Originally published in Screen Magazine, February 23, 2004, at 23.

One of the most misunderstood areas of copyright law applicable to advertising is music licensing.  Music clearance and licensing can be tedious, and if not done properly, can cause great problems for a commercial producer or ad agency.  This article addresses some of the major issues involved in music licensing and walks through the licensing process with the band Missile, a Chicago trio.

If music is being licensed from a third party publisher, music house, or record label, or as in this example, from a band, two separate copyrights must be licensed: (1) the musical composition (usually the lyrics), often owned by a music publisher; and (2) the specific recording of that composition, usually owned by the artist’s record company (here it’s Pop-e Records).  Licensing of these two copyrights is generally called synchronization (or "sync") rights and master recording rights, respectively.

It is possible to license sync rights from the music publisher without needing master rights from the record company if the music is created specifically for the production, such as being sung by a new performer or recorded by an agency composer.  If a master recording is used, however, a sync license must also be obtained unless the recording is of a composition in the public domain.  Because any one song may have several different recorded versions, the owner of the sync right will remain constant while the owner of the master will vary depending on which recorded version used.  Of course if the music was an original composition created in-house, there is no need to acquire a sync or master license (which can have implications under the "works-made-for-hire" doctrine).

But it’s free advertisement, right?
One of the exclusive rights afforded a copyright holder under the copyright laws is the right to reproduce and authorize a reproduction of a copyrighted work in television programs, motion pictures, and/or commercials.  In other words, Missile, or any copyright owner for that matter, has a right to control so-called "free advertisement."

Can I use copyrighted music in an ad for a school or church without first obtaining a license?  No.  All the same copyright and licensing rules apply regardless of the status of your client.  It makes no difference whether your client is a non-profit, educational, or charitable organization, if Missile’s or any other copyrighted music is going to be used in an ad, it must be licensed for that purpose.  The "fair use" doctrine does not apply.

What about the "8-bar rule?"
Many commercial producers are under the mistaken impression that a small portion of a copyrighted work may be used without obtaining a license.  One often hears, "You can use X number of bars for free."  This is totally false.  Any part of copyrighted music reproduced in a production must be licensed.  The "fair use" doctrine does not apply.

OK, so how is music licensed?
Say, you’d like to license Missile’s "Set In Motion" from their new CD "Welcome to the End of My Rope."  The first step is identifying the copyright owners of the material. In this case it’s the band’s vocalist and guitarist, Don Weaver.  However, copyright ownership may be split among several parties, so it is essential to make sure that you locate all parties that have an interest in a particular song. With master recordings, generally there will be one record company to deal with, although sometimes the rights may be split by territory, especially for foreign artists.  For example, one company may have rights for the United States while another may have rights for the balance of the World.  In our example, Pop-e Records controls all master recordings by Missile throughout the World.

Remember that many different songs may have the same title and that there may be several different versions of the same song by different artists on separate record labels.  If the recording to be licensed comes from a compilation or soundtrack album, there is a strong possibility that the record company that released the album does not control the recording, but licensed the track from the artist’s original record company.  Be sure that you are researching and licensing the right song and version.

Be sure to include in the license agreement what is necessary to accomplish the intended use of the advertising, i.e., the desired media (television, radio, industrial use, Internet, etc.), territory, and duration, as well as options for extending the length or scope of the licenses.  Exceeding the scope or duration of a music license is copyright infringement.  Damages for copyright infringement can be quite high.  The copyright owner may receive statutory damages ranging from $750 to $30,000 for each infringement, or actual damages and any profits attributable to the infringement.  In addition, punitive damages may be awarded for particularly egregious situations.

Given their frequent complexity, synchronization licenses for musical compositions and master recording licenses for musical recordings should always be reviewed by legal counsel in order to best ensure that all desired rights have been effectively secured.  You can reach Missile c/o Pop-e Records, 116 W. Illinois 2 West, Chicago, IL 60610, or at missile@pop-e.com.