Trip Aldredge's Music and law blog

SOPA and PIPA ,...it's complicated

2012-01-20T15:39:00.000-08:00

Not that anyone one has asked for my opinion but I have been thinking a lot about SOPA and PIPA (not Kate Middleton’s younger sister). This may all be a non issue now that the senate has postponed action on the legislation. However, I have been troubled because I have not been able to sort out my true convictions in the debate.

On the one hand, as an intellectual property lawyer, I wholeheartedly believe that we must do everything we can to stop copyright infringement. On the other hand as a believer in the First Amendment, I see that this proposed legislation is way too broad. As one commentator pointed out, SOPA has the potential to create a giant firewall around the United States. I have friends who work in China and I know from their experiences what true internet censorship looks like. Further, the music industry may slowly be on the path of recovery. I don’t always agree with the writer Bob Lefsetz but I think he has a point when he says that in the future, music is probably going to be delivered by some subscription based service and that what we’re seeing with Spotify and Pandora is that people are willing to pay for music delivery; not everyone is a thief. If there is validity to this point maybe we should move slower in enacting laws that have the potential to be so damaging to the growth of the internet.

I have to temper all of my First Amendment liberalism and idealism with some reality though. I was just thinking about how some political parties can consistently get people to vote against their own interests by refocusing the debate (e.g. “why should job creators have to pay taxes? “). I have to realize that my income has taken a hit over the past decade along with many of my clients because of the decline of the music industry. We can’t blame all of this on illegal downloading (not by a long shot) but piracy has put a lot of people out of work.

So, ultimately, I have to believe that more needs to be done to stop internet piracy. But the question might be this: Is our existing copyright law actually strong enough to be used to fight worldwide copyright infringement? It just might be. I read this morning that the Justice Department was able to shut down Megaupload, a notorious international facilitator of copyright infringement. This was based on using existing copyright law. I wonder if more study should be done into beefing up enforcement of our copyright law instead of passing new potentially hazardous laws.

As I tell my copyright law students, the law is always going to lag behind technology but I happen to believe that our US copyright law is pretty vigorous and capable of protecting intellectual property without necessarily creating new laws.

All Tomorrow's Lawsuits: The Velvet Underground v. Andy Warhol

2012-01-16T15:09:00.000-08:00

I am a big admirer of Andy Warhol. I believe his impact on 20th century art and culture is incalculable. I am also a big fan of The Velvet Underground so, of course I was fascinated to discover that the band (actually a partnership comprised solely of Lou Reed and John Cale) had just filed suit against the Andy Warhol Foundation, apparently because the Foundation was seeking to license the famous banana design from the band’s first album to a company that manufactures iPhone and iPad covers.

The complaint in the case is instructive. It reads like a concise history of Warhol and The Velvet Underground. One fascinating tidbit: The band received a $3,000.00 advance from MGM which they split with Warhol. It also spells out a compelling legal challenge. The Velvet Underground assert trademark rights in the banana, although in the 45 years since the fruit first appeared on The Velvet Underground and Nico album , the group never sought to register a federal trademark in the design.

Warhol’s apparent defense is that it has a copyright in the banana. However as The Velvet Underground’s complaint demonstrates fairly conclusively Andy Warhol never asserted a copyright in the work during his lifetime and because it was published in 1967 (eleven years before the implementation of the 1976 Copyright Act) it may well have been injected into the public domain for copyright purposes. The band is seeking a declaratory judgment to this effect.

I was initially skeptical of the band’s trademark claims but the complaint lays out a convincing explication of the band’s use of the mark over the past four decades. Particularly interesting is their 2001 license of the design to Absolut Vodka, a license which was apparently not questioned by Warhol. I also wonder who is licensing all those Velvet Underground t-shirts?

I don’t know that I’ve ever read a case that pitted copyright against trademark in such a unique way. There will most likely be collateral issues. For example, perhaps MGM’s successor may assert some sort of copyright interest in the banana design. Also, what is the status of Warhol’s original artwork? This is certainly going to be an interesting case to watch.

Photographer's Rights

2012-01-09T15:22:00.000-08:00

I have written before about the rights of photographers and the difficulty they have in protecting their copyrights. So, it was no surprise to read about a recent lawsuit filed by the heirs of the late rock and roll photographer, Jim Marshall, against a boutique owned by the designer, John Varvatos.

I am a big fan of Jim Marshall’s photography. I have a book of his work in my library. I wish I could re-produce some of his iconic images here (like Johnny Cash shooting the finger at San Quentin Prison), but I can’t because Marshall’s copyrights gave him the exclusive rights to control the public display and distribution of his work.

Varvatos was friend of Marshall’s. In fact, Marshall was supposed to speak at Varvatos’ store the night he died. Varvatos displayed several of Marshall’s photographs in his New York store in tribute to his friend. Apparently, he also made copies and displayed them at all of his stores in the United States, including those located inside of Bloomingdales, now a co-defendant in the suit. Marshall’s estate is seeking statutory damages of up to $150,000.00 for each infringement.

This kind of blatant misuse of someone’s intellectual property seems almost unbelievable in this day and age, but it is a reminder that the intrinsic value of photographer’s work is often severely misunderstood. I had this impressed upon me early in my career by a photographer friend of mine, and I have never forgotten the lesson. Having represented several photographers over the years, I see that it is important to remind the world of their intellectual property rights, especially in this digital age.

It's All Latin to Me

2011-12-30T10:03:00.000-08:00

Lawyers have become better at writing in plain English since I began to practice law in the Middle Ages. However, we could all do a better job at explaining certain things. One of the reasons that lawyers write in a certain way is to make sure that the point they are making is completely understood and not subject to interpretation. That’s why lawyers will occasionally use obscure Latin phrases. The other day I prepared a will for a client and she asked what the phrase per stirpes meant; a perfectly valid question.

Per Stirpes is legalese. It technically means a method of dividing up a share of an estate to a group or class of distributees, who take the share that a deceased person would otherwise have been entitled to. In other words, if you intend a share of your estate to go to your brother and he predeceases you AND you want the share that he would have received to go to his children, this is how you achieve that.

However, although there is an important reason to use this term in the document itself, it is equally important to make sure that the client understands what it means.

Next week we’ll discuss nunc pro tunc.

Happy Holidays !

2011-12-23T09:36:00.001-08:00

Curb v. Tim McGraw Round One

2011-12-14T14:37:00.000-08:00

I have slowly been trying to write a short book about some of the common disputes that arise in the music business. I had just begun work on the chapter concerning recording agreements and I thought to my self, "this topic has been done to death. What else is there to write about?" Then came the news two weeks ago about Tim McGraw's preliminary victory over Curb Records in the Davidson County Chancery Court.

This case has all of the necessary elements of a legal drama – high-powered artist battles even higher-powered label over arcane language in a recording agreement first entered into in 1992.

As I understand it, Curb first sued McGraw claiming that he had not delivered the required number of albums under the agreement, even though he in fact had delivered what he considered to be the final album under the agreement in 2010 (and Curb even released a single from the recordings).McGraw has counterclaimed alleging that Curb's actions (including multiple releases of greatest hits albums) are "a naked attempt to create a perpetual recording contract, forcing Tim McGraw into a repressive environment of infinite duration …".

I am assuming that the hearing held on November 30 concerned Curb's attempt to enforce the injunctive relief provisions of its agreement and to keep McGraw from recording for another label during the course of the litigation. I have reviewed McGraw's answer and counterclaim and have to say that it is one of the most eloquent pleadings I have ever encountered. (here's a link:www.tennessean.com/assets/pdf/DN174765524.PDF). It literally reads like a novel where you follow McGraw's career from 1992 through 2010 as well as a textbook analysis of how the delivery process and recording restrictions in a recording agreement can be manipulated.

I don't know how this will play out but if it goes further it will provide fascinating insight into some of the more esoteric provisions of recording agreements, often ignored during negotiations. It may also show us how some these overlooked provisions might come back to bite both parties.

A Special Place in Hell

2011-12-07T11:20:00.000-08:00

I read with visceral disgust an article in last Saturday’s Wall Street Journal about a new specialty of debt collectors, who contact the relatives of deceased people who have died leaving debts, and try to convince them that they have a moral obligation to pay the debt. This is a growing business. One such company advertises its services as “a proven approach that yields high returns at a low risk to the client’s reputation.” Translation: we can get your money without making you look bad for harassing grieving widows and orphans.

A relative is not generally responsible for a decedent’s debts unless they were jointly liable prior to the death (e.g. a joint credit card account or a mortgage). If someone dies leaving a will or dies intestate (without a will) with debts and assets the survivors will have to deal with all of this. This is what the probate process is for. It can be hard enough dealing with probate and dealing with the inevitable collection agencies that refuse to recognize the fact that someone may actually be dead (you would not believe some of the automated letters I have seen). However, to claim that the survivors somehow have a legal or a moral duty to pay these debts out of their own pockets is both reprehensible and in violation of Federal Law. It’s hard enough to deal with the loss of a loved one and to settle their affairs- but to be bullied and lied to during the process is repugnant. There is a special place in Hell for these folks.

Let Us Now Praise Phonoluxe

2011-12-04T14:22:00.000-08:00

I love used record stores. My favorite job ever was working at the Great Escape in Nashville where my duties included running the store’s rare record auctions. Accordingly, I have been honored to represent Phonluxe Records since the company’s founding in 1987. The store is run by Mike Smyth, an Englishman who knows more about American music than anyone I know and Jeff Knutson, ably assisted by a dedicated group of music aficionados, who are friendly and lack the whole High Fidelity vibe.

Mike is one of those people who truly understand the consumer side of the record business. When the CD revolution began in earnest in the early 90’s, Mike began buying the vinyl records everyone was so happy to get rid of. Now, having carefully preserved these treasures, he’s happily selling them back to these same people. I imagine that he’s now buying up used CD’s patiently waiting for the day that America’s youth tire of MP3’s.

Earlier this year, the store switched from a traditional 7 days a week schedule to being open only Friday through Sunday. The results appear to be really positive; it somehow emphasizes the special, rewarding experience of shopping at Phonoluxe. I love the fact that I can go in there with a record in mind and leave with something else that I didn’t know I needed until I found it.

Here’s to another 25 rockin’ years.

Reading about the Civil Wars

2011-11-20T11:14:00.000-08:00

I have been reading Adam Gold’s cover story in last week’s Nashville Scene about the Civil Wars (not the Civil War, I wrote about that here: http://tripaldredgelaw.blogspot.com/2009/02/oliver-wendell-holmes-said-it.html)and wondering how I missed all of this until recently. I have had several people tell me about this group but I never got around to listening to them. The duo made their debut at a club not two blocks away from my house and their management/record company/significant other is apparently in my building. They’ve sold 200,000 albums and 250,000 downloads. This is a phenomenal story but the real back-story is even more interesting from Christian music to a failed record deal to television commercials for hot dogs-and at the end of the day real talent which can take a band from the French Quarter Café to the Royal Albert Hall in two years. I am impressed by the genuineness of the story and can’t help thinking about the Civil Wars and their organic success as I also read about Citigroup finally unloading the once hallowed EMI Music Group. These are two very different stories of success in the music business. The band’s manager is speaking at a Nashville Bar Association CLE in a few weeks and I am looking forward to hearing him.

Copyright Office studies Remedies for Small Copyright Claims

2011-11-13T17:46:00.000-08:00

This is interesting. The Copyright Office just announced that it is soliciting public comment through its notice of inquiry process on how copyright owners handle “small” copyright claims “and obstacles they have encountered as well as potential alternatives to the current legal system that could better accommodate such claims.”

While our Copyright Act provides significant muscle in stopping infringement, the whole process from registration (a prerequisite to filing a copyright infringement lawsuit) onwards is byzantine and for many copyright owners too expensive.

I am sure that many people will come up with suggestions and I don’t know what the Copyright Office will ultimately come up with but this seems like a golden opportunity to simplify the system and provide some clarity as to the rules. I don’t know if Congress could create something like a small claims court for small copyright claims but the concept is intriguing.

This will be a conversation worth following.

On Splother

2011-11-10T13:28:00.000-08:00

I had lunch yesterday with my friend Dave Durocher to learn more about his new venture, Splother. I wanted to write about Splother earlier when the Nashville Scene featured the company in its list on 10 new innovative companies in Nashville but to be honest I didn’t really understand what it was the company did. I do now.

I’ve known Dave for a long time and I have always admired him as one of the true good guys involved in music publishing. What I did not know is that he is also a computer whiz who, with some other talented people, has figured out how to streamline the music licensing process to create true one stop shopping for companies looking for independent music for film, television and other uses.

Most artists know that the traditional record deal no longer exists so the mantra has been to get your music into film and tv. However, the gatekeeper process in this world has been as complex and daunting as in the major label world. So, the brilliance of Splother is that it removes the artificial A+R bias and allows the music to compete on its own merit. One can argue (as I sometimes have) that there needs to be a filtering process but the companies and services that provide that are still alive and well. This is something for the truly independent artist.

There may be competing models out there but this site seems intuitive and smart and could become really significant as it develops. Dave’s enthusiasm for the concept is obvious and that’s a great thing to see these days. I’ve also enjoyed reading his partner Steve Toland’s blog comments on the website. This is a company worth watching carefully.

Can't Get a Job? Sue Your Law School

2011-11-06T11:27:00.000-08:00

I am still bemused by an article I read in the Wall Street Journal; a few weeks ago which detailed two lawsuits filed by graduates of Thomas M. Cooley Law School in Michigan and New York Law School. The plaintiffs, graduates of the two schools, are suing the schools for allegedly distorting the employment records of their graduates. The suits seek tuition refunds and damages. All of this seems ironic to me. Lawyers can’t get jobs so they sue their law schools. Everybody knows that there are too many lawyers but can we really say that is the intentional fault of the law schools? I don’t remember my law school promising me anything other than to teach me “to think like a lawyer” (or was that Professor Kingsfield from The Paper Chase?) With many years of hindsight I see the benefits of a legal education and I have seen many lawyers successfully apply their training in non-legal careers. I think that it is unfortunate that so many people go to law school thinking that graduation is an automatic ticket to a great job but I don’t think that this is necessarily the fault of the institutions. It will be interesting to see how these lawsuits play out.

Not So Fast

2011-10-30T15:08:00.000-07:00

Some time ago, I wrote a blog post about what I perceived to be a turning in the tide of the RIAA’s litigation against file sharers. I was probably a bit naive in my thinking. While the RIAA may have changed its strategy, the cases that it filed originally continue to evolve through the court system. Most recently, in the case of Sony BMG Music Entertainment, et. al. v. Tenenbaum, the U.S. Court of appeals reinstated the jury verdict of $675,000 against graduate student Tenenbaum, who had admitted to downloading 31 songs from Kaaza. The trial judge had reduced the statutory damages awarded against Tenenbaum to $67,500 (that’s still $2,177.41 a song) on constitutional grounds. Apparently the Appeals Court ruled that the issue of constitutionality was premature. Tenenbaum’s lawyer, Charles Nesson had convinced the District Court Judge that the high statutory damages provided by the Copyright Act violate the Due Process Clause of the U.S. Constitution. There may yet be some viability to that argument. However, liability in this case and others like it remains a slam dunk.

The moral to all of this is that despite the fact that suing single mothers and college students is not the way for the music industry to win the hearts and minds of the public and stop illegal downloading and file sharing, it is still illegal, and potentially expensive.

Health Insurance for Artists.

2011-10-27T12:07:00.000-07:00

The Arts and Business Council in Nashville is sponsoring a seminar on November 14 on the topic of health insurance for artists. I know so many people who struggle with the issue of obtaining and maintaining health insurance. It's an issue for me every October when my insurance company jacks up its rates.

Anyway, this seems like something that could be helpful for a lot of people, so here's the link:

https://app.e2ma.net/app/view:CampaignPublic/id:7943.10845326270/rid:dbd47f01afddfbc6a4bc7b0d6389be08

National Estate Planning Awareness Week

2011-10-18T06:10:00.000-07:00

The folks at the National Association of Estate Planners and Councils have alerted me to the fact that this is National Estate Planning Awareness Week. Ordinarily, I am a bit wary of these things but because I believe that good estate planning is essential for everyone, I am happy to remind people of the following facts.

1. Young people with small estates and no dependents need, at the very minimum, a health care directive (or durable power of attorney for health care as we call them in Tennessee) so that they have someone selected to handle health care decisions for them in the event of an emergency.

2. For families with minor children, wills are essential, to appoint a guardian and provide for the children in case something happens to both parents.

3. For anyone with an estate of any value, planning is essential to avoid probate where possible, to avoid state and federal estate taxes, and to have some control over where your property goes.

4. Protection of assets may also be important, especially in dealing with heirs who may have ‘issues” (ranging from bad marriages to financial mismanagement to drug or alcohol problems).

The more I get involved in this area, the more I see how simple planning can be so beneficial for people at all stages of life. I also know, from firsthand experience, how easy it is to put this stuff off and be in denial about the inevitable.

This stuff is essential. If you have any questions regarding these issues, feel free to contact me.

When I Paint My Masterpiece

2011-10-17T09:55:00.000-07:00

Bob Dylan continues to fascinate me on so many levels. Several years ago I wrote about (and tortured my Copyright Law students with) the story of how Dylan had apparently ‘appropriated’ large chunks of the lyrics to some of the songs on his 2001 album Love and Theft from Japanese writer Junichi Saga.( http://tripaldredgelaw.blogspot.com/2008/11/what-does-bob-dylan-have-to-do-with.html). A couple of weeks ago, I read an article in the New York Times that revealed that several of Dylan’s paintings in his current gallery show at New York’s Gagosian gallery were actually copied from photographs taken by such well know photographers as Henri Cartier-Bresson and Leon Busy.

As always with Dylan, I am not sure what to make of this. Is it copying? It is plagiarism? Is it copyright infringement? Is it all protected fair use?

It turns out that the Gagosian Galley which is hosting the Dylan show is the same gallery that was sued along with artist Richard Prince, another artist whose work fascinates me, for copyright infringement based upon Prince’s work. Apparently, the defendants lost a summary judgment but the case will surely be appealed. (Cariou v. Prince, et. al., no 08-civ-11327).I have been really interested in this and the whole debate between attribution and copyright infringement in art and I wish I had more time to study it. This is endlessly fascinating stuff.

Technological Nostalgia Part II

2011-10-11T10:34:00.000-07:00

Once I had an assistant who obsessively saved every scrap of paper we produced. I recently found a notebook full of telephone call logs from 2002. Being a conservationist (i.e. cheap) I am using these old telephone logs as scrap paper, yet I am also fascinated reading the the messages I received back then. It’s like a quick trip back in time. These are a few observations.

1. I used to get a lot more phone calls before the eventual domination of email. On the day I am looking at I had over 30 calls.
2. I had a number of calls from a client that I did a lot of work for who eventually filed bankruptcy, leaving me with a large amount of unpaid fees.
3. I had several calls that day from a good friend who passed away shortly thereafter.
4. The international side of the music business used to be a lot more fun. A bunch of the calls that day dealt with a client’s record deal in England.
5. I am still unnerved when I see the message “needs to speak to you TODAY”.
6. At the time, I had several calls from a client who had discovered several unpublished photographs of Elvis Presley—that was fun.
7. I am gratified to see 7 or 8 names on that list of clients I still do work for today. I am grateful.
On the whole, I don’t know what’s more efficient, email or the phone. Getting a lot of phone calls and/or emails is evidence that your business is heading in the right direction but it can still be overwhelming and it can be a challenge to respond to everyone in a timely manner.

Let Us Now Praise Dennis Scott and Fab Fan Memories the Beatles Bond

2011-10-06T09:33:00.000-07:00

My friend and client (and Grammy Award Winner) Dennis Scott has had a long and storied career, but obviously, his first love is the Beatles. For the past few years, in addition to his successful career writing and producing children’s music, Scott has led a great Beatles tribute band called the WannaBeatles.

A while ago, Dennis told me he was creating a CD of Beatles’ fans talking about their memories of the fabs. My Beatles obsession knows no bounds so I was both encouraging and somewhat apprehensive about the project. After all, Beatles projects have varied from the sublime to the awful. I shouldn’t have worried, Dennis' album, Fab Fan Memories, the Beatles Bond brings together the sincere memories and observances of both ordinary fans (first generation and onwards) and celebrities such as Janis Ian, Melissa Manchester, Billy Swan and Phil Keaggy. I even learned something new about my friend Ed Salamon from listening to the disc. However, it is the collective experience of listening to the entire disc-from a fan recalling riding from Nashville to Memphis on a bus to see the Beatles in 1966 to Janis Ian talking about how excited she was as a teenaged recording artist to discover that Paul McCartney had ordered her records.

The disc is divided into sections and narrated by George Harrison’s sister Louise (who once refused to autograph my copy of her album “All About the Beatles”-but that’s another story…). Ms. Harrison’s habit of introducing each section with a question becomes a bit monotonous, but, hey’ she’s George Harrison’s sister. Background music is supplied by the WannaBeatles and the Liverpool Legends.

On the whole, this is a really well done piece of work and well worth searching out. Congratulations Dennis.

Two Passings

2011-09-28T13:26:00.000-07:00

I want to take the opportunity to note the passing of two fine people. First, Bob Sullivan, who died about two weeks ago after a 14 month struggle with leukemia. I knew Bob for at least 25 years and he was the kind of lawyer I aspire to be. He was a smart and zealous advocate for his clients while at the same time, a true gentleman. Always fun to talk to. At his memorial service last Saturday, his brother in law described him as a ‘great guy’, the exact phrase that was running through my head right before he said it. I am going to miss Bob.

On Sunday night, I learned that Paul Kirby had died at the far too young age of 48. I knew Paul from his first real band “Walk The West” which should have been huge as well as his second band “The Cactus Brothers,” who I had the privilege of representing. To my mind, the Cactus Brothers were both timeless and a decade ahead of their time-kind of a cosmic country band with great songs that made people dance. I have no doubt that today’s Americana world would have totally embraced the Cactus Brothers. I didn’t know Paul really well but I respected him as a songwriter and many of his songs have been running through my head for years and especially over the last few days.

In my less cynical moments I realize that both these guys made Nashville a special place to live and work.

Revenge of the Bratz

2011-09-23T15:44:00.000-07:00

I remember reading a few years back that the Mattel Toy Company has obtained an injunction against the makers of the Bratz dolls because of their alleged similarity to the Barbie Doll. I was confused-on the surface the two dolls are not at all similar. The case, Mattel v. MGA was premised upon Mattel’s argument that the Bratz dolls infringed upon Mattel’s copyrights’ among other claims. Ultimately, Mattel’s argument was based upon the mistaken premise that one can assert a copyright in a mere idea or concept. Remember that this is the same company which unsuccessfully sued a group for recording the song “Barbie Girl”.

The kicker to the Bratz case is that in prevailing, the Bratz manufacturer was awarded a judgment for its costs and attorneys fees in the amount of $137,000,000 (yes, one hundred thirty seven million.I triple checked it.) Section 505 of the Copyright Act provides that the prevailing party in a copyright infringement case is entitled to petition the court for an award of its costs and attorneys fees. This point was famously demonstrated in the case Fantasy v. Fogerty, wherein John Fogerty recovered his attorney’s fees in defending himself against his former publisher’s erroneous claim that he had somehow infringed his own work.

This is the reason one has to be dead certain of their legal position before instituting a copyright infringement case and it is, I believe, one of the main deterrents to more frivolous copyright lawsuits being filed. Still, if you can afford to pay $137 million in legal fees, I guess deterrence is not really an issue.

My Netflix Rant

2011-09-22T13:13:00.000-07:00

As if raising their prices exorbitantly overnight and then by way of apology (after losing more than one million subscribers) announcing that they were splitting the company into two separate services, (i.e. one for tradition mail delivery of DVDs and one for the streaming service- with two different websites, pricing plans and billings), Netflix has now taken corporate insensitivity to a new level.

In reviewing a Customer Satisfaction Survey I received from the company last week, I came across a question that innocently asked me to identify other ways I received movies for home viewing. The drop down menu identified such obvious services as Redbox, Blockbuster, HBO, Showtime, etc. and then in the last position, it asked me if I ever illegally download movies by Torrent or similar application.

If I was illegally downloading films (which I’m not) would I implicate myself? Think of such questions as “have you stopped beating your wife yet?” or “are you now or have you ever been a member of the Communist party?” On the surface, this is an absurd question. On a more sinister level, perhaps Netflix is getting ready to sue its customers. After the events of the last few weeks, who knows?

The Indemnity Clause

2011-09-06T12:16:00.000-07:00

Do you want to see a client’s eyes glaze over? Heck, do you want to see a lawyer’s eyes glaze over? Then spend a little time reviewing the indemnity cruise of a typical recording contract or music publishing agreement. Here’s an example:

Indemnity: Writer hereby indemnifies, saves and holds Publisher, its successors and assigns, and its parent, subsidiary and affiliated companies and its and their respective officers, employees and agents harmless from any and all liability, claims, demands, loss and damage (including, without limitation, reasonable attorneys' fees and court costs) arising from or connected with any claim, demand or action or by a third party which is inconsistent with any of the warranties, representations or agreements made or assumed by Writer in this Agreement which is reduced to a final adverse judgment or settled with Writer’s written consent. Pending the determination and/or settlement of any claim, demand or action which is inconsistent with any of the warranties, representations, covenants or agreements made or assumed by Writer in this Agreement, Publisher shall have the right, at Publisher's election, to withhold payment to Writer of any monies otherwise payable to Writer under this or any other agreement between the parties, and or any of their affiliates in an amount reasonably related to the amount of that claim, demand or action and the reasonably estimated amount of Publisher's costs, expenses or other damages in connection therewith (including, without limitation, legal costs and attorneys' fees). Upon the resolution of any claim, any monies withheld by Publisher as aforesaid may be used by Publisher to satisfy Writer's indemnity obligations hereunder and to the extent that the withheld sums exceed such indemnity obligations they shall be treated as additional Receipts. Publisher shall have the right, at Publisher's election and without limitation for any reason, to withhold and recoup and recover the amount of any and all costs and expenses (including, without limitation, legal costs and reasonable attorneys' fees) which are paid or incurred by Publisher or on Publisher's behalf to defend, respond to, negotiate or prosecute any claim, demand or action which is inconsistent with any of Writer's warranties, representations, covenants or agreements hereunder from any monies payable to Writer hereunder or under any other agreement to which Publisher or Publisher's affiliates are a party. Notwithstanding the forgoing, any amount so withheld shall be released if (and to the extent that) legal action shall not have been commenced with respect thereto in a court of competent jurisdiction within one (1) year following such withholding, it being agreed, however, that Publisher shall have the right to again withhold monies thereafter in the event such claim continues to be asserted, is reasserted or suit is later filed. Writer shall reimburse Publisher, on demand, for any payments made by Publisher at any time with respect to the actual amount of any claim, demand or action to which this indemnity applies. Writer shall have the right at Writer's expense, to participate in the defense of any such claim, demand or action with counsel of Writer's choice. The defense and settlement of that claim, demand or action, however, shall be controlled and determined in Publisher's sole discretion.

This is the clause, usually buried somewhere towards the end of the agreement that nobody wants to deal with but it is hugely important. Most people have some hazy idea of what indemnity means, informed perhaps by the classic film noir “Double Indemnity” rather than Black’s Law Dictionary. Nevertheless, here’s how Blacks’ defines indemnity “ A collateral contract or assurance by which one person engages to secure another against being damnified by the legal consequences of an act or forbearance on the part of one of the parties or some third person. Term pertains to liability for loss shifted from one person held legally responsible to another person”.

In plain English, this means that the indemnifying party assumes the responsibility for any legal consequences caused by their acts or warranties. The problem of course is that in its unmodified, un-negotiated form, the indemnifying party can be responsible for even all unsubstantiated or invalid claims asserted against the indemnified party. As everyone knows, anyone can sue anyone else for anything under the sun, so it is important to try and limit one’s exposure for all the various claims that can arise, especially those that are bogus.

I have always argued from an artist’s perspective that an artist should not be responsible for nuisance claims filed against a record company or a publishing company. At some basic level, those companies should be in a better position to absorb the cost of defending these claims as a cost of doing business. I have been involved in defending against many of these types of nuisance claims and while they are almost always dispensed with, the cost can be staggering.

The negotiation of this section of an agreement is always different and can head off in a multitude of directions. Very often, an artist can limit their liability to claims actually reduced to judgment or settled with their consent. The important part is to know what to ask for.

The Book Business

2011-09-02T12:40:00.000-07:00

There was an interesting article in Monday's Wall Street Journal, "The Book Business, a Rewrite" which pointed out the obvious; to quote directly “the economics of the book business are changing so rapidly, the industry barely looks like it did just six months ago". That's putting it mildly. Those of us who watched the slow ugly death of the traditional music business should not be surprised by the speed of the evolution of the book business. Still it is shocking to realize that there is not a legitimate new retail book business within the city limits of Nashville (unless you count Books-a-Million, which I just can't). I often reflect on this fact while driving to Franklin to buy a magazine (we have no newsstands either). To be fair, Nashville has a booming used book business (thanks Rhino, McKay’s and Bookman/Book Woman)and has two new bookstores slated to open soon, Anne Patchett’s much anticipated Parnassus Books and the Barnes and Noble/Vanderbilt University joint venture slated to open in the old Borders location on West End.

From a lawyer's perspective this is intriguing. As a reader who grew up in the book business, I am sort of repelled by Kindle and the whole concept of digital literature but I see the potential for many author's backlists and the few deals I have done in this area have been fascinating. More significantly, I know of some authors with devoted cult followings whose work would benefit significantly from a personal, immediate digital relationship with their audience.

The bottom line is that the book business is transforming itself like the music business, but apparently at a much faster rate. As practitioners and readers, we need to be ready.

What Nancy Thinks

2011-08-30T15:25:00.000-07:00

My wife, the newly minted PhD. Nancy McGuire Roche just started her own blog where she intends to write
“about cinema, television, culture studies, popular culture, gender studies, feminism, and perhaps even pedagogy”. Those are her words. Don’t tell her that I don’t know what pedagogy is. She’s awfully smart and entertaining so I highly recommend reading this, especially if you are interested in film.

Here’s the link:

http://nancyroche.wordpress.com

The Music Industry is Dead. Long Live the Music Industry 2.0

2011-08-29T11:29:00.000-07:00

Adam Gold’s article “The Music Industry is Dead. Long Live the Music Industry 2.0” in the August 25 issue of the Nashville Scene is the best overview of the current state of the music industry, let alone the Nashville music industry that I have read in some time. Here’s the link:

http://www.nashvillescene.com/nashville/the-music-industry-is-dead-long-live-the-music-industry-20/Content?oid=2610420

Gold does a great job of talking to all the major players and synthesizing a lot of information into something that is both enlightening and thorough. It’s also optimistic, which is nice to read in this day and age.

Everything You Ever Wanted to Know About Entertainment Law (But Were Afraidto Ask)

2011-08-27T16:59:00.001-07:00

I get those flyers in the mail from the National Business Institute advertising upcoming Continuing Legal Education seminars on a near daily basis. I’ve attended a bunch of NBI CLE classes in the past and I generally think that they provide a pretty good value. Having said that, I had to laugh today when I received a brochure for an upcoming seminar called “Entertainment Law 101”. I know two of the presenters and they are excellent attorneys. What I found amusing was the breadth of the program. In 7 hours they propose to cover
1. Film Industry Basics
2. Music Industry Basics (including record deals, 360 deals and publishing deals)
3. Copyright law
4. Literary Purchase agreements
5. Acting Agreements
6. Legal compliance in fund raising and securities law
7. Insurability of Entertainment risks

If I had time I would list all of the individual sub-category listings.

I think they are going to cover more in one day than I cover in the entire semester entertainment law course I teach. Clearly any one of these topics merits at the very least an entire day of study. Perhaps the real point of the seminar is to scare other lawyers away from the practice of entertainment law (as if they shouldn’t be scared away already). That’s generally how I feel after I spend a couple of hours in an estate tax seminar.
If you’re interested though, here’s the link: http://www.nbi-sems.com/SemTeleDetails.aspx/Entertainment-Law-101/Live-Seminar

I should also point out that the Nashville Bar Association puts on excellent Entertainment Law CLE’s twice a year, at the end of August and the beginning of December.

Incorporating Touring Activities

2011-08-26T07:00:00.000-07:00

I have just been reading articles about the horrible tragedy at the Indiana State Fair, where five people died when an outdoor stage collapsed. One article pointed out that this was at least the third such incident this summer.

I am often asked why I advise artists to incorporate their touring businesses. This is the main reason: liability. Undoubtedly, there will be lawsuits arising from the Indiana State Fair and undoubtedly the artists involved will likely be sued – even if they had absolutely nothing to do with the accident. Even if the artists ultimately prevail in court they still have to go through the necessity of dealing with the potential liability. The purpose of incorporating is to create a shield between this potential liability and your personal assets.

This is a real threat. Several years ago one of my clients managed a hugely successful country artist whose touring corporation was routinely sued for every person who slipped and fell or got hit with a random bottle of Wild Turkey at their concerts. On another occasion I represented a band that chose to tour without any type of liability protection. When a belligerent drunk got himself beaten up at an outdoor festival that they appeared at, they had to endure more than a year of costly litigation before the case was dismissed. They had to live with the uncertainty that their personal assets (houses, etc.) were at risk.

The liability protection afforded by proper corporate protection is a good first step in managing the risk inherent in touring and performing. The cost is negligible compared to the benefits and peace of mind such protection can provide

Mike Tyson's Tattoo

2011-08-25T09:00:00.000-07:00

I have resisted writing about this for as long as I have resisted seeing the movie but by now everyone has heard about the recently settled lawsuit arising from "The Hangover Part II" specifically over Ed Helms replica of Mike Tyson's face tattoo.

Victor S. Whitmill, the tattoo artist who first gave Tyson his signature Maori-warrior inspired facial tattoo sued Warner Brothers for "reckless copyright infringement".

The concept may appear silly or sinister until one is reminded of the purpose of copyright --which is to protect "original works of authorship" including works of visual art. I have never represented a tattoo artist but I have represented professional photographers and graphic artists and I can attest that their rights are routinely violated by others who are either ignorant or unconcerned with their intellectual property rights in and to their own work. In this respect, Mr. Whitmill's lawsuit against the makers of "The Hangover Part II" has real significance.

Because the lawsuit settled we will never get to examine the more fascinating issues of the case – Warner Brothers' apparent defense of fair use (i.e. Mr. Helms' tattoo was allegedly a parody of Mike Tyson's tattoo) or my initial question – was Mr. Whitmill's tattoo "fixed in a tangible medium of expression"( as is required by Section 102 of the Copyright Act) but scholars will still have an opportunity to debate these issues for some time to come.

Termination of Assignments of Sound Recording Copyrights

2011-08-22T09:00:00.000-07:00

A few weeks ago I wrote an article for Billboard Magazine about the Copyright Office amending the rules regarding termination of assignments of copyright. The editor wisely omitted the last sentence where I mused about whether the Copyright Office would ever take a stand on the issue of artists attempting to terminate their assignments of sound recording copyrights.

Now the New York Times has addressed the issue in an August 15 article “Record Industry Braces for Artist Battles Over Song Rights”. The article is a great primer on this complex and controversial matter. While it is clear that one of the purposes of the Copyright Act of 1976 was to give songwriters and other authors the right to recapture their work after 35 years, it is not clear whether or not the same rights apply to recording artists. This is because the termination provision specifically excludes “works made for hire” and nearly every recording contract from the 1970s on refers to sound recordings a “works made for hire”. The problem for the record companies is that the Copyright Act also has a very specific definition of “works made for hire” and sound recordings are not part of that definition. Further most record contracts go to great lengths to state that the artist is an independent contractor and not an employee of the record company, which further damages the work made for hire argument.

The New York Times article also addresses some of the confusing side issues in this debate. For example, how will the law address other “authors” of a sound recording including producers and engineers? How will the law affect artists who sign contracts in other countries subject to different laws (e.g. every major band from England)?

Although there is much discussion and debate on the issue, the battle will properly commence until January 1, 2013 when works created on or after January 1, 1978 become eligible for termination. Things are going to get very interesting. I would urge any recording artist who executed an agreement during the 1970’s to have that contract reviewed by a lawyer asap.

Contracting With Minors

2011-08-15T08:51:00.000-07:00

Watching a Justin Bieber documentary with my daughter (there goes my indie cred) I am reminded that the median age of music performers is getting younger. This trend has been apparent since Taylor Swift's initial success. I am sure that I am not the only Nashville lawyer who has faced a singing 10 year old in my office. However, signing minors to contracts is serious business and is often misunderstood. Legally, minors can't contract. Hence contracts signed by minors are generally unenforceable, unless a very specific process is followed. This process varies from state to state. In Tennessee the process is covered by the "Tennessee Protection of Minor Performers Act". T.C.A. Sec. 50 5-201 which sets forth a court approval procedure for "contracts pursuant to which a minor person is employed . . . or agrees to perform or render artistic or creative services". The process may include a provision by which the court appoints a guardian ad litem to represent the minor's interest.

Interestingly, the statute contains an apparently little known section that requires a trust to be set up for a portion of a minor's earnings. While most practitioners are generally aware of this statute very few people seem to be aware of this section, meaning, I am not sure how often the statute is followed in short-term employment situations (such as hiring a child actor for a small movie role or local commercial). However for any type of long-term personal services contracts such as a recording agreement, publishing agreement or management agreement. court approval is absolutely essential in order to have a valid binding contract. There are also other issues to consider in these types of agreements, including choice of law and jurisdiction. Sometimes these contracts are affirmed in more than one state. If your company is thinking about contracting with a minor, the important thing is to not ignore this court approval process.

new article in Billboard on termination of copyright grants

2011-08-01T13:04:00.001-07:00

I have a small piece in the Legal Matters section of the July 30, 2011 issue of Billboard entitled "Confusion Emerges Over the right to terminate U.S. Copyright Grants". It's fairly arcane but could be beneficial to those who assigned copyrights after 1978 pursuant to agreements dated before January 1, 1978.
Unfortunately, there does not seem to be an internet link to the article but left me know if you're interested in reading the article.

F with a G on Top: Copyrighting George Harrison

2011-06-29T15:19:00.001-07:00

I recently had a client ask me an intriguing question. He wanted to know if George Harrison’s iconic opening chord at the beginning of “A Hard Day’s Night” was protected by copyright.

Being inquisitive, I first had to learn what chord George is actually playing. Not surprisingly, there is some debate on this issue but George himself apparently identified the chord as an “F with a G on top”.” Whatever chord he is actually playing, the sound of George’s 12 string Rickenbacker changed the world.

I don’t believe that a single chord in and of itself is capable of copyright protection. The issue would be, did the chord by itself have sufficient originality and even if it did, would the use in another song be considered ‘de minimus’. Think, for example of the Beastie Boys sampling case, Newton v. Diamond. I also wonder if a possible use of the chord would be protected by the doctrine of fair use, since you can’t play the chord without thinking of the Beatles and “A Hard Day’s Night”.

But here’s another interesting question. Could the sound itself be capable of trademark protection? Attorney Robert Scott Lawrence in his blog “Who Is Your Lawyer?” points out that over 157 “sensory trademarks” have been registered by the United State Patent and Trademark Office, including the MGM lion’s roar, AOL’s “You’ve Got Mail,” and Homer Simpson’s “D’oh”. A quick scan of the USPTO’s webs site does not indicate any registration for George‘s “F with a G on top” but I am not entirely sure that such a registration might not be possible.

I am not sure I answered my client’s question but it was a fun distraction.

In Praise of Cat Ladies and Charitable Tax Deductions

2011-06-21T14:29:00.001-07:00

I have known many cat ladies in my life-my mother and my former assistant for starters, so I read the headline in last Saturday’s Wall Street Journal “A Cat Fancier Finds a New Way to Skin the Tax Man” with mild curiosity. What I discovered is good news for anyone who wants to know how to properly claim a charitable tax deduction for unreimbursed expenses incurred for volunteer work.

In the reported case before the U.S. Tax Court, Jan Van Dusen successfully challenged the IRS disallowance of $12,000 in expenses she incurred in caring for over 70 stray cats for a local IRS approved cat rescue organization,. The key, according to the article, is to keep detailed receipts and (this is important) to secure a letter from the charity acknowledging the gift. The donor has to secure the letter before the tax return is filed. Again, the charity has to be approved by the IRS.

This really seems to be an important victory for all types of volunteers and the charities that depend on them. As always, check with your tax professional.

The Rick James Lawsuit

2011-06-16T12:29:00.000-07:00

I have been following with interest the recently filed case Rick James v. UMG Recordings, Inc. in which attorneys for a trust established by the late James A. Johnson, Jr. have sued Universal Music Group over the same contractual royalty clause successfully litigated by the plaintiffs in F.B. T. Productions v.Aftermath Recordings, a case tacitly upheld by the United States Supreme Court.
The well-known clause found in numerous pre- digital recording agreements provides “ with respect to records sold by (Motown’s) licensees…Motown will pay…a royalty equal to fifty percent (50%) of Motown’s net receipts based on actual sales…” The plaintiff’s argument is that this clause applies to income from digital downloads and ringtones etc. Universal has blatantly argues that such sales are not third party licenses but are something called “resale agreements”. This defense ignores the plain language of these agreements and the 9th Circuit said as much. The labels simply did not anticipate that this type of income would exist when they drafted these contracts but they still need to honor their contractual commitments if they choose to exploit the source of the income.
The most interesting thing about the Rick James case is the plaintiff’s attempt to have the case certified as a class action lawsuit. The potential damages could be astronomical—just think of the potentially affected artists on Motown’s roster.
Of course the operative words are “could be”. The big question in my mind is how many artists and how many contracts does this apply to? How many successful recording artists from the pre-compact disc era are still operating under their original (non-renegotiated) contracts and if so, how many labels are still treating legitimate third party license income as something else entirely? I am not really sure how many artists this affects. However, the 9th Circuit case apparently had some effect on another class action case originally filed by the Allman Brothers against Sony/BMG. This case had been dismissed once before and apparently has been reinstated. Both of these cases and the cases that are sure to follow in the wake of the F.B. T. Productions case are significant and well worth watching.

We are defining a business model that doesn't exist

2011-06-14T11:05:00.000-07:00

"We are defining a business model that doesn't exist"--
Simon Fuller quoted in yesterday's Wall Street Journal on his new venture with Chris Blackwell. This could be interesting and is certainly worth watching. Everything Chris Blackwell has done has been worth watching and as much as the music snob in me might hate to admit it, Simon Fuller is a marketing genius who created an entirely new paradigm for breaking artists.

Producers in Peril

2011-05-25T09:00:00.001-07:00

I have noticed that a lot of my producer clients don’t call me to negotiate agreements as often as they used to. They are not calling my competitors either because I’ve talked to them about this. I can’t blame anyone for not wanting to pay legal fees to negotiate a contract where the advance is small and there is a fairly good chance that they will never earn royalties.

I am thinking that one of three things is happening:

1. The producers are actually negotiating the agreements themselves, in which case, more power to them.
2. They are not signing contracts at all, in which case the record company (or artist) and the producer are acting at their own peril.
3. The producer is just signing what is put in front of him—which is what I worry about.

While it is probably statistically most often the case that most albums won’t sell enough to recoup their recording costs, there are also numerous examples of records that yield a soundtrack master use or television commercial years after their initial release. Without an unambiguous binding agreement and (hopefully) a letter of direction the producer may not have the ability to collect their share of the future income. I have seen examples of master use licenses pushing recordings from unrecouped to recouped status years after their initial release and the producer relying on their ancient agreements to get paid. It’s a beautiful thing.

I also worry that producers may be ignoring their share of Sound Exchange royalties, which are becoming a not insignificant source of income (and which are not subject to recoupment).

Finally, I worry that without carefully reviewing the document, producers might be agreeing to such punitive clauses as controlled composition clauses for producer/writers and my pet peeve, the re-producing restriction (no, not a form of state mandated population control).

I would urge any producer reading this to have the lawyer of their choice at least read the next agreement they are presented with. I can’t help but think that even a quick review be a worthwhile investment.

David Byrne, Charlie Crist and a Public Apology

2011-04-13T15:02:00.000-07:00

I have been following with great interest this line of cases where politicians have infringed upon artist's copyrights by using their songs in campaign commercials without permission. Apparently the most recent case involves Charlie Crist, the governor of Florida who used the Talking Heads song "Road to Nowhere" without permission. Crist, the former attorney general of the state of Florida should have known better--this really is stuff they teach you in law school.

Byrne sued for $1 million. The most interesting allegation in the complaint is his claim under the Lanham Act that by using Byrne's song without permission the governor is implying a false endorsement.

Byrne is a creative guy and he came up with a very creative remedy. Part of the settlement involved Crist making a public apology for his infringement. This is good. Its about time that politicians acknowledge that they have to respect intellectual property rights. See the video here:

Two Views of the Current State of the Music Industry

2011-04-11T14:20:00.000-07:00

A couple of weeks ago, I took part in a great panel discussion called “Taking the Pulse of the Music Industry.” The panel, held at Trevecca Nazarene University in Nashville was intended to help the students in the music business program get some perspective on career paths in the changing music industry.

I was excited to find that I was on the panel with Kissy Black who runs the company Lotus Nile Media. At one point in the not so distant past one would have referred to Kissy as a publicist, but she is much more than that. She is a 21st century marketing guru and an evangelist for convincing artists to take hold of their careers and promote themselves. Her explanation of how artists and entrepreneurs can and should use the internet to promote their careers, manage their fan bases and distribute their product was brilliant. I left that night feeling like I had seen the future of the music industry and it was going to be OK.

A week or so later, on April 4, I read my friend and fellow lawyer Steve Weaver’s blog post which cited a survey conducted by Reverb Nation and Digital Music News. The poll found that “3 out of 4 artists would love to be signed to a recording agreement.”

It’s an interesting dilemma; for the first time ever, many types of artists are not dependent on the major label platform (or the independent label platform for that matter) yet 75% of artists surveyed still apparently yearn for that traditional avenue. It’s hard to know how to advise artists in this climate. I can see both sides of this issue but I remain energized by Kissy Black’s presentation and what the future holds for artist and entrepreneurs.

How to Hire a Business Manager

2011-04-08T15:35:00.000-07:00

I am please to be quoted in this week's (4/2/2011) Billboard article on "How to Hire a Business Manager". Its the issue with the great picture of Dave Grohl and crew on the cover. Glenn Peoples wrote the article and there's a lot of good information there.When Billboard asked me to contribute to the piece, I realized just how important and personal the relationship between business manager and artist really is. I don't think its something that thought about all that often so I highly recommend the article.

I Discover Law and the Multiverse

2011-03-21T19:36:00.000-07:00

Last fall I wrote about a fun blog I stumbled across called Preslaw.com, which reported all of the major court decisions involving Elvis Presley. Tonight, I heard a story on NPR about a relatively new blog called "Law and The Multiverse," run by two lawyers who are also self described comic book nerds. Their goal is to study the application of the law to those fictional characters who inhabit the universe of comic books and superheros.

Don't snicker too loudly. this stuff is fascinating and the authors are extremely well read and intelligent. Even though my comic book tastes never went much further than Batman and Superman, this material is ripe for legal analysis. I have to admit that my favorite posts dealt with such civil procedure topics as "Shape Shifting and Trial Testimony,""Superheros and Alter Egos" and "The Multiverse and Res Judicata".

For anyone with a passing interest in the outer limits of the law, this is great stuff.

A Seminar on Covering Your Assets

2011-03-15T11:36:00.000-07:00

I received an email from the Nashville Arts & Business Council regarding an upcoming seminar on artists of all types protecting their assets in the even of an emergency. Given the floods of last May, tornadoes and the horrible disasters we are witnessing in Japan right now this seems like a timely topic, so I wanted to pass the information on:

Cover Your A's (Art, Assets, and Archives)
Emergency Preparedness for Artists 101

Were the May floods in Nashville a wake-up call for you? Can your
career sustain the losses of a flood, studio fire, tornado, or burst
water line? Did you know that most homeowner's and renter's insurance
does not cover losses or liability for your art business?

What: The Arts & Business Council's April Seminar
When: Saturday, April 9, 2011, 9:30 a.m.-1 p.m.
Where: The new auditorium in the Howard School Complex (700 Second Avenue South)
To attend: $15 (includes brunch and free copy of Studio Protector).
Register now. Attendance limited to the first 25 participants.

This workshop will help you get started in protecting your career from
losses from both natural disasters and individual emergencies. Most of
the preparedness steps involve a little time and little or no money.
We will have an insurance expert on hand to demystify the topic of
business insurance and to answer your questions, and an artist who was
affected by flood to share lessons learned from the experience. Craig
Nutt, an artist and Director of Programs of CERF+ ( Craft Emergency
Relief Fund + Artists' Emergency Resources) will lead the session and
talk about emergency resources that are available to artists.
Participants will each receive a free copy of the Studio Protector:
The Artist's Guide to Emergencies®.

Presented in partnership with CERF+, Metro Nashville Arts Commission and Tennessee Association of Craft Artists with support from: Windgate Charitable Foundation, Nathan
Cummings Foundation and the Joan Mitchell Foundation.

Let Us Now Praise Foster & Lloyd

2011-03-02T09:06:00.000-08:00

I am pleased to note that my friends Bill Lloyd and Radney Foster are about to release their first new album in a few years (...like 20+). I am also pleased to report that the record. "It's Already Tomorrow" sounds great: the same fantastic combination of vocals, guitars, more guitars and great songs that made them a breath of fresh air the first time around. This time, the record is released on their own Effin Ell label and is available for pre -orders at their website. The record really is an unexpected surprise.

Statistics and Pop Music in Nashville

2011-03-01T15:47:00.001-08:00

Richard Florida, writing for The Atlantic, just published a fascinating article called
The Changing Geography of Pop Music .

The article confirms, via statistics, that Nashville leads the world by a hefty margin in its concentration of music businesses (i.e., record labels, publishers, publishers, distributors, recording studios, etc.). The article establishes with quantitative facts what we all have been feeling for years, that there’s something going on here. Despite the clear decline of major label’s country presence, there has been an organic growth of other genres, that can no longer just be seen as an anomaly - as well as a healthy repositioning of the country market. It’s a triumph of an infrastructure that has existed since Owen Bradley and Chet Atkins first started recording here. This infrastructure encompasses everything from studios and engineers, to gear rental companies to CPA’s and lawyers. This is largely why artists as diverse as Bob Dylan, The Who, Neil Young, Elvis Costello, Robert Plant and The White Stripes have quietly been recording here for the past 40 years. It’s a good place to get stuff done. As Florida writes, “The ongoing evolution of Nashville has made it into something of a Silicon Valley of the music business, combining the best institutions, the best infrastructure, and the best talent.”

Interestingly, the next top four cities are Los Angeles, Montreal, Toronto and Vancouver. What (besides Justin Beiber and the Arcade Fire) is going on in Canada?

Technological Nostalgia

2011-02-21T15:03:00.000-08:00

Reading Lindsay Ferrier’s recent piece
in the Nashville Scene on the death of video rental stores started a wave of nostalgia which I have not yet been able to shake. When I teach my copyright law class, I tell students about the 1983 Sony Betamax case, and the fact that, for a brief period of time, before the Supreme Court stepped in, the sale of videocassette recorders was potentially illegal in the United States. The motion picture studios thought these devices would lead to rampant copyright infringement. I try to get my students to imagine this time the 1980’s, when a lot of this revolutionary technology was being created, and they have no idea what I am talking about.

This then reminded me about the summer of 1982, when I was clerking for a Nashville entertainment law firm. One of my biggest memories from that summer involve one of the firm’s clients (a cutting edge Nashville band that I hate to label as “New Wave” – but, hey, it was the early ‘80’s) who was about to release their own independent EP. I don’t know if Jason & the Scorchers had released their first EP yet, but the concept of a band being able to release its own independent recording, without the assistance of a major label – was really mind-blowing. It seemed impossible. My other significant memory of that clerkship was reviewing a license agreement for one of the first compact discs. I believe that the label in question was contracting directly with the manufacturer, Phillips, to manufacture the disc. At that time, we thought of those things as novelty items for high-end audio buffs.

I contemplate all these developments not to date myself, although that is a by-product of these ruminations, but to demonstrate the constant march of technology and the curious and often parallel tracks of art and law. I can’t help but think about this attached graph (which made the rounds on the internet last week) showing the rise and fall of the compact disc market. In many ways, 2011 feels like 1982 again, without the big hair.

The Watermelon/Antones Tragedy: A Post Mortem Analysis

2011-01-30T12:49:00.000-08:00

I represented Watermelon Records for most of the 1990's. I was proud of the artists they championed,including the late great Don Walser. I hated to see the label file for bankruptcy protection back in 1999, although it was inevitable. Although I stayed in touch with the principals of the company, I was not involved in the second bankruptcy or the lawsuit filed by Don Walser's heirs. It was confusing and mildly depressing watching the Walser lawsuit from the sidelines though. I had vivid memories of Don and the great comeback he got to experience late in his life.

The Walser case was tried last spring in Austin. Last week, US Bankruptcy Judge Craig A Gargotta issued a 46 page opinion clearing Watermelon's successors of most of the allegations raised against them in the lawsuit, other than the simple claim of breach of contract.

Austin bankruptcy lawyer Stephen Sather wrote about the case and the whole sad saga and I found his analysis to be the most cogent writing I have seen on the subject. Mr. Sather graciously allowed me to reproduce his original blog, which follows:

Antone's Records: A Tragedy in Three Acts and 46 Pages

Austin prides itself on being the Live Music Capital of the World. While many musicians travel to Austin with stars in their eyes, the reality is that it is difficult to earn a living in the music business, either as an artist or an independent record label. For the past eighteen months Bankruptcy Judge Craig Gargotta has received an extensive education on what can go wrong in relationships between record labels and their artists. This education was on full display in a 46 page opinion he wrote in Walser v. Antone’s Records, et al, Adv. No. 09-1010 (Bankr. W.D. Tex. 1/24/11). You can find the opinion here.

However, Judge Gargotta was not the only one receiving an education. I represented the debtors and the case was a real eye opener for me. This is the story of Antone’s Records, a tragedy in three acts.

Act I: Watermelon Records

During the 1980s and 1990s, Antone’s Records and Watermelon Records were hometown competitors in the music business. Watermelon was founded by Heinz Geissler, a German immigrant. Its catalog focused on Americana music. Antone’s Records was founded by nightclub owner Clifford Antone and focused on blues music. At some point during the 1990s, Dallas investor and music lover James Heldt acquired a majority stake in Antone’s.

Watermelon Records was the first to fall. Watermelon Records filed for chapter 11 relief in 1998. At the time, many of its artists were unhappy with the label. After a contentious three year case involving competing plans and shifting alliances, Watermelon confirmed a plan in which its assets were sold to Texas Clef Entertainment Group, Inc. Texas Clef was an affiliate of Antone’s Records which was formed to make the acquisition.

Few of the artists filed claims in the Watermelon Records bankruptcy case. A group of artists was very active in the case and succeeded in having their records carved out of the sale. The plan of reorganization confusingly provided that artists who filed proofs of claim would be treated as parties to executory contracts and would receive a cure offer. Since most of the artists did not file claims, this provision applied to only a few parties. However, the artists did not receive cure offers. Instead, they received a pro rata share of the funds available to unsecured creditors.

Even though the plan was not followed, none of the parties seemed to take notice. Texas Clef re-released many of the Watermelon titles.

Act II: The Walser Suit

Antone’s, Texas Clef and sister label, Texas Music Group, drew the ire of many of their artists and publishers when they were slow to issue royalty statements and pay royalties.

In 2004, Texas yodeler Don Walser, known as the Pavarotti of the Plains, hired a lawyer and demanded that the label provide him with his royalty statements. After three tries, the label rendered an accurate statement and paid most of the royalties. However, this occurred after the expiration of a deadline to cure defaults. Nonetheless, Mr. Walser accepted the payments. Nothing more occurred until March 2005, when Mr. Walser filed a suit against the label timed to coincide with the South by Southwest Music Festival.

While many of the artists would dispute this, my belief is that the Antone’s labels were guilty not of malice, but failure to keep up with rapidly changing technology. During the 2000s, the sale of music began to shift from cassettes and compact discs to digital downloads. This new distribution channel multiplied the label’s reporting requirements exponentially. Compact discs are sold as a unit containing all the tracks. The record label generally used one domestic distributor and one or more foreign distributors. With digital downloads, consumers could purchase individual tracks or albums. In the early days of digital downloads, there were many competing digital download sites who often provided their reporting in inconsistent formats. It required many man hours to assemble all of this data into a statement. Having downsized its operation to save costs after Mr. Heldt was unwilling to continue subsidizing the labels’ losses, the labels were simply unable to keep up with reporting for over 100 releases. It was not until 2009, after chapter 11 had been filed, that in-house computer wiz Tristan Ader developed an automated database which synthesized the information received into a statement.

Meanwhile, the Walser lawsuit rocked along in Texas state court. The suit metastasized to include six defendants, including the three record labels, James Heldt, Heinz Geissler (now an Antone’s employee) and label president, Randolph Clendenen.

Act III: The Antone’s Bankruptcy

On November 18, 2008, on the eve of trial in the state court action, the three labels filed for chapter 11 relief. Ironically, it was during the bankruptcy case that the labels first began to generate timely statements and make timely royalty payments.

The Walser case was removed to bankruptcy court. The suit remained on hold for a lengthy period while the U.S. District Court considered a Motion to Withdraw Reference.

History repeated itself as competing plans were once again filed. The debtors filed a plan based on payments from cash flow and a new capital contribution from James Heldt. The Official Creditors’ Committee filed a plan proposing to sell the debtor’s assets to a new label for $125,000. At the last moment, the Creditors’ Committee sought to move up the auction from after confirmation to the confirmation hearing itself. An auction was held at the confirmation hearing with James Heldt making the high bid. However, the court rejected his bid and accepted the next highest bid, which came from New West Records. During the bidding process, the sale price doubled from the original offer.

In a mediated settlement, the Debtors, the Official Creditors’ Committee and James Heldt agreed to allow the New West sale to go forward at a slightly higher price with several other concessions. At this point, it became clear that Antone’s would not continue as an independent label. However, there was still the Walser suit to try. This trial was held in bankruptcy court over three days in May 2010. Although Mr. Walser’s estate had filed a proof of claim for $300,000, the estate’s attorney asked for damages of $1 million in closing argument.

On January 24, 2011, the Bankruptcy Court rendered its opinion denying substantially all of the relief requested by the Walser estate.

The Court’s opinion methodically analyzed and rejected the claimant’s theories. Among other findings:

· The Walser estate could not claim the masters embodying his recordings. When a record company pays for the recording of a musical performance, that recording belongs to the record company. The Court found that any claim for rescission of the recording agreement was pre-empted by the Copyright Act and that the Walsers had failed to meet the high standard for imposing a constructive trust under Texas law.

· The record company did not owe a fiduciary duty to the artist. Where Mr. Walser had representation from both an agent and an attorney, he did not rely on the record company to act on his behalf. There was not a relationship of trust and confidence under state law where he affirmatively distrusted the record company. In its ruling, the Court distinguished a case involving Apple Records and the Beatles.

· The record company did not commit fraud when it failed to provide royalty statements in a timely manner. As the Court stated, “No evidence exists that demonstrates actual fraud.”

· The Walsers could not recover damages for emotional distress or punitive damages on a breach of contract claim.

· The Walsers could not pierce the corporate veil to impose liability on the individuals associated with the record labels. Under Texas law, mere failure to observe corporate formalities was not a ground for piercing the corporate veil. On a contract claim, it was necessary to show actual fraud rather than merely constructive fraud to pierce the corporate veil. Where James Heldt had loaned millions of dollars to the company and had never taken a salary, there were no grounds for piercing the corporate veil.

The Court’s opinion is a valuable resource for cases involving constructive trusts, rescission, breach of fiduciary duty and piercing the corporate veil. Many of these issues involve routine Texas state law questions. However, there are so many questions addressed in this opinion that there is something for many people.

In the end, the Walser estate was awarded an unsecured claim for $28,161.41, an amount conceded by the Debtors and which had been tendered prior to bankruptcy, together with pre-judgment interest of $1,025.15, which was the amount the Debtors conceded was owed. The Court also allowed the Walser estate to apply for an award of attorney’s fees, but cautioned that it must segregate out the time spent on relief which was not granted.

This is a case brimming with ironies. The suit which pushed the debtors into bankruptcy was ultimately rebuffed. However, because the artist and publisher creditors did not support the plan proposed by the Debtors, the assets of the Debtors were sold to a new label. Hopefully for the artists, the third time will be the charm.

BMI Live

2011-01-28T10:31:00.000-08:00

BMI announced earlier this month that it has created a a new program for performing songwriters, “BMI LIVE,” which allows their writers to register their set list online and be paid the performance royalties for the concert performance, no matter the size of the venue.

The first payment is scheduled for BMI’s June distribution and will cover those performances from July 1, 2010 through December 31, 2010 which are entered before March 30, 2011.

I know that SESAC has had a similar program for some time and I presume ASCAP has something similar in existence or in the works. As revenue streams continue to shift for artists, this is a welcome development and if you are a BMI writer/performer, I urge you not to ignore it.

The XM Satellite Radio Litigation

2011-01-27T12:13:00.000-08:00

I have had a number of songwriters and artists ask me about the proposed settlement in the XM Satellite Radio Copyright Litigation Class Action pending in the United States District Court for the South District of New York.

The lawsuit essentially claimed that by virtue of its involvement with so-called “XM Recording Devices,” XM Radio facilitated copyright infringement. The case was certified as a class action and was recently settled by XM agreeing to pay out approximately $5 million to various owners of sound recordings and musical compositions broadcast on XM between March 30, 2006 and December 6, 2010. Settlement notices and proofs of claim were sent to potential claimants last week. In the packet I reviewed, the attorneys had identified the sound recordings belonging to my client, although other people have told me that the proof of claim forms they received were left blank.

If you think you might have a stake in this agreement and have not received settlement documents, you should contact the settlement administrator at 877-398-1139 or through their website www.notavxm.com.

Clearly there is some amount of money out there and it would be foolish to leave it on the table.

Who Owns Your Status Updates?

2011-01-21T11:24:00.001-08:00

Years ago (it was 1994 to be exact), I purchased a book at the Harvard Coop Bookstore, Who Owns Information? by Anne Wells Branscomb. I was determined to digest the contents of the book and become an expert in the then-emerging field of internet privacy. Sadly, I never made it through the book but it still looks impressive sitting on my office bookshelf.

I was reminded of this the other day when a potential client asked me who owns the information she posts on Facebook. I have to admit that is a question I had not given much thought to, but like everyone else, I had heard all sorts of rumors about Facebook and privacy issues. So I did what they taught us in law school. I looked it up. It seems the answer is clearly posted on Facebook’s site:

You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings. In addition:

1. For content that is covered by intellectual property rights, like photos and videos ("IP content"), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook ("IP License"). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

There is a lot more interesting information in this section under the “Statement of Rights and Responsibilities,” and it is well worth reading. Thus we can be assured that Mark Zuckerberg does not own your vacation photos, “likes” and i-Pod lists. At least for now.

The Man Who Needed a Will

2011-01-17T12:10:00.000-08:00

I have spent quite a bit of time over the last few years preaching to people about the need to have a Will. I can think of no better cautionary tale than that of Steig Larsson, the best-selling author of the Millenium Trilogy books.

Larsson died in 2004, before the books were published and became an international phenomenon. Larsson also died without a Will, leaving his companion of thirty years, Eva Gabrielsson, nothing. By Swedish law, his Estate went to his next of kin, his brother and father, from whom he was reportedly estranged.

I am pretty sure Larsson did not plan to die at 50. It is also unfair to speculate as to what his intent would have been for his Estate (which of course had not been fully realized at the time of his death). However, just like the sad case of Steve McNair, this just seems plain irresponsible, especially for a man whose real life career was reportedly as dangerous as that of his journalist protagonist ( and who, reportedly smoked three packs of cigarettes a day). I really hate hearing stories like this.

Let Us Now Praise Webb Wilder

2011-01-09T13:21:00.000-08:00

I am happy to share the news that my great friend and long time client Webb Wilder is going to be inducted into the Mississippi Musicians Hall of Fame next Tuesday January 18th. This honor puts Webb in the company of such notables as Jerry Lee Lewis, Elvis Presley, Mose Allison, Tammy Wynette, Bo Diddley and of course, his aunt Lillian McMurry.

I've wanted to post something about Webb for sometime just because, in all honesty, he is a beacon of rock and roll. The music that he and his cohorts make, defies categorization (other than perhaps the term "swampadelic") and never fails to inspire me or lift my spirits. Webb also serves as a great example of how to age gracefully in this business while still delivering the goods. After 20+ years of albums and movies it is gratifying to see the last of the full grown men get the recognition that he deserves from his home state.

Kickstarter: The New Patronage Model

2011-01-07T14:46:00.001-08:00

A few weeks ago the manager of my office building asked if I could please leave work early one evening because a production company would be filming on my floor. I was happy to have an excuse to leave early, so I readily obliged.

The next day I was pleasantly surprised to see Steve Taylor filming with a crew on my floor. I don’t know Steve all that well, but I know of him as a sort of renaissance guy: musician (he was an amazing front-man in the band Chagall Guevera), writer, record company exec, producer, video director, and now apparently filmmaker.

I later learned that the film Steve was making is an adaptation of Donald Miller’s book Blue Like Jazz. I just read an article in the Nashville Scene about the financing of the film.
”

And here is where it gets interesting. Apparently the original funding for the film fell through and the producers turned to the online service Kickstarter to raise money for the production. According to the article, they raised $345,992 in one month making it “the largest crowd funded creative project in American history,” according to the Scene.

I have heard of other amazing stories about Kickstarter. Coincidentally, I have a client who raised $14,000 to record an album in one month through approximately 155 donors (that averages around $121 each). Kickstarter keeps 10% of the money raised (5% for itself and 5% for Amazon for handling the transaction).

I have always been wary of most patronage type arrangements but this seems to be emerging as a significant new model. Any artist with a devoted fan base can look to their fans for actual support. This is a very direct way for an artist to connect with their audience and is yet another way that technology is supporting the independent artist.

Merry Christmas

2010-12-23T09:26:00.001-08:00

Merry Christmas and Happy New Year

Treatment Bound: Ukulele Rock

2010-12-17T14:33:00.000-08:00

I have had the good fortune of knowing and working with Tom Littlefield for over two decades. I have known Jonathan Bright for slightly less time. Both gentlemen are major talents as songwriters, singers and musicians. Littlefield’s late ‘80’s band The Questionaires, would have made it had it not been for record company idiocy.

When I heard that these guys were making a ukulele tribute to The Replacements, I knew it would be good. Musicians like George Harrison, Pete Townsend and Paul McCartney have shown us that ukuleles have more applications than just kitschy Hawaiian music. However, I did not know that the record “Treatment Bound” would be THIS good. The record works musically because of the great singing and instrumentation. It also succeeds on a higher level because Bright and Littlefield successfully deconstruct all these songs by The Replacements that you’ve known for years but never really analyzed. At his core. Paul Westerberg has a gift for unique melody and brilliant feel for lyrics. It was hard to discern some of the lyrics on the original records, and The Replacements’ reputation was more for their shambolic live performances than great musicianship, but so many of their songs have stuck in my brain for so long and Tom and Jonathan demonstrate why – because they are great songs.

Go to CD Baby to get this record now. ” Or, if you live in Nashville, go by Grimey’s.

You will smile right away and thank me later.

Rock and Roll High School

2010-12-08T10:48:00.001-08:00

As a parent of a child about to enter high school, I am acutely aware of Nashville’s educational options. Without trying to start a debate, it seems to me that unless a child is (a) extremely bright; and (b) extremely lucky, their quality public school options are limited. Having said that, I have been generally impressed with the school board’s establishment of magnet high schools that are geared towards certain academic skills and interests. For example, the Nashville School of the Arts nurtures young performers and other artistically inclined students. There are also schools that specialize in science and math.

I was dumbfounded to learn of a recent proposal to turn Pearl Cohn High School into a school with an emphasis on “music business.” If I understand correctly, part of the school’s curriculum would be to educate young scholars to enter into the music business. There are already music business curriculums at three local universities: Belmont, MTSU and Trevecca, last time I checked. Also, last time I checked, there really weren’t any jobs in the music business.

There is certainly merit in offering these courses on the college level. Indeed, I have taught music business law and copyright law on the college level for fifteen years. However, I believe the idea of offering this type of instruction to high school students is meaningless. High school kids who are interested in music should either be playing music or obsessed with listening to music, or both. I remember my friend and former law partner, now uber-manager Ken Levitan telling me that when he was a kid he had a subscription to both Billboard and Sports Illustrated. I think an interest in the music business should grow out of curiosity (or obsession) and it should not be a high school’s mission to try to teach it. Respectfully, I think high school is the time to teach kids critical thinking about the world around them, as well as practical things such as how to dissect stuff and how to balance a bank account. Preparing them for four years of college that would prepare them for a job that may not be there when they graduate just seems irresponsible.

So, what is it that You actually do?

2010-12-07T07:38:00.000-08:00

I recently heard a story on NPR about primary care physicians and how their patients and the public are unaware of how much work they do behind the scenes (reading test results, returning phone calls, calling in prescriptions and dealing with the health care bureaucracy). It made me think of the fact that most people are unaware of what lawyers do behind the scenes. I remember the idyllic view of what a law practice must be like I had while I was in law school. I thought lawyers sat around on the phone all day long, being smart and getting paid.

Basically, for starters, what we do is read. We read contracts, motions, cases, statutes and e-mails. There is also a lot of proofreading and editing the endless trail of paper we seem to generate. A lot of work goes into worrying and trying to get the best results for our clients. There’s also a lot of waiting involved. Waiting to hear from clients. Waiting to hear from opposing counsel. And judges. And clerks. And, of course, waiting to get paid. When you can organize your time well and the stars align, this sometimes works rather seamlessly. When it does not work, though, the whole system can collapse in failure.

None of this is meant to sound like a complaint. Hearing that story about primary health care physicians made me appreciate my own doctor more (especially when he gives me his cell number). It also makes me realize that as lawyers, we can try to do a better job of explaining to clients what we actually do for them, and how the process actually unfolds.

Legal Fees

2010-12-03T16:25:00.000-08:00

I have written before about legal fees, and last month I read an article Rob Johnson wrote for the November 15th issue of the Wall Street Journal:

Legal Advice…On A Budget

He reports that many law firms now offer legal advice to start-up businesses at either a discounted or flat fee. This is not a news flash. Here is a little secret: most attorneys I know are happy to offer services to start-up businesses for a flat fee or a reduced rate. It only makes sense to help bring certainty for the new small business. I offer this for routine services, such as drafting wills, forming a corporation or limited liability company or applying for a trademark. I, like most attorneys, strive to develop long-term relationships with clients. In fact, the only areas of legal practice that are incapable of being handled with set fees are litigation and sometimes contract negotiation, and these areas can be handled with a negotiated cap on fees. I have also read some intriguing articles about charging fees in litigation on a “per item” basis. Whether you are working with me or another attorney, always feel free to inquire about flat fees or at least good faith estimates of what your legal services may cost.

Protection Against Copyright Trolls

2010-11-23T15:11:00.000-08:00

This comes from the Learn Something New Every Day Department. I was surfing the internet reading other attorney’s blogs and came across an article by David Kravets on wired.com:

The $105 fix that Could Protect You from Copyright Troll Lawsuits

I have known about patent trolls for years; they are people who exploit small similarities in inventions, or technical violations of the patent law for profit through litigation. Tbey serve no useful purpose to society. I never heard anything about copyright trolls. Apparently, there is a new cottage industry in acquiring copyrighted material, registering it, then suing websites that have reposted it. I am not talking about sites that promote or engage in copyright infringement, but rather sites that include user comments and interactions (such as blogs).

All of these sites are protected by the Digital Millennium Copyright Act, which, through its “takedown agent” provision, allows a safe harbor for those who repost user generated content (such as Facebook, YouTube, etc.). What I did not realize until I read this article, is that in order to qualify for this safe harbor protection, the site has to register its takedown agent with the Copyright Office. The fee for the service is $105.

As the article points out, the traditional defenses in copyright infringement, such as fair use, remain viable, but the appointment of the takedown agent is a virtual bar to a suit proceeding in the first place.

So, if you are running any kind of blog or website that accepts third party content, or if you intend to quote liberally from third parties on your blog, I suggest you investigate the registration provisions of the DMCA. It could be the best $105 you ever spent.

Let Us Now Praise "Mountain Jack"

2010-11-17T14:08:00.001-08:00

I also wanted to throw in a plug for my friends and clients Brad Jones and Hans Rotenberry, both well known in their own fields. They have released their first 'duo' record together. "Mountain Jack" is available on cd and via download through our friends at New Boss Sounds.

Let Us Now Praise John Lomax, III

2010-11-17T10:37:00.000-08:00

I wanted to extend congratulations to my friend and client John Lomax III, the newest recipient of the Country Music Association’s Jo Walker-Meador International Award. I have always thought that John was a Renaissance man of sorts, having worked as a journalist and author, manager (Steve Earle, Townes Van Zandt, Kasey Chambers, and The Cactus Brothers), A+R man and music publisher. However, John received this award because of his work with his company Roots Music Exporters, which sells all types of music overseas.

Essentially John found an old school niche in the increasingly digital age- sending American music to Europe, Australia and Japan, to buyers who want to own the real thing, not an MP3. He’s found a way to export music that the labels have failed to distribute overseas, for whatever reason. I love John’s entrepreneurial spirit and as the grown up version of the kid who used to buy mail order records from all over the world, I admire that John is keeping this tradition alive. Also, his sales charts and want lists are always illuminating in showing international tastes (hint, they don’t always align with the Billboard chart).

I love to see small businesses succeed and get recognized, especially when they are this cool. Congratulations, John.

Who Is Harry Fox and Why Do I Have to Pay Him?

2010-11-03T08:00:00.000-07:00

Every now and then I get asked the question “Who is Harry Fox and why do I have to pay him if I want to put out an album?”

That’s a good question. The Harry Fox Agency is a wholly owned subsidiary of the National Music Publisher’s Association, responsible for issuing mechanical licenses and collecting mechanical royalties for over 10,000 music publishers in the United States. Many publishers appreciate using the organization because they also regularly audit major labels on behalf of their members. In other words, if you want a mechanical license, which you must have in order to record someone else’s song, you generally have to go through the Harry Fox Agency.

While applying for a mechanical license and complying with the quarterly accountings used to be a cumbersome process, a few years ago Harry Fox created an internet-based service called “Song File,” which allows a potential licensee to “purchase” a license for a certain number of discs and/or downloads online in a one-stop process.

All of this is interesting but it still does not answer the question “Who is (or was) Harry Fox?” I have not been able to ascertain much information on him except that he was an employee of the National Music Publishers Association, who, in 1938, was charged with the responsibility of issuing licenses and collecting mechanical royalties. Apparently Mr. Fox passed away in 1969 and the agency was re-named in his honor. (Poe, A Songwriter’s Guide to Music Publishing, Revised Edition, 1997). However, he is not to be confused with the vaudeville entertainer of the same name who is credited with inventing the Fox Trot.

Unreleased Albums and Re-recording Restrictions

2010-11-01T13:00:00.000-07:00

I do not know much about John Esposito, except that he is the current head of Warner Bros. Nashville. I also do not know much about Shawn Camp. I negotiated a contract with him once, but I don’t think I ever spoke with him. I know that he is a talented musician and successful songwriter. I also remember he had a short-lived deal with Warner Bros. back in the early nineties.

This is where it gets interesting. Apparently, Esposito recently heard Camp perform at a music industry function, was impressed by him and learned after the fact that 16 years ago, Camp recorded an album for Warners which was never released. In a move which I think is almost unprecedented, Esposito had the album (now titled “1994”) released.

I think it would amaze people not involved in the record business to learn how many albums go unreleased. I am not sure if Warners is any worse than any other major label, but I do have several friends and clients who recorded for Warners over the past two decades and their records have yet to see the light of day. This was due to a variety of reasons of factors, some of which make sense, some didn’t. (As Tom Petty sang “their A&R Man said ‘I don’t hear a single,’ the future was wide open.”) These situations are usually heart-breaking for the artists because not only is their record shelved and their relationship with their label severed, they typically don’t get a right to to acquire their unreleased masters, AND to add insult to injury, they are often prohibited from re-recording the unreleased songs due to the “re-recording restrictions” in their contracts.

I have never understood the equity of enforcing a re-record restriction in this type of situation. In many cases, if it’s a new artist, these most likely are his or her best songs, created over a long period of time. How does a re-recording restriction benefit the label in this situation? Conversely, how would the label be hurt if the artist re-recorded a song which was ultimately rejected by the label?

That is why it’s so refreshing to here about Warners’ move. I have also had recent dealings with labels who were willing to make long out-of-print albums available online. Making these recordings available digitally benefits both the labels and the artists and is a creative inexpensive way to battle internet piracy. Here’s hoping Mr. Esposito finds some more treasures in his vault.

Thoughts on Soundgarden's Platinum album

2010-10-26T15:50:00.000-07:00

About a year ago, I posted something here reacting in mock horror when the band Pearl Jam decided to release their new album on multiple formats, including the video game Rock Band. Now comes the news, reported in the Wall Street Journal, that Soundgarden have earned a platinum album for sales of their comeback retrospective LP Telephantasm, by bundling it with the newest release of the videogame Guitar Hero “Warriors In Rock.” According to the article, this album, which is Soundgarden’s first release in 13 years, was also the first album to go Platinum INSTANTLY, because none of the discs could be returned.

This appears to be a four-way win: for the band, Activision (manufacturer of Guitar Hero), Universal, and the RIAA. Is it a bold new marketing strategy, or is it a last ditch cash grab by a once revered, once relevant band who have not put out a record in 13 years? Does it destroy the legitimacy of gold and platinum status? Does any of this matter? I honestly do not know and am completely on the fence about all this. But I bet it would be fun to put the deal together.

Copyright Fatigue

2010-10-11T10:44:00.000-07:00

I wish that I could say that I read last Sunday’s article in the Tennessean about Mitch Bainwol’s speech at the recent Nashville Digital Music Summit, with interest; but that would be a bit of a lie. Bainwol, the current chairman of the RIAA, was detailing the organization’s newest strategies against online music piracy, all of which seem like more and more sophisticated ‘whack a mole’ games. The same article spoke of the industry’s ever oppressive 360 deals, which seem to alienate artists in the same way that the heavy handed attitude towards piracy has alienated fans.

I don’t want to be misunderstood. I am a complete believer in intellectual property rights and as a copyright lawyer, I will diligently enforce my client’s rights against infringement. However, I am becoming more and more convinced that the way to combat piracy in the digital world is through education and making an attractive, accessible product that people actually want to buy and own. We are in the midst of a great cultural shift and nowhere is it more apparent than in consumer’s relationship to music. All of us geezers lament the demise of the traditional retail record store. Not only did these businesses keep us current on new releases and new artists but they also had a social component to them. As so many people have commented, this social component has now moved almost exclusively online. This is not just affecting the retail component.

In his influential email post, Bob Lefsetz recently reported the following facts:

Time spent listening to radio by 12-24 year olds has dropped from 2 hours and 43 minutes in 2000 to 1 hour and 24 minutes today.

Time spent surfing the Web has jumped from 59 minutes a day to 2 hours and 52 minutes.

Another blogger whom I read religiously, James Marshall (whose site is called “The Hound Blog”) recently wrote that though we miss record stores and newsstands, there is some compensation in the fact that we can dial up almost any obscure music and film footage on You Tube. This also should convince people that the consumers have migrated online and that they are going to access music online. The history of technology has shown us that if the music industry keeps trying to erect barricades online, the young technocrats will simply find ways to remove them, legally or illegally.

I think the answer is coming, somewhere in the near future. The outline is emerging. In the short term the battles will continue to be fought but I believe that the only way to really stop piracy is to educate the audience-show them how songwriters and artists actually struggle to make a living, teach them that this is a penny business and that their pennies make a difference. That’s got to be better than the current Big Brother approach.

Random Thoughts about Estate Planning

2010-10-04T13:15:00.000-07:00

I read a great quote about estate planning on Matt Homann’s site The (Non)Billable Hour. He quoted Sue DeRoss who stated:

“Everyone gets organized at some point. They just might not be around for it.”

I think a lot about estate planning and especially how to convince people with property and children of the need to have a will. You cannot imagine how difficult it is to get people to focus on this important area. (As an aside, you also would not believe the number of people who start wills and never finish them. I have one file in my office which is over twenty years old.)

The other problem we, as lawyers, are now facing is people who decide to use online “will kit” providers and convincing then that these are not always the best choice.

Now we have a small amount of vindication from The New York Times. Times financial writer Ron Lieber did a survey of the three leading online will providers: Legal Zoom, Legal Writer, and Buildawill. He entered his information in each program, printed all three resulting documents and then took the documents to leading estate planners in New York for a thorough (although admittedly biased) review. Lieber discovered that while each of the documents was generally well-prepared, none of the online services could address the important kinds of questions people really want to ask their attorneys when they are doing estate planning: most often about kids and divorces. Nor could the kits offer any alternatives. Most of all, he found that the online kits do not do a good job of explaining the formalities which need to be observed with the proper execution of a will. The other thing that was remarkable to me was the cost of the online service was not that much less than hiring a lawyer to do the work and to create an individualized document. Most attorneys I know do these services on a flat fee basis, so for a simple will you might be talking about the difference of around $100.

This is not a general diatribe against the online forms business. I just believe that in two (2) important areas especially, wills and divorces (more on that later), it is very important to consult with an attorney to answer questions and prepare the documents.

Thank You, Thank You Very Much

2010-10-01T15:35:00.000-07:00

I spent the afternoon in a fairly useless pursuit of some arcane information about a Tennessee statute. However, as is often the case when doing research on the Internet, I stumbled upon a fascinating website:

www.preslaw.net.

This website consists of a collection of all the decided cases involving the King. This stuff makes for fascinating reading. When I was in law school, I did a long research project on the right of publicity, which essentially did not exist in Tennessee until Elvis died in 1977. Now, reading this website, I realize that Elvis' litigious afterlife has the makings of a law school class, if not an entire curriculum.

God Save WRVU

2010-09-27T14:05:00.000-07:00

Typically in this, my little window to the world, I have been writing about legal and economic issues concerning the music and intellectual property industry. Today I want to narrow my focus on a radio station: Vanderbilt’s WRVU.

VSC (Vanderbilt Student Communications, Inc.), the governing body of Vanderbilt University’s student media, recently announced that it is considering moving the venerable radio station to an internet address and selling its broadcast band. The presumptive rationale is that data shows that a large number of college students only listen to radio on the internet.

I am not sure if the student population is relevant here. When I was an undergraduate at Vanderbilt, we routinely ignored the programming on WRVU, although the station did produce local luminary Fred Buc of Lightning 100 fame during that time. It was only after I graduated from Vanderbilt that I discovered the great service that the station offered the Nashville community. Over the past quarter of a century, I have enjoyed the station’s programming, from blues to bluegrass (“George the Bluegrass show”), from jazz to funk (thanks, Doyle), from honky-tonk (thanks, Heather) to politics (thanks Mary and Freddie), from Ken Berryhill (the world’s oldest country DJ) to 91 Jumps, the Friday morning R&B show (a staple of my listening diet).

I cannot begin to tell you how much new music I have been exposed to on 91 Rock. I first heard some of my oldest friends and clients on WRVU. Nashville first rock scene in the 1980’s would not have happened without WRVU. I was reminded the other day that a bunch of us young (at the time) local music biz types were instrumental in helping WRVU with benefit albums and concerts back in the day. I still discover great new and old music, local and otherwise, on the station.

The idea of listening to radio on the internet reminds me of ham radio enthusiasts using their hobby to dial in strange and wondrous lands. The data be damned. This data ignores most of us adults who, for better or worse, do most of our serious listening in the car while commuting and running errands throughout our day. To ignore such an important facet of the Nashville community seems to be an abdication of the station’s not-for-profit charter, and foolish for a university that already has a difficult time relating to the city at large. We always took WRVU for granted, but it may have been the university’s best ambassador to the Nashville community at large.

For what it’s worth, we should all take a minute to urge Vanderbilt Student Communications, Inc. to reconsider this intemperate move. The University is still soliciting public commentary at the bottom of the page of this link:

http://www.vandymedia.org/wrvu/

Copyright Office Gives Some Guidance to Documentary Film Makers and Professors

2010-09-21T07:59:00.000-07:00

The Copyright Office has finally issued regulations on what activities can be properly classified as Fair Use when it comes to using audio visual work. Specifically, the Copyright Office states as follows:

(1) Motion pictures on DVDs that are lawfully made and acquired and that are protected by the Content Scrambling System when circumvention is accomplished solely in order to accomplish the incorporation of short portions of motion pictures into new works for the purpose of criticism or comment, and where the person engaging in circumvention believes and has reasonable grounds for believing that circumvention is necessary to fulfill the purpose of the use in the following instances:

(i) Educational uses by college and university professors and by college and university film and media studies students;
(ii) Documentary filmmaking;
(iii) Noncommercial videos.

Basically, what this means is that college professors (but not high school teachers?), documentary filmmakers, and makers of non-commercial videos can use certain software programs (such as Mac The Ripper and Handbrake) to copy portions of copyrighted motion pictures and other works in the same way that copies of works in other formats (VHS, for example) may be used for scholarship and criticism. This basically expands the existing law to include new areas of technology. What is more interesting about the new regulations is that they include documentary filmmaking and non-commercial videos. For years, I have been uneasy advising documentary filmmakers as to their rights due to the uncertainty in this area of law. Also, the other exception, “non-commercial video” would presumably cover “mash-ups” and other works that young filmmakers create. This seems like another example of the law playing catch-up with technology, and it is a most welcome advance.

Book Publishing in the Digital Age

2010-09-11T08:15:00.000-07:00

As someone who advises authors from time to time and grew up in the retail book business, I was happy to have the opportunity to attend a panel called The New Age of Book Publishing: A Digital Revolution” at the Americana Music Association convention yesterday. The panelists, including attorney Randy Smith and my friend renaissance man Tommy Womack, were uniformly informed and excellent. I confirmed my hunch that the book publishing world is like the music world was about six or seven years ago and if anything the atmosphere is even more like the wild, wild west than the music business.

We know that brick and mortar stores are probably going away; we know that sales of traditional media (i.e. BOOKS) are diminishing while sales of electronic media and their delivery devices are increasing. I learned that there is a huge debate over the aesthetic and quality elements of books on demand and that, not surprisingly, most authors still want to be published in nice hard bound books.

The most interesting question for the future is whether a writer wants to go the self published route, which is as open today as the DIY route in the music business, or whether they want to go the traditional route of finding an agent, who can hopefully place the book with a reputable publishing house. I suspect that this is still the goal of most authors even in the face of evidence that it may not matter economically in terms of overall sales potential. It still comes down to what type of book you are writing, what your potential market is for that book and what your platform is for accessing that market.
Strange days indeed.

The Myth of The Poor Man's Copyright

2010-09-09T14:23:00.000-07:00

For the past 15 years, I have taught copyright law at a local college. Every year, without fail, I wind up in an argument with a student over the legitimacy of a so-called “Poor Man’s Copyright.” Folks, the Poor Man’s Copyright does not exist.

However, the myth is so pervasive that many of my students have told me that they were been advised by other professors of the important merits of this method.

Basically, the strategy is this: you take whatever work you have created that you want to protect (song, novel, epic poem, etc.) and mail it to yourself (sometimes the myth suggests certified or registered mail but I am not sure of the distinction for this purpose). The belief is that this somehow proves you created the work. In actuality, this proves that you mailed yourself a package.

The problem lies in a fundamental misunderstanding of copyright law. Our law provides that one’s copyright exists in an expressive work as soon as it is “fixed in a medium of tangible expression” (i.e., this is what creates the actual “copyright.”) The second step is registration of the copyright. Registration is not required to sustain a copyright. It is advisable, though, for purposes of proof AND it is a prerequisite to any sort of copyright infringement litigation. For those purposes, there are no short-cuts or alternatives to copyright registration; one must follow the procedures laid out in the Copyright Act.

I am not sure what the historical background of the Poor Man’s Copyright is. A quick Google search reveals that it is a system recommended to this day in several European countries where there is no central copyright registration authority. It also may date back to the days before the Copyright Act of 1976, when there were legal concepts like “common law copyrights” and other anomalies.

I suppose there is nothing wrong with mailing yourself a package, but please do not rely on that action as any sort of substitute for proper registration.

Americana Music Association Conference

2010-09-08T09:07:00.000-07:00

To my friends in the Nashville area, or anyone who might be attending the Americana Music Association Conference this week, I am on a panel tomorrow (Thursday September 9) at 9:00 a.m. with my friends Webb Wilder, David Wykoff and John Allen. The topic is "Protecting Your Intellectual Property in the World of Indie Labels and Publishers." Speaking for all of us, I know we have some terrifying stories. Come by if you can. There are a number of interesting panels starting today and, of course, lots of great music between now and Saturday.

Straight Outta Cashville: the Young Buck Saga

2010-09-03T13:08:00.000-07:00

As my teenage daughter will be the first to tell you, I do not know enough about the rap genre. My appreciation crested at NWA and Grandmaster Flash. However, I have always been intrigued by the business side or rap and hip-hop, with its Byzantine system of allegiances, turf wars, conspiracy theories, and (on a more mundane level) some unusually structured record deals.

I have been following the recent stories about Nashville’s best-known rapper, Young Buck (David Darnell Brown). His story is well-known; he dropped out of high school to sign with Cash Money Records and ultimately signed with mega-rapper 50 Cent’s G-Unit Records. Young Buck was featured on 50-Cent’s very successful debut album Get Rich or Die Tryin’ and had his own releases, Straight Outta Cashville in 2004 and Buck The World in 2007. However, at some point he apparently had some sort of falling out with 50 Cent, which led to a hiatus in his recording career. All of this is detailed in a recent article in the Nashville Scene. Shortly after the article was published, Brown’s home was raided by IRS agents seizing assets because of his failure to pay taxes. All this lead to his filing bankruptcy in August. The bankruptcy itself is instructive. Mr. Brown, at 29 years old, owes over $212,000 in back taxes, two mortgages totaling around $685,000, and miscellaneous other debts. I really don’t know how successful Young Buck was in his big earning years, but this is some serious debt. He listed assets of $5,095,293. However, upon examination, $5,000,000 of this figure was apparently the expected recovery from a lawsuit he has recently filed against his former business associates, including 50 Cent. I do not know all of the intricacies of bankruptcy law, but I know this will not count as a tangible asset until he receives a judgment against the defendants. I do know that bankruptcy law allows a debtor to reject executory contracts and Mr. Brown will presumably use this to get out of his uncomfortable alliance with G-Unit. What also came to my attention was Brown’s intention to pay his creditors $12,500 per month from his “employer” Cashville Records. I could not find much information about Cashville Records, but from press reports, it sounds like it is Brown’s own label. I don’t know how his distribution works or what kind of money his label Cashville is netting on a monthly basis, but I do hope he is indeed able to pay his creditors $12,500 per month and have a successful Chapter 13 bankruptcy. A lot of Chapter 13 bankruptcies fail and are converted the Chapter 7 bankruptcies. The real moral to this story can be found in Mr. Brown’s recent statement to MTV News:

“I have a new team in place, but I am also paying full attention now," he added. "Nothing like this will ever happen again. This is a huge wake-up call for all entertainers to stay on top of your own trusted employees and team members, and replace anyone that was put in place by your record label if the situation you have goes sour. This IRS situation came about because I trusted accountants, lawyers and managers to handle my business for me while I focused on making music. From now on, I am going to stay on top of my own business.”

This is a true and important message for artists, no matter what genre or where they are on the income strata: pay attention.

..In which I Try to Stop Complaining and Appreciate What I Have

2010-08-27T15:01:00.000-07:00

Every now and then (more often than I care to admit), when I find myself in a whining mode, annoyed at a case, opposing counsel, slow or non-paying clients, creditors, I try to remember the story I read earlier this summer (July 17 in the Tennessean) about Kristen D’Antonio, a young 20 year old woman who is gradually losing her hearing. Her mission is to hear all the music she loves, from The Who to Anoushka Shankar, before she goes deaf, so that she can remember it.

I remember that we used to play a stupid pseudo-philosophical game: would you rather go deaf or blind? This woman answers that question with "I'd rather lose my eyesight than my hearing. When you hear things, it creates images in your mind — you can still 'see.' "

What especially struck me about Kristen’s story is her good cheer and positive attitude in the face of all this, and a number of other health issues. I want to remember her story and listen to music, and perhaps everything else, a little more carefully.

Dazed and Confused, 41 Years Later

2010-08-26T15:39:00.001-07:00

This is one of the great mysteries of all time to music nerds and copyright lawyers (I am guilty of being both) – why did Jake Holmes wait so long (41 years!) to sue Jimmy Page for copyright infringement? Specifically, on June 28 of this year, Holmes sued James Patrick Page, Super Hype Publishing, Inc., Atlantic Records, and others for copyright infringement claiming that Led Zeppelin’s song “Dazed and Confused” infringed upon Holmes’ song of the same title. Of course it did. It is the same song. Jake Holmes’ song is on i-Tunes if you want to hear the evidence.

By now, most music fans have heard the story of how Jake Holmes’ band opened for the Yardbirds (Page’s former band) at a 1967 New York show. Impressed by the artist’s performance, Jimmy Page and Jim McCarty purchased a copy of Jake Holmes’ record The Above Ground Sound of Jake Holmes the next day. They soon worked the song “Dazed and Confused” into their act. Page debuted his famous violin bowed guitar during the middle of the song. In fact, The Yardbirds recorded a live version of the song as “I’m Confused.”

Why did Holmes wait this long to take action? Willie Dixon was on the case early, suing for “Whole Lotta Love” infringing “You Need Love.” See this link” for a list of Jimmy Page’s “influences.” By waiting 41 years to file suit, Holmes is barred by the statute of limitations from collecting damages for the first 38 years of the song’s existence. I am sure that one of Page’s defenses will be laches – the allegation that the plaintiff “slept on” his rights.

Perhaps an answer could be found in a quote I came across in an old issue of Shindig! Magazine. Holmes is quoted as saying that he became aware of the song:

“as soon as it came out, and stupidly, I never followed up on it. In the early 1980’s, I did write them a letter, and I said basically: I understand it’s a collaborative effort, but I think you should give me some credit at least and some remuneration, but they never contacted me.” ( I wonder if Page’s attorneys will sieze upon the phrase “ collaborative effort”. I would).

If this case does not settle, it will be interesting to see how it plays out.

A Passage to India

2010-08-21T18:13:00.000-07:00

I remain troubled and intrigued by a New York Times article by Heather Timmons published August 4th: “Outsourcing to India Draws Western Lawyers”. The article discusses the inevitable outsourcing of legal work from the United States and other Western countries to India. Essentially, Indian companies, under the direction of Western lawyers, can perform many legal services at a cost as low as 10% of what American firms would charge.

Of course, all of this was predicted by Thomas Friedman in The World Is Flat”, but it is still disturbing, given the well-publicized inability many newly minted lawyers have had in finding gainful employment.

What was even more interesting than the article were the many varied responses in the comments section, mostly from people wringing their hands. One person wrote that going to law school was “foolish” and that employment afterwards was “a lie perpetrated by law school deans.” Another wrote that outsourcing was the “extermination of the middle class.” However, my favorite response was from “SGB” in Vancouver, as follows:

Message to lawyers, handwringers, and students considering their future prospects: the market for more affordable legal services is VAST.

Here's a great question for lawyers: "Could you afford yourself?"

Most lawyers--who are among the most highly paid employees in the world--will admit they cannot. Which means that legal services are too expensive by a substantial margin for all but the top 4 or 5% income earners in the US. The only way for others to access legal services is to give up a big part of their net worth or arrange contingency fees. Which means that probably 90% of individuals and small businesses will walk away from their legal problems rather than engage a lawyer to help solve them.

The comment goes on to say that outsourcing will bring down the total cost of legal services, making them more affordable and will present a unique opportunity to both consumers and attorneys. I wrote about this a few weeks ago in the context of pro bono work (i.e. the cost of legal services vs the demand for legal services and the need for legal services)”. This is a very daunting time to be a practicing lawyer, but as some people seem to recognize, it may be a time of great opportunity. It is a very interesting question. Also, if I were younger and keen for adventure, I might be on the next plane to India. I like the food and Ravi Shankar.

Elie Wiesel, the First Amendment and the Sad Truth

2010-08-16T12:29:00.000-07:00

The Wall Street Journal ran an interesting story last week by its drama critic Terry Treachout about a theater company in Washington which backed out of producing a play called "Imagining Madoff" because it had received threats of litigation from famed author and Holocaust survivor Elie Weisel.

Apparently, Weisel and his foundation were victims of Madoff's fraud and the playwright, Deb Margolin became interested in trying to imagine conversations between the two. Weisel took offense at his fictional portrayal. According to the article, he found it "defamatory" and "obscene" and in words which could have only been written by a playwright or a lawyer threatened to sue, if the play was performed "any time in any venue".

The article goes on to examine the First Amendment and the current state of libel law but then hits upon the sad stark reality that in this country, all one has to do is threaten to sue someone else to curtail their right to free expression. Mr. Weisel is a public figure and the playwright and theater company were most likely in their rights in producing the work, embarrassing as it might have been to Mr. Weisel. However, as Treachout writes, "when a world famous plaintiff decides to stare down a not so rich defendant who can't afford to fight back, the defendant usually blinks." I don't do a lot of work in libel law but I do find myself advising clients in the trademark area and quite often, when evaluating a mark that might draw negative attention from a rich corporate defendant, we end up evaluating the financial might of the potential plaintiff much more than the legal merits of the defendant's case or the relative strength of his mark. This is a sad unfortunate fact of advising clients in the 21st century; they might be able to win the case but they can’t afford to fight the case.

The Fab Four v. The Fab 4

2010-08-12T09:17:00.000-07:00

Anyone who knows of my interest in all things Beatles related will know that I was fascinated to learn of the recent law suit filed in Nevada federal court, The Fab Four Corp. v. The Fab 4, LLC. I almost predicted a lawsuit along these lines in my recent blog post about the Marty Robbins Tribute Show lawsuit.

In this case, The Fab Four, a Beatles tribute band based in Nevada, have sued the Fab 4, a Beatles tribute band in Colorado, alleging trademark infringement, claiming among other things, that “the Fab 4” is an imitation of “the Fab Four,” and false designation of origin under the Lanham Act. Interestingly, the Plaintiffs have a registered trademark for “The Fab Four The Ultimate Tribute” which was registered in January of this year, but only an application for the Fab Four mark individually.

There are two interesting aspects of this case. The first is the strength of the Plaintiff’s mark. They claim that their mark “the Fab Four” is descriptive of their services. But clearly, both bands’ entire reason for existing is to imitate the original real fabs. I wonder if that will have any impact on the case, it certainly should be considered by the defense.

The other interesting and troubling aspect of the case is that the Plaintiffs sued the Defendants in federal court in Nevada, the Plaintiffs’ home turf, apparently asserting jurisdiction because the Defendants’ website is accessible in Nevada. I have written about the worrisome development of the assertion of personal jurisdiction purely as a result of internet presence several times before, and it is a disturbing trend.

P.S. For my money, “1964, The Tribute” is the best Beatles tribute band and musically, my friends Steve Allen’s “Mystery Trip,” and Dennis Scott’s “The WannaBeatles,” both replicate the Beatles’ sound (but not their wardrob) and can’t be topped

Niches: Let us Now Praise Kimberly Dawn

2010-08-09T13:40:00.000-07:00

Although I consider myself a generalist, I have always been fascinated by niches: niche specialties of law practice, niche collectors, niche book publishing, and, of course, niche areas of the music business. One often reads or hears about niche areas of the music business that are thriving despite the economic downturn. Therefore, I was fascinated to learn about Murfreesboro’s Kimberly Dawn label, a label that specializes in releases of hand-packaged 3-inch CD-R’s, essentially EPs. The Nashville Scene wrote about the label and its specialty “moody atmospheric music.” This is a genre about which I know only a little (despite my admiration of Brian Eno), but I respect the fact that the label has built a network of collectors and musicians interested in its music. I am even more fascinated that the label elected to use the medium of the 3-inch CD, something that I thought died an ignoble death in the Eighties. The fact that only a few CD players can even play the things apparently ADDS to the attractiveness of the objects (kind of like when Cheap Trick released an 8-track version on their new album). I think Kimberly Dawn has a very interesting story and is a bright light in the local music business.

More on Tribute Bands

2010-08-04T08:35:00.001-07:00

I recently wrote about a lawsuit involving a musical tribute to Marty Robbins (http://tripaldredgelaw.blogspot.com/search?updated-max=2010-06-28T16%3A32%3A00-07%3A00&max-results=7). My friend and client Dennis Scott notified me of an interesting law review article with an exhaustive overview of the topic of tribute bands : Brent Giles Davis "Identity Theft: tribute Bands, Grand Rights and Dramatico-Musical Performances" published in the Cardozo Arts and Entertainment Law Journal (2006-2007). While I think that some of the author's analysis may be a bit heavy handed he does explore all of the issues surrounding performances involving tribute bands from the perspective of copyright law, trademark law and rights of publicity and then delves into the murky area of grand rights and dramatico-musical performances. He also identifies the sub species of "reverence bands"--think of The Long Players or Dennis' own band The WannaBeatles- and "tribute bands"--think Mini- Kiss. I think this is essential reading for anyone advising tribute bands.

Behind Every Succesful Album There is a Lawsuit

2010-07-23T09:42:00.000-07:00

A model named Kirsten Kennis has sued the band Vampire Weekend, its label XL Recordings and others for $2 million claiming that she did not authorize the use of her photograph on the cover of the band’s successful album “Contra”. Apparently Ms. Kennis alleges that her signature on the photographer’s release form was forged. The photo was apparently taken in 1983. Making sure that one has secured a release from any person appearing on album artwork is a standard practice and it seems strange that that practice might not have been followed in this case. Indeed, a spokesperson for the label was quoted as saying “As is standard practice, Vampire Weekend and XL Recordings licensed the rights to use the photo on the cover of Contra pursuant to a license agreement that contains representations and warranties authorizing this use of the photo.” (that actually sounds more like a lawyer than a spokesperson). This case could conceivably have implications for photographers, art directors etc. The case will probably settle but it would be interesting to know what the actual value of the model’s image is worth.

Internet Porn, Fair Use and the Boogie Woogie Bugle Boy of Company B

2010-07-22T15:45:00.000-07:00

Warner Bros. Records and its sister companies, together with Warner Chappell Music, filed suit last week against RK Netmedia and Realitykings.com, an internet porn site, alleging copyright infringement for using its masters and songs over 500 times "without license or consent."

According to a report in the Wall Street Journal, Realitykings will assert the Fair Use doctrine stating that the songs were used as "part of a commentary of popular night club culture."

I have not, err, umm, reviewed the evidence, but unless the clips are short live excerpts from “popular night clubs,” I doubt very seriously that Fair Use can stretch this far.

I thought about this case last night when Bette Midler’s version of “The Boogie Woogie Bugle Boy of Company B” turned up inexplicably on my i-Pod. That song was involved in a lawsuit in the late 1970’s between MCA Music Publishing and an off-Broadway musical called “Let My People Come – A Sexual Musical,” where the words were changed to describe something other than blowing reveille. The Defendants lost that case, the Court holding that whatever purpose the defendants were attempting “did not justify the unwarranted use and abuse of ‘Bugle Boy.’ ”

Although the cases are not similar, both do remind us of the outer limits of the Fair Use defense, which is, to paraphrase Samuel Johnson, “the last refuge of the scoundrel.”

Charles Lamb Said It

2010-07-21T09:44:00.000-07:00

"Lawyers, I suppose, were children once."

-Charles Lamb, from the epigraph to Harper Lee's "To Kill A Mockingbird" (1960)

In Case Delaware Indians Attack in East Nashville Mortally Wounding You and Scalping Your Son

2010-07-15T14:12:00.000-07:00

I am always reminding people of the necessity of drafting wills, in order to take care of estate planning before there is an urgent need. However, any urgency I could suggest pales in relation to that faced by Jonathan Jennings. The Nashville Retrospect, which is fast becoming my favorite local reading, recently reported on the discovery of Mr. Jennings’ will, executed in 1780. Mr. Jennings, it appeared, had been mortally wounded by Delaware Indians in what is now my neighborhood in East Nashville. This will was apparently the first will to be recorded in Davidson County, Tennessee and states as follows:

In the name of God Amen. I Jonathan Jennings of North Carolina on Cumberland River having this day Received several wounds from the Indians and calling to mind the mortality of my Body do make and Ordain this to be my last will & Testament. And first of all I give and recommend my soul to God that gave it and my body to be disposed of at the Discretion of my executors. And as touching my Worldly affairs I dispose of them in manner following Viz… Item… I give and bequeath to my… It is my Desire that my Estate be Equally divided between my Wife my sons William, Edmond, Elizabeth Haranor Mary, Aggy, Anne & Susannah all but such a part as shall be hereafter disposed of … Item… I give and bequeath to my son Jonathan who was Scalped by Indians and rendered incapable of getting his living a Negrow girl Milla & her increase who is to remain with my beloved wife till my son comes of age. Also a Choice Rifle Gun & a Horse and Saddle Item I give my beloved wife Four Choice Cows and Caves. The Wards Milla and her increase and the Ward Jonathan being interlined I devise that my Loveing Wife and my son Edmond be Executrix & Exectutor of this my last Will & Testament, Jonathan Jennings…Signed Sealed & Published in Presents of Zach White, Js. Robertson, William Fletcher

This is pretty fascinating reading and another reminder of the need for proper estate planning, at nearly every stage of life. It also gives me a whole new perspective on my East Nashville neighborhood.

Thoughts on Pro Bono cases

2010-07-14T12:19:00.000-07:00

I read an article in the Tennessean last month about the need and demand for free legal services in Tennessee exceeding the supply. The article pointed out that individuals facing criminal charges are constitutionally entitled to legal representation. But of course, this same guarantee does not apply in civil court. This is a major initiative of Tennessee Supreme Court Chief Justice Janice M. Holder, who recently unveiled the Court’s Justice For All program. The article mentioned the three primary ways that indigent people find legal assistance.

First, there is the Legal Aid Society, which represented almost 1,100 cases last year, but had to turn down many more cases.

Second, there is the traditional pro bono attorney. All attorneys are required by the Code of Professional Responsibility to do some amount of pro bono work, and despite the nasty image people often have of attorneys, most attorneys I know do pro bono work willingly and enthusiastically. The joke around most offices is that attorneys don’t mind doing pro bono work, we just like to be able to decide which ones are the pro bono ones.

Finally, I note that the Nashville Bar Association has launched a Modest Means Panel which will attempt to match attorneys with clients who have legal problems but can only afford to pay a certain amount per hour (in this case, no more than $75).

The reality is that most people cannot afford legal services on any kind of regular basis, and an unexpected legal emergency can be just as devastating as a medical emergency. One of the points I try to raise with folks who have questions regarding contracts or other business issues, is that they should not be afraid to consult with an attorney to avoid potential legal troubles later. I think all of us are in a position of wanting to help people and help them keep their legal problems from expanding.

I've been away

2010-07-12T08:44:00.000-07:00

Everyone should see a glacier at least once. It puts things into perspective.

Another Reason for People to Distrust the Legal Profession

2010-06-28T16:32:00.000-07:00

Here is another reason people distrust the legal profession.

As the New York Times recently reported , several law schools, including New York University, Tulane, Georgetown and even Vanderbilt are inflating grades --- essentially to help their graduates in this tough economic environment. I cannot express how reprehensible I find this and how hypocritical it is. The traditional law school model is to make a student’s entire semester grade depend on how he or she does on a final exam. Fair enough, I know I sound like an old guy, but we dealt with it. I suppose that I am lucky that the jobs I have had in law, from my summer clerkships on, were never dependent on my grades. Nevertheless, I would think any employer would be suspicious of a student with an inflated GPA. The general public certainly will be.

A Day in The Life

2010-06-27T12:54:00.000-07:00

I have been listening lately to a lot of my fellow attorneys rant about the death of the music business lately. It is manifestly true that I no longer see the same kind of deals coming from record companies and publishing companies. But I keep feeling that I am, in fact, busy doing entertainment law work. Therefore, as a kind of practice management exercise (or maybe it was just therapy) one day, earlier this week, I kept a list of all the items that I worked on from morning till I broke for lunch.

Here’s what I came up with:

1. A telephone call with a client regarding advising his independent label on publishing and distribution issues.

2. Wrote a letter for a publisher client to someone who owed them money.

3. Wrote a letter for a client regarding a theatrical production he was involved with.

4. Wrote a letter to a client regarding several disputes regarding his Christian music project.

5. Responded to an e-mail from a client regarding a problem with their UK distribution deal.

6. Reviewed a re-draft of a Chinese licensing agreement.

7. Wrote a formal notice letter for a client to their publisher who is in breach of contract.

8. Reviewed a royalty statement for a producer client and forwarded it to him with his royalty check (clients love to receive checks).

9. Wrote a letter to SoundExchange to ascertain if certain Letters of Direction were in place.

10. Drafted an Amendment to a License with an independent record company.

11. Corresponded with opposing counsel on a litigation matter (regarding a band’s leaving member).

12. Corresponded with a client regarding a copyright infringement litigation matter.

Thus, not only did I end up having a very productive morning, I was pleased to note that all of the matters were squarely entertainment related. Plus, there was a global reach extending from Nashville to London to Hong Kong. Perhaps this is anecdotal evidence of the health of the entertainment business, even while the traditional music business suffers through its difficult current transformation.

Six Degrees of Separation

2010-06-24T12:26:00.000-07:00

Anyone who knows me knows that I am a fan of the Beatles and I can revel for hours in all sorts of Beatles trivia and detail. Thus I was happy to learn that my former client, Bruce Sugar, recently co-produced Ringo Starr’s recent album “Y-Not”. I know that Bruce had worked on Ringo’s past albums, but it was nice to see him receive a co-producer credit. My first law partner and I worked with Bruce more than twenty (20!) years ago on what was essentially a huge collection case where an independent label with major label distribution basically stiffed about a dozen musicians, engineers, singers, and even a recording studio. It was a long hard-fought case, but I was always proud of the results we achieved for our clients. It was also an interesting introduction to the intrigue and slightly skuzzy inner workings of the record business. But I digress. I think it is amazingly cool to see Bruce Sugar rise from those humble beginnings to such an auspicious, fab assignment.

Richard A. "Pete" Peterson, R.I.P.

2010-06-18T13:01:00.000-07:00

I am sorry to learn about the recent death of one of my favorite professors and mentors, Dr. Richard A. “Pete” Peterson, Professor of Sociology Emeritus at Vanderbilt University. Although I was an English/Philosophy major in college, I took every course I could from Dr. Peterson because he was the first person I ever knew who applied serious study to the music industry. This was not dry academia; his classes were a lot of fun. Sometime later, he published a fascinating book called “ Creating Country Music: Fabricating Authenticity”. Somehow, with Dr. Peterson’s influence, I was able to take my fascination with music, my future training in law and my understanding of the structure of the music business, and figure out how to make some sort of a career for myself and for that I remain forever grateful.

The Sincerest Form of Flattery

2010-06-17T11:26:00.000-07:00

I have been following with interest the case of Robinson v. Petty in which the heirs of the late great Marty Robbins sued Jason Petty over his portrayal of Robbins in the tribute performance “Marty’s El Paso.” This case, which was pending in the United States District Court for the Middle District of Tennessee, settled on June 7. At issue in this case was not only the rights to such songs as “El Paso” and “White Sport Coat,” the renewal rights of which are owned by the Robinsons, but also the use of Robbins’ name, image and likeness, which are protected somewhat by a Tennessee statute passed in 1984, after the death of Elvis Presley. The Plaintiff also sued for federal trademark infringement, common law trademark infringement, and violation of the Tennessee Consumer Protection Act and Tennessee common law of unfair competition. Marty Robbins died in 1982. Musical tribute shows of all types are becoming an important facet in the entertainment economy, from Beatles tribute bands to the successful run of “Million Dollar Quartet” on Broadway, from “Always… Patsy Cline,” to the legendary Cheap Trick performing the even more legendary “St. Pepper’s Lonely Hearts Club Band” in its entirety. All of these examples, with the exception of the Cheap Trick performance, have engendered some sort of litigation. The Beatles’ company Apple is notorious for protecting its trademarks, as it probably should be. The common element uniting each of the presentations is that they require some degree of licensing from the underlying rights holders. Performers need to be sure that if their show is a dramatic/musical performance, that they have secured the grand performance rights from the appropriate music publishers. They also have to figure out if there are trademark issues or name, image and likeness issues involved. Although the various elements of these types of issues have been around forever, as performers seek new ways to earn a living playing music, the intersection of these rights will present a fascinating and complex emerging development in entertainment law.

Tax Relief for Flood Victims

2010-06-16T10:43:00.000-07:00

Victims of Tennessee’s recent floods may qualify for some indirect help from an unlikely ally, the Internal Revenue Service. It appears that because parts of Tennessee have been declared a federal disaster area, the IRS will let people who suffered a casualty loss take a deduction for the loss off their federal income tax. Also, the deduction can be taken off the 2009 tax return (and if you have already filed for 2009, you can file an Amended Return). There are wrinkles to this, so it is important to check with a tax professional. Note that there may also be additional residential energy credits if you replace windows and certain heating and cooling units. Finally, in Davidson County, the Davidson County Assessor of Property is developing a plan to assist owners of property “substantially damaged” or rendered unfit for occupancy. This plan would allow for a pro-rata adjustment of their 2010 property taxes.

If You Can't Type Something Nice Part 2

2010-05-20T12:49:00.000-07:00

On May 30th of last year, I wrote about the risks of being sued for libel by posting online It appears this problem is becoming more widespread. The May 16^th issue of The Tennessean carried a story about a local man who had been sued by a Florida condo owner because he had posted a negative review of a rental condo on TripAdvisor.com. This is exacerbated by the Florida Court’s somewhat broad expansion of jurisdiction. It appears that if you exercise your First Amendment rights to free speech on the internet, you run a serious risk of being sued by a litigious condo owner. The traditional concept of “truth” as a defense to libel probably pales when one considers the costs of hiring counsel in another state to defend your rights. This is not good news for First Amendment absolutists, but it is pragmatic advice for the rest of us.

Mike Farris Wins a Dove Award

2010-04-29T12:16:00.000-07:00

This is cool. I just learned that my friend and client, Mike Farris won a 2010 Dove Award in the category of Best Traditional Gospel Album for his stunning album "Shout!Live". The album features Mike's cool band The Roseland Rhythm Review and Nashville's McCrary Sisters and was co-produced by Mike and Joe McMahan. Mike has had an interesting and surprising career from his days as the lead singer of the Screamin' Cheetah Wheelies and this award is a vindication to all of those people (both here and beyond) who bekived in his talent.

Why isn't Chris Von Sneidern Famous?

2010-04-28T15:45:00.000-07:00

I am not really in the habit of writing movie reviews on what is ostensibly a music and law blog. However, I have been thinking all week about a movie I saw at The Nashville Film Festival called "Why isn't Chris Von Sneidern Famous?"

I have been vaguely aware of Chris Von Sneidern and his jangly guitar pop for years. I may have a couple of his albums and he has appeared on the same compilations as some of my clients like Bill Lloyd and The Shazam. The idea of watching a full length documentary about him was somewhat daunting.

What I realized as soon as the film began was that this really wasn't a movie exclusively about Chris Von Sneidern. It was also about its filmmaker, Kathleen McNamara, who started as a fan trying to figure out why one of her favorite artists was not better known. Having spent a lot of time trying to secure record deals for artists I believed passionately in, I could relate to her quest. The film is also a kind of elegy for a time which appears to have passed, when there was a thriving independent record scene in this country: when independent labels with some financing existed as a viable alternative to the major label system (Independent labels still exist, of course, as do majors, it’s just that the whole calculus has changed).

Finally the film is about Chris Von Sneidern who emerges as the kind of songwriter and artist who is going to write songs and play gigs regardless of the remuneration, his age, or any other factors. The film is a bit uneven, a little sad, but at its core, I found it quite inspirational (and I am definitely going to go check out those Chris Von Sneidern records). I don't know how the film is being distributed but it is worth looking out for

I Discover who is keeping the Music Industry Afloat

2010-03-23T13:20:00.000-07:00

I recently uncovered a very little known fact. I know who is keeping the music industry afloat. Me. I am financing it on my Visa credit card. This began when my 13 year old daughter received an i-Phone for Xmas (I’m not sure how I lost that battle). She had previously been aware of the world of i-Tunes but for some reason, it was not attractive to her. She was content to own conventional CD’s and listen to the strange amalgam of hiphop, bad rock and country that makes up Top 40. However, once she had the i-Phone, she decided she had to own the songs. Delighted by her new interest in music, we encouraged friends and relatives to send her i-Tunes gift cards for holidays, etc. When my daughter told me that Apple required a credit card to open an i-Tunes account, I naively obliged. Everything went fine while she tore through her gift cards, downloading everything from Ke$ha (hey, they went to the same school) to Lady Gaga. What I didn’t realize (and in fairness, I don’t think she realized either) was that once the gift cards ran out, she just kept going, savoring the cornucopia that is i-Tunes. I did not see the damage until I received my credit card bill a month later.

I am trying to imagine the damage I could have done if my mother had let me loose in a record store with $170 at age 13. The interesting point here is that this is a true demonstration of the fact that the singles mentality is now fully entrenched. While my daughter is passionate about the songs she wants to have on her i-Phone, she could care less about owning the entire album (except in the case of Taylor Swift), or even owning the physical product. Similarly, when the news of Alex Chilton’s death broke (R.I.P. Alex), several people told me they went to i-Tunes to download his music. I am seeing first hand the major sea change people in the industry have been talking about. The nerdy record collector in me hates it, but it certainly seems to show that the industry still has some signs of life.

Otis Blackwell inducted into the Rock and Roll Hall of Fame

2010-03-18T10:39:00.000-07:00

Congratulations to the late great Otis Blackwell for his induction into the Rock and Roll Hall of Fame. They should have done it a long time ago, when he was alive. I had the privilege of serving as Conservator for Mr. Blackwell and his wife for a number of years. I was happy to see that two of his children, Otis Jr. and Odette were able to accept the award on his behalf.

Stephen Mark Miller

2010-03-14T14:13:00.000-07:00

I was saddened to learn that former Nashville attorney Steve Miller died in July of last year. I just came across this information in a Vanderbilt Law School alumni publication. I had been thinking about Steve recently because I used to see him downtown all the time. I had not realized that he moved to Eagleville, Tennessee in 2006. Steve was a good lawyer and a nice guy.

BOW WOW WOW YIPPEE YO YIPPEE YEA

2010-02-23T11:33:00.001-08:00

Every now and then a copyright law case just makes me smile. Such was the case with the recently decided Sixth Circuit case, Bridgeport Music Inc. v. UMG Records, Inc. case from the Middle District of Tennessee, one of the many Bridgeport cases that have been lingering in this district for the past nine years. Someone could (and should) write a book about this litigation, most (if not all) of which concerns the creative output of the great George Clinton.

The importance of this case was the finding that the 1998 song “D.O.G. in me” by the group Public Announcement infringed Clinton’s composition “Atomic Dog” by using the phrase “Bow wow wow, yippee yo yippee yea.” In other words, the Court determined that “bow wow wow, yippee yo yippee yea” possessed enough originality to make it capable of copyright protection. Also, in regard to another part of the decision, there was expert testimony to the fact that the elements of Clinton’s song were not just “the mere abstract idea of a dog.” In fact, the expert testified that in Clinton’s song “the word dog constituted a stand-alone melody of one word.” This should be obvious to copyright lawyers and fans of Parliament Funkadelic, but it is nice to see it substantiated in the United States Court of Appeals.

Who Needs a Will?

2010-01-27T16:19:00.000-08:00

I have been on a quiet mission for a few years to encourage people to execute wills. Often, I have had people ask me, not unreasonably, why they might need a will.
I found a very elegant and succinct answer by Nashville attorney Barbara Moss in a recent article in The Tennessean. In answering the question “So, who needs a will?” Moss writes:
Anyone who owns property with no co-owner or beneficiary or who has children young enough to need a guardian needs a will. Someone who has a complicated family situation, such as children by a former spouse, or a taxable estate (in Tennessee, any estate over $1 million dollars), especially needs a will.
Moss goes on to write, as I did last year, about Steve McNair and how he could have saved his family thousands of dollars in estate taxes had he done some basic estate planning.
Also, since a large part of my practice caters to songwriters and recording artists, it is important to stress the need to divide the royalty income and/or copyright income the way you want it divided rather than either by the laws of your state (i.e. intestate succession) or by a well meaning but perhaps uninformed spouse. As Gary Roth, from BMI recently wrote:
Your state legislature determined what you’d likely want to do with your personal property and wrote the law that way, but you may have wanted to do it differently. That’s what you can accomplish with a will – but only if you create one.
From a personal standpoint, I know that people don’t like to contemplate their mortality, and a will makes you do that. On the other hand, the peace of mind that comes from knowing that you have done everything in your power to look

Danny Tate's Conservatorship

2010-01-26T11:11:00.001-08:00

Like many Nashvillians of a certain age, I read with horror and a certain amount of lurid fascination the story of Danny Tate and the involuntary conservatorship initiated by his brother. The story was reported in the Nashville Scene.(http://www.nashvillescene.com/2010-01-21/news/court-ordered-hell-mdash-how-an-errant-judge-and-a-controlling-sibling-stripped-nashville-rocker-danny-tate-of-his-money-his-livelihood-and-his-legal-rights/) Danny was the golden boy of Nashville pop in the 1980’s, and he had a successful career into the 1990’s. He apparently still has some success today when he is not battling some horrific addictions.

While the article was gripping, I thought the author unfairly criticized Judge Randy Kennedy in his handling of this case. Conservatorships are not pleasant and they are not tidy. In these actions, the Court gives one person power over the “person and property” of another person, if the facts indicate such action is necessary for the second person’s welfare. Presented with a petition to establish a conservatorship, the judge can only review the facts presented and appoint a guardian ad litem, to give a (hopefully) unbiased report to the Court as to the condition of the respondent and then, based on the statute, take the most appropriate action necessary.

I have been involved in a handful of conservatorships, both as a lawyer, and in one case as the conservator for a disabled songwriter and his wife. The latter case was one of the most challenging and rewarding cases of my career. It lasted more than a dozen years. Having served in that position, I got a firsthand appreciation of the awesome responsibility and the need to be resolute in the face of the oftentimes competing demands of family members and friends. I also developed an acute appreciation of the tough responsibility a probate judge faces in dealing with all of these demands and ensuring the well-being of the ward. The cases I have been involved in all concerned elderly or disabled people. I can’t even imagine all the challenges involved in dealing with an able-bodied person caught in a spiral of addiction. Reading Danny Tate’s story makes me appreciate the difficulty of the system, but I don’t really see any villains. It seems to me this is a bunch of people trying to use an imperfect and expensive legal system to deal with a terrible situation. I hope they can resolve this soon.

An Apparent Tax on Musicians and Producers in Tennessee

2010-01-12T14:00:00.000-08:00

I learned this week that two adages are true.

First: You are never too old to learn something new.

Second: Everything you know is wrong.

Case in point: I had a client call and ask me whether, as a musician and producer, he was required to have a business tax license and pay business taxes in Tennessee. I confidently told him “no.” I had researched this very point some time ago and had never heard anything to the contrary. He persisted in saying that his accountant told him I was wrong, so after reviewing the statute (which neither mentions nor exempts musicians), I asked a music business accountant. She confirmed that musicians and producers are, in fact, subject to the Tennessee business tax.

Here is what the statute states:

The Business Tax Act makes it a taxable privilege to make sales or engage in any vocation listed in Tenn. Code Ann. Sections 67-4-708(1)-(4). Any county or incorporated municipality in Tennessee may levy the privilege tax on those listed activities that take place within its geographical boundaries. (Tenn. Code Ann. Section 67-4-704).

Engaging in any business, business activity, vocation, or occupation described under this act is declared to be a privilege for state purposes and taxable by the state alone. (Tenn. Code Ann. Section 67-4-705).

The tax imposed under the Business Tax Act may be collected in addition to any other applicable privilege taxes established by law. The tax will be in lieu of any or all ad valorem taxes on the inventories of merchandise held for sale or exchange by persons taxable under this law. (Tenn. Code Ann. Section 67-4-701).

Registration

Prior to engaging in business, every person taxable under the Business Tax Act, except for those taxable under Tenn. Code Ann. Section 67-4-705, must register with the county clerk, in the case of taxes owed to the county, and/or with the city tax collector, in the case of taxes owed to a municipality. Taxpayers must contact the respective county or city official for registration information and forms. (Tenn. Code Ann. Section 67-4-706).

The fee for registration is $15 and must be paid at the time the application is submitted. Upon presentation of the application and payment of the $15 fee, the registering official will issue the taxpayer a license.

Annually thereafter, upon notification from the Department of Revenue that the taxpayer has filed the required business tax return and remitted the amount of tax due, the licensing entity will renew the taxpayer’s business license for another year. There is no additional fee for annual business license renewal.

The taxpayer must exhibit the license in the taxpayer’s place of business.

“Business” as defined by
Tenn. Code Ann. Section 67-4-702(a)(2):

“Business” includes any activity engaged in by any person with the object of gain, benefit, or advantage, either directly or indirectly. “Business” does not include occasional and isolated sales or transactions by a person who is not routinely engaged in business.

There are all types of businesses included and excluded (attorneys, for example, are excluded), but curiously, musicians and producers are not mentioned. Presumably they are meant to be covered under the catch-all category of “each person making sales of services or engaging in the business of furnishing or rendering services…” It just seems strange to me that in a state with such an important music industry, that such an activity is not mentioned at all.

The bottom line is that this is a tax that I was not fully aware of, and I would urge you to check with your accountant or tax professional to determine if your particular business requires a license and is subject to this tax.