According to Music Business Worldwide, a significant ruling by the U.S. Copyright Office has reaffirmed the termination rights of songwriters under the Music Modernization Act (MMA), drawing widespread applause from various organizations representing artists and songwriters. This decision outlines and ensures that songwriters can collect mechanical royalties generated from streaming platforms like Spotify, Apple, and Amazon after invoking their termination rights.

The ruling clarifies that the “derivative works exception” does not apply to the blanket license under Section 115 of the Copyright Act. This compulsory license, known as the 115 License, is administered by the Mechanical Licensing Collective (MLC), which was established by the MMA in 2018.

In October 2022, the U.S. Copyright Office published a notice of proposed legislation regarding the use of the derivative works exception to termination rights under the statutory blanket mechanical license.

The MLC’s policy, based on its interpretation of the “derivative work” exception, claimed that publishers would forever receive royalties from the MLC if they had licensed the work at least once before the termination date. The new ruling stipulates that songwriters who terminate their rights are entitled to be paid for post-termination uses of their works under the blanket license.

Jordan Bromley, a board member of the Music Artists Coalition (MAC), hailed the ruling as a landmark victory for songwriters and the music community. “By confirming how termination rights apply to the blanket license, the Office has affirmed the fundamental principle that creators should benefit from their work,” Bromley stated.

The Music Artists Coalition expressed that the decision ensures fair compensation for songwriters reclaiming their rights and strengthens the foundation of copyright law in the digital age. BMAC Co-Founder Willie “Prophet” Stiggers emphasized the importance of this decision in protecting Black music creators and amplifying justice within the music industry.

The Songwriters of North America (SONA) and the Nashville Songwriters Association International (NSAI) also celebrated the ruling. SONA board member Jack Kugell praised the decision as a victory for fair interpretation of copyright laws, while NSAI highlighted the ruling’s impact on efficient payments to songwriters.

David Israelite, President & CEO of the National Music Publishers’ Association (NMPA), commended the ruling for affirming the MLC’s practice of ensuring songwriters are properly paid post-termination. He acknowledged the songwriter groups’ efforts in pushing for this decision.

An MLC spokesperson welcomed the guidance, stating that the MLC will begin working to implement the rule’s requirements and release previously held monies in accordance with the provided timelines.

The ruling is takes effect on August 8, 2024.