You Really Got a Hold On Me

            I recently read that Smokey Robinson had settled a dispute with his ex-wife Claudette over his right to exercise the termination of copyright assignment in his songs under the 1976 Copyright Act.  While I am all for both marital harmony and post-marital harmony it would have been fascinating to see how a court might have interpreted this intersection of federal copyright law and domestic relations.

 

            Robinson had taken the somewhat unusual step of filing an action for a declaratory judgment apparently after receiving a letter from his former wife's counsel asserting a community property interest in the compositions in question, despite the fact that the couple  had been divorced nearly for three decades.  He wanted the court to confirm the fact that the Copyright Act gives the right to terminate assignments and recapture copyrights to the author alone and not an ex-spouse and presumably, despite whatever economic effect this might have on the ex-spouse).

            The Copyright Act is pretty clear in this particular area but it does provide some fairly troublesome questions for divorcing spouses.  One wonders if when divorcing in 1985, the Robinsons even contemplated that Smokey would be able to recapture the copyrights to his greatest hits.  Was there a duty of disclosure (of an event that might occur 29 years in the future)?  We often see how divorce settlements can be impacted by the Copyright Act but I think that this might have presented a different take on the issue.  As the clock begins to run on some of these massive hits from the 60s and beyond we will no doubt see more of these cases and they are tremendously important.

Ray Charles and the Problems of Estate Planning for Songwriters

Those practitioners who deal with estate planning issues for artists and songwriters are going to be paying attention to the decision of the California Federal District Court in the  Ray Charles Foundation v. Raenee Robinson, et al case which was decided in January.  In that case, the Court upheld the right of  seven of Ray Charles' twelve children to serve 39 notices of copyright termination on various entities including Warner/Chappell.  The heirs are exercising their statutory right to terminate assignments of copyright despite the fact that each of these children had agreed contractually that upon receipt of $500,000.00 each in an irrevocable trust that they “would  not inherit anything further under my father's estate plan and I am waiving my right to make a claim against his estate."

 

            Ray Charles entered into these agreements with his children and then apparently left his right to receive additional royalties from these compositions to his foundation – a charitable organization .   Clearly he intended to provide for his children but also to provide for those less fortunate.

            By attempting to terminate the copyright assignments, the children have the potential to redirect the income from these works to themselves, thereby thwarting their father’s charitable plans.

            In seeking declatory relief, the foundation argued that the children breached their agreement with their father by filing the termination notices.

            The Court concluded (1) that there could be  no claim against the estate because the estate had in fact been through probate and was closed and (2) because Section 304(c) of the Copyright Act provides that the termination right is inalienable and may be exercised "notwithstanding any agreement to the contrary" that the foundation did not have standing to stop the heirs from filing these notices of termination.  Note that Warner/Chappell did not contest the notices.

            The rationale in this case is pretty straightforward and it is difficult to know if the 9th Circuit will do anything different on appeal.

            As an important footnote, the Court goes to great lengths to explain that the holdings in the Milne case and the Steinbeck case were not relevant here.  In those cases, the original statutory heirs somehow terminated the original grants themselves and abrogated the whole "inalienable" concept.  The Court also noted the important lesson from the Larry Spier, Inc. v. Bourne Co. case that the intent of an author in executing a will is irrelevant under Section 304(c) because "if the author's intent were the paramount concern of the statute, then no termination of any kind would be allowed because most authors presumably intend to make the assignment that is the very object of Section 304(c)'s termination provisions".

            Therein lies the problem.  While the termination provisions of the Copyright Act serve an important purpose  they can subvert an author's original intent, no matter how beneficial and noble that intent might have been.  Artists and songwriters  contemplating long-term estate plans should be keenly aware of the potential impact of these provisions and plan accordingly,  to the extent possible.