Compositions are Being Sold for a Song: Proposed Legislation and New Licensing Opportunities Demonstrate the Unfairness of Compulsory Licensing to Owners of Musical Compositions

Today’s music business hardly resembles the industry in existence at the beginning of the twentieth century, yet musical composers remain bound by compulsory licensing laws enacted as part of the Copyright Act of 1909. Compulsory licensing permits an individual or company to rec-ord and sell any song without the composer’s permission. The user need only meet a few simple requirements and pay the composer a statutorily determined royalty rate. Although infrequently invoked, this statutory li-censing rate for compulsory licenses removes any bargaining leverage from the composers and effectively caps the rate composers can negotiate in the free market for reproductions of their songs. As new technology has expanded the available means for mechanical reproduction of musi-cal works, the use of the compulsory license has become increasingly troubling to certain constituents in the music industry. In response, Con-gress recently considered the Section 115 Reform Act, which would establish a blanket licensing system for new digital music delivery technologies. Wakolbinger examines the perceived advantages and disadvantages of the proposed legislation before suggesting an alternative: the total elimination of the compulsory licensing system. He argues that eliminating compulsory licensing would correct the fundamental unfairness of the prior system and permit the music business and intellectual property laws more flexibility to adapt to future advances in music reproduction technologies.

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