What is the Hatch–Goodlatte Music Modernization Act?

By Debby Winters

The complete name of “the Act” is the Orrin G. Hatch–Bob Goodlatte Music Modernization Act. The intended purpose is to modernize copyright law to account for the digital delivery of content. The bill was signed into law on Oct 11, 2018,  and it aims to revise the Copyright Act (17 U.S.C. § 115) in three major ways. The three titles to the Act will be discussed below.

Title I of the Act -streamlines mechanical royalties for digitally distributed music by allowing streaming services to pay a mechanical licensing collective (“MLC”) for a blanket license to stream copyrighted material. The MLC has a board of directors of 14 voting members and 3 non-voting members, with 10 voting members being representatives of music publishers, while 4 voting members being professional songwriters. The MLC is responsible for a number of activities under the Act, including:

  • the administration of blanket licenses;
  • the collection and distribution of royalties from digital music providers to songwriters and publishers;
  • the identification of copyrighted material embodied in sound recordings, locating the copyright owners of such material, and administration of a process by which copyright owners can claim such ownership; and
  • assisting with setting the royalty rates and terms.

Helpful to copyright holders, the Act provides a mechanism for royalty rates to be raised so that they reflect fair market rates and terms. This allows the rate to account for changes in the market. Helpful to streaming services, the Act protects streaming services from infringement lawsuits for past infringements.

Title II of the Act– attempts to provide owners of pre-1972 sound recordings with copyright protection. Before the Act, pre-1972 sound recordings were not covered under U.S. copyright law. Owners instead needed to rely on state and/or common law for protection. The Act brings pre-1972 sound recordings partially within federal copyright law by (i) providing federal remedies for unauthorized use of pre-1972 sound recordings for 95 or more years after first publication (which time may be extended depending on the year of first publication), (ii) providing a statutory licensing scheme for some digital streaming services, and (iii) providing a means of lawful, fair use of such recordings.

Title III of the Act– provides a means by which music producers can receive a portion of royalties distributed under the statutory license provided under section 114 of the Copyright Act.

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