Copyright law gives creators certain exclusive rights over their works, including the exclusive right to reproduce, perform, or distribute the work. Normally, in order for someone else to reproduce, perform, or distribute a copyrighted work, permission must be obtained from the copyright owner. Without permission, the copyright owner could sue for infringement and win money damages in court.
However, in some circumstances—known as compulsory licenses—a copyright owner’s permission is not required, provided that the user follows certain rules and pays fees set by law. Such compulsory licenses are commonly used by satellite television providers, cable providers, webcasters, and music companies.
One of the most common arenas in which compulsory licenses are used is the music industry. Once a song has been recorded and distributed to the public on recordings, any person or group is entitled to record and distribute the song without obtaining the copyright owner’s consent, provided they pay a fee and meet copyright law requirements.
In order to take advantage of this compulsory license, a notice must be sent to the copyright owner along with a fee set by the U.S. Copyright Office, known as the statutory fee or statutory rate. The fee for recordings is (in mid 2018) 9.1 cents per song (or 1.75 cents per minute of playing time). To verify the current rate, check the Copyright Office's guide to compulsory licenses. On the site, you can click “Mechanical Royalty Rate.”
If a song is three minutes long and an artist makes 10,000 compact discs containing the song, for example, the fee paid to the song’s owner would be $910.
Note that these rates are subject to change each year, so be sure to check the Copyright Office's current fee schedule.
A recording artist does not have to use the compulsory license, and many recording artists seek permission directly from the song owner and negotiate for a lower rate.
Remember that the compulsory license for recording music (the mechanical license) authorizes the use of the song only for nondramatic musical compositions and you could not, under the compulsory license, use it for dramatic purposes, such as in an opera or an overture to a musical. The compulsory license applies only to phonorecords (sound recordings) distributed to the public. Therefore, it cannot be used to record a song for use on a television show’s soundtrack. In such a case, permission must be obtained from the copyright owner.
Under the terms of a compulsory license, the licensee is permitted to make a new arrangement of the composition as long as the basic melody or fundamental character of the work is not altered.
In a different context, and without regard to the type of work involved, the concept of a compulsory license can arise in a copyright infringement action. A court has the power to order a copyright owner to grant a license to an innocent infringer instead of ordering the infringement stopped.
Finally, in countries that subscribe to the Universal Copyright Convention (U.C.C.), including the United States, an author may be required to grant a compulsory license to a subscribing government to translate his or her work into that country’s primary language if no translation has been published within seven years of the work’s original date of publication. This rule precludes copyright owners in most countries from preventing the translation of works covered by their copyrights into different languages.
Imagine that Jane writes and releases the song “Up the Stairs.” Later, Barry decides he wants to record “Up the Stairs.” If Barry is willing to pay the statutory fee, he does not need to ask Jane for permission—but if he wants to pay less per copy, he must obtain permission from Jane.
Or imagine that Sammy composes and records a country ballad. Later, Pauline, a punk rap star, acquires a compulsory license and records Sammy’s song but changes the words and eliminates the melody. Sammy can have Pauline’s compulsory license revoked and prevent the recording from being distributed further or played.
In this way, the conclusory licensing system minimizes the transactional costs for using these phonorecords, benefiting creativity and the economy.