A year or so ago, I sent a letter to my clients with minor children advising them of the need to do some simple estate planning. It was something I felt strongly about.
Like every Nashvillian, I was shocked to learn of Steve McNair’s awful murder on the 4th of July. I was surprised but not exactly shocked to learn that he had died without a will, and that in addition to the children he had with his wife, Mechelle, he had children from previous relationships in Mississippi (Steven L. McNair, Jr. and Steven O’Brian Koran McNair).
McNair reportedly earned over $90 million during his tenure in the NFL and owned property and held investments in both Tennessee and Mississippi. That means that at least these two states will be involved in the probate of his estate. To leave his wife without any clear picture of how to handle this is inconceivable. Worse, an action between the heirs could literally pit brother against brother and put the widow in a terrible position. None of this contemplates the horrible estate tax consequences of leaving so much money and property unsheltered.
All these possible hellish family scenarios could have been avoided by some simple planning, as could have most of the estate tax consequences.
It will be interesting and instructive to see how this plays out, but it won’t be pretty. This is why if you have children or if you own any assets at all, you need to do some estate planning.
Monday, August 24, 2009
Sunday, August 16, 2009
It's The End of The World as We Know it and I am Not Sure What to Think About It
"Next month Pearl Jam plans to release its new album simultaneously on CD and in Rock Band."
- from an article in today's New York Times magazine by Daniel Rudolph on the Beatles' new Rock Band game due out 9/9/9.
- from an article in today's New York Times magazine by Daniel Rudolph on the Beatles' new Rock Band game due out 9/9/9.
Sunday, August 2, 2009
Single Song Agreements
For some time now, I have been wanting to write a basic analysis of a single song agreement because this simple document is the backbone of the music publishing industry. It is also can be tremendously misunderstood.
First and foremost, a single song agreement is an assignment of copyright. Section 204 of the Copyright Act of 1976 says that any assignment of copyright must be in writing. Therefore, unlike certain verbal assignments that that occurred under the 1909 Copyright Act, you cannot assign your copyright in a musical composition unless you do so in writing. Also, except in very limited circumstances, you should never agree to assign your composition as a “work made for hire.”
Also, if there is more than one writer on a composition, and they are both/all assigning their copyright interest to the same publisher, the single song agreement is the document which details the writers’ percentages of the composition. It is important to note that the law presumes the splits to be equal unless specifically outlined. This split should be decided upon as near the date of creation as possible. I was once embroiled in a lengthy court battle over this very issue.
The next important part of the agreement is the warranty and indemnity provision. The writer must warrant that the work is original and will not infringe upon anyone else’s work. Remember that this does not apply to titles or ideas, although some writers apparently think otherwise.
The scope of the indemnity provision is extremely important to the writer. Unless he negotiates with the publisher to limit his liability against third party claims, he could end up on the line for all of the publisher’s legal fees, even if the underlying claim is frivolous. This is a very real possibility and should not be overlooked.
The next important section (and songwriter’s favorite portion, most likely) is the compensation section. Typically, the writer can expect to receive a portion of mechanical royalties, synchronization fees and royalties, public performance royalties (i.e., from airplay) and print royalties. The print royalty section is the most archaic section of the agreement and goes back to the days when music publishers were essentially print publishers who sold sheet music. Today, a songwriter would be lucky to have their work sold as a piece of sheet music. Mechanical royalties are the royalties that are generated from the sale of records (you remember records, don’t you?), compact discs and legal digital downloads. Synchronization royalties are the royalties generated from a “synchronization” of a song with a motion picture (movie, TV show, commercial, etc.).
Typically, a publisher splits all of this income with the writer under the terms of the single song agreement. Public performance income (radio, live performance, etc.) is paid directly to the writer by his or her PRO, or performance rights organization. The three PRO’s in the US are BMI, ASCAP and SESAC. Under a typical single song agreement, the writer has no claim to the publisher’s share of public performance income, or vice-versa.
The grant of rights provision can be critical to the writer. Usually, the writer will want to make sure that the publisher does not have permission to change the title, lyrics or music to a song without the writer’s consent. Also, the writer might want to limit the use of the work in certain kinds of films, commercials and/or political campaign. Without limiting language here, the writer has no control over these types of exploitations.
The next salient section is the accounting section. The writer wants to be sure that the publisher accounts to him (i.e., rendering a statement and a payment if applicable) at least twice a year. Additionally, most agreements allow the writer to object to the statement for up to one (1) year after receiving the statement. The writer should endeavor to increase that amount of time to at least two (2) to three (3) years. This period of time can fly by and you do not want to lose your contractual right to question a statement.
Another major issue in a standard single song agreement is demo costs. Some of these costs are almost always recoupable (that is, taken for reimbursement by the publisher from the writer’s share of royalties). The writer will want to be sure that he or she has a handle on what the costs will be. Understandably, keeping a handle on demo costs is also very important to the publisher.
Also, though this is rarely an issue, the writer will want to make sure the publisher cannot exploit the demo without approval from the writer.
Finally, this leaves the issue of a reversion clause. Most drafts of single song agreements omit the reversion clause, although, in my experience, the publisher will usually add this clause if requested. Essentially a reversion clause provides that if the publisher does not commercially exploit the composition within a certain amount of time, it reverts to the writer. This is fair, because in most single song agreements (as opposed to exclusive songwriting agreements) the publisher does not “buy” the song from the writer; his or her part of the deal is to get the song cut. Further, if the publisher cannot exploit the song, it is not really valuable to his or her catalog, yet it has intrinsic value to the writer.
It used to be easy to figure out the terms of a reversion. Exploitation used to mean that a song was recorded and released by an artist on a record label with national distribution or included in a film with some sort of synch fee. In the current environment, where anyone with an internet account can distribute nearly anything, this distinction becomes much more vague. The writer must pay special attention to this provision to ensure that he can live with its terms.
I hope this overview provides some insight into the workings of this document and proves there is no such thing a “just a standard single song agreement.” Although these agreements may seem similar in scope, each section of each agreement needs to be carefully reviewed.
First and foremost, a single song agreement is an assignment of copyright. Section 204 of the Copyright Act of 1976 says that any assignment of copyright must be in writing. Therefore, unlike certain verbal assignments that that occurred under the 1909 Copyright Act, you cannot assign your copyright in a musical composition unless you do so in writing. Also, except in very limited circumstances, you should never agree to assign your composition as a “work made for hire.”
Also, if there is more than one writer on a composition, and they are both/all assigning their copyright interest to the same publisher, the single song agreement is the document which details the writers’ percentages of the composition. It is important to note that the law presumes the splits to be equal unless specifically outlined. This split should be decided upon as near the date of creation as possible. I was once embroiled in a lengthy court battle over this very issue.
The next important part of the agreement is the warranty and indemnity provision. The writer must warrant that the work is original and will not infringe upon anyone else’s work. Remember that this does not apply to titles or ideas, although some writers apparently think otherwise.
The scope of the indemnity provision is extremely important to the writer. Unless he negotiates with the publisher to limit his liability against third party claims, he could end up on the line for all of the publisher’s legal fees, even if the underlying claim is frivolous. This is a very real possibility and should not be overlooked.
The next important section (and songwriter’s favorite portion, most likely) is the compensation section. Typically, the writer can expect to receive a portion of mechanical royalties, synchronization fees and royalties, public performance royalties (i.e., from airplay) and print royalties. The print royalty section is the most archaic section of the agreement and goes back to the days when music publishers were essentially print publishers who sold sheet music. Today, a songwriter would be lucky to have their work sold as a piece of sheet music. Mechanical royalties are the royalties that are generated from the sale of records (you remember records, don’t you?), compact discs and legal digital downloads. Synchronization royalties are the royalties generated from a “synchronization” of a song with a motion picture (movie, TV show, commercial, etc.).
Typically, a publisher splits all of this income with the writer under the terms of the single song agreement. Public performance income (radio, live performance, etc.) is paid directly to the writer by his or her PRO, or performance rights organization. The three PRO’s in the US are BMI, ASCAP and SESAC. Under a typical single song agreement, the writer has no claim to the publisher’s share of public performance income, or vice-versa.
The grant of rights provision can be critical to the writer. Usually, the writer will want to make sure that the publisher does not have permission to change the title, lyrics or music to a song without the writer’s consent. Also, the writer might want to limit the use of the work in certain kinds of films, commercials and/or political campaign. Without limiting language here, the writer has no control over these types of exploitations.
The next salient section is the accounting section. The writer wants to be sure that the publisher accounts to him (i.e., rendering a statement and a payment if applicable) at least twice a year. Additionally, most agreements allow the writer to object to the statement for up to one (1) year after receiving the statement. The writer should endeavor to increase that amount of time to at least two (2) to three (3) years. This period of time can fly by and you do not want to lose your contractual right to question a statement.
Another major issue in a standard single song agreement is demo costs. Some of these costs are almost always recoupable (that is, taken for reimbursement by the publisher from the writer’s share of royalties). The writer will want to be sure that he or she has a handle on what the costs will be. Understandably, keeping a handle on demo costs is also very important to the publisher.
Also, though this is rarely an issue, the writer will want to make sure the publisher cannot exploit the demo without approval from the writer.
Finally, this leaves the issue of a reversion clause. Most drafts of single song agreements omit the reversion clause, although, in my experience, the publisher will usually add this clause if requested. Essentially a reversion clause provides that if the publisher does not commercially exploit the composition within a certain amount of time, it reverts to the writer. This is fair, because in most single song agreements (as opposed to exclusive songwriting agreements) the publisher does not “buy” the song from the writer; his or her part of the deal is to get the song cut. Further, if the publisher cannot exploit the song, it is not really valuable to his or her catalog, yet it has intrinsic value to the writer.
It used to be easy to figure out the terms of a reversion. Exploitation used to mean that a song was recorded and released by an artist on a record label with national distribution or included in a film with some sort of synch fee. In the current environment, where anyone with an internet account can distribute nearly anything, this distinction becomes much more vague. The writer must pay special attention to this provision to ensure that he can live with its terms.
I hope this overview provides some insight into the workings of this document and proves there is no such thing a “just a standard single song agreement.” Although these agreements may seem similar in scope, each section of each agreement needs to be carefully reviewed.
Sunday, July 19, 2009
I've been away
I've been away on my first long trip in 12 years, as well as dealing with all the surprises and scheduling issues of summer. However, I have a lot to write about so, if you're so inclined..stay tuned.
Trip
Saturday, May 30, 2009
If You Can't Type Something Nice About Someone Don't Type Anything At All
I read an article this week about the dangers of getting sued for comments made while blogging. While this may seem like a remote possibility to those who frequent Facebook and Twitter, this sort of litigation is becoming a very real phenomenon. In the past couple of months I have counseled a client who was sued in another state simply for posting a true comment and a photograph on his website. Conversely, I had another client contact me because of disparaging and untruthful remarks posted about him on an internet message board.
In the first example , most people would immediately think that a case like that would be thrown out of court. While that may be ultimately true , remember the broad range of the internet. Essentially, my client is having to defend an action in a foreign state at great expense. As attorney Miriam Wugmeister said in the Wall Street Journal article I read “Though the likelihood of a plaintiff winning a lawsuit (of this type) is not high, you could go bankrupt just from defending against them.” Just to make matters more complicated, it also appears that the rules of personal jurisdiction as they apply to the internet are changing and expanding, after we thought they were fairly well settled.
There is something about the ease and instantaneousness of posting on the internet which makes it fairly certain that these cases will continue. Remember that the common law principles of defamation are not suspended on the internet, nor are the core principles of trademark law and copyright law.
In the first example , most people would immediately think that a case like that would be thrown out of court. While that may be ultimately true , remember the broad range of the internet. Essentially, my client is having to defend an action in a foreign state at great expense. As attorney Miriam Wugmeister said in the Wall Street Journal article I read “Though the likelihood of a plaintiff winning a lawsuit (of this type) is not high, you could go bankrupt just from defending against them.” Just to make matters more complicated, it also appears that the rules of personal jurisdiction as they apply to the internet are changing and expanding, after we thought they were fairly well settled.
There is something about the ease and instantaneousness of posting on the internet which makes it fairly certain that these cases will continue. Remember that the common law principles of defamation are not suspended on the internet, nor are the core principles of trademark law and copyright law.
Thursday, May 14, 2009
Let Us Now Praise Barbara Ringer
I read last weekend about the death of Barbara Ringer, who as the Register of Copyrights from 1973 to 1980, helped negotiate the massive overhaul of US copyright law that resulted in the Copyright Act of 1976. Although the seminal provisions of the Act are taken for granted today, Ms. Ringer is probably the person most responsible for codifying the termination of assignments provision of the Act, which allow authors and their heirs the right to reclaim their work, Although the 1909 Act had a variation of this provision as one of its tenets (in its two term approach) the system was abused and inherently unfair to authors and composers. The 1976 Act also codified the provisions of Fair Use for the first time. This paved the way for the decision in Sony v. Universal City Studios- certainly the most important technology case in the last 50 years
Ms. Ringer’s obituary in The Wall Street Journal quoted a law professor who opined that from a technological standpoint, the 1976 Act was obsolete from the moment it was passed. I disagree. I think that one of the great strengths of our copyright law is its ability to expand to handle each new technological innovation. although the challenges and possibilities presented by technology today could not have been imagined in the 1970’s.
Monday, May 11, 2009
In Praise of Biz Town
I had a great opportunity several weeks ago. I volunteered to assist my daughter’s sixth grade class on their two day visit to Junior Achievement’s Biz Town. I wish that there had been something like this when I was her age (or even in college). Essentially, Biz Town is a miniature city where the student- citizens fill all the roles from banker to mayor to postal worker, broadcaster, restaurant workers, right down to the Chief Financial Officer of the pet food store.
If I understand the principal correctly, Biz Town is a model of “circular flow”. The kids learn how money flows from the government to the bank to local businesses, to individuals, back to business and charities and back to the government in the form of taxes. The cool part was that the students assumed all of the responsibility of business owners and consumers. They had to deal with every aspect of running their business from borrowing money to figuring out how to price items to sell. The kids I was watching actually had to deal with the fact that the bank screwed up their loan application, which necessitated nine trips back to the bank. They had to learn to act with grace under pressure. As consumers, they had to balance their checkbooks, pay taxes, deposit their paychecks and save money for lunch, etc. If a student was overdrawn, they couldn’t buy anything else. If a business didn’t make a profit, it went bust. It was fascinating to watch this little microcosm unfold over the course of a two day period. I think the students learned something truly valuable about the way the world works.
Back when I was in school, I had a vague conception of what Junior Achievement was. I thought that they sold things like leather key rings, bookmarks and other non-essential items. I had no idea that Junior Achievement had become so relevant and so much fun. This is a truly unique enterprise, which should be commended.
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