The copyright statutes governing sound recordings and musical compositions allow private parties to negotiate around the respective compulsory licenses and to instead establish private royalty rates that are frequently adopted, either formally through the Copyright Royalty Board or rate court’s rate setting procedures, or informally through evolving industry norms. This phenomenon, herein termed “private copyright reform,” raises two immediate concerns: First, it presents distributional justice concerns insofar as it allows for reduction, and even elimination, of statutorily mandated royalties owed to songwriters, recording artists, musicians and vocalists. Second, when presented without full term disclosure, these privately determined rates can lead to the adoption of inaccurate “market” royalty rates. Private copyright reform also challenges traditional intellectual property doctrine; specifically, it questions the efficiency of compulsory licenses and collective rights organizations, while also raising questions of fairness around the ability of private parties to make law. While resolution of these doctrinal questions is outside the scope of this Article, the recent proliferation of private copyright reform suggests they are ripe for reconsideration.
If you’re interested in copyright policy and the relationship of law to practice, read this article. I’d like to see Garcia spend more time discussing adverse selection—the way in which opt-out and departure by strong members of collective rights organizations (CROs) can cause the remaining participants to be lower-quality, thus setting off a downwards spiral that may have negative welfare consequences overall despite the benefits to early-departers. Is there reason to consider mandatory CROs, not unknown to copyright law around the world, as a response?