Bridgeport, Audio Sampling and Transaction Costs

Earlier this month, the Sixth Circuit reaffirmed its decision in Bridgeport Music, Inc. v. Dimension Films, where it ruled that there is no de minimis use defense to digital sampling of a sound recording.

Get a license or do not sample. We do not see this as stifling creativity in any significant way. It must be remembered that if an artist wants to incorporate a “riff” from another work in his or her recording, he is free to duplicate the sound of that “riff” in the studio. Second, the market will control the license price and keep it within bounds. The sound recording copyright holder cannot exact a license fee greater than what it would cost the person seeking the license to just duplicate the sample in the course of making the new recording. Third, sampling is never accidental. It is not like the case of a composer who has a melody in his head, perhaps not even realizing that the reason he hears this melody is that it is the work of another which he had heard before. When you sample a sound recording you know you are taking another’s work product.
This case also illustrates the kind of mental, musicological, and technological gymnastics that would have to be employed if one were to adopt a de minimis or substantial similarity analysis. The district judge did an excellent job of navigating these troubled waters, but not without dint of great effort. When one considers that he has hundreds of other cases all involving different samples from different songs, the value of a principled bright-line rule becomes parent. We would want to emphasize, however, that considerations of judicial economy are not what drives this opinion. If any consideration of economy is involved it is that of the music industry. As this case and other companion cases make clear, it would appear to be cheaper to license than to litigate.

When the court emphasizes that its decision is not "driven by consideration of judicial economy" or that it did not "pull this interpretation out of thin air," perhaps it deserves a closer look at where this rule is efficient.

To some extent, the Bridgeport decision only codifies current industry practice, which requires clearance of any recognizable sample, regardless of whether the use might be allowed as de minimis taking or as fair use under copyright law.49 This ad hoc licensing regime is inefficient, time consuming and expensive. A single use of a three-second sample in a new major label recording may cost $1500 in recording license fee.2 A sampling artist may expect to pay up to $5000 for a looped sample of three seconds or less. 51 A looped sample greater than three seconds can run into the tens of thousands of dollars.52 Licensing of a musical composition may typically require the author of the derivative work to turn over between 15% and 66% the new work's musical composition copyright to the sampled work's author. This is charged to the sampling artist as an advance on payment of royalties.53 The sample clearance budget for a major label hip-hop album typically accounts for $60,000 of a $300,000 recording budget.54

These figures are only approximate industry averages. Individual copyright owners may choose to license samples at significantly higher rates or hold out from allowing their material to be sampled at all. A bright-line rule and risk-averse attitude towards small samples may encourage rent seeking from copyright owners. The ad hoc licensing regime has had a distinct effect on the development of music that relies on sampling. A work incorporating samples does not stand in as a substitute for the sampled work. Sampling may not harm the market for the original recording. In fact, the practice of sampling may lead to a demonstrable increase in demand for works that have been sampled.55

Although the Sixth Circuit is convinced that its bright line rule will have no discernable effect on creativity, some of the more prominent users of sampling have changed the way they create music because of the requirement to clear each and every sample. On “Paul’s Boutique,” released in 1989, the Beastie Boys pioneered the use of dense sampling. However, subsequent Beastie Boys albums have not followed this same technique, because of the high transaction costs necessary for a label to clear the work for release. “We can’t just go crazy and sample everything and anything... It’s limiting the sense that if we’re going to grab a two-bar section of something now, we’re going to have to think about how much we really need it.”56 In addition to expense, these requirements force artists to spend time cataloging each use of a sample within a recorded work, “It’s very tedious. We have to sit there and basically break out every single component of every track that we do and make a list of the sources for everything.”57 Chuck D of Public Enemy found that the sample clearance process forced the group to change its sound:

Public Enemy's music was affected more than anybody's because we were taking thousands of sounds. If you separated the sounds, they wouldn't have been anything--they were unrecognizable. The sounds were all collaged together to make a sonic wall. Public Enemy was affected because it is too expensive to defend against a claim. So we had to change our whole style, the style of It Takes a Nation and Fear of a Black Planet, by 1991.58

The Sixth Circuit attempted to mitigate the harsh effects of its ruling by noting that “there is a large body of pre-1971 sound recordings that is not protected and is up for grabs as far as sampling is concerned.”60 Prior to 1972, Federal Copyright law did not protect sound recordings. However, not all pre-1972 sound recordings are in the public domain. Rather, these recordings are protected by a variety of state statutory and common law copyright regimes.

In order to use a sample from a pre-1972 recording without infringing, a sampler will first need to determine whether a pre-1972 recording is subject to state or common law copyright and navigate the confusing and contradictory realms of state copyright law. Until 2067, when federal copyright law will preempt state copyright law, the status of public domain recorded music. 61 The public domain provides few viable alternatives for samplers seeking to avoid the information burden and high transaction costs of licensed sampling.

(These last few paragraphs are pulled directly from a short and generally mediocre law school seminar paper, hence the footnotes with the funky numbering.)

Further reading:
William Patry: The Sixth Circuit Reaffirms Controversial Sound Recording Opinion:

The original panel opinion, as well as Friday's, are controversial, for at least two reasons. First, the panel adopts a different approach to infringement of a musical composition embodied in a phonorecord than for infringement of the sound recording embodied in that same phonorecord; second, the difference lies in the lack of any requirement of even a de mininis taking for sound recordings. (While finding that a sampling of three notes was infringement, the court demurred on whether sampling of one note would be. I fail to see any basis in the court's reasoning for excusing the taking of one note when three is infringement).

Cathy Kirkman: Digital sound sampling = infringement:

The 6th Circuit has issued an amended opinion in the sampling case of Bridgeport Music, Inc., v. Dimension Films, which confirms the court’s earlier decision last fall and further clarifies its reasoning. The court adopted a “bright-line” rule for sampling of digital music, holding that all digital copying of sound recordings constitutes infringement, subject to any affirmative defenses such as fair use.

Ernest Miller, 6th Cir. Reaffirms - No De Minimis Defense in Copying Sound Recordings:

Congress thought it was being clever when it created a mechanical compulsory license for the creation of phonorecords in order to solve the potential monopoly problem in player piano rolls. But then technology changed, and one could record sound recordings and not simply holes in a roll of paper. This changed the industry even more dramatically (not to mention the advent of broadcast radio), and things got messy.

---
Notes
49 Josh Norek, Comment: “You Can't Sing without the Bling”: The Toll of Excessive Sample License Fees on Creativity in
Hip-Hop Music and the Need for a Compulsory Sound Recording Sample License System 11 UCLA ENT. L. REV. 83, 89
(2004).
50 Id.
51 Id.
52 Id.
53 Id. at 90.
54 Id.
55 See Henry Self, Comment, Digital Sampling, a Cultural Perspective, 9 UCLA ENT. L. REV. 347 (2002); Chris Johnstone, Note, Underground Appeal: A Sample of the Chronic Questions in Copyright Law Pertaining to the Transformative Use of Digital Music in a Civil Society, 77 S. CAL. L. REV. 397, 402 (Jan. 2004)
56 Eric Steuer, The Remix Masters, WIRED, November 2004.
57 Id.
58 Kembrew McLeod, How Copyright Law Changed Hip Hop, STAY FREE!, June 2004, at
last accessed Dec. 14, 2004).
59 See Why Sampling Law Needs to Change, DOWNHILL BATTLE, at
(last accessed Dec. 14, 2004).
60 393 F.3d at 401
61 See 17 U.S.C. §301(c), Capitol Records v. Naxos, 372 F.3d 471 (2d Cir., Jun 21, 2004).

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