Ray Charles’ Music Publishers Win $6.6 Million DEFAULT copyright judgment
Ray Charles Songs Lawsuit Could Make Major Impact On Copyright Battles
Ray Charles’ Music Publishers Win $6.6 Million Suit [PDF]
songwriters hope more lyric sites will seek license after gaining this first judgment.
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| Sheila Raye Charles, daughter of legendary music Icon, Ray Charles, recently celebrated her father's birthday in his home town of Albany, Georgia keeping her fathers' legacy alive for generations to come. |
With that in mind, a group of music publishers including Peermusic, Bug Music and Warner Chappell Music has won $6.6 million in a copyright infringement lawsuit against LiveUniverse, Inc. for displaying lyrics online to such songs as Ray Charles' "Georgia on My Mind."
In a battle over rights to Ray Charles' famous songs, the charitable foundation that was bequeathed the singer's money and assets is suddenly in a tough spot, in danger of losing the substantial revenues that "I Got a Woman," "A Fool for You," "Mary Ann" and other hits generate each year.
That's because Charles' children, who largely were cut out of the will, are attempting to terminate a copyright grant on the songs to Warner/Chappell Music. If the songs reverted to the children, then the Ray Charles Foundation no longer would get royalty checks.
Among LiveUniverse's properties were lyricsdownload.com, completealbumlyrics.com and lyricsandsongs.com. None of the websites are still operational, which represents some form of victory by the publishers after three years of litigation.
In late March, facing this potential loss, the foundation sued the children, seeking a declaration that the termination notices are invalid. To make this argument, the estate argued that Charles' songs were made under employment to a record label and music publisher. As such, these songs are allegedly works made for hire, "authored" by the predecessor to Warner/Chappell, and the children have no termination rights.
“One of the principal purposes of our lawsuit was to obtain a large statutory damage award, which would serve as a warning to persuade illegal lyric site operators that it makes good business sense to become licensed and avoid having their site shut down and damages awarded against them,” said Ross Charap in a statement, representing the music publishers.
But if that's really true, shouldn't it be Warner/Chappell suing Charles' children? Read on....
Well......In late September, a judge arrived at the same conclusion but left the door slightly ajar to a lawsuit if the songs were not made for hire.
:So, rather incredibly, the Ray Charles Foundation switched positions just yesterday and now is arguing that the songs were not, in fact, made for hire. The litigation could set up the next big court decision on termination rights, a suddenly important part of copyright law that is causing the music industry fits now that artists such as Bob Dylan, Tom Waits and Tom Petty have sent their own notices."
Several years after music publishers began pursuing websites that published lyrics on the Web without permission, they may have their biggest payoff yet. A recent court judgment [PDF] against LiveUniverse makes it crystal clear: hosting an unauthorized lyrics site can get you in serious legal trouble.
LiveUniverse.com and its owner Brad Greenspan were slapped with a $6.6 million default judgment by Los Angeles federal judge Wu, this week for running a lyrics site that didn't pay for a license from music publishers. That's $12,500 per song for the 528 songs whose lyrics he was accused of infringing.
Those songs include “China Girl” by David Bowie; “Moondance” by Van Morrison; “(Don’t Go Chasing) Waterfalls” performed by TLC; “Wake Me Up When September Ends” by Green Day; “Old Time Rock ‘n Roll” performed by Bob Seger; and “Georgia on My Mind” performed by Ray Charles.
The 528 songs were chosen as representative songs for the litigation from the catalogs of the music publisher plaintiffs: Peermusic, Bug Music, and Warner Chappell Music.
Greenspan went through a "revolving door" of attorneys, often failed to comply with the court's instructions, and sometimes failed to show up to depositions and key hearings, according to Ross Charap and Paul Fakler, the Arent Fox lawyers representing the music publishers who sued Greenspan.
"He engaged in serial misconduct, and refused to pay the court sanctions," said Fakler. "Towards the end he would show up, and have either a new lawyer, or no lawyer."
That's what ultimately led to the default judgment. The court docket shows Greenspan's last lawyer withdrew from the case in August 2011.
There are thousands of lyrics sites, and many of them remain unlicensed. Music publishers started pursuing these sites several years ago, and now, they're starting to see some real revenue come from online businesses who have taken licenses. "This is an important new stream of revenue for publishers. They got nothing from it five or six years ago, and now they get tens of millions of dollars."
Charap hopes that a big judgment against LiveUniverse will ramp up efforts to complete the licensing, at least for US sites.
"The sites that are offshore say, 'I'm immune from suit, so I'm not going to bother taking a license,'" he said. "The intent here was to persuade all the sites based here [in the US] to take licenses, to try to persuade ISPs to tell their customers to be lawful, and to persuade advertisers not to be on these [unlicensed] sites."
Many more sites started taking licenses once lawsuits began to be filed, added Fakler. A typical license for a lyrics site involves paying 50 percent of revenue to music publishers and songwriters. This payment is based on the number of views particular songs get, so writers of hit songs will tend to earn the majority of that income.
It's unclear how quickly the plaintiffs will be able to collect their money, but Greenspan should be able pay. He is co-owner of MySpace who still owns a significant chunk of the company when it was sold to News Corp. for $580 million in 2005.
While users who post lyrics on sites may feel like it's a harmless act, the sites themselves aren't harmless. They're making serious advertising revenue, and ripping off songwriters and publishers. Unlike recording artists, songwriters only make money off licensing their songs to others.
"These sites are making hundreds of not millions of dollars a year, on the backs of people who write this music and own this music," said Charap.
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As previously reported, the Foundation sued Charles’s children in March after they tried to reclaim ownership of the songs from which the charity earns a royalty.
Under American copyright law, songwriters can reclaim ownership of copyrights they previously assigned to a music publisher 35 years after their original deal. That rule was passed in the late 1970s, and the 35 year term only applied to deals done after the new law was enacted (for existing copyrights the term was longer), so is only now really coming into effect. The Charles family, like a number of veteran songwriters, are now trying to exercise that right to reclaim control of their father’s works.
But the Foundation doesn't want that to happen, because it would deprive it of the royalties it receives from the Warner publishing company. In trying to block the family’s termination notice (which tells the publisher the family wants their father’s copyrights back), the charity presented various arguments, including a deal between Charles and his children when he was alive regards their inheritance which, the Foundation says, stops the descendants from making new claims over their father’s estate now, and a claim that a 1980 renegotiation of Charles’s deal with Warner voided the termination right under US copyright law.
The Foundation also threw in the argument that some of Charles’s songs were written on a ‘work for hire’ basis while he was signed to Warner/Chappell, which would mean the copyrights in those songs would automatically belong to the publisher, rather than the publisher getting the rights via a pre-existing ‘assignment’ agreement with the musician. It’s an important distinction, because if works are created by an individual on a ‘work for hire’ basis, the employer is technically the creator, meaning the songwriter loses the right to reclaim their works after 35 years (because they were never their works to reclaim).
US copyright law is a bit vague as to what constitutes ‘work for hire’ in this context, and that question is likely to become a very big deal in the next few years, as more veteran artists exercise their 35 year opt-out right. Some publishers will likely claim (indeed a few already have) that some termination notices submitted by songwriters are not valid because works were created on a ‘work for hire’ basis.
Though, actually, this debate will be more significant in the record industry, because the record labels are convinced the 35 year opt-out provision has no relevance to them, because all sound recordings created under a traditional record contract are done so on a ‘work for hire’ basis, meaning recording artists have no claim under this bit of American copyright law. Some recording artists and their lawyers beg to differ though, and the whole “how do you define work for hire” debate could end up in court.
But back to the Charles case. While the Charles family will dispute any claims their father’s work was created on a work for hire basis, they also hit back at the Foundation’s lawsuit by saying, if the songs in question were indeed made work for hire, meaning Warner/Chappell was the creator, then only the publisher could try to block the family’s termination notice, because the charity wouldn’t have any official status to pursue such a claim, as a mere beneficiary of work created by the Warner entity.
It’s another area where American copyright law is ambiguous, though the judge hearing the case last month basically agreed with the Charles family’s viewpoint on that issue. Which means, according to Billboard, the Foundation has changed its mind, and is now saying the disputed songs were not made on a ‘work for hire’ basis, but were created by Charles and the copyrights assigned to the publisher. Whether such a fundamental change of position will damage the Foundation’s wider claim remains to be seen, the Charles family seem to hope so.
It also remains to be seen where this dispute goes next. Some had expected the case to provide some interesting insight on the ‘work for hire’ issue, which could have ramifications for other publishers and especially labels trying to block 35 year termination notices. Though if both sides in this lawsuit now agree the Charles songs were not created as a work for hire, it may have less relevance on that wider issue moving forward.
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