A licence granted by the copyright owner in respect of all or part of the copyright prior to an assignment of the copyright will be binding upon any assignee or successor in title.

A copyright licence

--either exclusive or non-exclusive--is a permission to exercise one or more rights within the copyright, and is granted by the copyright owner or person authorised to exercise those rights. The recipient of such a permission is a licensee. An exclusive licence, to be effective, should be in writing, signed by or on behalf of the copyright owner or person entitled to exercise those rights. A non-exclusive licence can take any form, including inference by conduct.

For the purposes of the 1988 Copyright Act, an "exclusive licensee" is empowered to operate the right licensed to the exclusion of all other persons, including the grantor of the licence.

Effects of losing Beneficial Ownership

Being beneficial owner of the copyright in one's own work feels as though it should be an inalienable right and, indeed, in many European countries it is. England and America stand out to disadvantage in this respect.

There is no doubt that unless the terms of a composer's agreement with a publisher are very specially tailored, ceasing to be its beneficial owner may considerably disadvantage the composer.

Firstly, the composer loses control of the way in which the copyright operates--which may or may not matter. Secondly, unless the assignment prohibits further assignment by the publisher, the composer may lose track of who owns the copyright. Perhaps most importantly, the composer may suffer financially, particularly in respect of the payment of mechanical royalties from MCPS, which, unless there is specific agreement to the contrary, will pay both shares directly to the publisher.

It is therefore essential that the composer's assignment cover the payment by the publisher of at least a 50% share of all mechanical royalties received by the publisher in respect of the composer's work.

The following points should be noted:

Once the whole copyright in a work has been assigned to a publisher, MCPS will pay all royalties directly to the publisher, even though the composer may be a member of the Society. This is because MCPS is only authorised to pay the beneficial owner of the copyright. The publisher should then, according to the terms of the assignment, be bound to pay the composer's agreed share. Composers who are MCPS members may be able to negotiate a provision in publishing agreements that their share of mechanical royalties be paid directly by the Society.

Some publishers deduct 10% from the royalties they collect before sharing the remainder with the composer. Often included in such royalties are mechanical royalties collected from MCPS. This is particularly unfair since the cost of collection and distribution has already been deducted by the Society. In addition the publisher can hold and make interest on the composer's share until payment is due under the publishing agreement between them.

If the composer could receive mechanical royalties directly from MCPS, both deduction and delay would be avoided.

No right to information. Once the publisher is beneficial owner of the copyright, MCPS is not at liberty to divulge to the composer details of payments that have been made to the publisher in respect of the work (nor, in theory, any other information relating to those copyrights). Nevertheless, MCPS will research well-founded complaints and queries from members who have an interest in a work but are not its beneficial owner, and may be able to pass information to the member if it has the consent of the publisher.

After strenuous representations from the Composers' Joint Council, it had been hoped that MCPS would permit composers to access the list of compositions which are registered with the Society, even where the copyright in them has been assigned. This would help composers trace new owners and follow up missing royalties. The likelihood of such a plan being implemented seems currently to be in question. Regular meetings between CJC members, MCPS, and MPA representatives are also planned, at which specific queries and complaints will be investigated. Composers should contact their association if they have such a query or complaint so that it can be brought up at a subsequent meeting.

If the publisher is not a member of MCPS or goes bankrupt, or assigns the copyright to another publisher who falls into either category, composers can lose all access to their share of MCPS royalties in relation to those copyrights they have assigned. They are not entitled to receive the royalties directly from the Society, as they are not the beneficial owners; and the publishers are not entitled to receive them either, as they are not a member of the Society or are no longer trading. It is imperative, therefore, that any assignment states that if the publisher (or their successors or assigns) ceases trading or ceases to be a member of MCPS (or an affiliated society) all rights granted in the assignment revert to the composer.

Delays. MCPS distributes record royalties at least once a month. (NB: AP.1 royalties are distributed daily). Broadcasting royalties are distributed only annually. If the contract between composer and publisher allows for annual accounting, with perhaps a 90-day period on top of that for rendering statement and payment, composers could have to wait up to 15 months for their share of MCPS royalties (over and above the time taken by MCPS to collect and distribute them). The publisher can be making interest on the composer's share of the money during this time: the composer cannot! However, the MPA has stated that some publishers may be prepared to pay advances on account of such royalties, where the composer's previous royalty record warrants it. Unfortunately, this means that the least-needy composers are most likely to receive such treatment.

For tax reasons, some composers may wish to defer payments, in which case they can come to some suitable arrangement with their publishers. For the majority, the sooner money is received the better!

Unallocateable Income and Rebate of Commission. At the end of each year, MCPS may find it has certain monies in hand. These are either unallocateable income (payments received by the Society for which they are unable to identify the copyright owner-colloquially known as 'Black Box' payments) and savings made by the Society which result in their being able to repay to the membership a portion of the commission that has been deducted from members' royalties distributed during that year. The Board of Directors and Executive decide whether such monies should be rebated to members or reinvested in the Company.

The latter kind of payment is normally distributed in proportion to the earnings of each member's copyrights. Thus, if a publisher receives, say, £1,000 as a Rebate of Commission payment relating to all the copyrights in the publisher's catalogue, and one of those copyrights was assigned to the publisher by Composer X, the publisher ought to pay Composer X's share (as stated in the publishing agreement) of the percentage of that £1,000 which relates to the earnings from that composer's work. Methods of distribution by MCPS of unallocatable income are decided by the Board.

In ceasing to be the beneficial owner of the copyright, Composer X is no longer in a position to know of the existence or amount of Unallocateable Income and Rebate of Commission payments and it is an unfortunate fact that many composers do not receive their agreed share of these monies.

Some publishers have claimed that it would be too lengthy a process to calculate each composer's share of such payments. However, MCPS will supply copyright owners with a breakdown of payments in relation to the copyrights to which they apply. Composers should try writing to their publishers requesting a breakdown of Unallocateable Income and Rebate of Commission payments made to them over the past few years in relation to those composers' works. Results could be interesting.

Joint Notification Forms. Unlike the PRS, the MCPS does not require the writer's signature on these forms, nor the publisher to send a copy of the assignment. Thus, they require no confirmation that any assignment has taken place, nor that the publisher is beneficial owner of the copyright.

It is possible, therefore, for an over-eager publisher to anticipate, or an unscrupulous one to claim, an interest in a work in which they have no interest at all, providing, of course, the publisher does not attempt to make a similar claim to the PRS, which pays royalties directly to the composer as well as the publisher. If publishers were to do this, composers would notice that they were only receiving, say, a 50% share on works that they had not assigned. Moreover, the PRS does require sight of assignments.

One reason why an unscrupulous publisher might be able fraudulently to claim an interest could be that the composer of the work is not a member of MCPS and has consequently neither registered the work with the Society as being in manuscript, nor him/herself as copyright owner. Another reason could be that the composer is a member but does not realise the work is likely to earn any mechanical royalties, and therefore does not miss the royalties when they fail to appear on the statement. A publisher who fraudulently receives royalties directly from the Society is hardly likely to pay the composer a 'normal share' of those mechanicals and give the game away.

This may ail sound pretty unlikely stuff, but professional composers have encountered instances of this situation, though foul play was not normally intended. In one case the publisher claimed ownership of the copyright before the terms of the assignment were agreed, let alone signed, and MCPS paid all royalties to the publisher without checking the existence of an assignment. Had foul play been intended, the composer might never have found out. Apart from anything else, the composer should have the opportunity of checking that all the details on the notification are correct--and although, theoretically, the MCPS copy should read the same as the PRS one, it is possible for different information to be entered on each copy.

MCPS should require either the composer's signature on their copy of the notification forms or sight of a copy of the assignment: then there can be no doubts. Until such time as this becomes the practice of the Society, the composer's only solution is to have it written into publishing agreements that the composer shall receive his/her share of mechanical royalties distributed by MCPS directly from the Society.

It is only fair to say at this point that most publishers are perfectly honourable in the way they operate their agreements and carry on their business: however, whilst the MCPS remains under the ownership of the MPA and the imbalances on the Board persist, composers are left in the position of being disempowered when it comes to effecting changes in some of the less-advantageous practices of the industry. Despite making representations to MCPS and the MPA over a period of several years, even the composers' request for access to accounting information has been refused.

Granting a Licence

An exclusive licence, to be effective under the 1998 Copyright Act, must always be in writing and signed by or on behalf of the copyright owner. A non-exclusive licence can take any form, including inference from conduct. If composers grant licences to publish their work or assign only certain rights, they retain those rights that they do not wish to grant and the publisher does not need. For example:

In addition, and very importantly, the composer can remain the beneficial owner of the copyright, which can be of some considerable value. However, it should be remembered that with the exception of actual beneficial ownership, if the licence granted gives all those rights which an assignment of whole copyright would have given, the contract will operate in more or less the same fashion as an assignment.

When granting any licence it is imperative that composers assert their moral rights and try to avoid giving waivers, particularly unconditional ones.

Term

Every agreement should specify the period of time during which the contract remains in force. This is called the term of the agreement.

Single piece Assignment or Licence

As with all assignments, to be effective under the 1988 Act a single-piece assignment or exclusive licence must be in writing and signed by the copyright owner in the case of an assignment, and by the person authorised to exercise rights granted in the case of a licence.

The term for an assignment is normally for the life of the copyright and all extensions and renewals thereof, but it can be shorter if so specified. Early reversion of copyright or any of the rights given under an assignment or licence can be very complex, and should only be invoked when serious breaches of fundamental conditions occur and the relationship with the publisher seems irredeemable. In some contracts there is an implied term that when demand for the copyright is agreed by both parties to have ceased, the contract will end, normally on the publisher's giving notice.

Even when a composer is signed exclusively to one publisher for all the composer's works during the period of that agreement, single-piece assignments are normally drawn up in respect of each work created during the contract period.

NB: even in single-piece assignments the composer should assert moral rights and ensure that the copyright reverts in the event of the bankruptcy, cessation of trading, or cessation of MCPS membership by the publisher.

Exclusive Service and First-Option Contracts

Under this type of agreement, the composer is tied to the publisher for all compositions and cannot normally take any works, during the term of the agreement, to another publisher. If contracts take the form of assignments or exclusive licences of future works, they must be in writing and signed by the copyright owners.

Despite the exclusivity of the agreement, if the parties agree it is possible to embody a provision that should the publisher not wish to publish certain of the composer's works, the composer will be free to take these to another publisher. In addition to the clause itself, it is wise, in each instance, to get such permission in writing from the publisher.

A first-option agreement will operate similarly to that described in the previous paragraph, granting the publisher the right of first option to publish the composer's works during the term of the agreement, but permitting the composer to take those which the publisher does not want to another publisher.

To a composer embarking on a career, the offer of a long-service agreement may create a feeling of security; but three to five years is long enough. If things are going well, both parties will probably wish to renew. If things are not going well there are no advantages to a composer in being tied to a publisher who operates without enthusiasm but continues to prohibit the composer from taking works elsewhere. Arty composer offered a ten year contract should make sure there is a 'natural break' clause for either party, at not more than five years.

The UK Courts have released one or two writers from exceptionally onerous agreements, but rarely allow for reversion of the rights in those works assigned prior to termination.

It should be remembered that whilst the term of exclusivity may be limited by such a service agreement, the copyright in the works created during that period will probably have been assigned for the life of the copyright; therefore the publisher will continue to be their beneficial owner even after the term of the service agreement has expired.

NB: In exclusive agreements, composers should assert their moral rights, and they should ensure that the copyright reverts to them in the event of the bankruptcy, cessation of trading, or cessation of MCPS membership by the publisher.

All agreements to assign or license should specify the territory over which the rights are granted.

Most assignments are for The World. The development of space technology has resulted in some publishers extending their territorial horizons to The Universe.

If composers wish to limit territory, they can do so either by naming the territories--if there are very few--over which they grant the publisher rights or, if they are numerous, by excepting specified territories from The World.

For other contracts see the links down the right, underneath the contracts heading in the menu.