Composers' Contracts: The Important Things You Should Know

by Atty. Michael Henry Ll.Yusingco

This article is all about contracts, particularly, contracts which you may encounter when you deal with your musical works. There are many factors to consider when we talk about contracts. Obviously, we do not have the time nor is this the venue to delve on this subject matter extensively. I would like however, to put the study in our specific context. I would like to relate this topic, or the problem areas of this topic, in real life situations involving composers.

As you know, I have been the counsel for FILSCAP for the past two years. And I have heard several concerns regarding contractual issues from some of the members. I am going to relay some of these issues raised by your colleagues. In this way, the pointers that I will discuss will be understood in the light of our very own personal experiences.

A composer was approached by a friend to write a song. The song was going to be used as a theme song for a particular group. The composer wrote the song and was compensated accordingly. Later on the composer found out that the song was being used for some other purpose. The group was profiting from the use of the song without giving the composer his due share. As many of you would certainly agree, the next step for the composer is to confront the group. Maybe even file an action in court. The problem is that the composer did not sign a formal written contract. There was only a verbal agreement. Is this binding and enforceable? I will answer this question later.

Another composer entered his song in a contest organized by a record company. One of the conditions of their contract is that the song entered by the composer will thereafter be owned by the record company. After being paid a paltry sum, the composer ceded ownership of his song in favor of the record company. Unfortunately, the record company no longer exists. So now, the composer is left with an empty bag. He cannot bring his work to other record companies because he no longer owns the recording rights. The only remedy left for the composer is to ask the record company which no longer operates to give the song back to him.

Finally, a composer and his band was an up and coming act. They were being signed up by a prominent record label. The contract they were asked to sign was composed of two parts. First, was a main contract consisting of two pages only. And second, an attachment consisting of ten pages. Unfortunately, for the composer and his band, one of the conditions in the attachment was that they could not record any of their songs after the termination of the contract with other recording companies without the written permission of the first recording company.    

Indeed, the foregoing stories are sad. What is even sadder is that they are true and maybe some of you have been in the shoes of these composers.

When it comes to entering into contracts concerning your musical works it is very important to first recognize what copyright is. Under the Intellectual Property Code copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following acts:

          1. Reproduction of the work or substantial portion of the work;

          2. Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work;

          3. The first public distribution of the original and each copy of the work by sale or other forms of

              transfer of ownership;

          4. Rental of the original or a copy of the work;

          5. Public display of the original or a copy of the work;

          6. Public performance of the work; and,

          7. Other communication to the public of the work.

Note that these foregoing rights are distinct from each other. Meaning, your contract may only touch on the mechanical reproduction and not on public performance or it can cover both. Actually, the most important consideration in dealing with your works was articulated by Former Chief Justice Hilario Davide, Jr. in a case, to wit:

“Stripped in the meantime of its indisputable social and beneficial functions, the use of intellectual property or creations should basically promote the creator or author’s personal and economic gain. Hence, copyright protection extended to the creator should ensure his attainment of some form of personal satisfaction and economic reward from the work he produced.”

Once you have settled the issue on what right you are dealing with and the personal satisfaction and economic reward that is acceptable to you, the next step is the written contract itself.

Earlier, I narrated a story about a composer entering into a verbal agreement. Is this binding and enforceable? Yes it is. A verbal agreement is valid and binding between the contracting parties. The problem is that when a dispute arises, it will be very difficult to prove one’s claim. It will be a case of one party’s word pitted against the other. Of course there are other ways to prove the agreement. But the best proof of the agreement, and its terms and conditions, is the written contract itself. Thus, the very first condition that you should demand is that the contract should be in writing. Note that the written contract maybe designated by different names. It can be a Deed of Assignment, Memorandum of Assignment, Memorandum of Agreement, etc.

The written contract should be very specific. It can be as short as one page or as long as fifty pages as long as the terms and conditions are very specific. There should be little room for interpretation. I am not saying that the contract should contain all the nitty-gritty details. Data and other supporting details may be referred to in an annex or attachment. The provisions that will govern the relationship of the contracting parties should be clear and direct. What are the rights and obligations? How much is the consideration? What is the manner of payment? What is the period of affectivity? These are the stipulations that should be specific and evident.

One important stipulation to really think about is the ownership of the songs involve. Under the IPC, the general rule is that the musical work belongs to its author. Your songs belong to you, the composers. Please note that it is also very critical that you register or deposit your works with the National Library. This simple act gives you the protection you need against infringers. It truly strengthens your right to enforce your rights over your work.

The exception to the foregoing rule is if the composer was employed or commissioned to write the song. In this case, it is the principal who owns the musical work created.

The question is: Should you cede ownership over your creation? It is my humble opinion that you should not. You should have to relinquish ownership of your creations. This is where the concept of music licensing comes to play. The basic idea here is that you can simply license others to exploit your work under specific terms and conditions. But at the end of the day, you are still the owner of your creations. This actually gives you direct hand over the use of your works. This is the personal satisfaction and economic reward Chief Justice Davide is talking about. This full and complete control over your creations would eventually, hopefully, lead to more creations from you.

The final point I would like to discuss is the contract in the third story I told you earlier. I have reviewed over a hundred contracts in the course of my practice. I have seen hundred-paged contracts. I have even drafted a half-paged contract. But I have never encountered a devious contract such as that.

The contract itself is indicative of an intent to deceive. At the least, there was an obvious intent to get one over the other party. True enough, one of the provisions “discovered” later on by the composer actually put him under perpetual control by the record company. This is a stipulation that is clearly contrary to law and moral and even public policy and therefore void.

The truth is the more alarming reality is that the composer felt that he had to sign such a contract. Despite some misgivings, he truly felt compelled to agree to such patently onerous terms. This is probably an issue best addressed by FILSCAP. But you should always keep in mind that when people enter into a contract, the fundamental pre-requisite is that the parties are in equal planes. If at the onset, the other party is enjoying dominance over the other, there may be some serious doubts over the validity of the resulting contract. A contract is defined by the meeting of the minds of two people. It is not an imposition of the will of a stronger person over a weaker one.

In sum, as composers you should always remember that your work should belong to you. Contracts you enter into should not deprive you of the fruits of your work. Neither should the contract prevent you from using your work in the manner you wish to. I end this talk with a reiteration of what Chief Justice Davide said, copyright protection extended to the creator should ensure his attainment of some form of personal satisfaction and economic reward from the work he produced. While it is true that intellectual property rights play a very significant part in our country’s economic development, we should never take for granted where these musical works came from. We cannot draw water if the well is dry. 

About the Author:

Atty. Michael Henry Ll. Yusingco is a practicing lawyer, a partner for Yusingco & Garcia Law Office, and FILSCAP’s Legal Counsel.