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This article is written by Nirali Shah, pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from Lawsikho.com.

A synchronization license or “sync” (in short) is a license related to music granted by the holder/ licensor of a particular composition or copyright, allowing the licensee or other person to synchronize his music with some kind of visual media output.

What is meant by synchronization license?

A Synchronization License is a contract between a music user or audio-visual output creator and the owner of a composition or song which is copyrighted, grants permission to release the song in a video mode through online / digital portals such as DVDs/ YouTube/ Blue-ray discs). This permission is also called sync rights or synchronization rights.

“Sync” licenses are agreements for the use of music in audiovisual projects. Used in its strictest sense, a sync license refers to the use of a musical composition in an audiovisual work. The term “master use” license is sometimes used to refer to the use of a music recording (sometimes referred to as a “master”) in an audiovisual work.

Sync and master use licenses can make money for songwriters, and master use licenses can make money for recording artists. It is possible for a license to include both a grant of rights in a song and a master if the same person wrote the song and produced the master.

What happens if I don’t get a license?

We are not in the business of enforcement. However, there are publishers and third parties out there who are indeed enforcers. The result can be legal action (in some cases) or takedown of the material or permanent strikes on your account. 

How does it work?

The composers or owners of a musical work cannot enter into a music / sync license agreement with each and every party interested to use their musical work. Entering into music license agreement for each and every licensee is such a cumbersome and time taking process. For this purpose, the owners or composers of the musical work would enter into a music license agreement with the publishing entities. Musicians themselves can publish their work on certain platforms such as the “Soundcloud”. But the majority of the publishing work is done by the registered publishing companies. Artists are paid royalties or lump sum value or commission as per sales in return. These publishing companies are mostly members of various copyright societies which are registered as per the provisions of Section 33 of the Indian Copyright Act, 1957.

Key elements of Music Synchronization Agreement and how such clauses can be included in the Agreement:

Definitions:

There could be terms which are used many times throughout an agreement. Similarly, definitions tend to make interpretation and reading of an agreement simpler and concise and reduce ambiguity. A defined term used anywhere in the agreement refers to the defined person or entity or process.

Term: 

How long does the agreement last for? One year? Five years? Ten years? In general, a musician should request a shorter contract term than a longer one. If things are going well, you can always extend the term.

The clause can be drafted as:

The tenure of this Agreement shall be effective from the Execution Date and shall continue till the XXX years. The tenure of this Agreement may be extended for additional one (1) year (“Extended Terms”) and changed if Parties agree in writing.

Exclusivity: 

Will the company be the only ones who can exploit your song(s) for the duration of the sync agreement or are you free to secure sync deals with other companies? Typically, musicians should agree to non-exclusive agreements in order to pursue other deals. The only exception for agreeing to an exclusive agreement is if a very established and reputable company is offering you a contract.

The clause can be drafted as:

The license granted is owed to Licensee, which (may/ may not) be assigned by any act of Licensee or by operation of law unless in connection with the consent of Publisher. 

Scope of Use / Grant of License:

This is the most important clause for a music license agreement. It clarifies the nature and extent of the license grant. The licensor must specify whether the license is an exclusive or non-exclusive grant. An exclusive license grant prevents the licensor to not further license the work. A non-exclusive grant of license permits the licensor to license the work with other potential licensees, there is no such limit for authorised licensees.

The right of the licensee to further sub-license must be referred to in this clause. Even if a non-exclusive license is granted, the licensee or the publisher can restrict or impose certain conditions that prevent the licensor from licensing the work on different platforms such as CDs, radio or websites. The licensor can also restrict the publishing of work by expressing the geographical limit within which the license will be effective. For Example: the composer can grant a license exclusively for use in the film and retain the rights of the song in relation to online streaming, public performances, albums, etc. 

The clause can be drafted as:

  1. The Licensee shall have the (exclusive/ non-exclusive), (revocable/ irrevocable) right and license to use the copyrighted musical composition in television, radio as well on the website, promotions and print advertising thereof. 
  2. The Licensee may also use the lyrics to the Composition in print advertising. 
  3. The Publisher hereby acknowledges that it will not grant any license to use the work in the marketing, advertising or promotion of any other website for the duration of the Term.
  4. Indian Performing Rights Organization (“IPRS”) or Phonographic Performance Limited (“PPL”) will license the Composition on television or radio stations and such other networks throughout India, such rights be granted under the license agreements. 
  5. The Licensee shall desire to use the Composition on networks stations which have not entered into a license agreement with IPRS or PPL, this agreement shall be deemed to constitute a license for such uses, without further compensation or any limitation. 
  6. Licensee shall have all the rights to expand, alter, adapt and make any such arrangements of the Composition and also, the Licensee shall have the sole right to decide in what manner the work shall be advertised, performed, published or exploited by the Licensor.
  7. In consideration of the License Fee payable to the Licensor, the Licensor grants a non-exclusive license in perpetuity in the territory of the whole world to the Licensee the Licensed Rights for exploitation in a manner as set forth in this Agreement.
  8. The Licensed Rights shall mean and include the right to communicate the Songs to the public through the Platform. Any right not granted expressly to the Licensee under this agreement shall be retained with the Licensor, which shall include but not be limited to the right to edit, alter and modify any part of the Songs; all right, title and interest in and to the Songs worldwide (including, but not limited to, ownership of all copyrights and other intellectual property rights therein), as well as all right, title and interest in and to its trademarks, service marks and trade names worldwide, including any goodwill associated therewith, subject to the limited license granted to Licensee hereunder. Any use of any such intellectual property by the Licensee shall insure to the benefit of Licensor and the Licensee shall take no action that is inconsistent with Licensor’s ownership thereof.
  9. The Licensee shall not have the right to sub-license the rights to any third party. 
  10. The Licensee shall have the right to display the lyrics of the Song in exercise of the Licensed Right, however, the Parties hereto agree that all the copyright in the underlying works of the Songs, including the lyrics and music thereof, shall be retained solely by the Licensor, and the Licensee shall not have any right to exploit such underlying works on a standalone basis, independent of the Songs.

Compensation/ Royalties:

For the most part, royalty splits between the musician and company depend on how much bargaining power each party has. Sometimes, it may be appropriate to simply accept a one-time payment to make things easier in certain situations. Other times, it may make sense to grant a license in exchange for the privilege of receiving significant exposure in a high-profile film or television show.

For the most part, music artists typically make the majority of their income from touring and merchandise. However, sync deals can generate a significant amount of money over time (i.e. having your music featured in the opening credits of a syndicated television show). So, if you are presented with one, you should carefully analyze the contract before signing on the dotted line.

The clause can be drafted as:

  • The Licensee shall pay the compensation valued at INR XXX to the Publisher, such payment shall be made within fifteen (15) working days from the effective date of this Agreement.
  • All Charges and sums quoted payable to the Licensee under this Agreement are exclusive of any taxes, for which the Licensee shall be additionally added at the applicable rate from time to time.
  • In the event of renewal of this Agreement, the Licensee shall pay the sum amounting to INR XXX to the Publisher for each Extended Terms so that, such payment shall be made within seven (7) working days of the beginning of such extended term. 

Termination:

This chapter explains how the parties can terminate the relationship and who is liable for such an incident. If any party commits some unlawful act, for instance, the act may constitute a violation of the agreement. Or, if the promised services are not completely executed by the service provider, they may be in violation of the agreement. Often, if the customer does not pay for the services rendered, then the customer is in violation of the contract. Or, if the parties agree to end the relationship without any strings attached, by written consent.

The clause can be drafted as:

  • The Contract may be terminated with immediate effect by the Client at any time upon written notice to the Service Provider before the Parties have signed and entered into the Definitive Agreement. 
  • The Contract shall terminate with immediate effect [and without notice] following signature and entry into the Definitive Agreement by the Parties.

Warranty and Representation:

This clause ensures that the parties to the agreement are competent enough to enter into any agreement. This clause includes a declaration by the one party i.e. receiving party, that they are authorized to do such acts and have the required permissions, licenses, consents or authority to enter into the agreement.

The clause can be drafted as:

The licensor hereby warrants and represents to the Licensee that: 

  • He/ she is a member of PPL and IPRS. 
  • The Composition is new and original. 
  • No claim exists against Composition.
  • He/ she himself/ herself owns the Composition and all the related rights. 
  • He/ she has the exclusive rights, authority and control to enter into this Agreement. 
  • The Composition will not infringe or violate the copyrights or any other rights, in future.

Modification and Amendment:

The amendment section describes how if the conditions (i.e. scope of services) change over the course of the partnership, the parties may change the agreement. Usually, to amend the agreement, written consent of both parties is required.

The clause can be drafted as:

  • Amendment – This agreement can be amended only in written form and signed by both parties.
  • Assignment – This Agreement may not be assigned by either party without the consent of the other party in written form.

Confidentiality:

This clause safeguards corporate secrets and all sensitive information gathered during and after the course of the contractual relationship.

The clause can be drafted as:

The Licensee shall keep confidential and only use for the purpose of this Agreement all Confidential Information and the Licensee shall ensure that such information, documentation and materials are not disclosed to any third party without the Licensor’s prior written consent. 

Indemnification:

The copyright owner shall indemnify the licensee from all the damages and third-party claims in relation to a breach committed by the owner of the copyright. Similarly, the indemnification clause also indemnifies the licensor from all damages and expenses caused by the use of the musical work by the licensee.

The clause can be drafted as:

Each Party (‘First Party’) indemnifies and undertakes to keep indemnified the other Party, its officers, employees and agents (‘Second Party’) against all actions, proceedings, costs, claims, damages, losses (including the cost of any settlement) whatsoever suffered or incurred by the Second Party in consequence of any breach of any representations, warranties, undertakings or obligations on its part contained in this Agreement or the exercise by it of the rights granted to it under this Agreement.

Jurisdiction/ Choice of Law: 

This clause describes how the conflict will be settled in the case of a dispute and what law applies. The parties will usually hold it close to home (i.e. in the state of the service providers). This provides a boost for local service providers doing business! Arbitration, mediation, and the use of common law courts are the most common forms of dispute resolution. 

The clause can be drafted as:

The interpretation, construction and enforcement of this Agreement and the Terms and Conditions and matters relating to them shall be governed in all respects by Indian law and the parties hereby submit to the exclusive jurisdiction of the XXX High Courts.

Dispute resolution:

How would it be treated if you and your client fall into a disagreement? There should be a two-fold answer to this issue. Next, how are you going to deal with the initial disputes about the job? Are you going to have an amicable conversation? Do you need to get your messages written down? The contract should typically demonstrate how initial minor conflicts will be resolved. Second, how are you going to deal with a bigger conflict that’s more difficult to resolve? Sometimes, the parties will talk regarding arbitration in these arrangements. A binding, non-judicial way to settle disputes is arbitration. Be sure to read the contract, no matter what, so you comply with what is written.

The clause can be drafted as:

In case of any dispute or disagreement arising out of this Agreement, the Parties shall:

  1. in the first instance, attempt to settle the same cordially;
  2. in the event of a failure to reach a cordial agreement, the dispute shall be referred to Arbitrator which shall be conducted in accordance with the provisions of Arbitration and Conciliation Act, 1996, or statutory re-enactment or any amendment thereof, as may be in force;
  3. and each party to the Arbitration will bear its respective costs relating to the arbitral proceedings. 

Force Majeure:

The phrase force majeure literally translates as a “greater force.” This clause should always be included in commercial contracts, as it can protect parties from circumstances that arise that are beyond anyone’s control. For example, in the event of a natural catastrophe, such as an earthquake or hurricane, a shipment schedule may be unavoidably disrupted. In general, the definition of force majeure is rather broad, with many contracts including wording about things like terrorist attacks and even acts of God. This clause is important to include to ensure that any failure to perform due to such an unforeseeable disruption is not considered a breach of contract.

The clause can be drafted as:

Neither party shall be liable for any breach of its warranties, indemnities or obligations under this Agreement other than in respect of payment obligations due to any matter reasonably beyond its control including but not limited to strikes, lockouts, trade disputes, acts or defaults of third parties, acts of God, force majeure or other unforeseen circumstances or as a result of the Licensee failing to carry out its obligations under this Agreement.

Miscellaneous Provisions:

Apart from these provisions, various other clauses can be added. A separate provision regarding the method for serving the notice among parties can be discussed under a notice clause. A mechanism for alteration and amendment of the agreement can be set out in a separate clause. Various other provisions such as the binding of the agreement on the successors of the parties and clauses giving the agreement the dominant status can be added. Apart from these clauses, various boilerplate clauses such as on waiver and severability should also be a part of the music license agreement.

The miscellaneous clauses can be drafted as:

Agreement:

This Agreement and the terms and conditions constitute the entire agreement between the parties and shall supersede all other/ prior written or oral understandings or agreements of the parties concerning the subject matter hereof which may not be changed or terminated except as set forth in this Agreement. In the event of any conflict between the requisitions of this Agreement and the Terms and Conditions the provisions of this Agreement shall prevail.

The benefits, terms and conditions of this Agreement shall be binding upon the benefit of the Parties hereto, their heirs, administrators, successors, and assigns. 

Notices:

  • Any notice to be provided in this Agreement shall be in written form and shall be addressed or delivered or faxed by suitable electronic means as may be communicated to the other party. 
  • Any notice shall be effective on receipt or within fifteen (15) working days of mailing or upon transmission in case of fax transmission/ electronic.

Waiver:

No waiver by either Party of any default shall be considered as a waiver of any default of the provisions of this Agreement.

Agreement drafted by all the Parties: 

This Agreement is the result of arm’s-length communications and negotiations between both the Parties and shall be construed as drafted by each Party in such manner that any ambiguities shall not be construed against any of the Party. 

Counterparts:

This Agreement may be executed in one or more counterparts by each party in writing, which shall become effective as an Original Agreement and which shall be binding upon both the Parties.

Music license agreement and end-users

End-users refer to common users who consume music. They aren’t directly related to a music license agreement. On the other hand, the aftermath of a music license agreement is directly related to the end-users. A musical work is governed among the end-users through an end-user license agreement. Online streaming platforms such as Gaana, Hungama, and YouTube are the most common platforms where a lot of musical content is consumed by the end-users. Users of these platforms are required to sign or agree to an end-user license agreement. These agreements prevent illegal distribution or commercial use of the musical work without authorization, thereby enforcing the standards of protection laid down in the native music license agreement. Users cannot play copyrighted music or sound recording in public performances and in places such as restaurants, bars, and saloons without the authorization of proper organizations. For instance, for playing a sound recording you will have to obtain a license from PPL. Whereas for playing the music and lyrics, the license is granted by IPRS.

Conclusion

It is no brainer that the next big thing after the creation of a musical work is to avail the musical composition for its mass consumption. The role of a sync license agreement in this process is of paramount importance. There has not been much change in the past few years considering the way a musical work is licensed. But quite a lot has changed in the consumption of music. Thanks to new generation technologies and ever-rising popularity of the internet. Any content made available is always prone to infringement. The same goes applicable to musical works. 

Key takeaways

In short, a music synchronization license is a license granted by the holder of the copyright of a composition, allowing the licensee to synchronize music with some kind of visual media output (i.e. film, television shows, advertisements, video games, movie trailers, etc.)


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