One of the rare but important clauses in music licensing agreement is the “Indemnification Clauses”. This is a legal phrase that when explained in layman term refers to a protection to either one of the contracting parties in case a lawsuit or a case is filed against the protected party.
Indemnification clause
Basic Example
Let’s have an example. Supposing you are assigned to research songs for a radio airplay/programming; you surf the internet and shop for possible good songs that fits your station audience.
Your boss or your guidebook entitled “So you want to start a career in commercial FM station?” always gives strong advice not to download songs from the Internet and use it for your radio station . It is because the owner of the website may not have the “publishing” rights to license the songs to you.
However, you might notice things have started to change and almost everything has been conducting business online including commercial banks, so why would you not try surfing for good songs on the Internet?
Then you stumble into a website which has songs in it that you really like, you then start downloading each of those, and read their terms of agreement. In their terms of agreement, you might read this “indemnification clauses”:
“Licensor shall indemnify and hold the licensee harmless from any and all claims, liabilities and costs, losses, damages or expenses (including attorney’s fees) arising from any third party claim directly relating to the music composition and the underlying master recordings.”
To make things clear, refer to the following definition below:
Licensor– the music publisher of the song, or it is the author of the song if not represented by third party music publishers.
Licensee –the one licensing the music.
Now the question, does it sound fair? The answer is yes. The licensor assures that if ever the licensee is having some legal problems brought about by the agreement; the licensor will answer for it “legally”. Depending on the clause, it might state as to what extent that the licensor would be supporting the case. This can include legal fees, damages, etc.
With the indemnification clauses, you are harmless from any claims and this gives you a peace of mind when entering an agreement onine. You just have to make sure the licensing agreement contains that indemnification clause. Of course as as disclaimer here, I’m not a lawyer and the content in this article does not constitute legal advice. If you want to make sure if the indemnification clause is fair or enforceable, then you need to hire an attorney to review it for you.
Another example- songwriter and the music publisher
Songwriter gears
Another example is between a songwriter and music publisher relationship. The songwriter enters into a publishing agreement with the music publisher. The agreement might contain the following indemnification clauses:
“The songwriter shall indemnify and hold the music publisher harmless from any and all claims…”
Does this sound fair to the songwriter? Yes, let me illustrate first why this is important from a music publisher perspective.
When songs are added to the music publisher catalog written by the songwriter; these songs are documented in the publishing records. The songwriter should declare correct information pertaining to the song such as the following (when required):
1.) Authors of the song
2.) Performance right society
3.) Copyright information
4.) Lyrics, etc
Supposing Record Label X would license a song from the music publisher written by Songwriter Y. Then the record label produces the song for artist X and releases it as a single. Years later, a lawsuit was filed against the label that the song is not written by Songwriter Y instead by another Songwriter X.
This is what will happen:
1.) If the music publisher answers all the potential liabilities arising from the contract (via an indemnification clause) then this means that the record label can ask for damages from the music publisher arising from the lawsuit.
2.) On the other hand, because of the indemnification clause between the music publisher and Songwriter Y, the songwriter would be liable to answer legally with the lawsuit. The music publisher can also ask for damages from the songwriter for falsifying the document.
From the songwriter perspective, this clause serves as a strong warning not to submit questionable songs to the publisher. This type of songs do not have proper copyright records, official songwriters, etc or in general- no proper documentation support. There are some songwriters which are taking advantage of other songs that they do not own, as a result it all ends in a lawsuit.
One of the common sources of trouble are bands. Band members are writing the songs but only gets the credit (probably because the main writer is greedy not to include the other band members). When the song landed a publishing deal and gets published in an album, other members of the band would sue the publisher and demanding credits or songwriter share.
Further help on indemnification clauses
The best way is to consult an entertainment lawyer. The lawyers will double check whether the indemnification clause suits your need, unfair or irrelevant.
Some indemnification clauses are unfair or not balanced between both parties. Beware if you see these lines in the employee-employer agreement. This indemnification clause for me is what classifies a “shark employer”.
“The employee shall indemnify and hold the employer harmless from any and all claims, liabilities and costs, losses, damages or expenses (including attorney’s fees) arising from the normal conduct of work.”
Of course it sounds unfair and do you know why? What if you do the work as instructed “perfectly” (employee following rules) and it’s your managers or company policy that results to disaster, are you willing as an employee to pay for that mistake ALONE? Of course not! If you see these lines in your employee contract, they are not good employers for you.
Sample Music License Agreement: Important Terms outlined
Before you can use any copyrighted songs, you must know and understand the terms outlined in a music licensing agreement. This short guide will illustrate some of the important items.
First important item: The name of the music publisher
name of the music publisher
It is important that before you sign the agreement; you are entering an agreement with a music publisher. Music publisher is mandated by law to issue music licenses in behalf of the songwriters involved. You need to ensure that the company is a registered music publishing entity (using sole proprietorship, partnership or corporation business registration) if you need to conduct business with a legally accepted party. You can ask for their business permit if you want.
Other things to check are the catalog of the music publisher. If the music publisher is ASCAP-affiliated (or BMI, etc.), you can check the registered songs in society catalog and double check the songs that you are planning to license with them.
This can be useful if your company already secure blanket licenses to these public performance organizations. So it means that you can use the songs in the catalog for public performance purposes without needing to pay additional licensing fee.
Or if the music publisher is foreign, check for foreign society’s affiliation. You can do this by asking the music publisher. ASCAP and BMI cover mostly US-based music publishers.
You can even checked with the US Copyright records to confirm the music publisher copyright claim. You can double check the history of published music by the publisher by knowing following the tips in this tutorial. Or much better you can even ask a copy of copyright certificates and other legal documentations supporting the claim of ownership.
All of these are important checks to make sure you are conducting business that you can trust.
Second important item: Scope of Music Compositions and Recordings
You need to ensure that the agreement clearly states the songs that you are going to license. Is it the entire catalog? Or a list of specific songs?
Licensed tracks in Appendix
Third important item: Licensee and detailed song application
License and use of music
You need to ensure that the music publisher has listed your correct company name in the agreement. The license must include details how the song will be used. A complete statement is a requirement to avoid confusions on the exact song usage/application. It should answer clearly all possible questions raised during the negotiation.
This usually takes place before drafting the music licensing agreement. For example, you are planning to license a music for film, the following can be the possible questions that needs to be negotiated with the music publisher:
a. Aside from granting sync and master recording rights, does the agreement allow to distribute the work worldwide?
b. Does the agreement allows to make several copies of the videos and sell it as copies?
c. Does the agreement allow to use the music in porn, racism, hate and terrorism promotion movies?
In relation to this, you need to mention to the music publisher in details about how you are going to use the music. The more details, the better.
In my experience, this section takes a lot of time discussing the rights and limitations of the license. There is where a lot of negotiation would take place. The result of this negotiation would be put into an agreement (see next section).
Fourth important item: Rights granted and Limitation of Use
These terms in the agreement should list down all the rights granted by the music publisher to the licensee. This based on how the client would be using the music. The music publisher simply cannot grant all rights if these rights are not being used at all by the project.
For example, if the music publisher is only granting you sync rights and master recording rights. Then these are the only rights that you will be using in your project.
You won’t be granted with print rights or other rights simply because you have not discussed with the publisher that you will be using this right in your project.
If the music publisher states that “any particular song usage not mentioned in the rights granted, the licensee is not allowed to use the music in those applications”, therefore stating the limitation of your license. You cannot use the music in any other applications other than what has been agreed upon.
There are lots of music rights that an application may require. For example in film, there are at least 3 important rights that the publisher should grant to its client. These are the sync rights, mechanical rights and master recording rights. Other application may even require more rights.
Fifth important item: Indemnification and Other terms
Other than what has been mentioned, the music publisher will include indemnification clauses in music licensing agreement, the details are discussed in the previous section.
License fee
The license fee is also the most important part. This license fee is agreed between the publisher and the client. It depends on the number of rights granted, the budget as well as the number of songs licensed in the catalog. This license fees should be stated clearly on the agreement. Also the royalty clause maybe necessary if the client would be paying them on a periodic basis. It all depends on the agreement between the publisher and the client.
Method of agreement
Also, it does not matter whether the agreement has been agreed on paper or using online method. What does matter is the proof of agreement. Of course, a lot of clients may prefer agreement on paper because they can exactly see the agreement as well as being able to affix a signature.
Online music licensing is also becoming popular due to the fact that it is a paperless processing, faster and Earth friendly. There are solid ways you can enter into a music licensing contract online, such as the one I am using here. You can always print the license copy as proof.
Content last updated on October 12, 2012