The late Ray Charles could set a concert house afire all by himself, just by sitting down and putting hands on the keys of an upright piano to bob, weave, and belt out a terrific tune. When it comes to straightening out the finances of his musical legacy, however, there soon may be enough attorneys in the court to fill the seats of a symphony orchestra.
Or so it may seem after the U.S. Court of Appeals for the Ninth Circuit recently granted standing to The Ray Charles Foundation in a lawsuit brought by Charles’ heirs over copyright termination rights. A passel of Charles children already were tussling with a major music publisher over copyrights. So the lawyers involved will need to pull up even more chairs to confer now that the foundation’s part of the party.
While Charles composed some of the best music ever to grace the rhythm and blues charts, he lived a life of great complexity and it all has turned into some elaborate legal counterpoint that now returns for a coda for a U.S. federal court to play through. Let’s plunk through some of the disharmony in this noteworthy case …
Dad’s estate pays $500,000 to each of 12 kids
Charles had made an agreement with all 12 of his children that he would leave each of them $500,000 if they waived further claims to his estate. They all did. This also meant that all future royalties from his works would go to the Ray Charles Foundation; the royalties are the foundation’s only source of income.
But, like many artists before the 1960’s, Charles did not own the copyrights to his works; those were held by a publishing company, which today is Warner/Chappell.
When Congress passed the 1976 Copyright Act, it took notice that many artists were in a similar situation, lacking rights to their works. Legislators saw that those who negotiate copyrights held unequal bargaining power with production companies. In this market circumstance, it also was difficult to determine works’ true value until they has been exploited. So Congress built in a termination window for artists who had transferred their rights to others; the creatives had to wait for a time before this provision kicked in. It cannot be revoked through contract; it is an inalienable right of authors–or their heirs. It’s what seven of Charles’ children attempted to exercise, affecting some iconic works by the R&B legend, including I Got A Woman, A Fool for You, Blackjack, Leave My Woman Alone, and Hallelujah, I Love Her So.
The foundation’s economic stake
But if the heirs succeeded, they were terminating with Warner/Chappell the Charles rights, based on which the music publisher was paying 100 percent of the royalties to The Ray Charles Foundation. The foundation sued, an action that the heirs contested. They said the foundation lacked standing and termination issues could only be decided between them and Warner/Chappell. They said the copyright termination provisions apply only to authors and their heirs, not beneficiaries.
The foundation said it had a stake in the matter and had to block the rights termination by the heirs because such a move would affect its sole source of income. The foundation asserted that Warner/Chappell lacked an interest in this case, since the music publishers would need to cut a royalty check regardless, and this case just decided to whom the money would be delivered; that, of course, would be the foundation, underscoring its standing. The foundation also claimed the termination provision does not apply to the disputed Charles’ tunes because they were all “works for hire.” Under Charles’ original agreements with the publishing companies, the termination provision exempted works for hire.
The appellate judges looked at the foundation’s economic stake in the potential termination of rights. There, the judges found standing for the foundation in the litigation under the “zone of interests” consideration. The appellate court remanded the case, which now likely will be watched closely not only for its copyright issues but also for wills and trusts implications, since it is becoming a common occurrence for celebrities to leave parts of their estates to charities and other nonprofits.