Being an entrepreneur in the music industry is just like starting any other small business. However, there are a few risks that distinguish operating an independent record label from other companies. One such distinction involves Intellectual Property (IP) issues. IP issues that may come up include trademark protection of one’s business name, as well as possible copyright dilemmas involving your business and/or the musicians you produce for.
Trademarking Your Name
Naming your record label is extremely important and you will want to pick a name that helps consumers and musicians identify your label. To be clear, your customers are the music-loving public who will be purchasing the CDs, records, and other media you produce for the musicians who record with your company. A record label name is extremely important to the functioning of the business, since it will be what draws other musicians, and therefore sales, to you.
Many business owners wonder if they should trademark their business name/ “trade name.” A trademark is a symbol, word, phrase, or a combination thereof that identifies the source of goods or services. Obtaining a federal trademark offers various protections to your business, primarily keeping others from using it. Some other benefits include:
- Nationwide trademark protection;
- Your trademark becomes part of the online database of trademarks;
- You can file a suit in federal court to enforce your mark if someone else starts using it;
- You get to use the trademark symbol ®.
To obtain a trademark, the mark must meet a few requirements. Essentially, there is a spectrum of distinctiveness that helps you determine if your mark will qualify for federal registration. For example, made up names are the easiest to obtain a trademark for. If your name suggests a product type, then it can be trademarked, but if a name describes your good or service, such as “Chicago Pizza,” it will most likely not be trademarked.
To trademark your business name, you can apply online with the United States Patent and Trademark Office (USPTO). By registering your record label, your trademark will cover the display of the business name in any font or color, so long as it is registered as a “standard character mark” on your application.
If you choose to not trademark your name, however, you need to make sure that the label’s name does not infringe on another trademark. While there are many criteria used to determine if trademark infringement exists, one factor is the degree of similarity between the two marks. You can go online to the USPTO’s website and check the Electronic Search System (ESS) database to make sure your name is not already in use by another business.
Another problem to avoid is making sure your record label’s name does not create a likelihood of confusion with a preexisting business in the music industry. To avoid this potential dilemma, search for your potential label name in the ESS database and make sure it does not sound or look like other labels. You can also protect yourself against infringing by searching on Google, as well as keeping in mind that geographic location does not matter. If there is a similar record label name anywhere else in the country, you could be in trouble.
Federally registering your business name is not necessary if you plan to operate only in one state. However, operating a record label means you will be shipping your CDs, records, and other media across state lines, and maybe even internationally. Also, the music business can be cut-throat, and it is crucial to make sure your business is protected because at the end of the day, it is still a business as well as part of your livelihood.
Copyrights and Sampling
Copyright is a legal protection for creative works such as paintings, books, or songs/musical compositions, etc. To receive copyright protection, the creative work must be (1) original to the author with a minimal degree of creativity, and (2) fixed in a tangible medium of expression. Your work, if it meets these requirements, is automatically copyright protected, but federally registering your copyright affords you more rights. Briefly, these rights include: the right to reproduce the work, to distribute copies of the work, to perform the works publicly, make derivative works, to perform sound recordings/digital audio of the work, and to display the work.
As the label owner, your company will not own the copyright in the music and lyrics; that is owned by the musician themselves. However, you will own the copyright in the sound recording. Since you will have a stake in the music, it is important to know about Sampling, which is a type of copyright infringement when it is done without permission. Sampling is taking a portion of a prior recording and incorporating it into a new song or other recording. Musicians get in trouble for this quite often, so it is important to know what not to do.
Sampling is legally allowed, so long as you are given permission, which is given in the form of a license. If a piece is sampled without permission though, the copyrights of the sound recording and the song itself have been infringed and your musician and your company could be in trouble. As the creator of the sound recording, your record label would be in trouble for producing and selling someone else’s copyrighted material. This is especially troublesome for an independent record label that may not have a lot of money to spend in court fees or settlements.
If illegal sampling occurs, a court can force the musician and/or the record label, to destroy all of the records containing the sampled work and pay damages to the copyright owner in an amount ranging from $750 to $150,000 for each infringement. So, when in doubt, always get permission!
Sources:
https://www.entrepreneur.com/businessideas/independent-record-label
https://www.thebalance.com/how-to-start-a-record-label-2460782
https://www.nolo.com/legal-encyclopedia/how-start-record-label.html
https://law-arts.org/pdf/Legal_Issues_in_the_Music_Industry.pdf
https://www.legalzoom.com/articles/should-i-trademark-my-business-name
Good job! This post presents a great outline for readers who are considering starting their own record label. I think its a timely topic because more people will try to create their own labels given the prevalence of programs like Sound Cloud and social media.
Now that I’ve read your post I am curious about the process of record deals. I think it would be interesting to do a post about simple record deal agreements.
The portion on sampling is also a helpful preventative measure. Getting permission is a simple solution that will keep the reader out of trouble.
I also think that making the distinction between owning the copyright to the recording vs. the actual music is very helpful. That is a point that would probably confuse the reader.
All in all, this an interesting post with very relevant subject matter. I would encourage you to stay with this topic for your next post!
Overall, great post. Nice introduction. Reads smoothly. I liked how you covered the importance of distinctiveness and provided an example of something that would not be approved by the USPTO. I also liked the contrast between applying for your own trademark but also staying out of legal trouble by ensuring that you are not infringing upon another business’s trademark. Valuable advice. I really appreciated the interstate commerce section and the reality that other companies and record labels are going to be out to get you because the industry is notoriously cutthroat—good persuasive use of language. Until your blog, I did not realize the significance of sampling. That said, I am actually surprised that the fines are that low. Statistically speaking, I wonder what the collective dollar amount is, per year, for lawsuits involving unauthorized sampling. It is probably ridiculously high. Overall, great job. I learned a lot. Thanks for the information!
Devon,
I loved this all-inclusive IP guide to starting an independent record label. You gave some great advice when it came to whether or not a record label should federally register their trademark. All record labels should assume they might sell or distribute media nationally, so I completely agree with your point. Furthermore, I loved how you provided insight into who owns what when it comes to the copyright of the music. It’s vital that a record label is aware of what portion of the creative process they own.
Your little bit on sampling at the end was fantastic. This is something most of us hear on a daily basis, yet we don’t realize the legal implications behind such an act.
I’m really looking forward to your future posts regarding the music industry. Well done.
– Cameron Plaster
This was a very interesting and informative post. I didn’t know much about the music industry before this and this is a great outline of what to do, and maybe more importantly, what not to do. I don’t know much about intellectual property either and you explained the concepts well and they were easy to understand. The sections combine well and provide a lot of useful information. I also liked the section at the end regarding sampling. I can think of dozens of songs that contain samples and I never realized it could cause so many issues. Overall, the post was very well written and I enjoyed reading it.
Matt Myers