Home Firm Practice Lawyers Fees Articles News Sitemap Contact Disclaimer
Protection of Intellectual Property in Technology Startup
Aside from competence of management team, control of intellectual property is a major focus of investor scrutiny. The ability to identify and protect intellectual property directly reflects on investor confidence and the resulting access to capital available to technology start-up. Protection of intellectual property assets is available through the law of copyright, trade secrets, patents and trademarks.
Financing Technology Startup
Many startup companies, particularly in technology sector, require capital beyond the means of their founders in order to finance continued growth. Expenses quickly add up, and a business that cannot manage its cash flow will not survive. Because startup companies typically have a limited operating history and are considered to be risky ventures, obtaining even simple financing arrangements can be a difficult task.
Music Recording & Licensing Contracts
In recent years, business organizations have sometimes been taken by surprise at the dunning notices they have received from certain collecting societies. In the United States, there are two major collecting societies responsible for licensing most of the copyrighted music that is produced in the country. The first is the American Society of Composers, Authors, and Publishers (ASCAP), a nonprofit unincorporated association formed in the early part of this century. The second, Broadcast Music, Inc. (BMI), is a nonprofit corporation that performs functions similar, if not identical, to those of ASCAP. Basically, these two organizations are responsible for licensing every type of music that is produced and copyrighted in the United States.
When a singer records an album with a record company, the record company assigns the licensing rights of the music and songs that are contained on the record to one of these licensing entities. The licensing entity is responsible for ensuring that royalty fees collected for the use of music are paid to the copyright owners. Thus, it is not uncommon to see an ASCAP or BMI license on a jukebox in a public place. It is also not uncommon to hear of instances where ASCAP or BMI "spotters" attend public performances of music - such as dances, receptions, banquets, and concerts - to ensure that the persons responsible for the particular event have obtained a valid license for the music being performed. In all such cases, the license will have been issued by ASCAP or BMI, or both. In the late 1980s and early 1990s, ASCAP and BMI became more active in checking the music licenses of certain organizations, such as nonprofit associations. Many nonprofit organizations play recorded music or hire bands to play live music at events such as trade shows, exhibitions, award dinners, and banquets. ASCAP and BMI are interested in making certain that the persons responsible for the events (i.e., the nonprofit organizations) have entered into licensing agreements allowing them to play the music.
This has taken certain businesses by surprise because trade associations have not, until recently, been aware of the need to obtain permission to play copyrighted music in public. The ability to perform one's music is, of course, one of the rights granted by copyright ownership. A license in this case is basically a permission to perform copyrighted music. The typical licensing agreement between ASCAP and a licensee provides that the license is granted for a term of one year during which the licensee may perform publicly or cause to be performed publicly in the United States and its territories and possessions, at certain events, nondramatic renditions of separate musical compositions within the repertoire of ASCAP. The fees are normally based on the size of the event in which the music is to be played.
The licensing of music is conceptually complex, but can be relatively straightforward in practice. The complexity lies in understanding what rights need to be licensed. To understand music licensing, one must first break down a song into its component parts. There are written elements (words, music, and arrangement), mechanical elements (the recording, or physical embodiment of the song), and aural elements (a specific performance of the song, or the vocal style of the performer). Over time, each element has been accorded protection to some extent, primarily under copyright and publicity or privacy laws, but sometimes under allied rights. The rights to each aspect of a song may be held by a different rightholder, making critical the proper identification of the rightholder for each right implicated in a proposed use.
The next step in developing a framework for music licensing is to envision the possible uses of a song, as the use determines the type of agreement necessary. The words, music, and arrangement of a song may be printed, in, for instance, sheet music, a textbook, hymnal or songbook, or photocopied for use by musicians and singers in a glee club, chorus, choir, school play or recital. This type of use requires a print license. The song may also be recorded. If the person who is creating the recording wants to hire a singer and/or musicians and hire a recording studio to lay down the recording, they require what is known as a "mechanical" license. If, however, the person creating the recording wants to use an already existing recording (for instance, the recording of the performer who popularized the song), the required license is denominated a "master use" license, because it entails the duplication and use of the master recording of the earlier artist.
The Firm can provide a full spectrum of music licensing contracts for protection and exploitation of intellectual property in the music recording industry. We can assist our clients on business and marketing issues and strategies (including risk management), the protection and exploitation of creative works (including trademarks and copyrights) litigation management, and other intellectual property..