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Category Archives: Music Business
As reported by BILLBOARD, BMG Rights Management acquired Hal David’s music publishing catalog at an estimated $42 million. Net publisher’s share is in the range of $3. 5 to $3.8 million and it is anticipated a multiplier of 11-13 times NPS was used to reach the purchase price.
Film/TV lawyer Gordon Firemark and Copyright/Trademark lawyer Tamera Bennett cover a “Motley Crew” of topics this month including trademark, copyright, film and tv legal issues surrounding the “Counting Crows,” “Raging Bull,” “Insane Clown Possee,” and “Sherlock Holmes” …. to name a few. Click here to listen.
Click here for the July 2013 Entertainment Law Update Podcast. Be sure to subscribe to the podcast in the iTunes store and share a review.
After 30 years as the bass player for the all girls band The Go-Go’s, Kathy Valentine is suing her former band mates for cutting her out of her twenty percent share of earnings.
The Go-Go’s jumped to fame in the early 80’s and continue to make money from merchandise, touring and record sales. The five band members – Belinda Carlisle, Jane Wiedlin, Charlotte Caffey, Gina Schock and Kathy Valentine – are equal owners in Ladyhead, LLC (receives all revenues for the The Go-Go’s excluding touring and owns The Go-Go’s trademark) and Smith-Pocket Industries, LLC (the touring arm of The Go-Go’s).
The four remaining band members notified Valentine earlier this year that she was out of the group. The lawsuit alleges the four remaining members formed a new entity, GoGoCo Corp., to license all of the rights associated with the name and good will of The Go-Go’s as well as touring. If that is the case, Valentine’s twenty percent share of revenues would be substantially diluted as GoGoCo Corp. would be calling the shots on when and how much money would flow to LadyHead, LLC and Smith-Pocket Industries, LLC.
It sounds like the group did things the right way years ago be forming the two initial entities where each band member was an equal owner. I suspect the operating agreements for those entities address what happens when a band member quits on their own or is forced out. But, maybe they don’t or the language is not beneficial to Valentine, as the lawsuit never specifically discusses those sections of the LLC operating agreement. Instead, the plaintiff’s complaint focuses on breach of fiduciary duty and breach of contract in not continuing to pay Valentine her one-fifth.
Sounds like the perfect case for mediation. The parties have all aired their laundry over the years and need a neutral party to help them work through a potential mine-field of separation issues.
The three remaining original band members of the Stone Temple Pilots sued expelled member Scott Weiland in May 2013 claiming breach of their written partnership agreement, breach of fiduciary duty and trademark infringement.
Weiland was voted out of the group in February 2013. The four group members operated under a written band partnership that allows a partner to be ousted for numerous reasons, including not making the band a top priority. The complaint provides a look at the various ways in which Weiland was not putting the band first and how he was subsequently “sabotaging” the band’s tour and new album release.
Weiland subsequently contersued the band accusing the members of conspiracy to oust him and demanding the band/partnership be dissolved.
There are four federal trademark registrations for STONE TEMPLE PILOTS owned in the name of the Stone Temple Pilots partnership and listing the four original partners, including Weiland, as the partners. Might we see some issues at the USPTO regarding those registrations and who is the proper party to maintain ownership?
More to come as this case progresses. We always love a good band name dispute.
Under New York state law a decision issued last week holds pre-1972 sound recordings are not subject to the DMCA safe harbor provisions and Grooveshark is liable for state law copyright infringement of UMG owned pre-1972 sound recordings. UMG Recordings, Inc. v. Escape Media Group, Inc. Opinion linked here.
The year the sound recording was released is key to UMG’s argument. Prior to February 15, 1972 sound recordings were protected by state law copyright schemes. All sound recordings released after February 15, 1972 are protected by Federal Copyright Law.
Grooveshark continues to hide under the protection of the DMCA (Digital Millennium Copyright Act) Safe Harbor provision claiming it didn’t know that content uploaded by third parties was infringing and had been uploaded without permission. I believe the judges’ decision was correct. If the pre-72 sound recording owners do not receive any of the protections of the Federal Copyright Act such as the ability to recover attorneys’ fees or sue for statutory damages, then why should an infringer receive defensive benefits from the Copyright Act?
Because this decision was issued by the New York State Appellate Court, that court had no obligation to follow a footnote in Capitol Records, Inc. v. Mp3 Tunes, LLC, 821 F.Supp.2d 627 (S.D.N.Y. 2011) in which the court states in dicta:
This Court agrees with [Mp3 Tunes, LLC] the plain meaning of the statutory language makes the DMCA safe harbors applicable to both state and federal copyright claims. Thus, the DMCA applies to sound recordings fixed prior to February 15, 1972.
UMG made a great tactical decision in keeping their pre- and post-72 sound recordings separated in their legal filings. A state court was the appropriate venue to decide if the DMCA applies to sound recordings that are not otherwise protected by the U.S. Copyright Act.
With Pandora’s topping of 200 million users, surely they can develop a business model to increase their revenues instead of decreasing their payments to copyright owners. I am a fan and user of Pandora’s services. Do I enjoy the ads that are inserted between songs on the “free” Pandora- no. But, I think most people enjoy Pandora enough that listening to a few ads can become the new normal to the free streaming radio experience. If you don’t like ads, opt for a premium ad-free service.
The fastest growing area of consumer consumption of music is streaming. See BBC News, “Streaming music revenues up 40% globally in 2012,” Aug. 15, 2012.
Revenues from music subscription services and streaming services collectively went from just 3% of total industry revenues in 2007 to 15% in 2012, totaling over $1 billion for the year. Distributions for digital performance royalties from SoundExchange, which include payments to performers and copyright holders for webcasting, satellite radio, and other non-interactive digital music services, increased 58% to $462 million in 2012.
Pandora and IHeartRadio are the two leading internet radio services in the US. According to reports by Triton Digital, in May 2012 Pandora held 74.2 percent of the daytime internet radio services to IHeartRadio’s 13.6 percent. See Glenn Peoples, BILLBOARD, The Next Digital Battleground, Vol 124, No. 25, at p. 22. Because internet radio is not interactive, meaning the user cannot choose the track or artist they wish to hear, license fees for use of the sound recording are pre-determined and are paid by the internet radio stations to Sound Exchange as a digital performance royalty.
Pandora continues to lobby in support of the Internet Radio Fairness Act, a bill that would change the standard by which the Copyright Royalty Board sets the statutory rate for the digital performance of sound recordings. In effect, Pandora wants to reduce payments to Sound Exchange which directly decreases royalties paid to artists, musicians, and sound recording copyright owners.
In November 2012 Pandora sued ASCAP, the largest of three Performance Rights Organizations in the United States, to lower Pandora’s rate for public performance royalties paid to music publishers and songwriters each time a song is streamed.
Internet radio and streaming services are clearly part of the future of the music business. Should copyright owners, artists and songwriters continue to see a decrease in royalties when these businesses thrive?
“When The Band Gets Divorced – Mediating The Band Partnership Dispute”
1 hr CLE pending
Join attorney/mediator Tamera Bennett at the Belo Mansion at Noon on Wednesday, March 27, 2013 for a discussion on common issues band members mediate when a member departs and/or the band dissolves.
We’ll be taking a look at the “Sugarland” partnership dispute, the recent “En Vogue” dispute, as well as the “J Geils Band” dispute and applying those fact patterns to structuring a successful mediation for your client.
Dallas Bar Association
2101 Ross Avenue
Dallas, Texas 75201
Free and open to the public. 1.5 hour MCLE pending.
Kick off 35 Denton 2013 networking with the people who make music happen in Denton and the DFW area. In The Mix Denton is a networking opportunity for artists, producers, engineers, songwriters, attorneys, accountants, managers, booking agents and members of The Recording Academy® (the “Grammy®” folks).
The Recording Academy® Texas Chapter’s first bi-annual event, GRAMMYs At The Texas Capitol, took place yesterday, February 26, at the State’s Capitol. Approximately 30 participants lobbied on behalf of the membership including Chapter Trustee, Paul Wall, National Vice Chair of the Board Of Trustees, Christine Albert, Chapter Governor, Terry Lickona, as well as GRAMMY® winner Ray Benson, country music artists Jack Ingram and Josh Abbott, as well as NBC’s The Voice finalist, Nakia. The resolution in the Senate and House deemed February 26, 2013 as Texas GRAMMY Music Day. This special day was sponsored by Texas Senators: Robert Deuell (R) and Leticia Van de Putte (D), and Texas Representatives: Myra Crownover (R) and Ryan Guillen (D).
Led by group members Todd Dupler, Director of Government Relations for The Recording Academy; Advocacy Chair Tamera Bennett; Advocacy committee members R.C. Rondero de Mosier and Ricky Anderson; and Sr. Executive Director Theresa Jenkins—the Texas Chapter met with policy makers to lobby for economic development and support for Arts education in public schools. Additionally, the group raised awareness about The Recording Academy’s concern for Intellectual Property and Piracy issues in the state of Texas.
Scenario: Band members are “in love” and all is rocking along. Money is starting to be made and then it happens — the honeymoon is over and a band member leaves voluntarily or is forced out. A lawsuit is filed and it starts to get ugly.
Even a written Band Partnership Agreement or LLC Membership Agreement may not be sufficient to resolve the dispute between the parties. A third-party neutral, i.e., mediator, might be necessary to hear all sides of the dispute and help guide the band members to a workable solution.
Common battle grounds include:
Who gets to use the band name?
Who owns the master recording copyrights?
Who owns the song copyrights?
Who owns the physical product or merchandise?
Can the band keep using the leaving band member’s name and likeness?
Here are some on-going band disputes where mediation, also known as alternative dispute resolution, could be used as a vehicle to resolve the dispute by the parties rather than by a judge or jury:
Boston v. Tom Sholz (former Boston guitar player)
LIVE – mediation occurred on November 1, 2012
Ariel Pink’s Haunted Graffiti
J Geils Band
En Vogue – lawsuit settled via arbitration
Chris Daughtry sued by Absent Element
To learn more about Music Attorney Tamera Bennett’s mediation practice click here.
No “freeze frame” for John Geils, Jr “J. Geils” or members of the J. Geils band that announced a tour this year without their name sake. J. Geils and the band are battling it out at the trademark office and the court-house for who owns the name.
John Geils, Jr. through a company I am assuming he has partial ownership in, filed and received a trademark registration of J. GEILS BAND in 2009 for clothing and live performances. The application shows use dating back to 1967. The trademark examiner seemed to fully vet the application and required the consent of J. Geils as he is a living individual.
Fast forward to April 2012 when a company named T & A Research & Development Corp. filed a trademark application for “The J. Geils Band” claiming a date of first use in 1969. Again, the trademark examiner fully vetted the application and issued an initial refusal requiring the applicant to submit a consent from J. Geils and further requiring the applicant to explain its association to the band. The response is not yet due.
In May 2012, Geils Unlimited, LLC filed a trademark cancellation proceeding seeking to cancel the “J GEILS BAND” registration. The petition for cancellation alleges Geils and other band members entered into a written shareholders’ agreement that restricted Geils use of the name J. GEILS BAND.
One more litigious twist – J. Geil’s company filed a trademark infringement suit on August 1 in district court.
Be watching for updates on the blog and a discussion on Entertainment Law Update Podcast.
Christian rockers Newsboys have 28 No. 1 singles and have been together for 26 years. They are just a little upset over possible consumer confusion with the rapper duo New Boyz.
New Boyz, around since 2009, just released a direct to DVD movie and is currently on a European tour.
With the continued consolidation of the record business, the overlap of genres on terrestrial radio and especially on services such as Pandora and Last.FM, Newsboys may have more than a blush of a claim that a music consumer could be confused between the two band names. The test in trademark infringement is whether or not a consumer is likely to be confused that a song or records released by one band was actually released by the other band. If you saw a New Boyz CD you might think it was the Newsboys.
There is a trademark registration with the US Patent & Trademark Office for NEWSBOYS for entertainment services; namely, live musical performances of a religious nature rendered by a group. The registration is incontestable and issued on March 29, 1994. Interesting side note — the owner of the mark is Wes Campbell, the manager of the Newsboys (that tidbit is a topic of discussion for another day on what a band should never do).
I did not find any trademark filings for New Boys.
The last Olympic metal awarded in the category of music was 1952. That’s right, 1952 ended forty years of Olympic Sporting Arts. Even without a metal event, music continues to impact the culture of the Olympic games. From the opening and closing ceremony’s, to the television broadcasts, to the live performances occurring at official Olympic events around London — Music is key to capturing the Olympic spirit.
While Paul McCartney can afford to play the Olympics for one pound in compensation, many other working musicians and artists simply can’t afford such a generous donation to the games. The question that musicians, the music unions and trade magazines are asking, is should the working musician have to donate their time? In fact, news reports state the British Musician’s Union reached a deal regarding the headliners at the Opening and Closing ceremony’s playing for free and requiring compensation for other professional musicians.
So you’re thinking – “The musicians should play for all the free publicity.” In fact, many bands perform free shows for that reason. Not so with the Olympics. The musicians are restricted in promoting their “Olympic” gig and are not allowed to sell their own merch at the show. Pride of country can only feed you so many meals….
Here’s a round-up of conversations on the topic.
Billboard – Dispute Between London Olympics …
LA Times – Are Organizers Not Willing To Pay…
Link to petition for musicians to be paid
More from the Musicians’ Union
This Digital Distribution Aggregation flow chart provides answers to basic questions on how a record label, or artist that owns their master recordings/sound recordings, can use a digital content aggregator to make their sound recordings available on iTunes, Amazon, Spotify and other digital services.
The flow chart is not all-inclusive and is not intended to endorse any particular aggregator. There are lots of choices out there these days. The chart will give you a starting point/frame of reference.
In a much watched lawsuit, the Allman Brothers, Cheap Trick and the Youngbloods reached a settlement with the Sony record label for back payment of digital download royalties. The lawsuit has been in the forefront of the dispute between record labels and recording artists over the treatment of digital download income in respect to contracts signed back before the advent of iTunes and mp3 files.
This case was certified as a class action, so potentially the settlement terms could impact recording artists that had deals with Sony (or a predecessor) between 1976 and 2001.
Sony is not alone in facing litigation from artists that signed deals prior 2003 for the license vs sale issue. The “Eminem Case” of F.B.T. Productions, LLC v. Aftermath Records was the pioneer case in which the Ninth Circuit held a digital download should be treated as a license, entitling an artist to a 50% royalty.
Click here for a running list of lawsuits over the sale vs license issue for digital downloads.
As promised, here is a running list of lawsuits filed against record labels over the license vs sale royalty issue for digital downloads. Please be patient as we gather details on cases. We may have a case name listed while we are in the process of tracking down the citation.
(The Temptations) Otis Williams and Ron Tyson v UMG Recordings Inc., 3:2012cv01289, filed March 15, 2012, NDCA.
Allman Brothers v. Sony BMG Music Entertainment, 1:2006cv03252, filed April 27, 2006, SDNY. As of 3/9/2012 The Court has preliminarily approved the Stipulation and the Settlement set forth, as being a fair, reasonable and adequate settlement as to all Class Members. A settlement in principal was reached a year earlier in March 2011.
Graciela Beltran v EMI Music, Inc., 4:2012cv01002, Feb. 28, 2012, NDCA.
Toto, Inc. v Sony Music Entertainment,1:2012cv01434, filed Feb. 27, 2012, SDNY.
Gary Wright v. Warner Music Group, 4:2012cv00870, filed Feb. 22, 2012, NDCA.
Kenny Rogers v. Capitol Records, 3:2012cv00180, filed Feb. 13, 2012, MDTN.
(Sister) Sledge v. Warner Music Group Corp., 3:2012cv00559, filed Feb. 2, 2012, NDCA.
Felice Catena (Bruce Gary Estate /Knack) v. Capitol Records, LLC, 2:2012cv00806, filed Jan. 30, 2012.
Peter Frampton v. A and M Records Inc and UMG Recordings Inc., 2:2011cv10649, filed Dec. 23, 2011, CDCA.
Carlton Douglas Ridenhour (Chuck D of Public Enemy) v. UMG Recordings, Inc., 3:2011cv05321, filed November 2, 2011, NDCA.
Rob Zombie v UMG Recordings, Inc., 4:2011cv02431, filed May 18, 2011, NDCA.
Rick James Estate v. UMG Recordings, Inc., 3:2011cv01613, filed April 1, 2011, NDCA.
F.B.T. Productions, LLC v Aftermath Records, 621 F.3d 958 (9th Cir. 2010) cert denied. Holding digital downloads are a license not a sale.
George Clinton v UMG Recordings, Inc., 2:2007cv00672, filed Jan. 29, 2007, CDCA.
Grammy nominee Drake has been sued by an ex-girlfriend who claims she co-wrote the hit song “Marvin’s Room” and is entitled to part ownership in the copyright in the song; copyright in the sound recording; and payment of songwriter royalties.
The first 30 seconds of the song is a recording of a phone conversation with the ex-girlfriend and plaintiff, Erika Lee. Lee asserts that she and Drake had every intention to write the song together and that her contributions were intended to be incorporated into the final song. Lee contends the intro “phone message” is key to the underlying song.
Lee’s complaint is somewhat confusing as issues of ownership of the sound recording are intermingled with claims asserting ownership in the underlying song.
The most interesting thing in the complaint to me is a cause of action for Breach of Fiduciary Duty. Really, songwriters have a fiduciary duty to one another? If a record label doesn’t have a fiduciary duty to an artist, do we really think that one songwriter would owe the highest duty of utmost care to a co-writer?
Read the complaint here.