Music Law: Legal Issues For Bands

When I played in bands in high school and college, in addition to playing guitar and bass, I always seemed to end up as the "logistics" guy.

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When I played in bands in high school and college, in addition to playing guitar and bass, I always seemed to end up as the "logistics" guy.

This meant that I lined up equipment, planned video shoots and recording sessions and generally made sure business was taken care of. I also registered the copyrights for our songs and recordings with the U.S. Copyright Office even though I had no clue what the legal significance of doing so was. It just seemed like a good idea.

Years later, as an entertainment attorney representing several bands, it is my job to advise them on the various legal issues which may need to be addressed in connection with their business organization and intellectual property.

The following is an overview of some of the major legal issues that concern musical groups. These comments are general and each issue obviously would require a more detailed look based on a particular group's situation.

Choice Of Entity

The most basic form of business comprised of two or more persons is a general partnership.

For that reason, virtually all bands start out as general partnerships. The legal requirements for a general partnership are few. For one thing, the partnership must file a fictitious business name ("DBA") certificate with the county clerk where the business is located. In addition, a partnership usually must file an SS-4 with the IRS in order to receive a federal tax number.

However, even though it's not legally required, it is recommended that the partners enter into a written agreement dealing with issues such as: sharing profits and losses, voting rights, new partners, departing partners, and ownership of intellectual property.

For a few reasons, including tax and exposure to liability, a corporation or a limited liability company (LLC) may be recommended.

A corporation may only be formed by executing and filing articles of incorporation in the office of the Secretary of State, usually in the state where the corporation has it's "primary place of business." An LLC may only formed by executing and filing articles of organization in the office of the Secretary of State, usually in the state where the LLC has it's primary place of business.

Generally, a corporation is subject to tax on it's earnings and profits. The shareholders are taxed for dividends distributed by the corporation. This is often referred to as "double taxation". However, the Internal Revenue Code and many state tax codes provide that the shareholders may choose to be treated as a Subchapter S Corporation, subject to certain restrictions, which lessens the double taxation issue via "pass-through" of corporate income, deductions, losses and credits to the shareholders. This is often called "pass-through taxation".

An LLC, on the other hand, has many of the tax attributes of a partnership but less formality than a corporation would require.

For a start-up band, the major disincentive for forming a corporation or LLC is the cost--- filing fees and franchise tax fees can be several hundred dollars. And the paperwork that must be kept up and submitted to various state and federal government offices on a regular basis can be a pain in the neck.

Copyright

Looking back at my band days, I am glad that I knew enough to submit those copyright applications. Copyright registration is so easy to do and so important that it should be high on the to-do list for any band. Copyright registration is available for the group's musical compositions and for sound recordings.

First, it is important to understand the big picture. Copyright is a form of protection provided by the laws of the United States (Title 17 of the U.S. Code) to the authors of original, works of authorship including literary, dramatic, musical, artistic, and certain other intellectual works.

Copyright is secured automatically when the work is created, and a work is created when it is fixed in a copy. Copies are material objects from which a work can be read or visually perceived either directly or with the aid of a machine or device, such as books, manuscripts, sheet music, film, videotape, microfilm, CDs or even MP3s. If a work is prepared over a period of time, the part of the work that is fixed on a particular date constitutes the created work as of that date.

So, even though you get a copyright in your work automatically when you record it in a copy, it is still very important to register your copyright with the U.S. Copyright Office.

In general, copyright registration is a legal formality intended to make a public record of the basic facts of a particular copyright. Even though registration is not a requirement for protection, the copyright law provides several incentives to encourage copyright owners to register. Among these are:

  • Registration establishes a public record of the copyright claim
  • Registration is usually required before you can sue someone for infringement.
  • If you register within 3 months of publishing your work or prior to an infringement of your work (I.e., a "timely" registration), statutory damages and attorney's fees will be available to you as the copyright owner in court actions. Otherwise, only an award of actual damages and profits is available to you.

    And for clarity, actual damages refers to the damages a copyright owner sustains essentially per unlawful copy made of the work. Statutory damages in Title 17 provide for damages per copyrighted work.

    This means that if you don't register your copyrights, you have to give evidence of each unlawful copy made (actual damages) to receive a damage award. If you do register your copyrights and can prove infringement at trial, you don' t have to prove damages and you receive the statutory award provided for in Title 17 per work infringed. And the losing side has to pay your attorneys fees.

    Here's a hypothetical. Let's say your song was used in a television or radio commercial without your permission. Even if you can prove all the elements of copyright infringement, your case will be severely compromised if you do not have a timely registration.

    If the other party knows that you cannot recover your attorneys fees if you win, they may gamble that you will not be willing to incur significant legal fees in taking the case to trial. At the very least, they may be able to leverage a cheaper settlement from you. In addition, the lack of statutory damages puts the pressure on you to prove your actual damages.

    Fortunately, registration is easy and inexpensive. To register a work, an application form is sent to the Library of Congress, Copyright Office, together with a filing fee of $45 for each application and a deposit of the work being registered. The deposit requirements vary in particular situations, and for specific information - go to www.copyright.gov.

    Trademark

    Unlike copyright, registering your trademarks is more expensive and sometimes complicated. But it is no less important.

    Finding out that another band has the rights to your band name (or one that is likely to cause confusion with yours) can be devastating after you have built up an audience and spent money branding yourself on posters, websites and merch.

    Therefore, it is important to carefully choose and then protect your band name and sometimes even a band logo. And remember - the standard for trademark infringement isn't simply that one person is using the exact same mark as another person. The standard is whether the public/consumers will be confused.

    This means that (a) you want to make sure that no one else is using the trademark (or one that is confusingly similar) already, and (b) you will want to register the mark with the United States Patent & Trademark Office. (www.uspto.gov)

    The main reason to obtain federal trademark registration is: to provide notice to everyone of your exclusive right to use the mark, thus eliminating someone's ability to use a good faith defense against a claim of infringement. The owner of a registered mark may also be able to get the court to order injunctive relief to stop third parties from using the mark or one that is confusingly similar.

    It is smart to conduct a trademark search. While a search is not a legal requirement, a decision to invest the money necessary in the search process up front may prevent spending money on trademark filing fees and legal costs down the road if someone else claims to have priority to your mark.

    As a very rough starting point, you can do a quick Google search to see if there are any glaring uses of the mark you want to use. Keep an eye out for uses "in commerce" and uses that are in the same general area as the goods and/or services you want to offer.

    Next, check out the USPTO website, where you can access and search the trademark database. This search will only help you if your proposed trademark is spelled exactly the same as another registered mark.

    For example, if you were searching for a registration for the mark Air for your band, your search would not reveal a registration for the mark Ayre. However, if these trademarks were both being used for bands, they would be deemed to be confusingly similar.

    For that reason and many others, many people engage a professional search company which will search not only Federal and State files, but also conduct an extremely thorough internet search and a common law search.

    A common law search encompasses such records as state-level corporate name filings, trade directories and periodic archives, in an effort to uncover any enterprises that may be senior users of a mark even though they have not filed applications for registration of the mark. Such common law searches may reveal that the proposed mark is already owned by another, or that you may not be able to obtain exclusive use of one or more of the marks.

    Although the search can be expensive, it is a worthy investment. Even if the trademark search does not score any direct hits respecting the desired mark, it can provide important insights as to other arguably similar marks in use by others. This knowledge can be put to use by, e.g., adding additional design elements to your mark to differentiate it from a possibly similar mark of another party.

    Assuming your trademark gets a clean bill of health via the search report, the next step is to file the application with the Patent & Trademark Office in Washington, D.C. The application must set forth the date of first use in commerce and the goods or services in connection with which the mark has been used. You will be asked to verify that, to the best of your knowledge, no other party has the right to use the mark, either in identical form or in such near resemblance as to be likely, when used in connection with the goods and services of the other, to cause confusion or mistake or to deceive.

    In addition to the application, you will need to submit specimens of use. Depending on how you are using the mark (I.e., as a service mark for the provision of services or as a trademark for the sale of goods), you may have to provide different specimens.

    For a trademark, the specimens might be samples of actual CD labels or packaging materials displaying the mark. It can even be a screen shot of the part of your website where you sell CDs or MP3s (I.e., "use in commerce"). For a service mark, it is acceptable to submit advertisements since, obviously, one cannot affix a mark to intangible services.

    Among the issues that typically require expert legal advice in a trademark application is the determination as to the appropriate class of goods or services for which registration is sought. The United States has adopted the international classification of goods and services, a list which sets forth 42 categories of goods and services. A separate filing fee and specimens must be submitted for each class in which registration is sought. The current fee is $325.00, per class, for each registration.

    Work-For-Hire

    As creative as musicians are, it is often necessary to look outside the band for certain services. An obvious example of this would be engaging a producer for a recording session. And let's not forget the friend of the drummer who designs posters, album covers and websites for the band. The legal implications of these relationships are significant, although highly overlooked.

    The use of employees, family, friends and freelancers to apply specialized artistic, musical, graphic, editorial and computer programming skills to the band's projects may raise questions about the rightful ownership of the resulting intellectual property.

    The band should contractually retain all ownership of any work contributed by any third parties. It does not matter whether or not the band paid for the services. Failure to do get it in writing can, and all too often does, result in complex work-for-hire and other disputes that take much time and expense to resolve.

    Appropriate agreements can range from a few lines to lengthy and complicated contracts depending on many factors. The common theme of the document would deal with the ownership of intellectual property rights, but they might also include, for example, provisions dealing with confidentiality, dispute resolution and credit.

    Website Issues

    By the same token, while many new bands are able to design and maintain their own websites, other bands engage a web designer and or webmaster to handle those chores. Again, the following issues may be relevant:

  • All audio, video, text and still image content on the band's website that is not owned by the band should be cleared in advance. This includes photographs of the band taken by third parties.
  • The use of a web designer and/or webmaster to provide specialized graphic, editorial and computer programming skills to the your website may raise questions about the rightful ownership of the resulting intellectual property. You should contractually retain all ownership of any work on the site contributed by such persons.
  • If the band will be selling it's own products online, it should make sure it's sales terms and conditions properly address issues raised by the worldwide nature of the Internet. Depending upon the types of merchandise sold on the website, these issues may include product liability, tax and related third-party claims.
  • All agreements between the band and webmasters, advertisers, purchasers and/or users should clearly specify the law and jurisdiction that will apply to any action resulting from the site.

    As a band becomes more successful, it will be faced with other legal issues. These may include employment agreements with road managers and other permanent staff, insurance issues, agreements with managers and agents, recording agreements, publishing agreements, merchandising and personal appearance agreements.

    by Tony Berman 2008 M.E.L.O.N.

  • 48 comments sorted by best / new / date

      Free to Guitar
      Poor man's copyright could bite you right in the rear. Sending a letter yourself is not 100% proof. The carrier doesn't certify the CONTENTS of the package, just that it arrived at such and such.
      guitarmaniac88
      thedarkblues06 wrote: SLD.Potato wrote: Generally, a corporation is subject to tax on it's earnings and profits. The shareholders are taxed for dividends distributed by the corporation. This is often referred to as "double taxation". However, the Internal Revenue Code and many state tax codes provide that the shareholders may choose to be treated as a Subchapter S Corporation, subject to certain restrictions, which lessens the double taxation issue via "pass-through" of corporate income, deductions, losses and credits to the shareholders. This is often called "pass-through taxation". Dude, do you honestly think anybody on this website got any of that?! You could've done a better job clearing this stuff up for people who aren't entertainment lawyers. Maybe you're just an idiot who can't read. Seriously, if you have a college education this is a very well written article, I enjoyed reading it as a law school student and as an avid musician. Kudos, I applaud you.
      I don't care about any kind of law stuff like this, though it is important, and I don't exactly understand it. It doesn't matter if you went to college or not, Do you think the Naked Brothers Band has a college education?
      Untamed_Horizon
      "though it is important" lol horrible filler. I think this article is very helpful, it just takes a little time and some research to be fully understood. Better off knowing at least some of the things listed up there than to be totally uninformed of all those legal issues.
      thedarkblues06
      guitarmaniac88 wrote: thedarkblues06 wrote: SLD.Potato wrote: Generally, a corporation is subject to tax on it's earnings and profits. The shareholders are taxed for dividends distributed by the corporation. This is often referred to as "double taxation". However, the Internal Revenue Code and many state tax codes provide that the shareholders may choose to be treated as a Subchapter S Corporation, subject to certain restrictions, which lessens the double taxation issue via "pass-through" of corporate income, deductions, losses and credits to the shareholders. This is often called "pass-through taxation". Dude, do you honestly think anybody on this website got any of that?! You could've done a better job clearing this stuff up for people who aren't entertainment lawyers. Maybe you're just an idiot who can't read. Seriously, if you have a college education this is a very well written article, I enjoyed reading it as a law school student and as an avid musician. Kudos, I applaud you. I don't care about any kind of law stuff like this , though it is important, and I don't exactly understand it. It doesn't matter if you went to college or not, Do you think the Naked Brothers Band has a college education?
      1. Then why read it? 2. No, because they are professional musicians. If you can understand basic English, and don't fly over this, and do maybe 20 minutes of research, anyone can understand what he has to say. Untamed_Horizon is right. Better off to know now. As well as the fact in entertainment/business/corporate law, if you don't spend the money to get it right in the first place, you'll pay so much more down the road, like the article writer said.
      §ArmyofAngels§
      Yeah, in New Zealand things are automatically copyrighted once you have a record of them in any form, e.g written music, sound recording. But how do you prove what date something was done? =\
      Write a copy on your computer and save it, it will have a "Date Created" thing in the file properties. As long as you have that original file on your computer you'll have proof of the date.
      MiG_853
      I found the points made really useful, and despite living in Portugal, a lot of the legal principles are the same; so definately a great article.
      Lemoninfluence
      ArmyofAngels wrote: Yeah, in New Zealand things are automatically copyrighted once you have a record of them in any form, e.g written music, sound recording. But how do you prove what date something was done? =\ Write a copy on your computer and save it, it will have a "Date Created" thing in the file properties. As long as you have that original file on your computer you'll have proof of the date.
      that's easily changed, so I doubt it'd be enough. checked
      _GoingBlind_
      send a certified letter/package to yourself via Post offfice/UPS/FED EX it will be sealed and dated after it is sent, so therefore sealed before postage.
      asfastasdark
      Tl;dr, but you definitely seem to know what you're talking about. I'm kinda the same as you, planning everything.
      YetAnotherMuso
      THANKYOU! I'm releasing an EP soon, and I have been looking everywhere for someone to just give a basic rundown on the sort of legal requirements of that...so yeah, very helpful indeed
      abbydaddy03
      I'm sure it is all necessary, but at what point? What if you just play and sing for a few bucks a couple times a month?
      cornmancer
      Good article, but you should have put a summary in laymen's terms at the bottome of each section.
      Kevin 49
      Can someone answer me a query? A good friend of mine was in a very famous band of 60/70's. last week he received a copy of a new compilation and one of the songs on it was written by him and the drummer. On the label it says copyright reserved but under the name of the drummer only. Now it was never released by the group at the time and EMI have had it in their vaults and now it appears. What should he do and does copyright reserved mean the drummer is getting royalties or is no one??? Please explain anyone?
      guitarp_11
      Excellent article. It is expensive though, when you sit down and think about it. Cutting an album with 10 songs cost $450 right of the top for copyrighting. Add 5 or 6 hundred more to that if you plan to trademark and become an LLC. Chops to the author, and if anyone out there happens to live in Winnmeucca, NV, or somewhere close, look me up. I'm a guitarist in search of a band, in almost any genre...
      TheWarlock724
      morgy159 wrote: Solution, **** the law!
      It's all fun and games to say stuff like that, until the law demands its reach-around. ... Which it WILL get.
      jazkel24
      Hey. Some cool stuff there. Aus rules are slightly different, but fairly similar. Interesting point it took me a while to get my head around initially: Copyright is automatic. As soon as the song is written, it's copyrighted. But you covered that. Good article!
      Regression
      Yeah, in New Zealand things are automatically copyrighted once you have a record of them in any form, e.g written music, sound recording. But how do you prove what date something was done? =\
      CoreysMonster
      I wrote this article, you imposter! *hopes writer didnt copyright it* i kid, awesome article!
      stephen_rettie
      Regression wrote: Yeah, in New Zealand things are automatically copyrighted once you have a record of them in any form, e.g written music, sound recording. But how do you prove what date something was done? =\
      post it to yourself
      ChazBcWarlock
      it seems quite complicated actually, i cant imagine reel big fish doing this themselves (meaning they must of hired someone to do it)
      Regression
      stephen_rettie wrote: Regression wrote: Yeah, in New Zealand things are automatically copyrighted once you have a record of them in any form, e.g written music, sound recording. But how do you prove what date something was done? =\ post it to yourself
      Yeah, but I've read about that. In the US it doesn't hold up in court because envelopes don't have to be sealed when posted. In New Zealand I'm not sure if envelopes have to be sealed or not.
      The_Man_IV
      BrianApocalypse : Useful stuff, but should've specified about the US, as the other countries all have different laws. POSTED: 10/06/2008 - 09:47 am / quote
      bite_the_bullet
      He did specify the country, just not that other countries have slightly different regulations which could be seen as common knowledge of a resident there... You obviously overlooked all the UNITED STATES government offices he cited as places whose regulations he was explaining.
      Lin
      would be great if someone could do a guide like this for UK, etc.
      Table Salt
      Great article! All new bands should look this over before they begin putting their name out there.
      Huffman
      shitson that complicated.. adn also a little to pricey 4 my uber starting up band except the google the name to check thing i ca afford that lol good shits though
      SLD.Potato
      Generally, a corporation is subject to tax on it's earnings and profits. The shareholders are taxed for dividends distributed by the corporation. This is often referred to as "double taxation". However, the Internal Revenue Code and many state tax codes provide that the shareholders may choose to be treated as a Subchapter S Corporation, subject to certain restrictions, which lessens the double taxation issue via "pass-through" of corporate income, deductions, losses and credits to the shareholders. This is often called "pass-through taxation".
      Dude, do you honestly think anybody on this website got any of that?! You could've done a better job clearing this stuff up for people who aren't entertainment lawyers.
      thedarkblues06
      SLD.Potato wrote: Generally, a corporation is subject to tax on it's earnings and profits. The shareholders are taxed for dividends distributed by the corporation. This is often referred to as "double taxation". However, the Internal Revenue Code and many state tax codes provide that the shareholders may choose to be treated as a Subchapter S Corporation, subject to certain restrictions, which lessens the double taxation issue via "pass-through" of corporate income, deductions, losses and credits to the shareholders. This is often called "pass-through taxation". Dude, do you honestly think anybody on this website got any of that?! You could've done a better job clearing this stuff up for people who aren't entertainment lawyers.
      Maybe you're just an idiot who can't read. Seriously, if you have a college education this is a very well written article, I enjoyed reading it as a law school student and as an avid musician. Kudos, I applaud you.
      prplhazed
      Probably the most informative article Iv seen on here, good job. Now to get a band together....
      jtbull
      Man I am glad I got into banking and scrapped pre law, but this is very helpful. Looks like three drunk lawyers came up with these laws, but still good.
      voodoochilli499
      Kevin 49 wrote: Can someone answer me a query? A good friend of mine was in a very famous band of 60/70's. last week he received a copy of a new compilation and one of the songs on it was written by him and the drummer. On the label it says copyright reserved but under the name of the drummer only. Now it was never released by the group at the time and EMI have had it in their vaults and now it appears. What should he do and does copyright reserved mean the drummer is getting royalties or is no one??? Please explain anyone?
      Hire a lawyer.