Sir Paul Sues Sony/ATV

Fake news.  That is my characterization of most news stories that report on entertainment and copyright litigation.  Witness the reporting of Paul McCartney's recent lawsuit against music publisher Sony/ATV.  It was reported that McCartney had sued Sony/ATV to recover the copyrights to his Beatles era compensations.

            Paul McCartney did not need to sue anyone to recover his U.S. copyrights.  Section 304(c) of the Copyright Act gives McCartney the right to terminate the assignment of these copyrights after (a mere) 56 years (these songs were all created prior to January 1, 1978; there is a different section that applies to post 1978 copyrights).

            The story of how Sony/ATV ended up with these copyrights to most of the Lennon/McCartney catalog has been detailed elsewhere. Beginning in October 2008, McCartney began serving termination notices on Sony/ATV and according to the complaint, the terminations will begin vesting in October 2018.  Sony has acknowledged that these terminations are valid.  The purpose of McCartney's lawsuit is to seek a declaratory judgment that not only are the terminations valid but that the terminations themselves do not give rise to a breach of contract claim against McCartney by the publisher.

            This may seem somewhat odd since it is well settled that the Copyright Act gives authors the right to terminate assignments of copyright despite any prior agreement to the contrary.  The problem is that this is U.S. law.  There is no corresponding British law.  Last year, when the member of the band Duran Duran attempted to terminate the U.S. assignment of copyright to their works, Sony's affiliate in the United Kingdom sued the band for breach of contract.  The court in that case ruled in favor of Sony/ATV.  This sounds crazy but the court found that Duran Duran did not present expert evidence of U.S. law so the British court did not take U.S. law into consideration.  It seems as if the Duran Duran decision should ultimately be remedied but if it is not, this does put songwriters like McCartney in an untenable position.  How can they exercise their statutory rights in one country only to be sued for breach of contract in another country?  For this reason, McCartney may be taking a stand for similarly situated creators ( i.e. British songwriters who signed UK publishing deals and had success in America) asking the U.S. court to rule that the exercise of his termination rights does not represent a breach of his publishing agreement and/or that the agreements cannot be enforced against him to the extent that they interfere with the exercise of his termination rights.  The unspoken third claim of this declaratory judgment is most likely:  take that Michael Jackson.

            It will be interesting to see how this plays out

Ace Arts LLC v. Sony/ATV and Apple Corps: The Beatles, Synchronization Licenses and Misuse of Coprights

For my fellow sufferers of Beatlemania, here's the scoop on the latest Beatles lawsuit.  Fans may remember last year that there were some advertisements for an exclusive in-theater documentary called The Beatles: the Lost Concert which focused on  the Beatles’ February 11, 1964 concert at the Washington D.C. coliseum, their  first concert in America.  Everyone has seen the film, it's notable not only for its kinetic energy but for the fact that the band had to stop after every few songs and rotate their equipment so that fans on all sides of the arena could see them.

            The film was shown on closed circuit television in 1964 and has been  available on a variety of formats from 8-millimeter film to laser disc; it was released as part of Apple's First U.S. Visit documentary in the 1980s and was featured in The Beatles Anthology. It seems from reading the reports that the original film was never registered for copyright and may have become part of the public domain.  There were apparently several master copies of the film one of which Apple purchased in 1995.  (Another copy was sold at auction in 2005).

            In 2009 a copy of the film was acquired by a company associated with the Plaintiff, Ace Arts LLC which made plans to add some documentary footage and interviews to the concert film and then distribute it for exclusive theatrical release.   The company went to Sony /ATV, the company which controls the majority of the Beatles' music publishing rights, to acquire synchronization licenses for the right to use the Beatles' songs in the film.  A synchronization license is required anytime one wishes to use a copyrighted musical composition in "synchronization" with a visual image.  It is not clear from reading the complaint whether the distributor successfully negotiated a synchronization license with Sony /ATV or simply agreed upon terms.

            Here's where it gets strange.  It appears that Apple then decided that it was going to release its own version of the concert on (the other Apple's) iTunes and somehow negotiated an exclusive  synchronization license with Sony ATV for 8 of the 12 songs in the film. As the complaint points out, the issuance of any kind of exclusive synchronization license is unusual.

            Sony/ ATV then apparently filed suit in England to enjoin the film's release and sent cease and desist letters to each of the theaters  in this country that were planning to exhibit the film.

            Ace Arts the distributor has now sued Sony/ ATV and Apple Corps in California federal court for antitrust -alleging a conspiracy between the two companies to block distribution of the film, as well as tortuous interference with its contracts and unfair competition.  It is also suing on the very interesting ground of misuse of copyrights.  There is a lot going on here – the most interesting elements concern the issuance of the synchronization licenses.  Did Sony /ATV issue the licenses and then renege on them?  Was this based on strong-arming from Apple?  Did Michael Jackson have anything to do with it?

            If the lawsuit goes forward it may shed light on the very interesting relationship between Apple and Sony ATV which controls the one aspect of the Beatles legacy that is outside of their grasp, their music publishing rights.  It might also provide information on the economics of synchronization licenses on this level and finally, it might shed light on how such an important historical film could have become part of the public domain.  This will be a very interesting lawsuit to watch.

Tomorrow Never Knows: Don Draper Does the Math

I am a huge fan of "Mad Men".  I am also a huge Beatles fan and once I discovered that the show’s  trajectory was chronological,  I have been anticipating Don Draper's discovery of the Beatles.  While we have had nice little references in the past (Don buying his daughter Sally the latest Beatles’ record, Don trying unsuccessfully to meet the Rolling Stones to discuss a television commercial) nothing prepared me for the visceral excitement of watching and hearing Don drop the needle on "Tomorrow Never Knows".  Matthew Weiner got this exactly right.

                The next day we learned that the show paid approximately $250,000.00 for the synchronization license and master use license i.e. the right to use not just the song but the Beatles' original recording on the show.  Every music lawyer knows what a coup it was for the producers to get the master use rights as well as the synchronization rights to "Tomorrow Never Knows".  I thought it would be fun to guess what the various interested parties might have made on this deal.  Understand this is pure conjecture, based on traditional record company/publishing company economics.  The Beatles’ story is not traditional. The story of how Lennon and McCartney founded a publishing company, then lost it, only to see it end up in the hands of Michael Jackson and Sony has been reported many times (apparently most explicitly in a book called "Only a Northern Song" that I am still waiting to get my hands on).  Additionally,  everyone is aware of the fact that the years of litigation between the Beatles and EMI mean that the Beatles most assuredly do not have a traditional 50/50 split of license fee income with EMI…but assuming that they did –

                Then, one has to also assume that this deal involved the traditional split of 50/50 between master use license and synchronization license.  That is not always the case but it is a good rule of thumb.  Under this scenario the publisher of the song, Sony/ATV would receive $125,000 of which $62,500 would be paid in equal shares of $31,250 to Paul McCartney and the heirs of John Lennon (as an aside it looks as if Lennon's share of the copyright to the song was renewed in 1995 in the names of Yoko Ono, Sean Lennon and Julian Lennon).

                From the master use side, typically the label EMI (the parent company of Capitol) would split the master use fee 50/50 with the artist which means that it would pocket $62,500 and pay out approximately $15,625 to each of the Fabs or their heirs.

                Again, all this is mainly illustrative and is not meant to presume to know the intricacies of Apple's finances.  However if anyone knows more details about this deal please share.  In the interim, I  can wonder what Don Draper's reaction would have been had he heard the original "Anthology" version of "Tomorrow Never Knows" and what Don Draper, the ad man would have thought about paying $250,000 to use a song in a television show.

The Miller Music Case: Correct but not Fair

Sometimes copyright law is correct but not fair. The U.S. Court of Appeals for the Sixth Circuit issued its ruling in the closely watched copyright case Roger Miller Music, Inc. v. Sony/ATV Publishing last week. The opinion, which I am sure comes as a tremendous disappointment to the Miller family clarifies an important question in copyright law; that is what happens when an author of a pre 1978 copyright dies before the renewal right in the copyright as vested.

The holding in this case is not abstract – it relies on a straightforward reading of 17 USC Sec. 304(a)(2)(B)(i). However the court's opinion does disturb what might have been a long-held belief about the Copyright Act’s application to pre 1978 copyrights and their renewal terms.

The great Roger Miller had a long-term professional relationship with Tree Music, the predecessor to Sony/ATV. Among the songs that are at issue in this case were those registered for copyright in 1964 including "King of the Road" and "Dang Me". The renewal terms for these works commenced January 1, 1993. Miller died on October 25, 1992. The facts of this case show that Sony applied to register the renewal copyrights in 1992 before Miller's death. The aforementioned section of the Copyright Act provides that if an application to register the renewal copyright is filed in the renewal year, the renewal copyright shall vest, upon the beginning of such further term, in any person who is entitled under Paragraph 1(c) to the renewal and extension of the copyright at the time the application is made".

The result, as the court said, is that "Roger Miller was entitled to the renewal copyright because he was living at the time an application for registration was made. Sony was in turn entitled as Miller's assignee and thus took ownership at the time the renewal vested on January 1, 1993.

This is the correct reading of the statute of course and on a purely philosophical level, it appears to be the correct result. However it seems to expose one of the vagaries of the Copyright Act and the commonly held belief that if an author died before the commencement of the renewal term, the rights went to his heirs automatically. The entire concept of the renewal term, which existed from the time of the Statute of Anne until the Copyright Act of 1976, was intended to give authors the proverbial "second bite at the apple" and to correct deals made when the author had an uneven bargaining position. The fact that publishers began to abuse this system by requiring authors to assign both the initial term and the renewal term of the copyright appears to have been an un intended consequence with was only remedied by the 1976's Act introduction of the 35 year termination of assignment provision and the introduction of the unitary term of copyright. However for authors who assigned works up to the end of 1977 the bizarre operation of the whole renewal concept remains murky and unfortunate. It seems unforgiving to require the operation of a renewal term to depend on something like the author's time of death and to have even that trumped by a publisher filing an application for renewal just seems inequitable.