recording agreements

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.

Copyright Update: Digital Music Streaming Issues

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This paper was written and presented by Tamera H. Bennett at the 28th Annual Technology Law seminar hosted by UTLaw CLE. It has been edited into multiple blog posts. Enjoy part 1 below, Part 2 here, Part 3 at this link and Part 4.

I.          Streaming Pennies Are Hard to Divide

While most songwriters and artists thrive on the creative process of crafting their next song or production, the creative process by itself often does not put money in the bank.  The songs and sound recordings need to be commercially exploited with the hope and goal of securing licensing fees.

Whether you’re a label, artist, music publisher or songwriter, you either know or are quickly realizing the music business is a business of pennies. Those pennies are often so sliced and diced the music business has become a business of percentages of pennies.  Copyright owners often spend as much time tracking down payment for licensed uses as they do tracking down unlicensed content on the web. 

In 2014, for the first time revenues from digital channels equaled revenues of physical format sales with both accounting for forty-six percent of global revenues.

The new media – or digital space is huge and growing. In 2014, the music industry’s global digital revenues increased by 6.9 per cent to US$6.85 billion. IFPI DIGITAL MUSIC REPORT 2015 at 6. For the first time, revenues from digital channels equaled revenues of physical format sales with both accounting for forty-six percent of global revenues.

Thirty-two percent of digital revenues are from subscription and ad-supported streaming services, up from 27 per cent in 2013. Digital downloads still account for the majority of digital income coming in at 52 percent of global digital revenue. An estimated 41 million people paid for music subscription services in 2014, five times the level of eight million people in 2010. Once the royalties for digital downloads and streams are collected, they have to be distributed to the copyright owners.

When discussing the music business and who owns what rights, it's important to note that there are two copyrights involved in each musical recording. 17 U.S.C. § 102. The copyright that attaches to the song covers the words, music, and the arrangement. Sound recordings are defined as “works that result from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work.” 17 U.S.C. § 101. The song copyright is owned by the song writer or a music publisher who was assigned the copyright. The copyright in a particular version of a recording is owned by the artist or record label. 

As an example of the difference between owning the song copyright and the master/sound recording copyright, recall that Dolly Parton is the songwriter of the hit “I Will Always Love You.” Neither Dolly Parton nor the music publishing company that owns the song copyright for “I Will Always Love You,” have any ownership in the sound recording copyright for the version of the song recorded by Whitney Houston for the movie “The Bodyguard.” Nor does the record label or Whitney Houston’s estate have any ownership in the song copyright. 

While music publishers and record labels are fighting their own issues on getting paid (and sometimes against each other), this article focuses on new media recent legal issues facing sound recording copyright owners.

Stay tuned for additional posts in this series.

Entertainment Law Update Podcast - Episode 47

Film/TV lawyer Gordon Firemark and Copyright/Trademark lawyer Tamera Bennett cover a "Motley Crew" of topics this month including trademark, copyright, film and tv legal issues surrounding the "Counting Crows," "Raging Bull," "Insane Clown Posse," and "Sherlock Holmes" .... to name a few.  Click here to listen.

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Entertainment Law Update Podcast 42 - For IP Lawyers

Film lawyer Gordon Firemark and music lawyer Tamera Bennett bring you a mid-Summer podcast covering film, tv, trademark, copyright and employment law issues. Click here for the July 2013 Entertainment Law Update Podcast.  Be sure to subscribe to the podcast in the iTunes store and share a review.

"When The Band Gets Divorced - Mediating The Band Partnership Dispute"

"When The Band Gets Divorced - Mediating The Band Partnership Dispute"1 hr CLE pending

Join attorney/mediator Tamera Bennett at the Belo Mansion at Noon on Wednesday, March 27, 2013 for a discussion on common issues band members mediate when a member departs and/or the band dissolves.

We'll be taking a look at the "Sugarland" partnership dispute, the recent "En Vogue" dispute, as well as the "J Geils Band" dispute and applying those fact patterns to structuring a successful mediation for your client.

Dallas Bar Association Belo Mansion 2101 Ross Avenue Dallas, Texas 75201 214-220-7400

Will Play for Tips: Legal Tips for Musicians/Artists/Songwriters at 35 Denton

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SATURDAY, MARCH 9TH at 35 Denton3:00 PM – 4:30 PM (UNT on the Square)

Will Play for Tips: 5 Legal Tips for Musicians/Artists/Songwriters

Join the Dallas Bar Association Sports & Entertainment Law Section for a panel presentation on March 9 from 3:00 PM – 4:30 PM at UNT on the Square, 109 N. Elm St. Denton, TX 76201.This introduction to legal issues in the music business panel will help you answer questions such as Who owns my song? Do I need a lawyer? How do I protect my brand? That's "fair use," right? and Can't we all just get along? Join us for a discussion covering copyright law, trademark law, business structure for the band and other music business legal basics.Participants in the panel include:

Tamera H. Bennett

, Bennett Law Office, PC/Farm to Market Music, LLC; 

Catherine Hough

, Ferguson Law Group;

Evan Stone

, Law Offices of Evan Stone;

Kevin Harrison

, Kevin Harrison Law.

Free and open to the public. 1.5 hour MCLE pending.

Digital Distribution Income Flow Chart for Music

This Digital Distribution Aggregation flow chart provides answers to basic questions on how a record label, or artist that owns their master recordings/sound recordings, can use a digital content aggregator to make their sound recordings available on iTunes, Amazon, Spotify and other digital services. The flow chart is not all-inclusive and is not intended to endorse any particular aggregator. There are lots of choices out there these days. The chart will give you a starting point/frame of reference.

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.

Entertainment Law Update Podcast 26: Zombies, Crowds, & Trees

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Take a listen to the latest edition of the Entertainment Law Update Podcast with co-hosts L.A.  film lawyer Gordon Firemark and Texas-based music lawyer Tamera Bennett. I would like to give a personal shout-out and thank you to Gordon for bringing me on board for this great podcast.  I am looking forward to an amazing 2012 for the podcast and can't wait to see who might be making a surprise visit as guest co-host!

George Clinton v UMG: Royalty Disputes and More

This article is was originally published in Billboard Magazine and has been reprinted with permission. George Clinton v. Universal Music Group Highlights Time Limits On Royalty Claims, BILLBOARD, Sept. 29, 2011.

by Tamera H. Bennett

Judging from pioneering funk productions helmed by Parliament-Funkadelic mastermind George Clinton, the man knows the value of staying on the beat and keeping time.

But the apparent failure of Clinton to keep an eye on the clock could cost him dearly in terms of royalties he claims he’s still owed. The decision highlights one of the challenges facing heritage artists and their heirs in navigating claims for underpayment of digital downloads and possibly other new media uses of their copyrights. In addition to keeping track of royalties due to them (which can require costly audits), artists must also be aware of how long they have to raise objections to the size of the payments they receive.

In 1980, Clinton signed a production agreement with Casablanca Records, which is now owned by Universal Music Group. UMG claims that it couldn’t reach Clinton for years and that it was unable to send him royalty statements. Once Clinton re-surfaced in 2001, UMG sent back royalty statements and payments to Clinton for the years 1996 to 2000.

But Clinton sued UMG in 2007 for breach of contract, claiming that the label group didn’t pay him all the royalties he was due from 2000 to 2003. His production contract required Clinton to provide detailed and specific objections to his royalty statements and he complied -- almost. Clinton outlined under-payments, non-payments and improper withholding of taxes.  What Clinton never specified was that he had been underpaid for royalties stemming from digital downloads.

Then earlier this year, Clinton amended his lawsuit claiming for the first time that UMG had not paid him the correct royalty rate for digital downloads, citing a 2010 decision by the U.S. Court of Appeals for the Ninth Circuit in F.B.T. Productions, LLC v. Aftermath Records. In the F.B.T. case, the court held that in certain contractual situations digital downloads are a license and as such the record label must pay a higher royalty rate to the artist.

Clinton had the right under his production agreement to review and audit royalty statements to determine if UMG had properly paid him. Clinton also had the right to sue UMG if it failed to do so.

But both of these rights had a time limit --- three years after the date a royalty statement was “rendered” to Clinton. It is very common in recording agreements for there to be a time limit on bringing a lawsuit, a period of time which is usually shorter than the statute of limitations stipulated in state or federal law.

Three years seems like a pretty easy way to calculate a deadline. Indeed, in 2003, Clinton and UMG agreed to a “tolling” agreement that effectively froze time so the three-year window within which Clinton had to file a lawsuit for the statements rendered in 2000 and later would not run out.

But on Aug. 9,  U.S. District Court Judge Philip S. Gutierrez ruled that the clock had started running three years from the time Clinton should have received his royalty statement. If Clinton didn’t receive his royalty statement, his 1980 contract placed the responsibility on Clinton to tell UMG in writing that he never got his statement. Clinton’s four-year absence cost him the ability to sue UMG for potential accounting errors over multiple years.

In his ruling, Gutierrez made it clear that Clinton failed to specifically object to the underpayment of digital download royalties in a timely manner. Because Clinton didn’t comply with the requirements in his recording contract, he lost the opportunity to challenge UMG on years of royalty statements specifically related to digital downloads.

At the end of October, Gutierrez will determine whether Clinton v UMG will go to trial on the question of whether the tolling agreement was valid. The district judge ruled that it wasn’t valid, but an appeals court reviewed the decision and sent the question back to Gutierrez.

If the tolling agreement is valid -- that is, if Clinton’s suit against UMG is deemed to have been filed within the required time frame, then Gutierrez will rule on Clinton’s claims that UMG failed to pay him royalties due to him, excluding those for digital downloads. This is a significant concern for any label or artist. Even though there is no binding court decision in Clinton v. UMG on this issue, it has become imperative to include language that references the freezing of all statutory limitations periods as well as contractual limitations periods.

The possibility that the tolling agreement could be declared invalid has prompted Clinton to sue his now-former lawyers for legal malpractice. Tamera H. Bennett is an entertainment and intellectual property attorney based in Lewisville, Texas.

Protecting An Artist's Legacy Through Estate Planning: Dallas Bar CLE

In the US alone, thousands of copyright creators and/or copyright owners die each year.  How many of these folks create a comprehensive estate plan, or even a basic will or simple trust?  The goal of estate planning is to minimize the potential for probate litigation, make life easier for those left behind, and to preserve an artist's legacy. All to often we see cases where artists simply failed to plan for the protection and/or distribution of their estate.  Perhaps even more heart-breaking and legally interesting are the cases where the plan failed and the heirs, with the assistance of the court, were able to override the estate plan.

Austin based music and estate planning lawyer Ken Pajak and Dallas based music publishing lawyer Tamera H. Bennett presented "Protecting An Artist's Legacy Through Estate Planning:  Probate and Post -Death Administration of an Artist's Rights to the Sports and Entertainment Law Section of the Dallas Bar Association on May 25, 2011.

To review the article and handouts prepared by Ken Pajak and Tamera Bennett for the "Protecting An Artist's Legacy Through Estate Planning" presentation click here and here.

For quick links to the topics and cases of interest discussed at the CLE and in the article click here.

By clicking on the names you can read more on the estates of Bobby Fischer, Jack Kerouac, Darrell "Wayne" Perry, and James Brown.