estate planning

Music, Estates, Taxes and the IRS - Latest On Michael Jackson and Prince

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The Value of Michael Jackson's Right of Publicity

What's the value of a name? That is the question the IRS is asking in a dispute over the post-death value of Michael Jackson's name and likeness.  Under California law, where Michael Jackson resided at the time of his death in 2009, his right of publicity lasts for 70 years after his death. That means his estate can continue to make money from licensing the rights to use Michael Jackson's name, likeness, and voice.

The IRS Court will need to determine the value of Jackson's right of publicity at the date of his death.  The rub is that the family says the value was almost zero at the date of his death because Jackson was taking minimal steps to promote his name and likeness. Post-death, the family ramped up efforts to maximize revenues and did a great job promoting and licensing the name and likeness rights of Jackson. The IRS claims they are entitled to the increase in value, not just the purported value at death.  The asserted value at death was $2,105. The IRS claims the value is closer to $434 million.

The valuation does not take into account revenues from song or sound recording copyrights owned or licensed by Jackson.

Hindsight might be 20/20.  Music attorney Tamera Bennett was interviewed in 2009 on the value of the Jackson estate and stated, "Michael Jackson’s most valuable asset is his name and likeness, ie, his right of publicity. This right is descendible under California law. For estate tax purposes the value of his right of publicity is speculated to exceed the liquid assets of his estate."

Prince's Estate Tax Payment Could Have Been Reduced

Prince died in April 2016 without a will, trust, or other estate or tax planning documents in place. In a worst case scenario, Prince’s estate is subject to a federal tax of 40 percent and Minnesota’s state tax of 16 percent. In January 2017, Prince's estate had to make its first estate tax payment to the IRS. It's estimated the estate will owe $100 million in taxes.

Like the Jackson estate, the Prince estate is working to maximize revenues from the music assets. Deals were struck to have Prince's music catalog available on all major streaming services in February. Most likely a choice Prince would have personally hated based on the limited streaming deals he did during his lifetime. Additionally, Universal acquired rights to Prince's "vault" of back catalog recordings that have not been released.

Music attorney Tamera Bennett discussed the Prince estate issue with KRLD radio news manager Mitch Carr in the days following Prince's death. You can listen to the interview by clicking here.

Entertainment Law Update Podcast - The Top Cases and News of 2016

music-lawyer-tamera-bennett-trademark-entertainment-law-update-podcast-year-in-review-2016

Listen to Dallas-area music lawyer Tamera Bennett and Los Angeles film lawyer Gordon Firemark discuss the latest entertainment law issues on the Entertainment Law Update Podcast.

Click the arrow below to listen to the Entertainment Law Update Podcast or subscribe in iTunes.

In Episode 80 of the Entertainment Law Update Podcast, Tamera and Gordon offer an unscientific take on the top copyright, trademark, film, TV and other entertainment law cases of the year. The round-up includes:

Please leave us listener feedback at the iTunes store. Your comments will help other folks find our podcast.

EntLaw Update does a phenomenal job of keeping you current on issues of interest to anyone working at the intersection of law and media. Hosts Gordon Firemark and Tamara Bennett are personable and engaging, presenting stories in well-organized fashion that often leaves room for humor. As an avid consumer of law podcasts, I have to say this one is my favorite — if you need a reminder that the law isn’t *always* boring, Entertainment Law Update is what the doctor ordered!
— Michael

This post contains affliate links. That means if you click a link I may receive a benefit.

Tamera H. Bennett - Mediation, Trademark, Copyright Spring 2016 Newsletter

Here's the latest news from Denton County trademark and music lawyer Tamera Bennett. Click the link to see updates from Tamera on her news interview on Prince's estate, walking the Cowtown Half Marathon, and protecting your band name as a trademark.

Texas Music Lawyer Tamera Bennett Interviewed On Prince Estate Issues

Lesson Learned From Prince Make an Estate Plan attorney Tamera Bennett interviewed on KRLD. #princerip #rightofpublicity #estateplan #copyright

Dallas copyright and music attorney Tamera H. Bennett was interviewed today by KRLD Radio News Anchor Mitch Carr regarding what happens now to the assets in Prince's estate.

The death of music icon Prince shook the music world . . . but it's also causing headlines in the legal world. Prince's sister Teeka Nelson has gone to court to ask that someone be named to take over her brother's multimillion-dollar estate . . . and says there is NO WILL.

Click the arrow below to hear Mitch Carr and Tamera Bennett's conversation recorded on April 27, 2016.

Transcript of interview with Texas Music Lawyer Tamera Bennett on Prince Estate:

Mitch Carr -- The death of music icon Prince shook the music world . . . but it's also causing headlines in the legal world. Prince's sister Tyka Nelson has gone to court to ask that someone be named to take over her brother's multimillion-dollar estate . . . and says there is NO WILL.

Tamera Bennett -- So two different things were talking about.  Dying intestate means he died without a will.  

Mitch Carr -- Okay.

Tamera Bennett -- So he didn't have a written document saying this is how I wish for my assets to be disbursed upon my death.  So he dies intestate which means the state of Minnesota, just like every other state, has statutes that say who will get what upon his death.  It will go to his siblings.  And, under Minnesota law his half-siblings are treated as equal to his -- I believe he has one sister who is a full sibling.

Mitch Carr -- Right. I think what's important here is this can be a life lesson for all of us.

Tamera Bennett -- It sure can. Because we want to -- I think most of us want to control what happens to what we own whether it be small or large-- at the end of the day. And, even more than that do we really want to put our family into a position of having to figure out our wishes? And, sometimes these kind of disputes can not be fun.  So, I'm hopeful that their family will not have a lot of disputes. But, they might. We've seen it with other estates as they've passed away -- Ray Charles, James Brown.  And, in those cases they actually did do a plan.

Mitch Carr --  The fact that there can be fights either way, what does that tell us about how we should do our estate plan? How can we draw something up that won't end up in a legal battle?

Tamera Bennett --  There's nothing that's ever foolproof because it depends on the people who are left.

Mitch Carr -- Alright.

Tamera Bennett -- So, one of the recommendations we often have for people is to spell out why you're leaving them what you're leaving them. And, you don't fully disinherit people.

Mitch Carr -- The bottom line here from a legal aspect is do what you can but nothing's foolproof.

Tamera Bennett -- Exactly right and I think what's interesting partly about Prince is that there are some assets that he has that are very valuable that under Minnesota law it's going to be difficult to figure out who gets them. And one one of that is his right of publicity. So his name and likeness is obviously very valuable. In Texas we actually have a statute that says if -- pretty much -- if you're a famous person and you take value from your name or your likeness or you license that, for fifty years after your death, your heirs can benefit and control how your name and likeness is used. Minnesota doesn't have that law saying that it's inherited.

Mitch Carr -- It's unclear how much Prince's estate is worth. But during his career, he made hundreds of millions of dollars for record companies, concert venues and others . . . and he owned $27 million in property near Minneapolis.

Follow Tamera on Twitter @tamerabennett and Mitch on Twitter @mitchcarrnews.

The clip is used by permission of KRLD-CBS Dallas.

Sherlock Holmes - Some Copyright, Some Not

In a 10-month-long dispute between the Conan Doyle Estate and writer/editor Leslie Klinger, the trial court ruled 50 of the Sherlock Holmes stories, all published prior to 1923, are in the public domain.  Ten stories published after 1923 are protected by copyright in the US.

The court held elements introduced in the Sherlock Holmes stories published after 1923, such as Watson having a second wife, remain under copyright in the United States.

The UK copyright for all the Sherlock Holmes stories expired in 1980.  According to UK law, the term of copyright protection is the life of the author plus 50 years.  Mr. Doyle died in 1930.

Even though the works were originally published in England, they still receive copyright protection in other countries. The protection in the US, is based solely on US law.  So why is 1923 the magic year in the US, the short answer is with implementation of the Copyright Term Extension Act it was determined that works published prior to 1923 are in the public domain. “Because of legislation passed in 1998, no new works will fall into the public domain until 2019, when works published in 1923 will expire. In 2020, works published in 1924 will expire, and so on.”

Read more about the history of the  dispute and ongoing trademark issues here.

Hear film lawyer Gordon Firemark and copyright lawyer Tamera Bennett discuss the case on the Entertainment Law Update Podcast Episode 47 and Episode 43.

Copyright Grant Termination Can Undo Songwriter Estate Plan Part 1

Ray Charles planned ahead and gave each of his 12 children $500,000 in trust as their inheritance and required a release of any future claims against his estate.  What he didn't plan on was his heirs (children) exercising their ability under the U.S. Copyright Act to file notice of termination of the copyright assignments for Charles' songs and reclaim those revenue streams.  Charles left the bulk of his estate, including his copyright assets, to The Ray Charles Foundation for the benefit of hearing and seeing impaired persons. There are two schemes for termination of copyright grants under the U.S. Copyright law and they arise from works created and published pre or post January 1, 1978.  Ray Charles' wrote songs and signed copyright assignments falling into both categories, which makes this a very rich fact pattern.  The specific timing requirements for the notices are covered in detail here.

In a legal opinion focused primarily on the applicability of California's Anti-Slapp statute, you'll find some great nuggets on the intersection of estate planning and copyright law.

1.  A copyright grant termination notice is not "a claim against the estate" if probate on the estate has closed.   Which raises the questions: what if probate is still pending? or probate never occurred and the window of time under state law probate proceedings has past? or filing a notice of termination would be timely while probate is pending? or the heirs must file the termination notices before the probate proceedings end to fall with the notice window?

2.  If copyrights were created as "Works for Hire" then the copyrights were never part of the author's estate and filing the notice of termination could not be a claim against the estate.  Of course, no heir wants to argue "work for hire" because anything created as a work for hire does not have a right of termination.

3.  A termination right is inalienable because under the statute, "termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or a future grant."  Does this mean there is no way for an author to control post-death what happens to his/her copyrights?

The opinion in this case was rendered in early 2013.  While notice of an appeal was filed, there has been no additional recorded court activity.  I suspect The Ray Charles Foundation and the heirs are entering into some form of negotiation.  Which leads to Part 2 of this post (coming soon) which addresses why The Ray Charles Foundation needs the Charles' heirs to maximize the value of the Foundation.

I've written numerous times about heirs reversing an estate plan via their statutory rights granted under the U.S. Copyright Act in relationship to Renewal of Copyright and Termination of Copyright Grants.  Read more here, here, and here.

Applicable code sections: 17 U.S.C. 203, 304.

Case cite: The Ray Charles Foundation v. Robinson, 2:12-cv-02725-ABC-FFM, (USDC Cal. 2013).

Malcom X Heirs Sue for Copyright Infringement and Injunction

The Heirs of Malcom X sue to stop the publication of key portions of Malcom X's diaries.  While the diaries were donated to the New York Public Library, the family argues no copyright transfer has occurred to allow defendant, Third World Press, to print all or any portion of the diaries.    The family, via the entity X Legacy, LLC, seeks emergency injunction relief to stop the publication.  To add to the confusion, one of Malcom X's daughters is an editor of the project and seems to be defending the actions of Third World Press. Donating of papers to a library or other organization is a common practice of high-profile individuals.  The act of donation does not constitute a transfer of the copyright.  At a minimum, in accordance with the terms of the donation or loan agreement, the donee may have the ability to display the materials for research purposes or public review.

At this stage in the litigation process, it is unclear on what grounds Third World Press, LLC is claiming they have the right to reproduce and distribute the diaries.

Sherlock Holmes, Elementary, Copyright Protection and Trademarks

Updated 2/10/14

In a 10-month-long dispute between the Conan Doyle Estate and writer/editor Leslie Klinger, the trial court ruled 50 of the Sherlock Holmes stories, all published prior to 1923, are in the public domain.  Ten stories published after 1923 are protected by copyright in the US.

The court held elements introduced in the Sherlock Holmes stories published after 1923, such as Watson having a second wife, remain under copyright in the United States.

The UK copyright for all the Sherlock Holmes stories expired in 1980.  According to UK law, the term of copyright protection is the life of the author plus 50 years.  Mr. Doyle died in 1930.

Even though the works were originally published in England, they still receive copyright protection in other countries. The protection in the US, is based solely on US law.  So why is 1923 the magic year in the US, the short answer is with implementation of the Copyright Term Extension Act it was determined that works published prior to 1923 are in the public domain. “Because of legislation passed in 1998, no new works will fall into the public domain until 2019, when works published in 1923 will expire. In 2020, works published in 1924 will expire, and so on.”

ORIGINAL POST:

"It's elementary my dear Watson, Sherlock Holmes might still have copyright protection."  Not precisely the definitive answer one expects from Sherlock's reasoning of all things - even the intricacies of copyright law.

The recent  lawsuit filed against the estate of Sir Author Conan Doyle might bring out  heirs of other great works created in the late 1800's and early 20th century to see just how long copyright protection can be stretched.

The character of Sherlock Holmes  first appeared in publication in 1887 and was featured in four novels and 56 short stories spanning until 1927.  According to US Copyright Law, the works written and published prior to 1923 are in the public domain. That means the characters, story lines and plots are free for use.  The Estate asserts the works between 1923 and 1927 are infringed by the book In the Company of Sherlock Holmes scheduled for publication by Random House.  In order to head-off an infringement suit, author/editor Leslie Klinger filed a declaratory judgment action asking the Judge to find the copyright on certain works featuring Sherlock Holmes and certain elements of the stories has expired.

The Complaint filed does a great job laying out the facts regarding when certain elements were first used in the Sherlock Holmes stories and why those elements are in the public domain.

Read more from the The Hollywood Reporter ESQ blog and TechDirt.

Also visit the Conan Doyle Estate website to see which Sherlock Holmes projects have been "licensed" or "authorized."

On another interesting note, the Conan Doyle Estate Limited has been busy filing  trademark applications for the brand SHERLOCK HOLMES.  In 2010 the estate filed six intent to use trademark application featuring the name SHERLOCK HOLMES.  Based on US Patent and Trademark office filings, none of these trademarks are currently in use by the Estate.  The image above of Holmes with the Pipe is a registered trademark of the The Sherlock Holmes Memorabilia Company.  According to the Conan Doyle Estate Website, the Estate is pursuing cancellation of this trademark registration.

Allman Brothers Settle Class Action With Sony Over Digital Downloads

In a much watched lawsuit, the Allman Brothers, Cheap Trick and the Youngbloods reached a settlement with the Sony record label for back payment of digital download royalties. The lawsuit has been in the forefront of the dispute between record labels and recording artists over the treatment of digital download income in respect to contracts signed back before the advent of iTunes and mp3 files. This case was certified as a class action, so potentially the settlement terms could impact recording artists that had deals with Sony (or a predecessor) between 1976 and 2001.

Sony is not alone in facing litigation from artists that signed deals prior 2003 for the license vs sale issue.  The "Eminem Case" of F.B.T. Productions, LLC v. Aftermath Records was the pioneer case in which the Ninth Circuit held a digital download should be treated as a license, entitling an artist to a 50% royalty.

Click here for a running list of lawsuits over the sale vs license issue for digital downloads.

Recording Artists Suing For Digital Royalty Accountings

As promised, here is a running list of lawsuits filed against record labels over the license vs sale royalty issue for digital downloads.  Please be patient as we gather details on cases.  We may have a case name listed while we are in the process of tracking down the citation. (The Temptations) Otis Williams and Ron Tyson v UMG Recordings Inc., 3:2012cv01289, filed March 15, 2012, NDCA.

Allman Brothers v. Sony BMG Music Entertainment, 1:2006cv03252, filed April 27, 2006, SDNY.  As of 3/9/2012 The Court has preliminarily approved the Stipulation and the Settlement set forth, as being a fair, reasonable and adequate settlement as to all Class Members. A settlement in principal was reached a year earlier in March 2011.

Graciela Beltran v EMI Music, Inc., 4:2012cv01002, Feb. 28, 2012, NDCA.

Toto, Inc.  v Sony Music Entertainment,1:2012cv01434, filed Feb. 27, 2012, SDNY.

Gary Wright v. Warner Music Group, 4:2012cv00870, filed Feb. 22, 2012, NDCA.

Kenny Rogers v. Capitol Records, 3:2012cv00180, filed Feb. 13, 2012, MDTN.

(Sister) Sledge v. Warner Music Group Corp., 3:2012cv00559, filed Feb. 2, 2012, NDCA.

Felice Catena (Bruce Gary Estate /Knack) v. Capitol Records, LLC, 2:2012cv00806, filed Jan. 30, 2012.

Peter Frampton v. A and M Records Inc and UMG Recordings Inc., 2:2011cv10649, filed Dec. 23, 2011, CDCA.

Carlton Douglas Ridenhour (Chuck D of Public Enemy) v. UMG Recordings, Inc., 3:2011cv05321, filed November 2, 2011, NDCA.

Rob Zombie v UMG Recordings, Inc., 4:2011cv02431, filed May 18, 2011, NDCA.

Rick James Estate v. UMG Recordings, Inc., 3:2011cv01613, filed April 1, 2011, NDCA.

F.B.T. Productions, LLC v Aftermath Records, 621 F.3d 958 (9th Cir. 2010) cert denied. Holding digital downloads are a license not a sale.

George Clinton v UMG Recordings, Inc., 2:2007cv00672, filed Jan. 29, 2007, CDCA.

Right of Publicity -- 2011 In Review

When a famous person dies, the survival of the right to control and profit from their name and likeness depends on when they died and what state they lived in at their death.  Famous artists may need to take a closer look at where they call home during their life to insure their right of publicity has a home post-death. After losing a battle in 2005 to have Jimi Hendrix's right of publicity protected by New York state law, where Hendrix lived at his death, Hendrix's heirs worked to amend the Washington state right of publicity law.  Hendrix's heirs sued under the newly amended law. In 2011 a trial judge held Washington’s Personality Rights Act, that allowed anyone to sue in Washington to enforce their rights regardless of where the lived when they died, was unconstitutional.  The trial court's decision has been appealed to the Ninth Circuit.

This year an Indiana court ruled that Indiana's post-death right of publicity law cannot be applied retroactively.  The court ruled John Dillenger's heirs have no claim to Dillenger's name and likeness because Dillenger died before Indiana had a posthumous right of publicity.

A California  district judge's decision ruling Marilyn Monroe was a resident of New York at her death is on appeal to the Ninth Circuit.  If upheld, Monroe's post-death right of publicity would not be protected by changes to the California right of publicity statute which granted retroactive protection to famous California residents who died before 1985.  See Milton H. Greene Archives, Inc v. Marilyn Monroe LLC, 08-56471 (9th Cir. filed 2008).

Estate Updates On Bobby Fischer and James Brown

Where there's money ... there will be battles.... Bobby Fischer's Estate: An Icelandic Court's ruling may have ended the running dispute as to who is the actual heir to renowned chess player Bobby Fischer.  I blogged here about the dispute between the person claiming to be his child and the women claiming to be his wife.  DNA testing ruled out the child as an heir.  The court ruled in March 2011 that documentation was sufficient to prove a women from Japan was his wife at his death at would inherit his 2 Million dollar estate.

James Brown's Estate: There really is no end in sight for the dispute between the heirs over the James Brown Estate. I blogged here on the ongoing dispute between Brown's heirs and Brown's alleged heirs regarding his estate plan that included the bulk of his estate going to a charitable trust.  An action has now been filed to overturn a 2009 Settlement Agreement that allocated a portion of his estate to heirs that were not specifically named in his will. By the court's action in approving the 2009 Settlement Agreement, the corpus of the charitable trust was substantially reduced.