The 9th Circuit Court of Appeals is set to decide an important case between the children of Ray Charles and the Ray Charles Foundation, he charity which Mr. Charles gave his right to receive royalties from his music publishing agreement with Warner-Chappell Music in his will. Whilst the charity has had the benefit of the royalties to date, Section 304(c) of the U.S. Copyright Act provides the statutory heirs of deceased authors, in this case Mr. Charles’ children, the sole right to terminate the assignment of copyrights from an author to a third party. Can they prevail and in effect overturn their father’s wishes?
Mr. Charles died before he was permitted (under the statute) to send the vast majority of termination notices to Warner-Chappell to regain his songs. The termination right may not be transferred by will or by any other “agreement to the contrary” and in order to ensure that his Foundation would continue to receive the music publishing income stream after his death for the life of copyright, Mr. Charles entered into agreements with each of his children providing that in exchange for $500,000 they would not take any actions to challenge the Estate. Nevertheless, the majority of Mr. Charles’ children decided to exercise their termination rights pursuant to Section 304(c) and have argued that the agreement they entered into with their father is an “agreement to the contrary” of the statutory provisions. The Ray Charles Foundation, meanwhile, argues that the children have the right to terminate the copyrights, provided that they return the $500,000 they each received from Mr. Charles. The Ray Charles Foundation also challenged the validity of the termination notices, using the argument that the musical compositions were created as “works made for hire,” and as such are not subject to termination under Section 304(c). This is an argument that has been raised in other cases concerning 304(c), although not always successfully: in the vast majority of cases, publishers have declined to assert the defence to termination , and for an example, see the ultimately successful case brought by Village People front man Victor Willis to regain his copyrights to songs including the classic YMCA). However, particularly in cases involving sound recordings, record labels will argue the sound recordings made under recording agreements are “works for hire”. Interestingly Warner-Chappell itself declined to raise this argument.
The District Court ruled that the children did not violate their agreement with the estate by filing the termination notices, and that the foundation was not entitled to a return of the $500,000 that each of the children had received.
The 9th Circuit has now heard the appeal by the Ray Charles and their decision is pending. In this case, the fact that Warner-Chappell appears not to have raised objections to the termination notices perhaps suggests that the Foundation “may be grasping at straws”. But with more artists and their heirs terminating prior assignments of copyrights, this case will hopefully add some clarity to the protection afforded to authors and their heirs under the U.S. Copyright Act.
The Ray Charles Foundation v. Robinson et al. 13-55421 (9th Cir. Filed March 12, 2013)