The Law regarding Music Sampling
Sampling is the use of portions of prior recordings which are incorporated into a new composition. Sampling has become an integral part of many genres of music today. When you sample someone's song without permission, it is an instant copyright violation. It is the unauthorized use of copyrighted material owned by another. Sampling without permission violates two copyrights-the sound recording copyright (usually owned by the record company) and the copyright in the song itself (usually owned by the songwriter or the publishing company).
If you want to use a sample legally, you must obtain permission from the copyright owner. The copyright owner is usually a publishing company or record label. Remember that you must obtain permission from both the owner of the sound recording and the copyright owner of the underlying musical work. The fee for a license to use a sample can vary tremendously. The fee will depend on how much of the sample you intend to use (a quarter second is a minor use; five seconds, a major use), the music you intend to sample (a Madonna chorus will cost more than an obscure drum beat), and the intended use of the sample in your song (it is more costly to build your entire song around the sample than to give it only minor attention).
There are two different ways to pay for a license. First, you can pay a flat fee for the usage. A buy-out fee can range from $250 to $10,000 on a major label. Most fees fall between $1,000 and $2,000. The other way to pay for the license is a percentage of the mechanical royalty rate. The mechanical royalty rate is the amount a person pays to the copyright owner to make a mechanical reproduction (copy) of the song. A license which is a percentage of the mechanical royalty rate is generally between ½ ¢ and 3¢ per record pressed. Everything is negotiable and it is not unusual to get a license for free, if you ask.
If all of this sounds confusing, there's hope. There are businesses devoted entirely to securing and negotiating clearances for samples. These firms charge less than an entertainment attorney would charge and are generally more knowledgeable about the going rates for uses.
If you use samples without obtaining the proper clearance licenses, you have to be aware of the penalties. A copyright infringer is liable for "statutory damages" that generally run from $500 to $20,000 for a single act of copyright infringement. If the court determines there has been willful infringement, damages can run as high as $100,000. The copyright owner can also get a court to issue an injunction forcing you to cease violating the copyright owner's rights. The court can also force you to recall all your albums and destroy them.