Music Royalties, Intellectual Property & Trademarking – GRM Daily

Written By: Al-Amin Amusan

In 2018, the late rapper Juice Wrld released his hit single “Lucid dreams,” which was from his debut studio album Goodbye & Good Riddance. As one of his most popular songs, it has received 1.9 billion Spotify streams. However, Juice Wrld and his estate own a negligible portion of the song’s rights and have received less than 15% of the royalties. How is this possible? Nick Mira, one of Juice Wrld’s frequent producers, interpolated the melody from Sting’s “Shape of my heart,” and when Sting caught on, he sued for copyright infringement.

Since Nick Mira and the Juice Wrld crew never got the sample cleared, Sting won the lawsuit and was awarded the song’s rights and royalties. Juice Wrlds team should’ve contacted the owner of the master recording (which appears to be Sting himself) and the owners of the publishing to discuss and agree upon a set of terms and a clearance fee which we will touch on later. This situation is an example of Entertainment law in action. 

In music people sign record deals everyday, and for a lot of artists it’s a measure of success. In the past decade the music industry has changed a lot with the advent of streaming companies. It has become the main way people listen to music in today’s day and age. However, it has left a lot of artists dejected. Most streaming companies practice a stream share system, in which all the money received by the company is then distributed per stream to all artists.

On the surface, the system seems to be beneficial and fair to all parties, but in reality it is unfair to smaller artists and it has been criticised as such. So much so that a bill has been proposed in parliament to remedy these issues and create a more equitable environment for artists that have been affected. This could help create an equitable payout and industry for upcoming artists who are unable to make a living due to the inequality of the stream share system that is currently in place.

In the meantime there’s a couple ways artists can use different systems in place to be more efficient and maximise profits. This can be achieved by starting an LLC(limited liability company) or LLP(limited liability partnership) if it’s a band. One of the good reasons an artist or band would want to start creating an LLC, would be to protect your personal assets against music related claims. You would not be sued personally for a legal scenario affecting your music after incorporating an LLC because the LLC owns your music.

Furthermore, it’ll be more efficient to have all your different royalties collected by the same entity that would be under your control. You could get your publishing, master and sync royalties all going to the same place and with the help of a good accountant you could minimise taxes paid. In the case of a group of artists, a LLP would help sort out splits and who owns what share of the partnership. This could help prevent any future disputes and misunderstandings that often occur. 

The different splits between writers and producers is often hard to delegate due to different types of royalties. For example, the aforementioned publishing royalties. Publishing pertains to all of the rights that songwriters have over their songs, such as the right to publicly play a song, such as on the radio or in a live performance, as well as the right to duplicate a song. To collect all royalties earned from these activities, you’ll need a publishing administrator to register your works with collection societies across the globe, license your rights, and collect royalties. There are several reliable publishing administration companies such as songtrust. 

Another way musicians make money is through licensing. This is essentially when you give another entity the right to play your music publicly, and you’re owed royalties for that. Similar to publishing royalties there are companies in charge of this. In the UK that company is PPL, and they collect the royalties for music placed on TV, played in public or on the radio. Sync licensing in particular is a very lucrative venture for artists (that’s getting your music into things like TV shows). These companies like Songtrust, ASCAP, BMI and PPL are all very important because they can also help find out who owns what when it comes to sampling and clearing. Samples are a staple of hip-hop, but can be very tricky to clear, so to avoid risk of losing royalties it’s simply smarter to contact the rights owners of the music you want to sample and agree on a set of terms. Another way to claim royalties, is claiming on songs that have infringed on your intellectual property. 

Additionally, on the topic of intellectual property, Several rappers and singers have catchphrases, terms and words that they invented and are associated with their brand, this can be part of their intellectual property and all artists should endeavour to protect this property as they would any other asset. One of the ways to protect these terms, for example when Skepta says “GREAZE” is to trademark the term. A trademark is a term, name, symbol, or device, or a mix of these, used by a business or person  in commerce to distinguish its goods and services from those of others. 

Trademark rights can be used to prohibit others from using a mark that is confusingly similar to yours. It helps you prevent others from stealing things, terms and ideas that are closely related to your brand and using it in theirs, without negotiating with you first. In order to obtain national trademark rights, which serve as proof of ownership of the mark and allow the owner to sue for infringement in court, the owner must first apply to register the mark at the relevant institutions, which in the United States is the USPTO and in the United Kingdom you can apply online on the UK GOV website. Copyright kind of works the same way, but the benefits or necessity of registration differs from place to place.

On the other hand a lot of these rights are lost when artists sign record deals and contracts, most of these contracts come with recording advances (money paid to artists to record the music) in which the artists take in exchange for the rights to their work as a songwriter or performer. The same applies for producers/beat makers who are technically songwriters since they made the composition. All of these people and roles are entitled to different types of royalties and rights that are usually given away, most people don’t sign away all their rights but usually the record label gets a larger share because they take on the risk of investing in the artist.  To simplify and explain the flow of royalties in the Music industry i’ve attached a simplified diagram created by Tunecore below:

Entertainment law can be very complicated and is always evolving, but hopefully this article would help give people just coming into the industry some insight on how to best navigate the industry. There’s many ways to monetise your art and a good understanding of the laws surrounding it is never a bad way to start.

Be sure to let us know what else you’d like to see us unpick in the world of music and entertainment law, and keep it locked on GRM Daily for the next instalment of Law, Schooled.