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Help with a mechanical license contract Licensing

Discussion in 'Copyright, Trademark, Patent Law' started by jazzbiker, Oct 1, 2013.

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  1. jazzbiker

    jazzbiker Law Topic Starter New Member

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    I have been asked to sign a mechanical license contract to sell a couple of my songs. I don't expect much in the way of royalities so I hoped to avoid hiring an attorney to review. I'm particularly confused about #2 as whether the purchase is limited to 1000 copies or if the buyer has the option to buy more under the same terms.

    Thanks for looking!



    MECHANICAL LICENSE AGREEMENT

    This Mechanical License Agreement (“Agreement”) is made this the _____ day of September, 2013, by and between XXXX (hereinafter referred to as “Licensee”) and XXXX (hereinafter referred to as the "Owner").

    The parties hereby mutually and expressly agree to the following terms and conditions:


    1. Ownership. Owner warrants and represents that it is the sole and exclusive proprietor
    of a valid copyright or license in the musical work now entitled:

    Song 1
    Song 2

    (hereinafter referred to individually or collectively as the "Work" or "Musical Work"), and that Owner has the right to grant the license herein contained.

    2. Grant of Rights. Owner hereby grants to Licensee the right for up to 1,000 copies to record, reproduce, market and sell the Musical Work. Further, Owner grants to Licensee the nonexclusive right, privilege and license, during the term of the copyright of said Work and all renewals and extensions thereof, to use the Work, and to make and/or use arrangements thereof, in the manufacture and sale of parts of instruments serving to reproduce the Work in the United States.

    3. Compensation. Licensee shall pay to Owner royalties at the following rates on all copies
    containing the above-named musical Works manufactured, sold and paid for in the United
    States during the term of the Work's copyright and all renewals and extensions thereof:

    (a) For each phonorecord manufactured, sold, and paid for, Licensee shall pay the Owner EIGHT AND ONE-HALF (8.5) CENTS.

    (b) The term "phonorecord(s)" or "records", as used herein, means any
    and all methods of mechanically reproducing the musical Work including, but not limited
    to, phonograph records, cassette tapes, digital audio tape, compact disc, digital transmission, and any and all methods of reproducing the Work, now known or to later come into existence.

    As to records manufactured in the United States and sold by Licensee for export to other countries, royalties shall be payable pursuant to this contract, except with respect to records exported to countries which require the payment of copyright royalties in connection with the import or sale of such records, in which event no royalties shall be payable hereunder. Notwithstanding the foregoing, as to all mechanical devices (such as masters) which are exported by Licensee to companies in other countries for use by such companies for the manufacture and sale of records, a royalty of ONE HALF the United States royalty rate shall be payable to the Owner.

    Licensee agrees to render to Owner quarterly statements, and payments of all royalties payable hereunder, within 45 days after March 31st, June 30, September 30, and December 31, for each quarter for which any such royalties accrue pursuant to the terms hereof.

    4. Indemnification. Owner shall release and hold harmless, Licensee from loss or damage (a) arising out of or connected with any claim by a third party or parties which is inconsistent with any of Owner's warranties set forth herein, or (b) by reason of any final non-appealable adjudication invalidating the copyright of the Work.

    5. Assignment. The parties hereby agree that this Agreement is assignable by either party as long as the royalty rate herein stated is paid to Owner. Written notification of any assignment shall be promptly provided to the other party.

    6. Binding Agreement. This Agreement is contractual in nature and is binding on each party hereto including each party’s heirs, legal representatives, successors, assigns, owners, directors, shareholders, employees and agents of the parties hereto.

    7. Applicable Law. This Agreement shall be governed by the laws of Ohio. All disputes hereunder shall be resolved in the applicable state or federal courts of Ohio. The parties consent to the jurisdiction of such courts, agree to accept service of process by mail, and waive any jurisdictional or venue defenses otherwise available. Any prevailing party shall recover its costs as well as reasonable attorney fees incurred.


    IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have reviewed the terms and conditions of this agreement, and have each caused to be affixed hereto its or his/her hand and seal the day indicated.
     
  2. Betty3

    Betty3 Super Moderator

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    Since a contract is involved, your best bet is to talk to an attorney. However, someone here might come along with some information for you.
     
  3. army judge

    army judge Super Moderator

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    I hope you KNOW you're selling your artistic creations for a mere $85.00 EACH, assuming 1,000 are sold. Plus, you're getting incline planed on international licensing.

    That alone is a bad deal in my view from a licensing standpoint, not a legal one. From a legal perspective you're incline planing yourself. You're agreeing to receive a tad more than musical artists, but their deals grow with sales.

    If you have little or no interest in the money, because you sure won't receive any, give the songs away.
    This deal won't even give you exposure.
    You'd get more of that on a sunny day in a nudist colony, or going YouTube.

    You also agree to wear the risks and absolve the distributor, wax producer of any legal ramifications insofar as licensing your material. If this was my deal, and I've done several of these for country artists, as well as R&B talent, I'd just gift the dude my material and ask him to buy me a nice dinner, some fine wine, and a couple good stogies.

    Heck, a couple Ben Franklins or a $500 iTunes card would be worth more.


    Sent from my iPad3 using Tapatalk HD
     
    Last edited: Oct 1, 2013
  4. jazzbiker

    jazzbiker Law Topic Starter New Member

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    Thanks for your feedback. My understanding is the statutory rate for a mechanical license is 9.1 cents not much more than the 8.5 cents. This is a project I am involved in and I was going to give the licenses away for the 1st 1000. I figure if it takes off, I'd want the statutory rate for additional licenses.
    When you've done these before, were you able to charge more than the 9.1 cents? I thought if there was no contract the licensee could use by paying the statutory rate.

    I had a question on the international as well. I have seen the same verbiage on boiler plate agreements. Again, when you've done these, were you able to charge more for international licenses?

    Same with the indemnity clause.

    My main goal is to limit the licensee to 1000 copies and then have to pay the going rates if more copies are needed.

    One more question. Does the statuory rate trump the contracted rate? Or the other way around?

    Thanks again




     
    Last edited: Oct 1, 2013

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