By: Jake Shapiro
INTRODUCTION – THE RECORD AGREEMENT
The record label business model is simple – labels are in the business of selling and distributing recorded music that they didn’t create. It’s not uncommon to hear artists complain about record label contracts once they see the impact their deals have on the control of their own music.
To understand the source of the problem, it’s first necessary to understand the copyrighted work at issue in many record label agreements. The key to controlling one’s own music is to control one’s “master” recording, which is the original sound recording of a song. The copyright in a sound recording is distinct from the other copyrightable aspects underlying the musical composition, such as the copyright in the music, beat, lyrics, word, or other underlying content. Hypothetically, while Otis Redding would be the copyright owner (absent an agreement with his record label) of the sound recording in which he performs “Try a Little Tenderness,” Kanye West and Jay-Z would presumptively jointly own the copyright in the sound recording “Otis,” which samples some of Redding’s work (However, I don’t know this to be the case in their particular situations, but hypothetically that’s how it would work). The point is that two different artists can each have a copyright in their own sound recordings of the same music or lyrics.
As the music industry evolves, artists are looking to negotiate deals that allow them to maintain ownership of their masters so that they can have more flexibility in monetizing the very music they created. Yes, itmay seem odd that artists are forced to negotiate to control their own music – music that likely saw minimal artistic contribution by the record label. In this vein, it is best to look at the record label as an investor in artistic content where it invests in an artist in return for control in the finished sound recording. This type of deal essentially makes the artist indebted to the label for the term of the agreement, which a label is likely to ensure lasts until the label at the very least recoups the costs of their investment. These types of contracts are called personal service contracts, and these contracts are especially unique in the music industry as record label agreements are treated differently under the law as compared to other personal services contracts for non-music entertainers. For example, California limits most personal services contracts to seven years because of the potential harms and undue limitations they place on individuals; however, lobbying efforts by the recording industry has resulted in an exception to the music industry where the contract can instead last until certain milestones are met, such as a certain amount of albums or songs produced in an effort for the label to recoup its investment.
Artists’ Frustrations with Transfer of Ownership in Record Agreements
In recent years, Taylor Swift has expressed her frustrations with the lack of control in her music as famed music manager Scooter Braun acquired the rights to her masters. Kanye West also recently went public about his fight to regain the rights to his masters. He wrote on Twitter, “When you sign a music deal you sign away your rights. Without the masters you can’t do anything with your own music. Someone else controls where it’s played and when it’s played. Artists have nothing accept [sic] the fame, touring and merch.”
A typical provision in a record label agreement regarding the rights to the masters looks like this:
“You grant and convey to Label, and confirm that Label shall be the exclusive, perpetual owner of all mastersthroughout the universe, including without limitation, all copyrights therein as a “work made for hire”. Label and all parties authorized by Label shall have the exclusive right to exploit the Masters, and to use your name, voice and likeness in connection with such exploitation. The right to use your name, voice and likeness shall be exclusive during the term and non-exclusive thereafter” (emphasis added).
What this clause means is that the artist essentially has no ownership or control of the master sound recording created under the agreement. Most notably, it means that the artist doesn’t have the authority to license the use of that sound recording as a sample in another work as this right has been transferred to the record label. Of course these provisions have a huge impact on an artist’s ability to control their own music, but it also has an impact on litigation related to copyright ownership or rights of publicity. The impact on litigation is that if you have transferred your copyright ownership, then you cannot assert a copyright claim in subsequent litigation since it’s not longer the artist’s copyright to enforce. Furthermore, even if you can assert a right of publicity claim under your contract, there is still the hurdle of not having your state right-of-publicity claim preempted by federal copyright law.
ANALYSIS AND UPSHOT
Recent Case – In Re Jackson
Recently, the U.S. Court of Appeals for the Second Circuit ruled on a case between rappers 50 Cent (Curtis James Jackson III) and Rick Ross (William Leonard Roberts II). The case involved both copyright and right of publicity issues in which 50 Cent sued Rick Ross because Rick Ross released a free mixtape that included a sample from arguably 50 Cent’s most famous song “In Da Club.” The song on Rick Ross’s mixtape was titled “In Da Club (ft. 50 Cent)” where Rick Ross rapped over the “In Da Club” beat, and the song also included a 30-second sample of 50 Cent singing the song’s hook (i.e., a 30-second sample from the master sound recording). Such sampling in free mixtapes is common practice in the hip-hop industry, and both parties to the lawsuit conceded that they have themselves created mixtapes including sound recordings of other artists despite not obtaining permission from either the artist or the rightful copyright holder (most likely the artist’s record label). Nonetheless, 50 Cent brought a lawsuit against Rick Ross to recover on a state right of publicity claim because he couldn’t sue based on copyright law because of his agreement with Shady Records/Aftermath Records (“Shady/Aftermath”) where 50 Cent was left without any copyright interest in “In Da Club” because of a provision where 50 Cent conveyed all rights to his masters to the label.
On appeal, the Second Circuit agreed with the district court and affirmed the grant of summary judgment in favor of Roberts because Jackson’s state right-of-publicity claim was preempted by federal copyright law. While Jackson wasn’t contractually barred from bringing his right-of-publicity claim, the claim was preempted by copyright law because the Second Circuit reasoned that the claim failed to assert any substantial state interest separate from those protected under copyright law; thus, the doctrine of implied preemption precluded a state right-of-publicity claim.The Second Circuit also held that the claim was really about the reproduction of a copyrighted work (“In Da Club”) rather than the use of 50 Cent’s voice or likeness; thus, 50 Cent’s claim was also barred by the doctrine of express preemption, which is where a federal statute explicitly directs that state law is preempted. There was a slight wrinkle in the case because Rick Ross didn’t necessarily own the copyright in “In Da Club” either, so it wasn’t his work to exploit; however, the Second Circuit held that because Shady/Aftermath owned the copyright and had the exclusive right to authorize its reproduction, it must also have the right to tolerate its reproduction without permission. Thus, the Court held that 50 Cent’s suit against Rick Ross would interfere with that right. Generally, copyright law doesn’t preempt the right of publicity since one’s identity or persona is outside the scope of copyright law. The Second Circuit’s decision here is correct since it’s a situation where the right of publicity clashed with copyright law as 50 Cent was disguising what should be a copyright claim as a right of publicity claim.
The upshot of all this is that regardless of the debate about copyright law preempting state right-of-publicity claims in some scenarios, this all happened because of a provision in the recording agreement 50 Cent signed with Shady/Aftermath. If 50 Cent had controlled his masters, then he would’ve been able to assert a copyright claim for the reproduction (sample) of “In Da Club.” Sure, the claim would be viewed negatively by the hip-hop industry where such samples are the norm as rappers don’t usually sue over sampling, but the point is that 50 Cent would’ve had that avenue available in a strictly legal sense.
Obviously, the biggest win for artists would be that they own their masters outright, but it’s unlikely that this historical practice in recording agreements just magically goes away. Thus, I propose the middle ground of granting the artist the right to legally enforce the copyright in the master in situations where the label is willing to tolerate the reproduction and therefore act. The reason this proposal makes sense is because copyright law is not meant to give artists the right to exploit works that they don’t own and didn’t contribute to creatively; thus, if the label won’t enforce the copyright, then the artist who created the work should have the right to sue so that they can control the reproduction of their work without other artists being able to sample the work without paying for a license due to the record label’s tolerance and inaction.
The result of the “In Da Club” litigation is a perfect example of why artists should control their own masters, which is why artists should negotiate for a caveat in their recording agreements regarding the transfer and ownership of their rights. Of course, record labels play an integral role in the industry as they fund projects and promote artists that might otherwise lack funding if they were independent, especially as they begin their careers. Thus, there isn’t necessarily a problem with the label having some degree of control and ownership in the very music they invest it, but it would be a showing of good faith to create a caveat for situations like the 50 Cent lawsuit where the record label chooses to tolerate exploitation and abstain from taking legal action against other artists who reproduce a master recording (or a portion thereof) without permission. In such situations, artists should propose (and the label should accept) a narrow set of circumstances where if the label declines to act, the artist should have the right to legally enforce the copyright of the master recording that the artist created even though the artist may no longer control the master in other circumstances.
 How Do Record Labels Turn a Profit: Have You Ever Wondered How Record Labels Make Money from Music, Recording Connection, https://www.recordingconnection.com/reference-library/recording-entrepreneurs/how-do-record-labels-turn-aprofit/#:~:text=When%20an%20artist%20gets%20signed,costs%2C%20promotion%20and%20legal%20fees (last visited Feb. 22, 2021).
 Shirley Halperin and Jeremy Helligar, The Big Payback: How Pharrell Williams Is Breaking the Chains of the Music Industry’s Troubled Past, Variety (Aug. 11, 2020), https://variety.com/2020/music/news/pharrell-williams-master-slave-industry-contracts-1234729237/
 Keith Hatschek, Retaining your master rights is smart business, Disc Makers Blog (Apr. 16, 2013), https://blog.discmakers.com/2013/04/retaining-your-master-rights-smart-business/
 Halperin and Helligar, supra note 2.
 Todd A., The “typical” major label deal sucks. So why do artists keep signing? Part 1: indentured servitude, Making Music in the 21st Century (Apr. 29, 2016), https://medium.com/making-music-in-the-21st-century/the-typical-major-label-deal-sucks-so-why-do-artists-keep-signing-part-1-indentured-servitude-90617d9edc3c.
 Kathryn Rosenberg, Restoring the Seven Year Rule in the Music Industry, 26 Fordham Intell. Prop. Media & Ent. L.J. 275, 282-83 (2015) (discussing the “very onerous penalty for [musicians] exercising rights granted to everyone else under a personal services employment agreement.”) (citation omitted).
 Id. (discussing a hypothetical example of an album advance where if there is a $250,000 advance and 250,000 albums are sold, a band could still end up in debt to their label despite earning $3,000,000 in sales).
 Darrell Digga Branch, Why It’s Vital Producers Own Their Masters, Hip-Hop DX (Aug. 1, 2019), https://hiphopdx.com/editorials/id.4310/title.why-producers-need-to-owned-their-masters#.
 Rhian Jones, Why Kanye West’s fight for his masters marks a changing music industry, The Guardian (Oct. 9, 2020), https://www.theguardian.com/music/2020/oct/09/kanye-west-fight-for-rights-to-masters-music-industry.
 Future of Music Coalition Staff, Major Label Contract Clause Critique, Future of Music Coalition (Oct. 3, 2001), http://futureofmusic.org/article/article/major-label-contract-clause-critique.
 In re Jackson, 972 F.3d 25, 31 (2d. Cir. 2020).
 Id. at 25
 No Remix: Copyright Act Preempts Right of Publicity Claim, The National Law Review (Sept. 9, 2020), https://www.natlawreview.com/article/no-remix-copyright-act-preempts-right-publicity-claim.
 In re Jackson, 972 F.3d at 31.
 Topic: Right of Publicity, International Trademark Association, https://www.inta.org/topics/right-of-publicity/#:~:text=The%20right%20of%20publicity%20is,or%20photograph%E2%80%94for%20commercial%20benefit. (last visited Feb. 22, 2021) (defining the right of publicity as “an intellectual property right that protects against the misappropriation of a person’s name, likeness, or other indicia of personal identity—such as nickname, pseudonym, voice, signature, likeness, or photograph—for commercial benefit.”).
 In re Jackson, 972 F.3d at 31.
 Id. at 55.
 Id. at 41-42.
 Id. at 54.
 S. Candice Hoke, Preemption Pathologies and Civic Republican Values, 71 B.U. L. Rev. 685, 700 (1991) (“Where Congress includes within a statutory scheme a provision that explicitly directs that state law shall be preempted, the Court describes [this] as express preemption.”).
 In re Jackson, 972 F.3d at 41.
 Facenda v. N.F.L. Films Inc., 542 F.3d 1007, 1028 (2008).