To begin our hypothetical project, the musician (band leader) first needs to obtain various intellectual property rights to copyrighted material which will be incorporated into the making of his/her finished product (CD).
The first agreements necessary would be those to obtain various rights: (a) The right to record other musicians’ compositions. (This is achieved by acquiring and executing a contract called a mechanical license); (b) The right to use Cover Art – Usually the musician and/or record company will execute an agreement with an artist to create cover art for the CD. This agreement should set forth who owns the art, the manner in which the art work is to be used and for what period of time, the compensation to be paid for the use of the artwork; and who is the copyright owner of the artwork; (c) The right to use Liner Notes – An agreement should be used to engage a writer to produce liner notes, which should set forth, the manner in which the liner notes are to be used and for what period of time, the compensation to be paid for the use of the liner notes, and who is the copyright owner of the liner notes.
Secondly, our musician would use various contracts to determine how the CD masters are to be produced and determine the rights of ownership in and to the masters produced: (a) SIDEMEN AGREEMENTS – If sidemen are used at the recording session, the band leader, and/or record company or producer, as the case may be, should execute a contract with all sidemen setting forth that the band leader, and/or record company or producer, owns all rights, including copyright, in and to the sound recording being made. This agreement should also set forth the amount of compensation paid to the sidemen; (b) BANDMEMBER AGREEMENTS – If all bandmembers have ownership rights to the masters being produced, agreements would need to be executed by the bandmembers specifying this. Also agreements among bandmembers should set forth bandmember responsibilities and ownership rights in and/to the group name, and other group products (such as merchandizing rights); and (c) PRODUCER AGREEMENTS – If a producer is used the artist and record company to make the masters, all parties should have an agreement specifying what ownership rights and responsibilities, the producer, bandmembers and record company have, to each other and to the finished product, i.e., masters and CDs.
Lastly, the musician needs to execute an agreement which sets forth what type of intellectual property rights the record company acquires. For example, is the record company merely licensing the master for a specific period of time (LICENSE AGREEMENT)? Or is the record company making an outright purchase of the master (PURCHASE AGREEMENT)? These agreements also address, among other things, type, and amount, of compensation (artist royalties) to be paid to the musicians; the manner, and territory, in which the record company can use the masters; and the amount of mechanical royalties to be paid to the musicians if s/he is the composer of the compositions on the CD.
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