Songplugging Lawsuit: Pickin' and Suin'

Occasionally people will ask me to recommend song pluggers to them and it is a question which fills me with anxiety.  The problem is that there is no one size fits all kind of plugger – and each relationship is special.  For the uninitiated, a song plugger is the person who “pitches” a songwriter’s material to  artists, producers and A & R people for consideration.  It is a difficult job – especially in this time when the number of major labels and recording artists has declined.  It is also a field with a very low success ratio.  For every great story of a song pitch leading to a breakthrough hit single, there are a million stories of the A& R person “just not hearing it …” Finally, it is also a process that largely goes on behind closed doors, so the writer may be unaware of all the things the plugger may or may not be doing to advance the writer and his or her material.

            My friend, journalist Tom Wood told me about a lawsuit that’s recently been filed in state court here in Nashville:  Donaldson v. Keaton.  I don’t know the parties but it is essentially a lawsuit filed by an aggrieved songwriter from Ohio against a Nashville song plugger he had retained to pitch his songs.

            The complaint is a model of legal drafting being both informative, educational, fact laden and persuasive.  The plaintiff, Donaldson has sued for fraud, promissory fraud, a violation of the Tennessee Consumer Protection Act, breach of contract and negligent misrepresentation. Over 207 separate paragraphs, the plaintiff’s attorney  carefully lays out a case against the song plugger, Keaton.  am keeping a copy of the complaint on file for future reference.

            It is hard to know what really happened in this case but one can imagine what might have transpired to lead to this dispute.  I will say that the  one part of the complaint that was kind of chilling is found in Paragraph 23:  Plaintiff started to get suspicious in mid‑2014 about whether Keaton was providing services as agreed to because no results were being obtained after approximately 16 months of paying Keaton for services.

            Therein is a hard truth – plugging is an occupation where with even the most talented writer and the most connected and reputable song plugger – it might take more than 16 months to get a tangible result.  One might never get the results.

  I have been on both sides of this issue and I don’t see any simple solutions but it does bring to mind the old cliché:  “You must be present to win”.  Most writers (and artists) who achieve any kind of success in Nashville do so by being present in this town – working, networking, keeping their ears to the ground.  I think that this kind of long-distance business relationship described in the complaint is fraught with the potential for miscommunication and misunderstanding.

Is 17 USC 205(e) a Trap for the Unwary? Advice to Puiblishers and Administrators

Not long ago I was involved in what should have been a routine lawsuit over a collection of past-due royalties.  At some point during the litigation the other side brought up 17 USC 205(e) as a possible defense.

            For the unaware this little-discussed section of the Copyright Act states:

A non-exclusive license, whether recorded or not, prevails over a conflicting transfer of copyright ownership if the license is evidenced by a written instrument signed by the owner of the rights licensed…and if

(1)        the license was taken before execution of the transfer; or

(2)        the license was taken in good faith before the recordation of the transfer and without notice of it.

            Section (1) is a no-brainer but Section (2) is a potential landmine as it gives a possible defense of innocent infringement in a case where a licensee claims to have acquired rights without notice of the prior assignment (for example from an artist or a songwriter).

            I researched the statute pretty carefully and could find no reported cases dealing with it specifically although there are plenty of cases that explore similar territory and those cases generally come down on the side of the copyright owner (see for example Douglas v. Hustler Magazine, Inc., 769 F.2d 1128 and Symnatec Corp v. CD Micro, LLC, 286 F. Supp. 2d 1265) which states plainly “failure to record an assignment of copyright is not available as a defense to infringement”.

            Nonetheless despite the comfort these cases offer this odd statute does seem to present some kind of defense in those rare cases where a licensee could actually prove that it  had no knowledge of a prior transfer of copyright ownership.  The lesson here for all publishers and administrators should be to always record copyright assignments and related documents as soon as possible after execution.

New Live Performance Income for Songwiters

Here’s some potentially good news for independent touring artists.  After operating somewhat under the radar, both BMI and ASCAP have made a big push in allowing songwriter artists to collect income from live performance of their work.  While income from live public performance is of course implicit in the rights that BMI, ASCAP and SESAC collect, as a practical matter the organizations historically only have only paid  this income to major artists performing at major venues.  According to an article in the Tennessean a week or so ago, technological innovations now allow the performing rights organizations to direct some of this income to smaller acts who report their performances correctly.  

            The BMI system is called BMI Live, ASCAP’s is called Onstage and SESAC has a program called Live Performance Notification System. 

            I don’t think there is any data  on how much a small or mid-range artist could generate from these programs, but it would be foolish not to investigate them.  One doesn’t want to leave money on the table.  It is great to see technology being used to assist songwriters and performers for once.

The XM Satellite Radio Litigation

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.

Songwriters and Bankruptcy

Back in June, Gary Roth, Head of Business Affairs at BMI, posted an article on the organization’s website explaining the potential ramifications of bankruptcy on songwriters and composers. This information is timely, especially in a state like Tennessee where we have the highest bankruptcy rates in the nation.

Many people do not realize that not only their copyright, but also their royalty income (i.e., public performance royalties, mechanical royalties, synchronization royalties, performance royalties, etc.) are considered “property” for bankruptcy purposes, just like any other piece of property, tangible or intangible. When a debtor files a Chapter 7 bankruptcy seeking liquidation of his debt, this property is subject to collection by the U.S. Bankruptcy Trustee, whose job is to try and use these assets to pay creditors. These assets can be sold by the Trustee, by auction or otherwise, to satisfy debts.

This is a very real probability.

I have represented both songwriters contemplating bankruptcy and publishers and other investors who have purchased these rights from the Trustee. In many cases I have learned that the songwriters were never even made aware that they could lose their copyrights and their rights to royalty income in bankruptcy. Either their bankruptcy attorneys never told them, or the writers never volunteered the information to their bankruptcy attorneys. Either way, they lost the rights to income from some significant copyrights and in some cases, the copyrights themselves.

One should always consider the risks of losing their rights to royalty income from their songs before filing a petition in bankruptcy.