What is an Interpolation License?

An interpolation license is a legal agreement between the owner of an original composition and an artist, producer, or company that wants to use a part or fragment of that composition in a new work. This license grants the licensee (the artist or producer) permission to incorporate, reproduce, and sometimes sell the portion of the original composition within their new creation, subject to specific terms and conditions.

How Does an Interpolation License Work?

Let’s say Alex Artist and Pedro Producer are working on a new hip-hop track and want to use a 10-second snippet from a classic rock song. Pedro reaches out to Pure Publisher Co., which holds the rights to the original composition, to negotiate an interpolation license.

They agree that Pedro can use the 10-second fragment in the new track, and in return, Pure Publisher Co. will receive a 10% share of the publishing royalties generated by the new composition.

What Happens if You Don’t Obtain an Interpolation License?

Failing to secure an interpolation license can lead to serious legal and financial consequences:

• Copyright Infringement Claims: The owner of the original composition can sue for copyright infringement, potentially resulting in significant damages, including profits from the new work and legal fees.
• Removal or Withdrawal of the Composition: The original rights holder may demand that the new composition be taken down from digital platforms and physical sales, and prohibit future live performances.
• Lost Income: The infringer may lose revenue from the new composition and face restrictions on future sales and distribution.
• Reputation Damage: Infringing on copyrights can damage an artist's reputation in the music industry, negatively affecting their career and future opportunities.

Does the Interpolation License Include Permission to Use the Master Recording?

No, an interpolation license typically only covers the musical composition, not the master recording. If you want to use the original recording in your new work (a process known as sampling), you need a separate license for that. In cases where the same entity owns both the composition and the master recording, a single license agreement may cover both uses.

Key Clauses in an Interpolation License

A typical interpolation license includes several essential clauses:

• Identification of the Parties: Names and contact details of both the licensor (the original rights owner) and the licensee (the artist/producer).
• Description of the Compositions: Details about the original composition and the specific fragment to be used in the new work.
• Definition of the Interpolation: A clear description of the exact portion of the original composition that will be used.
• Approved Use: Specifies how and to what extent the interpolation can be utilized in the new composition.
• Grant of Rights: Outlines the rights granted to the licensee, including the right to use the fragment in the new composition and to create derivative works.
• Territory: Defines the geographic scope of the license.
• Duration: The time period during which the licensee is allowed to use the interpolation.
• Payment Terms: Agreed-upon payment conditions, which might include flat fees or a percentage of royalties.
• Reports and Audits: Requirements for the licensee to provide sales reports and allow the licensor to audit records.
• Credits: How the licensor should be credited in all releases of the new composition.
• Warranties and Representations: Declarations regarding the validity and legality of the license.
• Other Uses: Procedures for negotiating additional licenses if the licensee wishes to use the interpolation for other purposes.
• Dispute Resolution: Outlines the procedures and jurisdiction for resolving any disputes that may arise.
• General Clauses: Standard legal provisions related to contract modification, termination, assignment, and other relevant aspects.

Is a Lawyer Necessary for Creating a Copyright License?

While it’s not mandatory to hire a lawyer to draft or review a copyright license, it’s highly advisable to consult with a lawyer who specializes in music and entertainment law. They can help ensure that your rights are protected and that the contract is legally sound.

If legal fees are a concern, platforms like Flou offer an affordable solution. With Flou, you can draft, sign, send, and track your contracts quickly and efficiently, all in one place. Click here to try Flou for free today.