Reclaiming copyright ownership: Why Taylor Swift doesn't need Romeo to save her

What you need to know

• There is often more than one copyright owner in relation to a hit song. While the songwriter generally owns the copyright to the lyrics they wrote, and may own copyright in the music composition alone or with other musicians, they may not necessarily own the rights to the master sound recordings which is a further and separate copyright work often controlled by a record label.
• However, even where a songwriter does not control their master recordings but retains the rights to the lyrics and music, they can, subject to contractual agreements, create an adaptation of the song to obtain copyright in a new sound recording of the adaptation.
• There can be hefty financial consequences for failing to obtain an appropriate licence from the correct person to use songs and other musical works in commercial settings. 
• Statutory licensing schemes do not always cover all the things you may want to do commercially with a song or other musical work.

What you need to do

• Ensure you are correctly identifying all relevant copyright owners for the work you want to use.
• Always ensure you have appropriate licences in place before using works or parts of works for commercial purposes (including using printed lyrics, music without lyrics, or a complete recording).

As Taylor Swift fever infects the world, we decided to delve a little deeper into the storm surrounding the re-recording of Swift's first six studio albums and discuss why understanding copyright and its ownership is important when using songs and music in business.

Copyright in a song

Copyright law is the foundation of the music industry. In Australia, and unlike other major forms of IP rights (trademarks, patents and designs), there is no register of copyright interests. Instead, copyright protection is automatically afforded to a work once it is expressed in material form (such as putting lyrics in writing or recording music). It can be licensed or assigned to others in writing by the original copyright holder.

Typically, there are multiple layers of copyright in a song:

• First, the song lyrics that accompany a song attract copyright protection as a literary work. The owner of copyright in this work will be the person(s) who wrote the lyrics, subject to contract or employment status.
• Second, the actual musical composition of the song such as its sound, melody and rhythm will be protected as a musical work. The owner of copyright in this work will be the person(s) who created the music, subject to contract or employment status.
• Finally, a recording of a song also attracts protection as a 'sound recording', separate from the copyright that exists in the music and lyrics themselves. In the recording industry, this is often referred to as a "master" recording. The owner of copyright in this work will be the "maker" (often a producer who is employed by a record label), subject to contract.

Different rights may apply in the case of sound and video recordings of live performances and to video clips for the song. And even in the case of a work owned by a third party, the original creator(s) will retain moral rights.

The copyright owner has the exclusive right to do certain things in relation to their work or sound recording. With the song lyrics and musical composition, the copyright owner's rights include reproducing them in a material form, performing them in public, and making adaptations.

The copyright owner of the sound recording can, among other things, make copies of the song in the sound recording, communicate the recording to the public, and enter into licensing arrangements in respect of the recording (subject to ensuring no breach of the moral rights of the song writer in the underlying works).

What happened in the "Taylor's version" controversy?

Taylor Swift owns the copyright in the musical composition and lyrics of her songs as a lyricist and songwriter. However, when she first signed a deal with her former record label Big Machine Records, the contract stipulated that Big Machine would own the copyright in the master recordings of Swift's first six albums (the "Masters"). As her contract with Big Machine expired, Swift tried and failed to negotiate the purchase of the copyright in the Masters. Big Machine then sold all of its assets including the rights to the Masters (and copyright) to Swift's former music manager, Scooter Braun, giving up legal ownership to Ithaca Holdings (Braun's company). The Masters were then subsequently sold in late 2020 onto investment firm, Shamrock Capital for a sum rumoured to be in excess of US$300M.

This means that Swift is unable to use, license the reproduction of, or control what happens to any of the original sound recordings of the songs from her first six albums.

Why is this important?

In order to use the sound recordings from her first six albums, Swift would be required to license or buy them back from Shamrock Capital. However, as Swift owns the musical compositions and accompanying lyrics, she always had the exclusive right to perform and create adaptations of her songs subject to the terms of her original contract with Big Machine.

Once the restriction periods in her initial record deal began to expire (around late 2020 and likely determined from the date that each album was recorded), Swift began re-recording the music from her first six albums so that she would finally be able to own new master recordings of these songs. So far, Swift has released re-recordings of three out of six of her first albums, with her highly anticipated fourth re-recorded album to be released on 27 October this year. The re-recorded albums are being released as "Taylor's Versions". By doing this, Swift is able to own the copyright in the musical composition, lyrics and master recordings of her music, placing her in a stronger position to control the licensing and use of her music for better promotion and financial compensation.

What does this mean for businesses?

You might be asking yourself why Swift's "Bad Blood" has anything to do with business. The answer is, it serves as a timely reminder about the complexity of copyright ownership in the music industry and the consequences of getting it wrong when it comes to obtaining a licence to use another's music.

Under the Copyright Act 1968 (Cth), copyright is infringed when someone does something that usually only the copyright owner is allowed to do (ie. copies, reproduces or otherwise uses the protected work), without permission from the owner or a valid defence. It is not necessary for the entire protected work to be copied, reproduced or used for infringement to occur, it need only be a "substantial" part of the work (determined qualitatively and not by percentage used). The consequences for copyright infringement could include substantial damages being payable by the infringer.

As recently as 2021, the Federal Court of Australia ordered the payment of damages including a retrospective licence fee of $500,000 and $1M in additional damages, after it found that Clive Palmer had reproduced musical works owned by Universal Music, without authorisation. This case highlighted the various factors taken into account when assessing damages for copyright infringement. See our discussion of the Universal Music Publishing Pty Ltd v Palmer decision here.

In order to avoid infringing copyright, it is imperative that businesses seek out copyright owners and obtain appropriate licences when planning to use copyrighted material. While statutory licensing schemes may provide appropriate consents for some uses (eg, playing some songs in a restaurant as background music), when using songs or music (including printing lyrics) in advertising and promotional material (or embedding them in products), businesses should take care to ensure the licence they obtain adequately covers their proposed use of the works in question and is obtained from the correct owner.

Authors: Kellech Smith, Partner; Daele Tyler, Lawyer; and Isaac Song, Graduate