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The use of digital sampling has become ubiquitous in the music industry. Simply put, digital sampling is a technique of extracting a recorded passage from a previous musical work and inserting that passage into a new recording. The “sample” is often used in a repetitive manner as well as in conjunction with new music, lyrics and/or other samples. Digital sampling, therefore, consists of copying and/or creating a new musical work based upon a pre-existing work. Typically, a recorded song is protected by one or more copyrights. Thus, before releasing a song with a digital sample, a record company or a representative of the new artist must seek permission, which is almost always in the form of a nonexclusive license, from the copyright owner of the original work. The question being faced by potential licensees and licensors alike, however, is whether the need for these licenses is diminished in light of the recent ruling by the U.S. District Court for the Central District of California in Newton v. Diamond, 204 F. Supp. 2d 1244 (C.D. Calif. 2002). For many outside of the music industry, music licensing is a confusing subject. This is mainly because people tend to think of “music” as a single entity and a single right. However, there are two very different and very distinct sets of rights: the rights to the musical composition (the written lyrics and the accompanying music), and the rights to the sound recording of the musical composition. T.B. Harms Co. v. Jem Records Inc., 655 F. Supp 1575, 1577 at n.1 (D.N.J. 1987). See also, U.S. Copyright Office Circular 56a and 3 Melville B. Nimmer & David Nimmer, “Nimmer on Copyright,” at � 2.10 [A][2]. This distinction is best explained by an example. The song “I’m a Believer” was written by Neil Diamond, and he (or an assignee) owns the copyright to the musical composition. As a result, Neil Diamond (or his assignee) will be credited as the copyright owner of the musical composition on each release of the song “I’m a Believer,” regardless of whether it is the version recorded by him, the version recorded by the Monkees or even the more recent version recorded by the group Smashmouth (for use in the movie “Shrek”). On the other hand, the members of the Monkees or Smashmouth, or their respective record company, would own the sound recording copyrights to those versions of the song. This distinction between sound recordings and musical compositions was delineated by the U.S. Supreme Court in White-Smith Music Publishing v. Apollo, 209 U.S. 1 (1908). DIGITAL SAMPLING Any reproduction of a musical composition or a sound recording requires the consent of the owner of that particular copyright. See 17 U.S.C. 106. For purposes of digital sampling, two types of licenses are generally sought: on the underlying musical composition (a “mechanical” license) and on the recorded performance or sound recording (a “master use” license). The Copyright Act expressly limits the protection of a sound recording to “the actual sounds fixed in the recording.” 17 U.S.C. 114(b). This means that a “soundalike” recording (a recording emulating the style of a famous artist) can be made without violating the sound-recording copyright. See, e.g., Fantastic Fakes Inc. v. Pickwick Int’l Inc., 661 F.2d 479 (5th Cir. 1981). The “soundalike” recording, however, would still require a license for the musical composition. Digital sampling is defined as making a copy of a portion of an existing sound recording and then using that copy in a new sound recording. See Jarvis v. A & M Records, 827 F. Supp. 282, 294-95 (D.N.J. 1993) (citing Judith Greenberg Finell, “How a Musicologist Views Digital Sampling Issues,” N.Y.L.J., May 22, 1992, at 5 n.3). See also, Tin Pan Apple Inc. v. Miller Brewing Co. Inc., No. 88-Civ.-4085, 1994 WL 62360, (S.D.N.Y. Feb. 23, 1994). While the process of copying was always available, a sampling revolution occurred during the mid-’80s, when MIDI (musical instrumental digital interface) devices became commercially available to musicians, and all sounds could be reduced to and copied from digital code. Within a few years, digital sampling became prevalent throughout various genres of popular music. See Brett I. Kaplicer, Note, “Rap Music and De Minimis Copying,” 18 Cardozo Arts & Ent. L.J. 227 (2000). The issues of whether digital sampling amounted to copyright infringement and/or whether digital sampling should be governed by traditional copyright principles baffled the music industry. This is because only a portion of the original recording — e.g., a few seconds of guitar playing — is taken, and, in most instances the new song does not sound similar to the original song. For several years, the songs including the samples did not credit the original authors or performers, and no licenses were issued. The owners of the sampled songs were reluctant to allow the courts to entertain these issues, and, as such, approached litigation tentatively. ‘GRAND UPRIGHT’: A PRECEDENT The landscape changed with Judge Kevin T. Duffy’s decision in Grand Upright v. Warner Bros., 780 F. Supp. 182 (S.D.N.Y. 1991), the first case to address directly the issue of digital sampling. At issue in Grand Upright was musician Biz Markie’s sampling of the chorus from the 1970s easy-listening song, “Alone Again (Naturally),” in his rap song “Alone Again.” Duffy began the opinion by quoting the seventh commandment, “Thou shalt not steal” and concluded by referring the case to the U.S. Attorney’s Office for consideration of criminal charges. Following Grand Upright, digital sampling was viewed categorically as copyright exploitation requiring a license from the copyright owner to avoid a charge of infringement. Indeed, one court opined that, without authorization from the copyright owner, “[t]here can be no more brazen stealing of music than digital sampling.” Jarvis v. A&M Records, 827 F. Supp. 282, 294-95 (D.N.J. 1993). The licenses issued for digital samples skyrocketed once this broad copyright protection was uniformly extended. Indeed, music industry experts have stated that although no one can accurately determine the true amount of licensing income derived from digital sampling, such licenses garner no less than $150 million per year in payments, and may actually cost the samplers more than $250 million. The factors that typically determine the cost of the license are the popularity of the original song, the fame of the original artist and/or songwriter, the way in which the sample is used, the duration of the sample, where the sample is found in the original recording, where the sample appears in the new recording and the extent to which the sample is used in the new recording. Based on these considerations, the owner of the copyrights being sampled will negotiate either a one-time fee or a per-unit royalty rate for use of the sample. The latter has become the accepted mode of licensing, with copyright holders issuing licenses for digital samples limited to one or two words, a three-note bass line and even a single drum beat. These licenses are issued for as much as 10 cents per unit to as little as one-half cent per unit. Because new albums can contain literally dozens of samples, the cost to the record companies issuing the new work can become quite high. Indeed, an album with 20 digital samples might sell 1 million units, creating a liability of $2 million in license fees. Against this backdrop, the record companies have become reluctant to pay for digital samples that they believe to be de minimis, and from this quagmire of fees arose Newton v. Diamond, the first case to focus on this issue. THE FACTS BEHIND ‘NEWTON’ In Newton v. Diamond, 204 F. Supp. 2d 1244 (C.D. Calif. 2002). the plaintiff, James W. Newton Jr., was a flautist and composer, and the sole author and copyright owner of a musical composition entitled “Choir.” Newton was also the recording artist who performed in “Choir.” In 1981, Newton assigned his copyright to the sound recording of “Choir” to ECM Records. The defendants in Newton were the recording group known as the Beastie Boys, a well-known rap/alternative rock group. The Beastie Boys obtained a license from ECM to digitally sample the sound recording of “Choir” in its new composition entitled “Pass The Mic.” The Beastie Boys did not obtain a license for the musical composition of “Choir.” Accordingly, Newton brought a copyright infringement suit. Given that the Beastie Boys acknowledged using the master recording to “Choir,” there seemed little defense against a charge of infringement. Indeed, the defense did not deny that the compositional components of “Choir” were appropriated, but, rather, asserted that the compositional components that were taken were not separately copyrightable from the composition “Choir” as a whole. The sample at issue consisted of a six-second segment of the flautist playing three notes. Newton explained that in the flute piece that was taken, the performer fingers and “overblows” a C above middle C on the flute, while simultaneously using breath control to sing and emphasize the 3-note sequence of C, D-flat and C. The expert testimony proffered by both sides acknowledged that this technique (which was labeled the “Newton Technique”) was not unique and had been widely performed before the creation of “Choir.” Newton’s infringement action was premised solely on the Beastie Boys’ failure to obtain a license for use of this segment of the “composition.” In reviewing the evidence before her, District Judge Nora M. Manella agreed with the Beastie Boys, and held that, as a matter of law, the portion of the “Choir” composition that was taken by the Beastie Boys was not copyrightable. Utilizing the rationale of Jean v. Bug Music, No. 00 Civ 4022, 2002 U.S. Dist. Lexis 3176 (S.D.N.Y. Feb. 27, 2002), the district court first determined that the copyright certificate for “Choir” only covered the composition as a whole, and did not cover the constituent parts of “Choir” when reviewed separately. Because of the admission that this three-note sample was commonly used, both before and after “Choir,” the district court held that the segment could not be original and, therefore, could not be subject to copyright protection. Notwithstanding, the court did recognize situations in which three notes could be deemed original: sequences with accompanying lyrics, sequences at the heart of the musical composition, sequences and lyrics that were repetitive and sequences that were based upon analyses of both the written composition and the sound recording. Manella’s opinion also determined that even if the three-note pattern were copyrightable, the Beastie Boys’ use of the sample did not amount to copyright infringement. Focusing on the two works at issue, Manella found that the sample was neither qualitatively nor quantitatively significant to “Choir.” As such, according to the district court, the use of the sample was de minimis, and, therefore, not actionable. IMPACT OF THE RULING The Newton decision was met with cheers from the recording companies, and fears by established artists and songwriters. Steven Ames Brown, a recording industry attorney, stated in a conversation that Newton opened the door for samplers to “borrow” freely from any past work. Likewise, an agent for older, established artists expressed the concern that samplers now have carte blanche to steal lawfully copyrighted material without compensating the original artist or songwriter. Yet the effect of Newton should not be as pronounced as some industry insiders hope. In Newton, the “composition” that Newton relied upon was actually sheet music. As such, the composition could not contain any of the performative aspects that made “Choir,” or portions thereof, unique. Yet it was precisely those performative elements that Newton’s infringement claim relied upon. Indeed, the district court opined that Newton’s simultaneous playing and singing into the flute was not part of the “composition” since the notations set forth on the sheet music registered with the U.S. Copyright Office did not include reference to breath control or “overblowing.” Since this technique was not part of the written composition it was not deemed “original” to obtain copyright status. Accordingly, the only protection available was the copyright to the sound recording, for which the Beastie Boys had obtained a license. Although sheet music is one of the forms of deposit authorized by the U.S. Copyright Office, virtually all musical compositions sought to be copyrighted are deposited in an aural device, such as a compact disc or cassette. Therefore, the problems encountered by Newton would not be present in most other instances. Indeed, at various times, Manella appeared to lay blame on Newton’s failure to include his unique elements in the sheet music deposited with his copyright registration. Hence, Manella ruled that such a segment could only be protected by the sound-recording copyright for which a proper license was granted. The question that remains after Newton is whether we have seen the end of licensing digital samples. The answer must be a resounding “no” for two disparate reasons. The first is that Newton serves to reaffirm the requirement that a sampler obtain a license for the sound recording at issue. Second, Newton is limited to situations in which the sound recording and composition do not actually cover the same work. As Manella clearly found, the elements that Newton sought to protect, while perhaps present in a musical composition, were not present in the copyrighted composition “Choir.” That is, the sheet music failed to include the unique elements of Newton’s performance. While Newton may affect similar cases in which the sheet-music deposit fails to express the performative aspects of a composition, such cases are rare. As such, Newton should not be read as the death of licensing, but rather as a guide to the requirements of a proper copyright application. Oren J. Warshavsky is an associate in the intellectual property group in the New York office of Newark, N.J.’s Gibbons, Del Deo, Dolan, Griffinger & Vecchione (www.gibbonslaw.com). He specializes in copyright litigation, representing both artists and recording companies. Jay L. Berger is the senior artist representative at Artists Rights Enforcement Corp. in New York. In addition, he has testified at trial as a damages expert in copyright cases.

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