U.S. Copyright Office Issues a Final Rule in the Proceeding "Termination Rights, Royalty Distributions, Ownership Transfers, Disputes, and the Music Modernization Act."

The Copyright Office has issued a final rule in its proceeding “Termination Rights, Royalty Distributions, Ownership Transfers, Disputes, and the Music Modernization Act.” This final rule confirms that the derivative works exception to termination rights under the Copyright Act (the “Exception”) does not apply to the statutory mechanical blanket license established by the Music Modernization Act. It directs the mechanical licensing collective (“MLC”) to make future royalty distributions in a manner consistent with this understanding of the Exception and to engage in a corrective royalty adjustment process to correct earlier overpayments that were made based on an erroneous understanding of the Exception. Finally, the rule addresses related notice and timing provisions and other matters relevant to identifying the proper payee to whom the MLC must distribute royalties.

Additional information is available on the rulemaking's webpage.