Bill Would Fill the Gap in Copyright Protections for Music on AMFM Radio

On January 31, Sen. Marsha Blackburn filed the American Music Fairness Act. If it were to become law, the bill would secure full public performance rights in copyright owners' music sound recordings. The bill is backed by a bipartisan group of co-sponsors, including Senators Alex Padilla, Thom Tillis, and Corey Booker. An announcement for the bill states that Rep. Darrell Issa will be introducing companion legislation in the House. In the 119th Congress, both chambers should give the American Music Fairness Act the timely consideration it deserves. 

Copyright law contains a gap in its protection of the property rights of sound recording owners. Currently, terrestrial commercial AM/FM radio stations are allowed to broadcast copyrighted music sound recordings to attract listening audiences and earn money from airing ads around those recorded songs – all without obtaining a license or compensating the recordings' owners. 

 

The American Music Fairness Act would fix the issue. Under the Act, AM/FM stations would be required to pay royalties to owners of sound recordings – just like satellite radio and Internet radio stations pay public performance royalties to sound recording owners. 

 

Importantly, the American Music Fairness Act would set low, set flat royalty rates for smaller stations. For instance, the bill would establish a rate of $10 per year for non-profit and commercial stations that generate less than $100,000 in revenue each year. An annual rate of $500 would apply to stations that generate revenues over $100,000 but less than $1.5 million each year. 

 

Another merit of the Act is that it would enable sound recording owners to receive public performance royalties from foreign radio stations. The U.S.’s lack of full public performance rights has enabled foreign stations to lawfully withhold royalties from American copyright owners. But if the Act becomes law, foreign trade agreement provisions would kick in and compel those stations to finally pay American sound recording owners for the use of their copyrighted property. 

 

Previously, the American Music Fairness Act has been falsely attacked as a tax bill. In reality, the Act is a pro-property rights bill. No intellectually honest person can claim one private party's obligation to pay another private party for the use of private property is a government tax. Copyright royalties are not taxes. (The obvious differences between payments for the right to make copies, publicly display, or publicly perform another's copyrighted property and payments of taxes or fees to the government are addressed in more detail in my blog post from September 2022.) 

 

The American Music Fairness Act was introduced in both the House and Senate in prior Congresses, and the House Judiciary Committee passed it in December 2022. Sen. Blackburn and her colleagues deserve thanks for reintroducing the American Music Fairness Act in the 119th Congress and giving sound recording owners another chance at being fully secured in their rights. Hopefully, the Senate will take up the bill for due deliberation.

 

Additional background on the American Music Fairness Act can be found in my 2022 Perspectives from FSF Scholars, "American Music Fairness Act Would Secure Copyrights in Sound Recordings," as well as in my April 2021 Perspectives, "Congress Should Secure Full Copyright Protections for Music Sound Recordings."

Satellite and Webcasting Royalty Payments at Issue in Copyrighted Music Case

On August 16, a lawsuit was filed for a case called SoundExchange, Inc. v. Sirius XM Radio Inc. Plaintiff SoundExchange's complaint alleges that Sirius XM underpaid royalties for public performance of copyrighted music recordings on its satellite digital audio radio service (SDARS). SoundExchange is a non-profit entity that collects digital performance royalties from statutory license users and distributes them to artists and copyright owners.  

Royalty rates are set by the Copyright Royalties Board (CRB). The CRB separately sets royalty fees for satellite radio and commercial webcasters under the statutory license. As explained in SoundExchange's complaint, regulations provide that "royalties for webcasting are calculated on a per-performance basis rather than as a percentage of gross revenues: the webcasting royalty is assessed for each transmission of a sound recording to a listener, while the SDARS royalty is assessed as a percentage of the revenues the service generates." 

SoundExchange alleges that Sirius XM improperly allocated excessive amounts of revenue to its webcasting service – which requires lower royalty payments – thereby reducing royalties payable for its satellite radio service. Additionally, SoundExchange alleges that an independent audit revealed Sirius XM underpaid royalties, and that regulations require that amount owed – as determined by the auditor – be paid. According to SoundExchange's complaint: "To date, Sirius XM already has unjustifiably withheld more than $150 million in royalties owed to artists and copyright owners under the SDARS statutory license."

The case is likely to be a one-off because Sirius XM is the only provider of SDARS and music webcasting services. But given that Sirius XM has approximately 34 million subscribers and generates significant public performance royalties – not to mention the $150 million in unpaid royalties figure alleged in the complaint – a legal resolution will be tremendously important for copyright owners. 

That said, copyrighted sound recordings are valuable property and it is the role of Congress -- and its delegated authorities at the Copyright Royalty Board -- to provide clear boundary rules defining the scope of exclusive rights and expectancy interests in copyrighted property. Clear rules are a necessary foundation for ensuring that copyright owners can maximize the value and returns for their labors and investment. If nothing else, the case may furnish occasion for more clearly specify for future purposes how revenues and royalties are allocated between SDARS and webcasting services. 

 

This blog post does not express a position on the correct prospective outcome in SoundExchange, Inc. v. Sirius XM Radio Inc. The case is only at its beginning in the U.S. District Court for the Eastern District of Virginia. Sirius XM has not yet filed any detailed pleadings in response to those SoundExchange allegations. Stay tuned. 

Law Journal Article Endorses American Music Fairness Act

On May 17, the Journal of Legislation published an article titled "Oh Brother, Where Art Thou Royalties? Reflecting on the Emergence of Bluegrass and Appalachian Folk Music in Promoting the American Music Fairness Act." Written by Mark Edward Blankenship, Jr., the article discusses the 2000 movie named in the title as a window into the need for Congress to pass legislation securing full public performance rights in music sound recordings. Existing law exempts terrestrial AM/FM radio stations that broadcast copyrighted sound recordings over-the-air from having to pay royalties to the owners of those recordings. As the article points out, "[t]errestrial radio is the only medium allowed to use intellectual property without copyholders' permission or compensation, which is fundamentally unfair."

The article provides a straightforward legal history of public performance rights as well as their extension to performances of copyrighted sound recordings – except when it comes to terrestrial radio broadcasting. That historical backdrop sets the stage for the American Music Fairness Act (MMA), which has been introduced in the 118th Congress – S.253 and H.R. 791.  The article rightly concludes that "[a]dopting the AMFA would benefit many artists, honor intellectual property owners’ rights, and promote the progress in the arts." 

The AMFA also is the subject of my February 2022 Perspectives from FSF Scholars, "American Music Fairness Act Would Secure Copyrights in Sound Recordings." 

As an important conceptual sidenote, I disagree with the article's statement that "[u]nlike its foreign counterparts that employ a natural-rights view, the United States employs an economical view of copyright protection." In The Constitutional Foundations of Intellectual Property: A Natural Rights Perspective (Carolina Academic Press, 2015), Free State Foundation President Randolph May and I cited ample historical evidence that the Founding Fathers as well as jurists and legal scholars of the nineteenth century understood copyrights as natural property rights to the fruit of one's labors. Certainly, Congress takes economic considerations seriously in defining the boundaries of copyright protections. That is consonant with the Founders' political philosophy of natural rights, according to which copyright protections promote progress in the useful arts as well as financial opportunities for creators. 

However, it is true that U.S. copyright law is premised on a different set of principles than foreign countries. Although European regimes are characterized by some writers as being based on “natural rights,” the occasional use of the term in that context can be highly misleading. Different theories of natural rights exist, but when speaking about the American constitutional order, I think it best to speak of the natural rights principles reflected in the Declaration of Independence and held in common by the likes of the American Founders, James Kent, Daniel Webster, Abraham Lincoln, as well as other American statesmen and jurists. In chapter 6 of our book Modernizing Copyright Law for the Digital Age, Constitutional Foundations for Reform (Carolina Academic Press, 2020), FSF President Randolph May and I described European copyright regimes as being premised on a "moral rights" view. And in that book, we warn Congress against importing those foreign concepts into American law because they actually could undermine the protections for American copyright owners.

Recording Music Revenues Up: Stronger Copyrights Would Increase the Pot

Late September of this year, the Recording Industry Association of America (RIAA) released its "Mid-Year 2022 RIAA Revenue Statistics." RIAA's report reveals many interesting and positive trends and data points for the U.S. recorded music market. The report also ought to serve as a reminder that the sound recording industry is copyright intensive and that Congress can bolster copyrights for owners of music recordings by passing the American Music Fairness Act.

According RIAA's report, during the first half of 2022, retail revenues for the U.S. sound recording industry grew to $7.7 billion, up from $7 billion during the first half of 2021. And wholesale revenues rose to $4.9 billion during the first half of the year, up $300 million compared to the first half of the prior year. 

Streaming is overwhelmingly the dominant source of revenue for the sound recording industry, as about 84% of its revenues during the first half of 2022 came from streaming services. Of the $6.5 billion generated by streaming during the first half of the year, about 78% or $5 billion came from paid streaming subscription services. Meanwhile, revenues from digital downloads of single tracks and albums declined 20% to $256 million, amounting to only 3% of total revenues for the recorded music industry. As RIAA's report shows, paid subscriptions have continuously increased in recent years and have now reached the 90 million subscriber mark.

 

Conversely, RIAA reported declines in revenues from digital and customized radio services such as SiriusXM and Internet radio stations. Total revenues from that category of services dropped 3%, down to $556 million. Notably, U.S. copyright law does not secure a public performance right for sound recording owners when AM/FM terrestrial radio stations broadcasts their music. As a result, direct revenues to the music recording industry from airplay on terrestrial radio is effectively zero. 

In terms of revenues from retail sales of physical products, revenues from CD sales declined 2% to $200 million. CD sales constitute 26% of physical revenues. Yet revenues from vinyl records continue to grow. According to RIAA's report, "[r]evenues from vinyl albums grew 22% to $570 million, and vinyl's share of the physical market increased from 68% to 73%."

Having noted these overall positive trends in music recording revenues, there are things that Congress can do to help promote the music marketplace and grow the pie bigger for recording artists and music fans. Perhaps the most immediate thing Congress can do is pass the American Music Fairness Act – H.R. 4130 and S. 4932. 

As previously mentioned, current copyright law exempts terrestrial AM/FM radio stations from having to pay royalties to owners of copyrighted sound recordings when their music is played on the air. This means that commercial AM/FM stations can profit off of copyrighted sound recordings by broadcasting them to attract audiences and then draw revenue from running ads. 

The American Music Fairness Act would require AM/FM stations to pay royalties to owners of sound recordings for the use of their intellectual property just like satellite radio and Internet radio stations pay public performance royalties to sound recording owners.

 

So long as the U.S. exempts American AM/FM stations from paying royalties to American sound recording owners, foreign stations have no obligation to pay royalties for broadcasting copyrighted sound recordings owned by Americans. But by passing the American Music Fairness Act into law, Congress would open up royalty revenue streams from foreign radio stations and American copyright owners would receive revenues that they rightfully deserve. Importantly, the legislation includes a low, flat royalty rate for smaller commercial stations as well as for non-profit stations. 

As discussed in my February 2022 Perspectives from FSF Scholars, "American Music Fairness Act Would Secure Copyrights in Sound Recordings," H.R. 4130 has received a hearing in the House Judiciary Committee. And S. 4932 was introduced in September of this year. There is still time in the 117th Congress for the American Music Fairness Act to become law. Congress ought to make it so. 

Senate Bill Would Ensure Royalties for Radio Play of Copyrighted Sound Recordings

On September 22, Senators Alex Padilla and Marsha Blackburn announced the introduction in the Senate of the American Music Fairness Act – S.4932. If it becomes law, the bill would secure full public performance rights for owners of copyrighted music sound recordings. In particular, the bill would secure the right of sound recording owners to receive royalties when their music is broadcast by terrestrial AM/FM radio stations. Current copyright law specially exempts AM/FM radio stations from having to pay such royalties, thereby giving those stations free rider use of copyrighted sound recordings for commercial purposes. That exemption should be removed from copyright law.  

S.4932 is identical to H.R. 4130. The latter bill received a hearing in the House Judiciary Committee on February 2 of this year. The House Judiciary hearing on the bill was the subject of my February 24, 2022, Perspectives from FSF Scholars,"American Music Fairness Act Would Secure Copyrights in Sound Recordings." Additional reasons for supporting the legislation were offered in Free State Foundation Legal Fellow Andrew Magloughlin's March 2022 blog post, "Broadcasters' FCC Filing Undermines Radio Copyright Exemption." And the American Music Fairness Act was one of the many interesting issues discussed during FSF's July 2022 webinar, "Hot Topics in Copyright Policy."

 

Notably, the American Music Fairness Act provides for significantly reduced royalty payment rates for non-profit and small commercial AM/FM radio stations. And don't for a minute confuse royalties with taxes. Royalties are payments owed to private parties for usage of their property rights. For more on royalties versus taxes, see my blog post from September 6 of this year, "In Debate Over Radio Royalties, Congress Should Favor Property Rights."

 

Hopefully, the 117th Congress will dedicate time in its remaining schedule to pass the American Music Fairness Act into law. By doing so, Congress will accord owners of copyrighted music sound recordings what is rightfully due to them when their music is played by commercial AM/FM radio stations. 

In Debate Over Radio Royalties, Congress Should Favor Property Rights

An article published in Law360 on August 31 covers the ongoing debate in Congress over whether AM/FM radio stations ought to pay royalties when the stations play copyrighted sound recordings over-the-air. Mixed into the debate is an attempt by some radio broadcasters to equate copyright royalties with taxes. But it's a ruse and easy to see through. Royalties are rooted in intellectual property (IP) rights, and Congress should recognize the right of sound recording owners to receive royalties when their copyrighted music is played on the radio. 

The Law360 article mentions House Concurrent Resolution 33, which opposes recognizing the exclusive right of music recording owners to receive royalties when radio stations, including for-profit stations, broadcast their intellectual property (IP). House Concurrent Resolution 33 (H.Con.Res.33) states that "Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air, or on any business for such public performance of sound recordings."

 

It's bothersome that the House resolution lumps in public performance royalties with government fees and taxes. There are obvious, categorical differences between those things, but the resolution's language appears intended to blur the distinctions. Royalties are not taxes or government fees. Royalties come from private property rights. They are proceeds from the use of one's private property by another private party. 

 

The House resolution gets it right on taxes, but wrong on royalties. Congress should not impose new government fees or taxes on users of copyrighted sound recordings like AM/FM radio stations. But Congress also should not continue to privilege radio stations with free rider use of copyrighted sound recordings that belong to third parties. That privilege unjustly undermines the property rights of sound recording owners to receive a return when their private property is commercially exploited. 

 

For a legislative approach to this topic that better respects IP rights, see my August 2021 Perspectives from FSF Scholars, "Congress Should Secure Full Copyright Protections from Sound Recordings" and my February 2022 Perspectives, "American Music Fairness Act Would Secure Copyrights in Sound Recordings." As explained in those papers, the American Music Fairness Act (H.R. 4130) would finally recognize that sound recording owners have a public performance right to receive royalties when their copyrighted works are played over-the-air by AM/FM radio stations. The Constitution's Article I, Section 8 Copyright Clause gives Congress the responsibility to secure property rights in creative works such as sound recordings. And the American Music Fairness Act, if enacted, would achieve a pro-property rights result. The House Judiciary Committee ought to favorably report the bill and the House ought to pass it.   

"Hot Topics in Copyright Law & Policy" Video Now Available

 

Watch the YouTube video of the Free State Foundation's webinar on current legal and public policy issues in copyright, held July 28, 2022.

 

A panel of prominent copyright experts addressed copyright hot topics such as music royalties, the proposed American Music Fairness Act, needed Digital Millennium Copyright Act reform, problematic state legislation licensing of ebooks, and the American Law Institute's misguided Copyright Restatement project.

 

Participants were Jessica Richard – Vice President, Federal Public Policy, RIAA, Devlin Hartline – Legal Fellow, Hudson Institute's Forum for IP, and Adam Mossoff – Professor of Law, Antonin Scalia Law School, GMU. Free State Foundation Director of Policy Studies & Senior Fellow Seth Cooper moderated the discussion. FSF President Randolph May opened and closed the webinar.

 

Tweet: #FSFCopyright

Ninth Circuit Turns Down State Copyright Claims in Narrow Decision

On August 23, a panel of the U.S. Court of Appeals for the Ninth Circuit determined that the California copyright statute's protections for the "exclusive ownership" of sound recordings made before 1972 did not include the right of public performance. In so doing, the Ninth Circuit reversed a District Court decision that I wrote about in a March 2015 blog post. Back in 2015, state copyright claims regarding public performances of pre-72 sound recordings had fared well in court. But as the Ninth Circuit observed in Flo & Eddie, Inc. v. SiriusXM Radio, Inc., those claims did not find favor at the appellate level. 

In sum, the Ninth Circuit panel in Flo & Eddie determined that the there was no common law recognition of public performances in sound recordings when California first used the term "exclusive ownership" into its 1872 copyright statute. And the Ninth Circuit panel concluded there was no evidence sufficient to overcome the presumption that the common law rule of no public performance rights was changed by the statute's use of that term in 1872 – or in 1982, when California revised the statute.

The legal question about whether public performance rights in pre-72 sound recordings is offered under state law seemed to be a strong candidate for resolution by California's highest court of law rather than by federal courts. In fact, that question was certified to the California Supreme Court in a related case called Flo & Eddie, Inc. v. Pandora Media, Inc. But the California Supreme Court dismissed that case before deciding the question. That dismissal was prompted by Congress's passage of the Music Modernization Act of 2018 (MMA). 

The MMA, signed into law by President Donald Trump, finally recognized public performance rights in copyrighted sound recordings pressed before 1972. Thus, on a prospective basis, copyright owners of pre-72 sound recordings enjoy public performance rights when their creative works are digitally transmitted on satellite radio or by Internet webcasters. And most claims regarding public performances of pre-72 sound recordings prior to the MMA were resolved in a major class action settlement. Although the MMA preempted most state law claims regarding pre-72 sound recordings, Flo & Eddie's claims remained alive – at least until the Ninth Circuit's decision. But in light of the MMA and the legal settlement, the Ninth Circuit's decision ultimately is a narrow one. 

Tennessean Op-Ed on Modernizing Copyright Law for the Digital Age

Free State Foundation President Randolph May and I today published an op-ed in The Tennessean titled "Three Ways to Modernize Copyright Laws in the Digital Age." The just-published op-ed touches on themes we addressed in more detail in our new book, Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform(Carolina Academic Press 2020). Our thanks go to The Tennessean for publishing our op-ed. Be sure to check it out at The Tennessean's website. Our new book is available both in print and e-book editions. 

Copyright Bill Would End Unequal, Inequitable Treatment of Pre-72 Sound Recordings

Current federal copyright law fails to provide important copyright protections to music artists and other copyright holders in sound recordings made before 1972. As a result, copyright holders do not enjoy the same right under federal law to receive royalties for public performances of pre-72 sound recordings that others enjoy for later recordings. A new bill in Congress offers a workable, straightforward, and long overdue solution to this glaring problem.

On July 19, Representatives Darrell Issa and Jerrold Nadler introduced HR 3301, the “Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society Act” – or “CLASSICS Act.” If adopted, digital audio transmissions of pre-72 sound recording would no longer be excluded from federal protections for public performances of copyrighted sound recordings. HR 3301 would also provide a streamlined way for resolving pre-existing state law claims for digital audio transmissions of pre-72 sound recordings. The CLASSICS Act strongly merits consideration without delay by the 115th Congress.

As Free State Foundation President Randolph J. May and I described in our book, The Constitutional Foundations of Intellectual Property: A Property Rights Perspective (2015), copyright is a unique kind of private property right, rooted in an author’s creative labor. The U.S. Constitution’s Article I, Section 8, IP Clause authorizes Congress to protect an author’s exclusive right to the proceeds of his or her work. Federal copyright law establishes baseline protections for copyright holders – including exclusive rights to proceeds from public performances of sound recordings.

Without any apparent explanation, the Copyright Act of 1976 excluded federal protection for the owners of copyrighted sound recordings made before February 15, 1972. Digital music services such as Sirius XM and Pandora have publicly performed pre-72 sound recordings via digital audio transmissions without paying royalties to copyright holders in the manner they routinely pay for post-72 sound recordings. Although the 1976 Act largely preempted state copyright laws, Section 301(c) left intact state jurisdiction over rights in sound recordings fixed before 1972. This state of affairs has resulted in a handful of lawsuits against digital music services based on state copyright law. Courts have largely – but not entirely – recognized that owners of pre-1972 recordings have property interests under state law and that those interests may not be misappropriated without compensation.

In a 2015 report, the U.S. Copyright Office reiterated its view that “pre-1972 recordings should be brought under the protection of federal copyright law.” According to the Copyright Office, federal recognition of public performance copyright protections in pre-72 sound recordings “would serve the interests of licensing parity by eliminating… market distortion” and also “allow for a federal compensation mechanism for the artists responsible for pre-1972 works.”

The CLASSICS Act, HR 3301, is perhaps the most promising legislative proposal to date for extending federal copyright protections to public performances of pre-72 sound recordings. Passage of HR 3301 would bring needed parity to federal law. HR 3301 would end free-riding commercial usage of valuable copyrighted sound recordings. Certainly, this would be in step with Congress’s constitutional duty to secure copyright holders’ exclusive rights to the proceeds of their intellectual property. Going forward, copyright holders would receive royalties based on rates established by the Copyright Royalty Board pursuant to its “willing buyer/willing seller” standard that seeks to approximate market prices for public performances of sound recordings via digital audio transmissions.  

Further, the CLASSICS Act would clear up existing uncertainties tied to state copyright laws. If adopted, the HR 3301 would preempt state law claims based on public performances of pre-72 sound recordings that meet the requirements of federal law. The bill also provides a streamlined option for settling prior lawsuits based on state copyright lawsuits claims. Within nine months after the HR 3301’s effective date, if digital music providers pay royalties for all public performances of pre-72 sound recordings taking place during the last three years, all state law claims against such providers would be federally preempted.

Importantly, a press release by the CLASSIC Act’s sponsors states that HR 3301 has a broad base of support from a diverse array of participants in the music marketplace. Listed supporters of the bill include the Recording Industry Association of America (RIAA), Pandora, musicFIRST, the Internet Association, SoundExchange, and the American Federation of Musicians. This cross-section of support bodes well for the bill’s prospects in this Congress.

The sponsors of the CLASSIC Act should be commended for introducing the bill. HR 3301would at long last recognize the rights of copyright holders in pre-1972 sound recordings, and justly ensure they receive compensation for commercial uses of their intellectual property. Congress should give HR 3301 prompt attention.

Pre-1972 Sound Recordings Bill Consistent with the Constitution's Intent

The Second Circuit is the latest venue in an ongoing legal dispute over copyrights in sound recordings made before 1972. At issue in Flo & Eddie v. Sirius XM is a lower court ruling that New York common law provides owners of pre-72 sound recordings exclusive rights to public performances and proceeds of those recordings.

On August 5, Public Knowledge posted its amicus curiae brief urging that the lower court ruling be overturned. But as I've written, sound legal basis exists in state common law and equity for lower court rulings in New York and California recognizing such rights.

Whatever the ultimate outcome in the Second Circuit or in other courts, Congress can bring resolution to the pre-72 issue and bring needed reform to federal copyright policy for sound recordings.

Right now copyright law fails to adequately protect the rights of artists, producers, and other owners of sound recordings. Current law gives certain music platforms privileges to profit from public performances of copyrighted works without paying royalties or paying royalties at regulated rates set far below market value. And when it comes to pre-72 sound recordings, federal law allows preferred platforms to publicly perform copyrighted music without paying any royalties to sound recording owners at all.

Principled market-based reforms are needed to shore up the rights of owners of sound recordings. The Fair Play Fair Pay Act – H.R. 1733 – would improve protections for the rights of sound recording owners to the proceeds of their labors and move copyright policy in a free market direction.

Under the Constitution's Article I, Section 8 Intellectual Property Clause, Congress has the duty to secure to authors and producers of creative works the proceeds of their own labors. H.R. 1733 offers Congress the opportune means for fulfilling its duty under the Constitution to protect intellectual property (IP) rights. Congress should give the bill a full and fair hearing without delay.

Importantly, the Fair Play Fair Pay Act (H.R. 1733) would finally provide public performance copyright protections to the owners of sound recordings made before early 1972. No good reason exists for excluding federal copyrights in pre-1972 sound recordings while including pre-72 books or movies.

As Free State Foundation President Randolph May and I have written about previously in our Perspectives from FSF Scholars series of IP papers, the case for federal copyright protection dates back to the Founding Fathers and is embodied in the Constitution. The IP Clause assigns Congress the duty to secure to authors and producers of creative works the proceeds of their own labors. James Madison considered the lack of federal copyright protection one of the vices of the government then operating under the Articles of Confederation. And in Federalist No. 43, Madison wrote that “[t]he utility of this power will scarcely be questioned,” since “the States cannot separately make effectual provisions” for copyright.

A handful of courts, rightly, have recognized state common law copyright remedies for pre-72 sound recordings. (See my blog post, "Crediting State Common Law’s Role in Protecting Intellectual Property Rights.") But H.R. 1733 would offer uniformity and finality to the question by establishing federal public performance copyrights in pre-72 sound recordings. H.R. 1733 would apply the "willing buyer/willing seller" standard to music services transmitting post-72 sound recordings.

The "willing buyer/willing seller" standard defines "reasonable" rates as payments that "most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller." It seeks to approximate market values. And so the "willing buyer/willing seller" standard is preferable to the misguided Section 801(b) anti-disruption standard, as well as any other standard that seeks to insulate privileged incumbents from competition and innovation.

Under H.R. 1733, AM/FM broadcast radio, cable and satellite video services, broadcast TV, as well as non-interactive Internet-based music services such as Spotify and Pandora, would all have to obtain consent of sound recording owners. Absent agreement, all such music platforms publicly performing copyrighted music would pay royalties based on that same rate standard. That means all of those competing services would be treated equally under the law.

Under the IP Clause, Congress has an obligation to secure to authors and producers of creative works the proceeds of their labors. The Fair Play Fair Pay Act – H.R. 1733 – would be an important step in remedying critical defects in federal copyright law regarding sound recordings. It would put rights in sound recordings on more secure footing by eliminating favoritism and broadening the scope of protections.

Other improvements and adjustments in federal copyright law ought to be considered in order to protect the rights of artists and other recording industry rights holders in today's fast-changing digital environment. But by giving a prompt and fair hearing to legislation for reforming and better protecting copyrights, like H.R. 1733, Congress can live up to its constitutional obligation.