Federal Music Modernization Act has a troubled rollout

As legislators and industry appointees work to drag long-outdated copyright laws into the 21st century, the process of implementing the Music Modernization Act has not been without its growing pains.

The Orrin G. Hatch-Bob Goodlatte Music Modernization Act, more commonly known as the MMA, was signed into law by President Donald J. Trump in October 2018.

The act called for the formation of a group tasked with overseeing the licensing and administrative rights implemented under the MMA, leading to the formation of the Music Licensing Collective in July. Updates since then from the group formed to navigate the music industry through the MMA's full implementation have largely come in the form of news releases announcing new appointments to leadership positions.

Many of those selections have raised eyebrows in the music industry, said Jordan Bromley, a transactional music attorney and partner at Manatt, Phelps & Phillips LLP's Los Angeles office.

In particular, he highlighted the licensing collective's unanimous approval of music publisher Harry Fox Agency as one of the group's primary vendors for managing the matching of digital uses to music works, distributing mechanical royalties and onboarding songwriters, composers, lyricists and music publishers and their catalogs to the music database set to go online Jan. 1, 2021.

Songwriter-aligned music attorneys were understandably skeptical at the news, Bromley said, as Harry Fox Agency had fought tooth and nail against the implementation of the MMA. Now, he said, the group is suddenly critical to its success.

"They're the group that was contracted by Spotify and other streamers to obtain licenses," Bromley said. "So now there's this perception that they're being elevated and rewarded in spite of their opposition."

Mitch Stoltz, senior attorney for the Electronic Frontier Foundation, shares that perception. Having called out groups like Harry Fox Agency at the time of the bill's passage for interfering with the process in a "grab for perpetual control over20th century culture," Stoltz said many of the collective's leadership selections haven't done much to allay concern.

"The point of copyright law is to incentivize the creative process while enriching the public, and that was what the Music Modernization Act was intended to do," Stoltz said. "The publishing labels -- who have virtually always held control over music copyrights and intervened throughout the lawmaking process to retain that power -- are still essentially getting what they would want."

Beyond issues with the collective, the implementation of the MMA has also created chaos for a select few parties litigating over the royalty rights to their pre-1972 sound recordings. Most notably Flo & Eddie, the surviving members of the '60s funkadelic rock band The Turtles, who have since 2012 been engaged in multi-state and federal litigation against streaming giants Pandora Inc. and Spotify Inc. over royalties.

Pandora successfully challenged Flo & Eddie's trial court victories at the 9th U.S. Circuit Court of Appeals, which remanded the case back to the Central District of California in an Oct. 17 ruling. The panel ordered the district court to consider new provisions that might bar the state law claims.

In short, said Bromley, this has left Flo & Eddie in a remarkably difficult position. Particularly given the fact that they were poised to rack up a nine-figure combined trial award ahead of the MMA's passage.

While he had sympathy for the "Happy Together" singers, Bromley said the band's unfortunate legal turn may be sadly necessary.

"I truly do hope they can work out something where they don't walk away feeling as though this whole exercise has been a wasted effort," Bromley said. "But it's not looking great."