FEATURED ARTIST AGREEMENTS: 6 KEY POINTS
Artist collaboration disputes have gained increasing attention in South Africa. Many big songs are plagued by disagreements over ownership, royalties and credits. Featured Artist Agreements are designed to minimise such disputes. Here are 6 key points to look out for in a Featured Artist Agreement: 1. MASTER OWNERSHIP Typically, the primary artist or the record label will own the copyright in the sound recording (also known as the (“master”). This is because the primary artist or the label would have paid for the making of the sound recording. It’s not uncommon, however, for parties to agree to jointly own the sound recording. 2. COMPENSATION The primary artist and featured artist should set out their desired compensation structure. The featured artist may receive a flat fee or percentage from the sales and streaming of the sound recording or a combination of both. Additionally, accounting periods should be clearly stipulated i.e. how often the featured artist will receive financial reports and payment. There seems to be a tendency of artists to conclude agreements that only specify their respective shares in the song without addressing the timing of payments and other aspects. This is a recipe for disaster. 3. PERSONALITY RIGHTS A clause addressing how the featured artist’s name, likeness and personal attributes are to be used is very important in a Featured Artist Agreement. To prevent unwanted associations or endorsements, featured artists should ensure that the agreement confines the usage of their name, likeness and personal attributes solely to the promotion of the song. 4. MARKETING AND PROMOTION The primary artist or the record label will usually take the responsibility of promoting the song. However, a big part of collaboration is to leverage the featured artist’s involvement. As such, the primary artist may want to clearly define the featured artist’s participation in promotional activities such as the shooting of a music video, public appearances, interviews or social media posts related to the song. Can you imagine incurring the cost of a music video and the featured artist doesn’t show up? 5. CREDIT Attribution is one of the most important aspects of collaboration. The agreement should detail how and where the featured artist will be credited. Crediting artists not only enhances reputation and visibility but may affect the payment of royalties. For instance, the South African Music Performance Rights Association (“SAMPRA”) will want to satisfy itself of the featured artist’s participation as a performer on the sound recording prior to allocating needletime royalties. 6. COMPOSITION ROYALTIES/ PUBLISHING The agreement should set out the featured artist’s ownership share in the copyright in the composition if the featured artist made a songwriting contribution. If not, the agreement should still clearly identify the writers and their respective shares in the composition. NOTE: The points outlined above are not exhaustive and should not be considered hard and fast rules. Every agreement is unique and should be tailored to fit the specific needs and circumstances of the parties involved. It is always advisable to seek legal advice.
PRODUCER AGREEMENTS: 6 KEY POINTS
Traditionally, a producer was seen as the overarching creative and technical supervisor of a recording project, while a beatmaker focused on creating the instrumental tracks, or “beats.” In recent years, the roles of producers and beatmaker have increasingly overlapped, to the point where they are often considered the same. The rise of popular music genres such as Amapiano, House and Hip Hop has brought with it, disputes over royalties, credit, and ownership. Many of these disputes often involve producers. These issues highlight the need for producers and artists/labels to enter into clear and comprehensive Producer Agreements to reduce disputes. Here are 6 KEY POINTS to consider in a Producer Agreement: 1. MASTER OWNERSHIP Generally, the artist or label will fund the recording and as such, will want to own the copyright in the sound recording (also known as the “Master”). The Producer Agreement will usually contain language requiring the Producer to transfer any rights he/she may have in the Master to the artist or label. 2. COMPOSITION ROYALTIES/PUBLISHING If the producer made a contribution to the songwriting, (this includes making the beat and/or melody) the Producer is entitled to a share in the copyright in the musical work (also known as the “Composition”). A Producer Agreement should specify the composition ownership splits alternatively it should cross reference a split sheet. 3. PRODUCER POINTS While a producer will typically not own the Master, the producer can participate in the revenue flowing from the sales and streaming of the Master. producer points are a percentage of the sales and streaming of the Master that the producer is entitled to. One point represents one percent. The typical rate for a producer working with an artist signed to a major label is 3-4% of the artist’s royalty rate. Yes, the producer points are usually deducted from the artist’s royalty rate. In a traditional major label deal, an artist generally earns 16-20% of the sales and streaming revenue. However, a producer working with an independent artist should be able to negotiate 15-20% of sales and streaming revenue. Big-name producers may be able to negotiate an even higher percentage. 4. UPFRONT FEE The Producer may request an upfront fee for their participation in the project. The Producer Agreement should clearly outline when the fee is payable and the remedies available to the producer should the fee not be paid. Some labels may want to recoup this fee before the producer earns from sales and streaming. As with everything else, this is negotiable. 5. CREDIT Naturally, a producer should be credited as such. A producer will also be credited as a co-writer (where applicable). In addition, some producers may want to be credited as a Featured Artist e.g. ‘Artist XYZ Feat. Kelvin Momo’. This usually happens with big-name producers who release their own music as the primary artist. Credit is crucial as attributing producers to their work is a promotional tool that opens up future opportunities. Similarly, an artist may want to benefit from being listed alongside a big-name producer. The parties should negotiate their preferred credit specifications. 6. ACCOUNTING & AUDITING A Producer Agreement should include provisions for regular accounting statements and the right to audit the artist or label’s records. This helps producers verify their earnings and address discrepancies. NOTE: The points outlined above are not exhaustive and should not be considered hard and fast rules. Every agreement is unique and should be tailored to fit the specific needs and circumstances of the parties involved. It is always advisable to seek legal advice to ensure that all relevant aspects are adequately addressed and that the agreement reflects the true intent of the collaboration.
COLLECTIVE MANAGEMENT ORGANISATIONS (CMOs)
In the music industry, Collective Management Organisations “CMOs” are organisations appointed by rightsholders to administer the licensing of the rightsholders’ music and collect royalties on behalf of the said rightsholders. Rather than rightsholders handling individual requests for music usage, CMOs issue blanket licences to users on behalf of rightsholders. Blanket licences grant users access to the rightsholders’ entire repertoire in exchange for a licence fee. CMOs collect the licence fees and pay them over to rightsholders in the form of royalties. This streamlined approach benefits both users and rightsholders by simplifying the licensing process and ensuring that rightsholders receive compensation for the use of their music. Some forms of music usage falls outside the mandate of CMOs. For instance, a user who wishes to use music in synchronisation with visual media, e.g in film, advertisement, or video game would need to obtain permission directly from the relevant rightsholder. We’ve created an infographic to help you remember the main CMOs in South Africa and the rights administered by each CMO. To make it easier, we have grouped the CMOs by the copyright they represent, namely, the copyright in the composition and the copyright in the recording. SAMRO – Southern African Music Rights Organisation SAMRO administers Performance Rights i.e. the public performance of compositions. When a composition is played on radio, in a restaurant, or performed live, royalties are owed to the composers of that composition. SAMRO’s rightsholders are composers and music publishers. CAPASSO-Composers, Authors, and Publishers Association CAPASSO administers Mechanical Rights. This is the right that arises when a composition is reproduced from one format to another e.g. When a composition is downloaded from a digital service platform, when a CD or vinyl is created etc. CAPASSO’s rightsholders are composers and music publishers. SAMPRA – South African Music Performance Rights Association SAMPRA administers Needletime Rights, also known as Neighbouring Rights. This is the right that arises when a sound recording is played in public e.g. when a sound recording is broadcasted on radio. SAMPRA’s rightsholders are record companies (or independent artists who own their sound recordings) and performers who perform on the said sound recordings. IMPRA – Independent Music Performance Rights Association IMPRA is an alternative to SAMPRA. Like SAMPRA, IMPRA administers Needletime Rights. IMBOKODO Imbokodo is an alternative to SAMPRA and IMPRA. Like SAMPRA and IMPRA, IMBOKODO administers Needletime Rights. RAV – RISA Audio Visual RAV collects royalties which arise when a music video is performed in public e.g. when a music video is played on TV. Additionally, RAV collects royalties payable when a sound recording is dubbed e.g. when sound recordings are reproduced by jukebox operators. RAV’s rightsholders are record companies (or independent artists who own their sound recordings). AIRCO – The Association of Independent Record companies of South Africa AIRCO is an alternative to RAV. Like RAV, AIRCO collects royalties that arise when a music video is performed in public. Unlike RAV, AIRCO does not administer sound recording dubbing rights.
MEMBERS OF THE MUSIC DUO THE NEPTUNES INVOLVED IN LEGAL DISPUTE OVER “THE NEPTUNES” TRADE MARK
Another dispute involving the rights to a band/group name has been reported. This time, the dispute involves the well-known songwriting and production duo, The Neptunes. The duo is made up of childhood friends Pharrell Williams and Chad Hugo. The Neptunes were hit-making machines in the late ‘90s and the 2000s. The duo wrote and produced for global superstars such as Usher, Justin Timberlake, Jay Z, Britney Spears, and Gwen Stefani to name a few. In 2022, the Neptunes were inducted into the Songwriters All of Fame. The dispute arose when Williams’ company, PW IP Holdings, lodged applications for the mark, “The Neptunes” in various classes of goods and/services without listing Hugo as a co-owner. Hugo claims that Williams and his company “fraudulently” seek control over the “The Neptunes” trade mark. A trade mark is a word, phrase, or device which distinguishes the goods and/or services of one company/person from those of another. The owner of a trade mark has the exclusive right to use the mark and prevent others from using an identical or confusingly mark in the course of trade. It does not appear that Williams disputes Hugo’s co-ownership as he claims to have contacted Hugo’s team at some stage to formalise the co-ownership. Hugo contends that Williams and his team were insisting on “onerous business terms” that would deprive Hugo of “proper control and compensation.” In the South African context, section 10 (3) of the Trade Marks Act 194 of 1993, states that a bona fide proprietor of a trade mark is a person who has originated, acquired, or adopted the mark and has used it or proposes to use it in relation to the relevant goods and/or services. Applying this section in the context of a musical act that consists of more than one member is not always simple given the erratic nature of group dynamics. To avoid chaos, artists are encouraged, from the onset, to enter into a comprehensive band agreement that addresses, amongst other things, trade mark ownership portions, the use of the band name by former members, administration, licensing, and compensation. In his book, ‘South African Music Law, Contracts & Business’ Advocate Nick Matzukis likens a band agreement to an antenuptial agreement. This is a very useful way to view it and yes, it is absolutely THAT serious. We’re watching this matter with keen interest although it appears ripe for settlement.
SAMPRA AND RESTAURANT GROUP REACH SETTLEMENT AFTER CRIMINAL CASE
On 29 February 2024, the South African Music Performance Rights Association (SAMPRA) announced that it laid criminal charges against the restaurant group Life & Brand Portfolio. Life & Brand Portfolio is the parent company of popular restaurants La Parada, Tiger’s Milk and Lucky Fish & Chips amongst others. SAMPRA is a Collective Management Organisation (CMO) that administers Needletime Rights (also known as Neighbouring Rights) on behalf of its members, namely performers and record labels. Needletime is the royalty that is due when a sound recording is performed or broadcast in public. A good example of a public performance or broadcast of a sound recording is when a song is played on radio, retail stores, clubs, pubs and restaurants. It’s important to remember that there are two copyrights in a recorded song audio, namely the copyright in the sound recording and the copyright in the composition. SAMPRA is only concerned with the public performance of the sound recording. SAMPRA should not be confused with the Southern African Music Rights Organisation (SAMRO), which is concerned with the public performance of the composition. SAMPRA licenses users of music, including broadcasters and venues that play sound recordings in public. SAMPRA then pays the licence fees over to their members in the form of royalties. According to SAMPRA, they laid criminal charges against Life & Brand Portfolio after the restaurant group failed to pay the applicable licence fees. Fortunately, on 7 March 2024, SAMPRA announced that they had reached a settlement with Life & Brand Portfolio. The restaurant group finally committed to signing an agreement with SAMPRA and paying the applicable licence fees. This is a speedy win for rightsholders. While the Copyright Act 98 of 1978 and the Performers Protection Act 11 of 1967 both make provision for criminal penalties for certain types of infringement, it would have been interesting to see which sections, in particular, SAMPRA relied upon to lay criminal charges. This should serve as a stark reminder to owners of establishments that make use of music. Unless you are using royalty-free music, copyright subsists in the music played at your establishment. Familiarise yourself with all the relevant rightsholders and the CMOs represented by the said rightsholders, ensure that you are licensed with them and make provision for the applicable fees in your budget.
RE-RECORDING RESTRICTIONS & THEIR IMPACT ON LABELS AND ARTISTS
Taylor Swift’s re-recorded album “1989 (Taylor’s Version)” has reportedly sold approximately 1.5 million units in the United States alone within the first week of its release, making it the biggest opening week for any album released this year. Up until its release, the biggest first-week sales for 2023 belonged to the artist, Drake with 402,000 units sold with his album “For All the Dogs”. Taylor Swift almost tripled Drake’s first-week numbers with an album that was first released a decade ago. This is a remarkable feat. You might ask why Taylor had to go through the trouble and expense of re-recording her albums. The simple answer is that she does not own the rights to the original recordings, the rights were vested in the first record label she was signed to, namely Big Machine Records. The label sold the rights to music entrepreneur Scooter Braun’s company Ithaca Holdings, which subsequently sold the rights to the investment company, Shamrock Capital. By way of background, every recorded song is made up of mainly two copyrights, namely the copyright in the composition (lyrics, melody, and/or structure of the song) and the copyright in the sound recording, which is the original recording of the song (also known as the “master”). The copyright in the composition is owned by songwriters and the copyright in the master is usually owned by the person or entity that pays for the making of the master, typically the record label. You might wonder whether Taylor’s new recordings infringe on any rights held by Shamrock Capital. They do not. Copyright law allows a person who creates a new master to own the copyright in the new master created. Given the considerable risk that labels take to invest in the recording and promotion of artists, it would not make business sense (to labels) for artists to make new recordings of the same songs the labels invested in as it could create confusion in the market and devalue the original recordings. To protect their investment, labels made provision for a re-recording restriction clause in recording contracts. The clause restricts artists from making new recordings of the songs delivered under the contract for a certain amount of time after the release of the songs or a certain number of years after the expiry of the contract. Taylor waited for the recording restrictions in her contract to expire and proceeded to re-record her previous albums, making her the owner of new masters. At the same time, Shamrock retains ownership of the original masters. Both recordings exist on music platforms with the same titles, the slight difference being Taylor’s new recordings are aptly titled “Taylor’s Version”. In 2022, the re-recorded version of her album “Fearless” received 401.2 million streams, while the original version received 257 million streams. In the same year, the re-recorded version of the album “Red” was streamed 961.6 million times while the original was streamed 254.7 million times. As an artist who writes the majority of her music, Taylor still owns the copyright in the underlying compositions in the original recordings owned by Shamrock. Therefore, anyone who wishes to license the original recordings for television, film, or advertisements from Shamrock would still need Taylor to clear the use of the compositions. Taylor is in a position to approve the licensing of her compositions ONLY when her new masters are used, effectively cutting out Shamrock from licensing revenue. While the re-recording of music is hardly a new phenomenon, Taylor Swift’s success with re-recorded albums serves as a seminal moment. We can expect the re-recording restriction clause to be the subject of drawn-out negotiations between artists and labels in the near future.
WHO OWNS THE TRADE MARK TO A BAND NAME?
While copyright often takes center stage in discussions about recording artists, trade marks tend to be overlooked. Outside of recorded music, trade marks can be very lucrative assets for recording artists. WHAT IS A TRADE MARK? A trade mark is a word, phrase, or device which distinguishes the goods and/or services of one company/person from those of another. The owner of a trade mark has the exclusive right to use the mark and prevent others from using an identical or confusingly mark in the course of trade. Accordingly, the name of a band may qualify as a trade mark. OWNERSHIP Generally, record labels are not interested in owning an artist’s name or stage name (there are some draconian exceptions, of course). Usually, a record label will ask for a non-exclusive licence to use the name for the purpose of promoting the band and the music recorded by the band. As such, the question of ownership of the band name is often left to the band members to determine. Will the founding members own the trade mark or will ownership vest in all the members? Will the members own the name in equal shares? In the absence of a written agreement, the question can be determined in the following ways: Applying the above principles to a band is not always simple when one considers the changes that often occur within a band’s personnel. THE ISLEY BROTHERS TRADE MARK DISPUTE Does a member who has stopped performing with the band still have an ownership interest in the band name? The veteran R&B/ Soul band, The Isley Brothers is currently contending with this very issue in a pending court dispute. The lead member, Ronald Isley successfully applied for the registration of the trade mark “The Isley Brothers” as the sole owner. The application proceeded to registration in August 2022, much to the disapproval of his former bandmate and brother, Rudolph Isley. Rudolph is asking the court to declare that the trade mark “Isley Brothers” is jointly owned by the brothers in equal shares. In addition, Rudolph is asking the court for a share of all proceeds received by Ronald in connection with the trade mark. It is worth noting that Rudolph stopped performing with the band in 1989. This is one of many disputes of this nature. It is also very common for band members to form factions that perform separately using the same band name or a derivative thereof. This has happened to the likes of UB40, and the Commodores, amongst many others. From a South African perspective, I was watching with keen interest to see whether the dispute between members of the popular duo, Black Motion would involve the rights to the name “Black Motion”, but the dispute centered more around physical property such as studio equipment. CONCLUSION To minimise disputes, bands should address the issue of ownership very early after formation. The first priority is to enter into a clear and comprehensive band agreement. The band agreement should address (amongst other things) who owns the rights to the band name and in what proportions, licensing, and crucially, whether members who leave the band may continue to use the band name. Once the issue of ownership has been determined, the band should ensure that it applies for registration of the trade mark as soon as possible. Bands may also consider forming a legal entity under which all its business is conducted. Ideally, the entity should own the trade mark to the band name as opposed to it being owned by individual band members. Trade mark due diligence in the context of a band may not be as enjoyable as performing and creating music but it is absolutely vital.
WORKPLACE BREATHALYSER TESTS AND ZERO TOLERANCE POLICIES
Workplace breathalyser tests and zero-tolerance policies are under the spotlight again. In the recent Labour Court judgement Samancor Chrome Ltd (Western Chrome Mines) v Willemse and Others (JR312/2020) [2023] ZALCJHB 150 (29 May 2023, the court had to consider whether the Commission for Conciliation, Mediation and Arbitration’s (CCMA) arbitration award in favour of an employee who was dismissed for failing a breathalyser test was reviewable. FACTS OF THE CASE: The employee was dismissed after he failed several breathalyser tests. The employer had a zero-tolerance policy in place for drugs and alcohol. The policy states that employees may be summarily dismissed for misconduct if they test positive for drugs or alcohol. The employee subsequently consulted his doctor who took the employee’s blood sample for testing and the results came back negative. The employee was still dismissed. At the CCMA, the employee led evidence by a chemical pathologist who testified that a breathalyser test may in certain instances produce false positive results and that the more reliable test is that of a blood sample tested in laboratory conditions. Of particular importance is that the chemical pathologist stated that in his opinion, the result DID NOT mean that any alcohol was not in the employee’s bloodstream, it merely meant that the blood alcohol level did not exceed 0.010 g/dl, but for all clinical purposes, the result was negative. The CCMA found in favour of the employee. APPLICATION FOR REVIEW: The employer took the arbitration award on review and argued that its zero tolerance policy does not require the employee to be intoxicated or to be unable to perform his duties. The zero tolerance policy only requires the employee to have a blood alcohol level of anything over 0.000g/dl. THE COURT’S FINDING: The Labour Court dismissed the employer’s application and accepted the employee’s evidence that the breathalyser tests may produce false positive results as the evidence was corroborated by an expert. COMMENTARY: 1. SOLEY RELYING ON BREATHALYSER TESTS: Employers are cautioned not to solely rely on breathalyser tests. Provision should be made in contracts of employment for employees to consent to blood tests. In addition to the breathalyser testing, physical observations of the employee in question remain important, including establishing whether the employee’s faculties were impaired to such an extent that the employee could not perform his/her duties. 2. ZERO TOLERANCE POLICIES ARE NOT “SILVER BULLETS” Employers are cautioned not to view zero tolerance policies as “silver bullets” that should result in dismissal in all instances. Employers are still required to align their zero tolerance policies with their operational requirements and apply the said policies in accordance with the circumstances of each offence. While employers have the prerogative to set rules in the workplace, the Labour Court has previously made it clear that the implementation of zero tolerance policies does not necessarily mean that the Labour Court will not have a say in the matter. In the case of Shoprite Checkers (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and others the Labour Court stated the following: “But the law does not allow an employer to adopt a zero tolerance approach for all infractions, regardless of its appropriateness or proportionality to the offence, and then expect a commissioner to fall in line with such an approach. The touchstone of the law of dismissal is fairness and an employer cannot contract out of it or fashion, as if it were, a “no go area” for commissioners.” Contact us for more information on breathalyser tests and zero tolerance policies.
MUSIC SAMPLING AND THE LAW
Photo by Luis Gherasim on Unsplash The Sunday World is reporting that veteran singer and composer Caphius Semenya is claiming a 50% share of royalties from a song that appears on late rapper AKA’s posthumous album, “Mass Country”. It is being reported that AKA sampled one of Semenya’s songs without permission. Information about the specific songs in question is scant at this stage. While AKA previously used Semenya’s hit song “Matswale” on a previous album for a song ironically titled “Caiphus Song”, our understanding of the report is that the dispute was sparked by a new song. Without speculating about the details and merits of the matter, it’s worthwhile to discuss the general principles of music sampling. No discussion on music sampling would be complete without first defining the two different copyrights involved in a song, namely: The copyright in the Sound Recording (known in industry terms as the Master) and; The copyright in the underlying Musical or Literary work i.e the Composition. The Sound Recording is the original recording of the song. The Sound Recording is owned by the person or entity who commissions its making and pays for it in money (typically a record label or the artist if they are independent). The Composition is the various elements of the music including the melody, lyrics, and structure of the song. The Composition is owned by the songwriters and producers i.e composers and/or their publishers. In addition, it is important to differentiate between a sample and an interpolation. A sample is a portion of an existing Sound Recording incorporated into a new song. On the other hand, an interpolation is a portion of an existing Composition that is replayed, recreated, and/or re-sung and incorporated into a new song. View in your mind an interpolation as the use of a blueprint of an existing house to build a new house and view sampling as the use of the bricks from an existing house to build a new house. Sampling requires the permission of the record label or an independent artist (whatever the case may be) AND the permission of the composers or their publishers because BOTH the Sound Recording and the Composition are being used. An interpolation only requires the permission of the composers or their publishers because only the Composition is being used. This entire process is known in industry terms as a “clearance”. Some music producers believe that they can evade the responsibility of clearing an existing song by merely re-recording and replaying the parts they wish to use i.e. interpolation. This is because a new Sound Recording copyright vests in the new recording created. While this is a legally sound method to avoid the clearance of the existing Sound Recording, an interpolation will ALWAYS implicate the copyright in the Composition. An interpolation constitutes an adaptation in terms of section 6 (f) of the Copyright Act 98 of 1978, an exclusive right of the copyright owner. Accordingly, permission from the relevant composers and/or their publishers must always be sought, failing which the person making the adaptation may be held liable for copyright infringement.
COMPANY NAME REGISTRATIONS VS TRADE MARK REGISTRATIONS
Many new companies are under the mistaken belief that obtaining approval for a company name automatically grants them trade mark protection. Unfortunately, this is not true. A company name, as the name suggests, is the name under which an entity trades and is registered on the register of companies. In contrast, A trade mark is a word, phrase or device which distinguishes the goods and/or services of one company/person from those of another. Trade marks are registered on the register of trade marks. The owner of a registered trade mark is presumed to be the exclusive owner of the trade mark and can prevent others from using an identical or confusingly name in the course of trade. You’ll be interested to know that despite the register of companies and the register of trade marks both being under the Companies and Intellectual Property Commission (CIPC) “umbrella”, their respective registers are not cross-checked. The obvious danger here is that a company may very well obtain approval to use a company name but it may later transpire that the approved name incorporates a pending or registered trade mark that belongs to another company. This often leads to company name objections. Imagine the inconvenience and cost of being forced to change your branding months down the line. It is advisable for a company name reservation to be preceded by a separate trade mark availability search on the trade marks register to search for identical and/or confusingly similar names. This should also be accompanied by extensive market research to check for trade marks that are not on the register but may have acquired a reputation in the market through use. Once the said checks have been conducted, serious consideration should be given to filing a trade mark application for the proposed company name.