Confidential — Attorney Work Product
Date: [Insert Date]
To: [Client/Producer]
From: [Entertainment Counsel]
Re: Pre‑Release Copyright and Clearance Risk Memorandum — Single “Night Loop”
Executive Summary
The project presents high clearance risk in four areas: (1) sampling of a four‑bar 1990s drum machine loop from a released sound recording; (2) chorus melody and partially rewritten lyrics referencing an independent work “风的影子” (Wind’s Shadow); (3) music video incorporation of street dancers, identifiable passersby, city murals, and visible advertising billboards; and (4) artist contractual constraints (exclusive management; brand endorsement). Proceed to release only after (i) dual clearance of any sample (master and publishing) or substitution with original sound; (ii) derivative and synchronization licenses for the “Wind’s Shadow” elements (mechanical compulsory license is insufficient due to lyrical/melodic changes); (iii) talent, choreography, mural, location, trademark, and publicity releases, or alternatively edit/blur/replace; and (iv) conflict checks with artist management and the endorser’s brand restrictions. E&O insurance should be bound after deliverables and legal opinions where needed.
Assumptions and Key Markets
- Primary exploitation: worldwide digital audio and audiovisual release (U.S., EU/UK, PRC as key territories).
- The 4‑bar loop originates from an identifiable commercially released track (title TBD).
- “Wind’s Shadow” is an original copyrighted work by identifiable authors/rightsholders (TBD).
- The music video (MV) depicts street dancers performing choreographed routines, murals plainly recognizable, passersby discernible, and third‑party brand billboards legible.
- One artist is under an exclusive management agreement; the other has an active brand endorsement with exclusivity/morals clauses.
I. Sampling of 1990s Drum Machine Loop (4 bars)
Legal framework
- U.S.: Any use of a pre‑existing sound recording requires authorization from the master owner; de minimis is not a defense in the Sixth Circuit (Bridgeport Music v. Dimension Films, 410 F.3d 792 (6th Cir. 2005): “get a license or do not sample”). The Ninth Circuit recognizes de minimis for sound recordings (VMG Salsoul v. Ciccone, 824 F.3d 871 (9th Cir. 2016)), but reliance is jurisdictionally risky. Composition sampling is separately analyzed under substantial similarity and de minimis (Newton v. Diamond, 388 F.3d 1189 (9th Cir. 2004)).
- EU: CJEU in Pelham (C‑476/17, “Metall auf Metall”) held sampling requires authorization unless the sample is unrecognizable in the new work or qualifies as quotation under Directive 2001/29, subject to strict conditions.
- PRC: Copyright Law (as amended, 2020; effective 2021) protects both recordings and musical works. Use generally requires permission and remuneration; no reliable de minimis defense for recognizable sampling.
Risk and analysis
- Master: Any recognizable 4‑bar drum recording taken from a released track requires a master use license. Even percussive content can be distinctive (timbre, processing, ambience).
- Composition: If the loop reproduces protectable expression (e.g., distinctive rhythmic pattern coupled with unique sound arrangement), a musical work license is also required. Generic drum patterns alone may be uncopyrightable, but the safer view is that sampling from a released track implicates the composition unless a musicologist concludes otherwise.
- Interpolation: Re‑creating the loop avoids the master claim but not the composition; for drum patterns that are generic, a composition license may be unnecessary if a musicology opinion supports non‑protectability. Absent that, obtain a composition license.
Clearance posture
- High risk without clearance. Proceed with either: (a) dual clearance (master and publishing) from the master owner (label) and composition owner (publisher(s)/writers); or (b) substitute with an original, non‑infringing drum part created from scratch with independent sound design; retain musicology memo.
Negotiation notes (sampling)
- Rights: Non‑exclusive master use license; synchronization and mechanical coverages for all media; MFN across all sample rightsholders.
- Royalty/advance: Advance/MG (recoupable) plus running royalty. Typical sample royalty 0.5–3.0% of PPD or a pro rata share of artist’s net master royalty; or a per‑unit penny rate; define “Net Receipts.” Ensure sample royalty is not calculated on top of distribution fees. Cap on most‑favored nations escalation.
- Credit: “Contains a sample of [Track], performed by [Artist], courtesy of [Label]; written by [Writers], published by [Publishers].”
- Territory/term: Worldwide; perpetual or long‑term (at least life‑of‑copyright for masters if feasible); all media now known or hereafter devised.
- Approvals: Label/publisher approval of final audio; limit to not unduly delay release (deemed approval after X days).
- Indemnities/warranties: Licensors warrant ownership and authority; licensee indemnity limited to use outside scope. No moral rights claims where waiver is available.
- Alternatives: If licensor demands outsized royalty or veto rights, replace sample or recompose.
II. Chorus Referencing “Wind’s Shadow” (melodic reference + partial lyric rewrite)
Legal framework
- U.S.: Derivative works require author’s permission (17 U.S.C. §§ 101, 106(2)). The §115 compulsory mechanical license applies only to non‑dramatic audio‑only covers with no material changes to melody/lyrics. Synchronization rights (for MV) are always subject to voluntary licensing; no compulsory sync license exists.
- EU/UK: Adaptation/arrangement rights require authorization; moral rights (paternity/integrity) can restrict alterations and require attribution.
- PRC: Adaptation right is reserved to the author (PRC Copyright Law arts. 10, 32). Moral rights include rights of attribution and integrity; alterations require consent.
Risk and analysis
- Substantial similarity in melody and any lyrical borrowing likely triggers composition rights. Modification of lyrics or melody creates a derivative work requiring the publisher’s prior written consent; a mechanical compulsory cover is insufficient.
- The MV requires a synchronization license from the composition owner(s) regardless of whether the sound recording is new.
- If “Wind’s Shadow” authorship or chain of title is unclear, clearance cannot proceed; risk of later infringement claim and takedown is high.
Clearance posture
- Obtain: (a) derivative work license (adaptation/arrangement) from the publisher(s)/writers of “Wind’s Shadow” covering lyric changes and melodic reference; (b) mechanical license(s) (outside the U.S., direct or via CMOs as applicable); and (c) synchronization license for the MV and all AV exploitations.
- If rightsholder refuses derivative rights, rewrite the chorus to remove similarities, supported by a musicology report.
Negotiation notes (composition)
- Grant: Right to create, exploit, and perform a derivative work; synchronization and mechanical rights for the new version; worldwide; all media.
- Ownership/splits: Agree new publishing splits reflecting contribution and any sample obligations; often original authors demand a controlling share for derivative uses (e.g., 25–50% or higher). Ensure PRO registrations and split sheets are executed pre‑release.
- Royalty/advance: Recoupable advance against mechanicals and sync fees; MFN with any co‑publishers. Per‑stream and per‑unit accounting aligned with distributor statements. Reserve neighboring rights unaffected.
- Approvals: Lyric and melodic changes subject to publisher approval; set objective timelines. Credit language agreed.
- Moral rights: Secure consent to modifications and waiver (where legally possible); otherwise, tailor changes to avoid prejudice to author’s honor/reputation.
III. MV Materials: Dancers, Murals, Passersby, and Billboards
A. Performers and choreography
- Choreography is copyrightable (17 U.S.C. §102(a)(4)) and similarly protected in EU/PRC. Secure a written license or work‑made‑for‑hire agreement from the choreographer, plus performer/talent releases from all dancers granting use of their performances and likeness in all media, worldwide, in perpetuity. If union performers (e.g., SAG‑AFTRA music video contracts), comply with union minimums and residuals.
B. Murals and street art
- U.S.: Murals are protectable works; the architectural exception (17 U.S.C. §120(a)) does not cover murals. Display in an MV is a reproduction/derivative use likely requiring the muralist’s permission unless the artwork is truly incidental, fleeting, and unrecognizable; fair use is uncertain. Moral rights (VARA, 17 U.S.C. §106A) protect attribution/integrity; while filming per se is not destruction, prominent use may imply endorsement/infringe reproduction rights. See Castillo v. G&M Realty (5Pointz) for robust VARA enforcement (integrity rights).
- EU: Strong moral rights; recognizable use in commercial AV typically requires author consent; quotation exception is limited.
- PRC: Copyright Law permits limited use of artworks “located or displayed in public places” for certain purposes; commercial exploitation such as an MV generally requires authorization and respect for moral rights (attribution/integrity). City or wall‑owner consent is not a substitute for the artist’s copyright consent.
Action: Obtain written licenses from mural artists (and, where applicable, property owners), including attribution terms and waiver/consent regarding integrity and association. If licensing is impractical, avoid or blur.
C. Passersby and right of publicity
- U.S.: State right of publicity/privacy laws (e.g., CA Civ. Code §3344; NY Civil Rights Law §§50–51/§50‑f). Commercial use of an identifiable person’s likeness in an MV generally requires consent. Incidental/brief background appearances may reduce risk but are fact‑specific.
- EU/UK: GDPR/UK GDPR and personality rights may apply; releases mitigate claims of misuse/false endorsement.
- PRC: Civil Code right of portrait and name requires consent for commercial use.
Action: Obtain crowd/individual releases where feasible; otherwise ensure no identifiable faces or blur in post.
D. Billboards and trademarks
- Visible third‑party marks risk false endorsement or trademark dilution (Lanham Act §43(a) in the U.S.) and similar regimes elsewhere. Incidental use and nominative fair use defenses are uncertain when the MV is promotional/commercial.
Action: Avoid, clear with rights holders, or blur. Confirm no conflicts with the endorsing artist’s brand exclusivity.
E. Ambient music at locations
- Ensure no third‑party music is audible in production audio; otherwise obtain sync/master clearances or re‑record without the ambient material.
F. Locations
- Execute location releases covering filming rights, signage permissions, indemnities, and insurance. Note: property owner consent does not waive muralist copyright.
IV. Artist Agreements and Conflicts
- Exclusive management artist: Confirm the manager’s consent to the release, marketing use of name/likeness, and any approval rights affecting timelines. Ensure manager commissions are accounted in the master revenue waterfall as agreed.
- Endorsed artist: Review endorsement for category exclusivity, morality, and approval clauses; pre‑clear MV content, wardrobe, props, and any visible brands to avoid breach. Avoid conflict with direct competitor marks appearing in the MV.
V. Licensing Checklist (All Must Be Executed Before Release)
- Sampling: Master use license from label; composition license(s) from publishers/writers; or written confirmation of original re‑record/recompose with musicology memo.
- “Wind’s Shadow”: Derivative work/adaptation license; synchronization license; mechanical licenses as required per territory; agreed publishing splits and registrations.
- MV: Choreographer license or work‑for‑hire; dancer talent releases; mural artist licenses and attributions; location releases; passerby/model releases or blurs; trademark clearances or blurs; E&O insurance.
- Internal: Manager consent letter; endorser brand clearance; distributor/label warranties; cue sheets for PROs; metadata and fingerprinting (Content ID) strategy.
VI. Key Negotiation Terms (Master and Publishing)
A. Master (sample and MV)
- Grant: Non‑exclusive, worldwide, perpetual right to reproduce, distribute, publicly perform, communicate to the public, synchronize, and otherwise exploit in all media.
- Fee: Recoupable advance/MG; running royalty 0.5–3.0% of PPD or artist‑share basis; MFN across all sample licensors.
- Accounting: Semiannual statements; audit rights; caps on administrative fees and distribution deductions.
- Approvals: Limited to final audio reference; deemed approval after defined period.
- Credit: Fixed form. No implied endorsement.
- Warranties/Indemnities: Title, authority, non‑infringement; mutual but capped indemnities; no consequential damages. Moral rights waiver/consent where applicable.
B. Composition (“Wind’s Shadow” and any sampled composition)
- Grant: Derivative adaptation rights; mechanical and synchronization rights; worldwide; all media; perpetual or long‑term (minimum 20–35 years with renewal options), recognizing moral rights constraints in certain jurisdictions.
- Financials: Recoupable advance; mechanical rates (per‑unit or streaming shares) aligned with statute/industry; sync fee MFN with any co‑owners; participation in future third‑party syncs of the new version per negotiated split.
- Splits: Documented in a split sheet; reflect original writers’ percentage for derivative elements; coordinate PRO registrations globally.
- Moral rights: Written consent to modifications; attribution requirements; lyric approval.
VII. Revenue Split and Waterfall Recommendations
A. Master income (recording)
- Define “Gross Receipts” and “Permitted Deductions” (distribution fee, transaction fees, approved marketing spends if recoupable).
- Waterfall: (1) Off‑the‑top: sample licensor royalties and fees; MV third‑party licenses if linked to master exploitation; (2) Recoupment of producer fee/advance; (3) Artist/label net split (e.g., 50/50 or per existing label deal).
- Producer points: 2–5% of master Net Receipts, recoupable against producer advance, subordinate to sample royalties.
- Featured artist split: Define cross‑collaboration splits (e.g., 50/50 between featured artists after producer and sample deductions), consistent with existing label/management agreements.
B. Publishing income (composition)
- Allocate shares per split sheet (writers’ shares inalienable where applicable). Admin publisher commission 10–25% of publisher’s share if using an admin publisher.
- Sampled composition participation: Off‑the‑top share as negotiated with the sampled work publishers.
- Cue sheets: File to capture performance income from MV broadcasts/streams.
C. MV and ancillary income
- Advertising revenue from platforms: Share as master income unless otherwise agreed.
- Brand integrations: Separate “net” definition; pre‑clear with endorser; allocate between label/producer/artists per a bespoke schedule.
D. Audit, transparency, and dispute resolution
- Annual audit rights with reasonable notice; payment cure periods; New York law/venue (or other agreed forum); injunctive relief for IP breaches.
VIII. Release Cadence and Risk Mitigation
- Gating conditions precedent: No release until all clearances executed and countersigned; PRO registrations completed; E&O insurance bound with minimum limits acceptable to distributor (e.g., USD 1–3 million), naming distributor/exhibitors as additional insureds.
- Staggered rollout:
- Audio single with cleared or substituted drum part.
- MV release only after mural/talent/trademark/publicity clearances; deliver an alternate “clean” MV with blurs/edits for sensitive territories.
- Territory gating: If any licenses are territory‑limited, configure geo‑blocking accordingly.
- Contingency plan: Maintain “no‑sample” audio version and “no‑mural/no‑brand” MV cut for rapid swap if a claim arises. Include takedown procedures in distributor agreement.
- Documentation: Maintain clearance bible (all licenses, releases, chain‑of‑title, musicology memo, cue sheets).
- Content ID/Fingerprint: Register cleared master to minimize third‑party claims; whitelist licensors as needed.
IX. Risk Ratings (Pre‑clearance)
- Sampling: High (U.S./EU/PRC) unless fully licensed or replaced.
- “Wind’s Shadow” derivative: High without adaptation and sync licenses.
- MV murals/portraits/trademarks: Medium‑to‑High depending on identifiability; reduce to Low with licenses or editorial removal.
- Artist contractual conflicts: Medium; depends on endorsement exclusivity and manager approval.
Next Steps
- Identify sampled track and rightsholders; commence parallel master and publishing negotiations; obtain musicology support for scope.
- Contact “Wind’s Shadow” publisher(s)/writers; secure derivative, mechanical, and synchronization rights; finalize composition splits.
- Clear MV elements: choreographer/dancers, muralists, location, passerby/trademark. Prepare alternative edits.
- Review artist agreements for conflicts; obtain written consents/waivers as needed.
- Bind E&O insurance post‑clearances; finalize distributor deliverables.
Please advise if you want us to open negotiations on your behalf; we can circulate draft license forms reflecting the above terms and coordinate musicology and E&O placement.
