Compulsory Licenses Under U.S. Copyright Law

Compulsory licenses are a statutory mechanism embedded in the U.S. Copyright Act that allows certain parties to use copyrighted works without obtaining direct permission from the copyright holder, provided specific procedural and royalty requirements are met. This page covers the definition, scope, operational mechanics, common scenarios where compulsory licenses apply, and the boundaries that separate compulsory licensing from voluntary licensing or unlicensed use. Understanding this framework is foundational to navigating music copyright law, digital distribution, and broadcast media legally and at scale.

Definition and scope

A compulsory license, under 17 U.S.C. § 115 and related provisions of the Copyright Act, is a government-mandated authorization that overrides a copyright owner's exclusive right to control certain uses of a work — provided the user complies with statutory conditions and pays a government-set or government-supervised royalty rate. Unlike copyright licensing agreements negotiated privately between parties, compulsory licenses are available to any qualifying user as a matter of law.

The Copyright Office administers core aspects of compulsory licensing, including receiving notices of intent and collecting certain royalty remittances. The Copyright Royalty Board (CRB) — an independent entity within the Library of Congress established by the Copyright Royalty and Distribution Reform Act of 2004 (17 U.S.C. § 801) — sets the royalty rates for most compulsory license categories through formal rate-setting proceedings.

Compulsory licensing is not a blanket authorization. It applies only to specific categories of works and uses, which are enumerated in the statute. The exclusive rights under copyright framework remains intact for all uses not covered by these enumerated categories.

How it works

The operational structure of a compulsory license follows a defined procedural sequence. Failure to follow any step can expose the user to copyright infringement liability under 17 U.S.C. § 501.

1. Determine eligibility — Confirm that the intended use falls within a statutory compulsory license category (e.g., mechanical reproduction of a nondramatic musical work, digital audio transmission, or cable retransmission).
2. Serve notice of intent — For mechanical licenses under § 115, the user must serve a Notice of Intention to Obtain a Compulsory License on the copyright owner before or within 30 days of distributing the phonorecord, and before any distribution to the public. The Music Modernization Act of 2018 (Pub. L. 115-264) modified this requirement, authorizing the Mechanical Licensing Collective (MLC) to administer blanket mechanical licenses for digital audio services as of January 1, 2021.
3. Pay royalties at statutory rates — Royalty rates are set by the CRB and published in the Code of Federal Regulations. For mechanical licenses, rates are published at 37 C.F.R. Part 385. For digital performance royalties (e.g., internet radio), rates are at 37 C.F.R. Part 380.
4. Maintain accounting records — Compulsory licensees must keep and render monthly or quarterly statements of account, depending on license type, to the copyright owner or designated collective.
5. Comply with scope restrictions — The compulsory license authorizes only the specific use defined by the statute. A mechanical license, for instance, does not authorize synchronization of music to video.

Common scenarios

Mechanical licenses (§ 115) — When a recording artist wishes to release a cover version of a previously released, commercially distributed song, § 115 provides the right to do so without the original songwriter's permission, as long as the work is not changed in its basic melody or fundamental character. The royalty rate as of 2023 is set at 9.1 cents per physical or digital permanent download for songs 5 minutes or under (37 C.F.R. § 385.3).

Digital audio transmissions (§ 114) — Internet radio services, satellite radio, and certain cable audio services qualify for statutory licenses to publicly perform sound recordings. SoundExchange administers royalty collection on behalf of rights holders for these transmissions.

Cable television retransmission (§ 111) — Cable systems may retransmit over-the-air broadcast signals under a compulsory license, paying royalties into a fund administered by the Copyright Office and distributed to copyright owners of the retransmitted content.

Satellite retransmission (§ 119 and § 122) — Satellite carriers may retransmit local and distant network signals under separate statutory license frameworks, with § 122 covering local-into-local retransmission royalty-free and § 119 covering distant signal retransmission at statutory rates.

Jukebox licenses (§ 116) — Coin-operated phonorecord players (jukeboxes) operate under a compulsory license with royalties negotiated or set by the CRB.

Decision boundaries

Compulsory licenses are categorically distinct from fair use and from voluntary licensing. Fair use is an affirmative defense against infringement and involves a four-factor judicial analysis; it carries no royalty obligation and no advance notice procedure. Compulsory licenses require procedural compliance and royalty payment but do not require negotiation or the copyright holder's consent.

Compulsory license vs. voluntary license — A voluntary copyright transfer and licensing arrangement can authorize uses that compulsory licenses do not reach (such as synchronization rights or dramatic adaptation), can be negotiated to any rate, and can include exclusivity. A compulsory license is non-exclusive by statute and is available to all qualifying users at identical rates.

What compulsory licenses do not cover:

• Synchronization rights (matching music to visual images) — no compulsory license exists; negotiation is required
• Dramatic performance of musical compositions (e.g., staging an opera)
• First publication — § 115 mechanical licenses apply only after the copyright owner has distributed the work publicly; there is no compulsory right to be the first to release a recording
• Works not distributed as phonorecords or as part of an enumerated broadcast category
• Derivative works that alter the basic melody or fundamental character of the original song

The copyright collective rights organizations such as ASCAP, BMI, SESAC, SoundExchange, and the MLC serve distinct roles within this landscape — some administer compulsory rates, others operate under consent decrees or voluntary blanket licenses that parallel but differ from the compulsory framework. Understanding which organization governs which right is essential for compliance, and a full breakdown of these distinctions is covered in the copyright-collective-rights-organizations reference page.

References

• U.S. Copyright Act, 17 U.S.C. § 115 — Scope of Exclusive Rights in Nondramatic Musical Works
• U.S. Copyright Act, 17 U.S.C. § 114 — Scope of Exclusive Rights in Sound Recordings
• U.S. Copyright Act, 17 U.S.C. § 111 — Cable Systems
• U.S. Copyright Act, 17 U.S.C. § 801 — Copyright Royalty Judges; Appointment
• Copyright Royalty Board — Official Website
• U.S. Copyright Office — Compulsory License Overview
• 37 C.F.R. Part 385 — Mechanical and Digital Phonorecord Delivery Royalty Rates
• 37 C.F.R. Part 380 — Rates and Terms for Noninteractive Webcasting
• Music Modernization Act, Pub. L. 115-264 (2018)
• Mechanical Licensing Collective (MLC)
• SoundExchange — Digital Performance Royalty Administrator