US Media Law Updates
On 11 October 2018, President Trump signed the Music Modernization Act (the "MMA") into law, which had passed without opposition through the House and the Senate earlier in the year after significant negotiations with various parties in the music industry. The MMA will overhaul music licensing in the US and modernise Section 115 of the U.S. Copyright Act in order to reflect digital progress and bring legislation in line with the new online streaming era.
Here are the key points to note:
1. The MMA will make it easier for rights holders to be paid more fairly when their music is streamed online by introducing a common database of rights in music called the Mechanical Licensing Collective ("MLC") and creating a new central agency to administer mechanical rights for digital services, amongst other changes.
2. The MMA will introduce the Compensating Legacy Artists for their Songs, Service & Important Contributions Act ("CLASSICS") to ensure that royalties will be received by artists for songs recorded pre 1972, which are currently not protected under federal copyright law. The same principles of whether the statutory licence for digital and audio transmissions is applicable to post 1972 sound recordings will be applied to pre 1972 digital audio transmissions, amongst other changes relating to claims and infringement remedies.
3. The MMA will also introduce the Allocation for Music Producer Act ("AMP"), which is the first time producers have ever been mentioned in copyright law. The AMP will aim to improve royalty payouts for producers and engineers when their recordings are used and played on satellite and online radio by establishing a legal procure for such producers and engineers to collect their royalties directly from SoundExchange, instead of pursuing the artist in question.
All parts of the music industry have received the final version of the MMA and the improvements it will make to the ever-changing music market, as it aims for a fair playing field by encouraging and supporting accurate and complete remuneration for rights holders across all new and emerging platforms.
Mission Product Holdings v. Tempnology, LLC
On 29 October 2018, the Supreme Court granted certiorari in the case of Mission Product Holdings v. Tempnology, LLC, a case that put into question whether or not Congress, pursuant to the Bankruptcy Code, intended to allow debtor-licensors the right to reject trademark licenses (and their licensees to reclaim those licensed rights through 365(n)). As EU licensees of US trademarks who have had a licensor declare bankruptcy in the US, the rights that a merchandising program were built around can vanish in an instant – and the chance of any remedy for damages from that termination unlikely given the insolvency of the licensor.
In Mission Product Holdings, the First Circuit Court of Appeals in Boston held that trademark licenses could be rejected by bankrupt licensors under 365 and reclaimed by licensees under 365(n). This was based on several reasons, including language in the legislative history which indicated that while Congress felt comfortable in how to treat copyrights and patents in the language of the statute, procedurally trademarks were more difficult and the history included an invitation for the courts to bring trademark law under 365 through the common law. This has been, to date, ignored but now given new life. This is squarely counter to holdings in other Federal Circuits that trademarks could not be rejected, and give this disagreement between the circuits the Supreme Court felt it appropriate to take the case on certiorari to decide the matter.
The Supreme Court's decision on the issue should finally resolve historic disputes between the different courts and their interpretation of the issue…we hope.