record labels, artists should think about how to control their creative works in terms of longevity without putting their rights in someone else’s hands. This is especially important in light of the fact that a court’s determination of whether a contract is unconscionable is a reactive measure.
Aside from unconscionability, do artists truly comprehend the contract provisions used by record labels and consent to them? Contracts require a meeting of the minds, and there is apparent consent on its face. Under California Civil Code §1565, the consent of the parties in a contract must be (1) free, (2) mutual, and (3) communicated to each other.9 Conceptually, does an artist grasp what these provisions mean and how these provisions will affect them and their works? More importantly, does undue influence potentially play a role in making consent not necessarily free? Many artists strive for notoriety, money, and fame and may not think of these nuisances, but these nuisances matter. Record labels are aware of this. Accordingly, as long as these parties contract with one another, artists should use their termination rights to increase their bargaining power.
Footnotes
[1] 17 U.S.C. §102(a)
[2] 17 U.S.C §106
[3] Cal Civ Code §1670.5
[4] Donald S. Passman, All You Need to Know About the Music Business 309 10th ed 1991.
[5] William Henslee & Elizabeth Henslee, You Don’t Own Me: Why Work for Hire Should Not Be Applied to Sound Recordings, 10 J. Marshall Rev. Intell. Prop. L. 69, 704, 2011.
[6] William Henslee & Elizabeth Henslee, You Don’t Own Me: Why Work for Hire Should Not Be Applied to Sound Recordings, 10 J. Marshall Rev. Intell. Prop. L. 69, 703-704, 2011.
[7] William Henslee & Elizabeth Henslee, You Don’t Own Me: Why Work for Hire Should Not Be Applied to Sound Recordings, 10 J. Marshall Rev. Intell. Prop. L. 69, 713, 2011.
[8] Brian Day, In Defense of Copyright: Record Labels, Creativity, and the Future of Music, 21 Seton Hall J. Sports &Ent. L. 61, 70 (2011).
[9] Cal Civ Code §1565