Legal Question in Intellectual Property in Texas

Re: Music copyright infrengment

What you are wanting to do is a bit like downloading music from a pay-per-download site, making a CD, and then selling the CD with the music. That's a copyright violation even though you 'bought' the music. The PPD site assumes the D/L for your own personal use and not make a copy for profit.

What you'd have to do is contact ASCAP and get a license to use and sell copyrighted music. I'd expect that with the limited use you are considering, the license fee should be quite reasonable.

Re: Music copyright infrengment

The "simple" answer to your question is "no," and here's why. When you buy a physical copy of a sound recording (such as a CD), you don't own "the recording," per se. Instead, what you hold are 1.) the physical medium the recording is recorded on and 2.) a number of licenses (usually implied licenses) that go along with the physical medium and allow you to do certain things. For example, when you buy a Willie Nelson CD, you are buying the physical CD itself and the implied licenses (set out in the copyright laws) to play the songs on the CD on your home stereo and to transfer your licenses by selling the physical CD you bought to someone else.

The copyright owner (usually the record label), however, is the one that actually owns "the rights" (i.e., the copyright) to the recording, and the copyright owner does not have to license all of its rights to you, the purchaser of the CD (or downloaded file). In fact, they usually don't---that's why selling your own bootleg CDs is illegal, even if you bought the original CD to begin with. Using copyrighted recordings in the soundtrack of a commercial video is one of those things that you would have to obtain a special license from the copyright owner for, since the copyright owner has the exclusive right to create "derivative works" from the original work.

Note that the fact that you "paid for the recording" doesn't make any difference, because what you paid for was a license to play the recording in your home and not a license to make derivative works from the recording. The same rules apply with downloaded files, too.

A royalty is simply the price that a copyright owner charges you for a particular license---it's basically just a price tag. Thus, in your situation, the issue is not really whether the record label or performers got paid a royalty or not, the issue is really about whether you bought the right kind of license to do what you want to do with the music.

While that may sound like bad news to you, I would not let that discourage you from pursuing your business. The music business is all about licensing, and you may actually find it more efficient to obtain a commercial license with a record label or two than to buy songs off of iTunes or the like. You can sometimes obtain a license to an entire catalog of music, and it may turn out to be a lower-cost option for you, since you will be basically buying wholesale, rather than retail.

You might want to check out http://www.riaa.org (Recording Industry Association of America), which provides some information about licensing sound recordings. There are other options/issues you may want to consider, but apparently my response is limited to 3000 characters (as I have just found out the hard way). You can e-mail, if you like, though. Best of luck to you!