THE MYTH OF THE STANDARD CONTRACT
There is no “standard” song contract. I have never seen the same contract used by two different publishers, nor do I often see the same publisher use the same contract more than once without significant revisions in its terms. These contracts are “standard” only to the extent they tend to address the same issues. They don’t always address these issues the same way.
When a publisher gives you a contract to sign and tells you it is the “standard” contract, that is just a negotiating technique designed to discourage you from varying its terms. We all know that most of these contracts are generated on a word processor and can be modified easily. Even if they aren’t on a word processor, lines can be marked through and added to, even in longhand. (Be sure both parties initial and date any such handwritten modifications.)
How do you avoid being intimidated by the “standard” form? As soon as you are handed a “standard” contract and a pen to sign it with, say “thank you” and that you’ll have your lawyer look it over at once. Then go out and find a competent music attorney!
There are three main types of song contracts: songwriter contracts, co-publishing agreements, and administration deals. The major distinction has to do with how much of a song’s copyright the songwriter is conveying. In a songwriter’s contract, 100% of the copyright is usually conveyed to a publisher. In a copublishing agreement, some lesser amount of the copyright is usually conveyed to a publisher, typically 50%. In an administration deal, none of the copyright is conveyed. Instead, an administration company agrees to monitor your copyright catalog in return for a commission of the earnings, typically 15%.
Remember that the ultimate goal is to find users for your songs, issue licenses to those users, and to collect the resulting revenue. The less copyright you transfer away, the more of what is normally known as the “publisher’s share” of income will come back to you–in addition to the amounts the contract sets aside for you as the writer, or the “writer’s share.” The more clout you have, the more copyright you may be able to retain.
WHAT SONG(S) ARE COVERED?
Songwriter contracts may be for a single song or for a few specified songs. Term songwriter contracts usually cover all songs written by you while the contract is in force. Co-publishing agreements may also reach back to cover all songs ever written by you. Administration deals may fall anywhere in the spectrum.
My advice to up and coming songwriters signing with a publisher or administrator for the first time is to limit the number of songs as much as possible. Your bargaining power is probably at its weakest. Your first deal will probably be one-sided, against you. Avoid tying up your entire catalog, past, present and future. As you achieve success and your bargaining position strengthens, you will be able to negotiate future contracts that are more advantageous to you.
“Term” refers to the time during which the contract will be in effect. The publisher wants the right, (but not the obligation), to hang onto you for as long as possible, should you turn out to be a success. Thus, it is common for the Term to be expressed as one year, with the publisher having two to four additional one year options to renew and extend the contract.
It is usually in your interest to limit the Term as much as possible, so you will be free to negotiate better deals once you have established a track record and have more bargaining power. I try to make the publisher’s exercise of an option contingent on some set performance goal. For example, you might require that the publisher not be able renew the contract unless the publisher has been able to place at least one of your songs with a major label recording act during the previous contract period.
Don’t confuse Term with the length of time the publisher keeps your copyright. The transfer is often “for the life of the copyright.” You may have signed a one year contract that only applies to songs written over a one year period, but which transfers those songs to the publisher for the duration of the copyright. For songs written after January 1, 1978, the copyright duration is generally the life of the songwriter plus 70 years.
You want a specific provision calling for the reversion, or return, of all copyrights to you. Reversion might take place at the end of the Term, a certain number of years after the end of the Term, or in the event the publisher is unable to obtain a major label recording of your song within a certain time frame. Your publisher may resist the idea. I argue that the songs are of no value to anyone if they are merely gathering dust in the publisher’s office.
TERMINATION OF A COPYRIGHT ASSIGNMENT
As a songwriter, the legal protection afforded you, as the copyright owner of your songs, is probably your most valuable asset. That’s why other parties are anxious for you to convey your copyright ownership to them. What many songwriters and some publishers don’t know is that the songwriter may terminate such a transfer after 35 years with or without the publisher’s permission. At that point, copyright ownership reverts back to the songwriter, who may keep it, or sell it to another publisher, (even the original publisher), for the remainder of the copyright term, when the song or songs will become public domain.
To terminate a copyright assignment, the songwriter must notify the publisher. The notice must state the specific date of termination, (which may be anytime within 35 to 40 years after the original transfer. The notice must be sent between 2 and 10 years prior to the intended date of termination. Finally, the songwriter must file a copy of the notice the Copyright Office before the date of termination. For example, if you transferred copyright ownership to a publisher on January 1, 1980, you can terminate that transfer as early as January 1, 2015 by sending a notice to the publisher and Copyright Office as early as January 1, 2005.
Caveat: The rules are different for songs written before January 1, 1978. Even for songs written before January 1, 1978, the rules vary depending on exactly when the songs were written, first published, or first registered with the copyright office. In addition, the new termination rules for songs written after January 1, 1978 have not yet been tested in court. The issue simply hasn’t come up yet. Don’t expect publishers to give up their catalogs without a fight. Here are a few of the potential court arguments in the not so distant future:
Publisher’s Attorney: Read the contract. You agreed that your songs were “works for hire” and we are the employer, so technically, we are the author of the songs and always have been. You don’t have anything to terminate.
Songwriter’s Attorney: In determining whether a song is a “work for hire,” courts will look to the real relationship between the songwriter and the publisher: the publisher’s control over the details of the way the songwriter works, whether tools such as an office, studio, or musical instruments are supplied by the publisher, tax treatment, etc.
Publisher’s Attorney: Read the contract. When you transferred your copyright to us, you also transferred “all renewal and termination rights.”
Songwriter’s Attorney: The Copyright Act provides that a copyright transfer may be terminated “notwithstanding any agreement to the contrary.”
Publisher’s Attorney: Let’s be reasonable. This isn’t fair. We already paid you for your copyright. You sold it. We bought it.
Songwriter’s Attorney: If a song is still valuable now, after 35 years, you didn’t pay a fair enough price for it. The legislative intent behind the new termination rules is to protect songwriters and other authors by allowing them to repossess their copyrights as they enter their retirement years so they can renegotiate new and fairer publishing deals when they have a clearer sense of the true worth of their creations.
It should be interesting to watch this issue as we enter the 21st century. Publishers and record companies should be lobbying Congress to amend the termination rules. Once a songwriter recovers his or her copyright, he or she has recovered the exclusive right to reproduce the song (or recording), rendering publishers’ and record companies’ back catalogs worthless. Or are they? Publishers and record companies may still own the exclusive right to use your name, likeness, biography, etc. to exploit your work, (assuming their lawyers remembered to put that language in their contracts), regardless of whether you get your copyright back. That’s a pretty hefty marketing advantage, so you may have good reason to simply renegotiate a fairer deal with your existing company.