If copyright terminations weren’t complicated and freighted enough already, the case involving the Ray Charles Foundation and the legendary singer’s heirs has many in the legal entertainment industry scratching their heads, wondering if this litigation will set unexpected precedent. The foundation was bequeathed with song rights stemming from a copyright grant by Charles to Warner/Chappell Music. But Charles’ heirs have sought to terminate the grant pursuant to the copyright act and recover for themselves rights to hits like “I Got a Woman.” And that’s where things have gotten complicated.
The heirs, who fared poorly in the will (provided $500,000 each isn’t exactly chopped liver), sent notice to terminate the grant and the foundation filed suit (copy of same, thanks to the Courthouse News) for declaratory relief. That litigation is pending and in the early stages; a decision could have significance for termination-rights disputes says billboard.biz.
In another case on termination rights, involving a co-author of the Village People anthem, “YMCA,” a federal court in California declared there was a successful reversion of rights and enforced termination of the copyright grant. Here, if the heirs successfully terminate the grant, then the rights to Charles’ songs will revert to them, along with royalty checks that have been going to the foundation. But could the parties please make up their minds as to what’s at legal issue in the dispute over control of some songs by the legendary entertainer? The litigation has gone on for awhile now and the latest twist, in which the defendant in the case is asserting standing, perhaps, simply, because it has collected royalties, has some analysts scratching their heads as to whether the courts are about to change the ground rules for determining who can or can’t terminate an artist’s right to his creation.
This mess started when the heirs asserted their statutory termination rights pursuant to Title 17 § 203 shown in part below. The charitable foundation opposed the termination and sought to defend itself to retain the copyrights to many famous Ray Charles’ songs by asserting a “for hire claim,” which, if true, would mean no termination rights for the heirs. A judge tossed that legal position and agreed with the defendant, heirs argument that if the songs were in fact “for hire”, then Warner/Chappell Music would’ve asserted a claim of ownership to the songs; they would have intervened and asserted their rights. So, the plaintiff changed its tune and has since abandoned the for hire argument. The plaintiff now seeks standing as a “beneficial owner.”
Title 17 U.S. Code § 203 . Termination of transfers and licenses granted by the authors: “(a) Conditions for Termination. — In the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions: (1) In the case of a grant executed by one author, termination of the grant may be effected by that author or, if the author is dead, by the person or persons who, under clause (2) of this subsection, own and are entitled to exercise a total of more than one-half of that author’s termination interest…”
Some analysts have criticized the case because of the inconsistent allegations, but the judge has allowed the case to continue and requested further briefing on this issue — whether a beneficial owner has standing to challenge termination rights. If the judge finds that the foundation has standing as a beneficial owner and permits the case to advance, that would provide some precedent for other royalty recipients, like record producers, to challenge termination notices.