9th Circuit Hears Ray Charles Royalty Fight


PASADENA, Calif. (CN) – An attorney for the Ray Charles’ charitable foundation on Thursday urged the 9th Circuit to restore its legal battle against the singer’s adult children, for transferring copyrights of songs it claims to own as the singer’s successor in interest.
     The Ray Charles Foundation sued seven of the singer’s children in Los Angeles Federal Court on March, 29, 2012, alleging breach of contract and breach of faith.
     The lawsuit claimed that in 2010 the children breached an agreement preventing them from seeking any further interest in their father’s estate after he died in 2004.
     Charles’ four daughters and three sons served publisher Warner/Chappell Music with notice of copyright termination in March 2010, according to the complaint.
     Under the Copyright Act of 1976, children of deceased authors typically get a chance to transfer copyrights of the author’s work.
     Among the 51 compositions at issue were rights to Charles’s 1954 breakout hit, “I Got a Woman,” and chart toppers “A Fool for You,” “Mary Ann” and “What’d I Say.”
     The masters of Charles’ recordings have been valued as high as $25 million.
     Charles created the foundation before his death to provide financial support for the hearing-impaired, the poor and for youth outreach programs.
     Royalties from Warner/Chappell were used to fund the foundation.
     In 2008, Charles’ children told the Los Angeles Times that Charles’ manager Joe Adams had a virtual stranglehold on the foundation and the singer’s estate and trust.
     Adams was not named in Charles’ will and the children felt he had frozen them out of the estate, the Times reported.
     Two years before he died, the foundation says, Charles met with all of his 12 children and told them they would each get an inheritance of $500,000. But while the foundation claims the agreement made clear there would be no more money forthcoming, the children told the Times that at the meeting in a hotel near LAX, their father had suggested they could expect more money in the future.
     In a Jan. 25, 2013 ruling, U.S. District Judge Audrey Collins sided with the children and granted their motion to dismiss the lawsuit, finding the foundation lacked standing to pursue its claims.
     On Thursday morning, Ray Charles Foundation attorney Mark D. Passin told the 9th Circuit panel that the foundation did have standing, because Judge Collins had overlooked a U.S. Copyright Office regulation that protects “beneficial” owners such as the foundation.
     In a brief to the court , Passin’s firm, Robins, Kaplan, Miller & Ciresi, said that Collins’s interpretation of copyright law would leave beneficial owners “powerless” to challenge termination or transfer of a copyright interest.
     “That beneficial owner would have to stand by idly and be stripped of its ownership interests, even where the notice of termination is facially deficient. It would simply make no sense,” the brief states.
     Judge Andrew Hurwitz asked how the foundation’s claims could survive if Warner/Chappell holds the ownership rights.
     According to the record, the publisher did not dispute the Charles children’s rights to terminate the copyrights.
     Charles had recorded songs for Atlantic Records and its subsidiary publisher Progressive Music under a work-for-hire agreement, meaning the publisher owned the underlying compositions, while Atlantic retained ownership of the recordings.
     In 1980, Charles allegedly amended the terms to include previously unassigned works, while he still received cash payments and royalties for his work. Proceeds ended up with the foundation after his death.
     By the time his children filed the copyright notices, Warner/Chappell, a successor to Progressive, owned the singer’s music.
     “The question is, if Warner doesn’t care and they are the owner of the copyright, why should you be allowed to challenge that termination?” Hurwitz asked.
     Passin said that the foundation was a party to the contract with Warner, and that under that agreement it was entitled to royalties.
     In addition, Passin said, under copyright law statutory authors have standing to object to terminations of copyrights.
     “Clearly Ray Charles was the author, and the foundation was the successor in interest to the author,” Passin said.
     Intellectual property attorney Marc Toberoff urged the court to uphold the lower court ruling.
     With Charles’ daughter Raenee Robinson in the courtroom, Toberoff argued that because Warner/Chappell had not challenged the terminations, the foundation’s claims must be thrown out.
     Judge Morgan Christen wondered why at the very least the foundation could not challenge the children’s notice to terminate the copyrights in 2015. The foundation had asserted that under copyright law, the earliest the copyrights could be terminated is 2020, because Charles had amended the agreement back in 1980, according to court records.
     “Even if they come in and say, ‘The children have the right to terminate, we give up,’ why aren’t they entitled to a judicial declaration about the appropriate window in which those rights may be executed?” Christen asked.
     “Because they don’t have standing to sue under the Copyright Act,” Toberoff said.
     Toberoff got into an extended and at times tense debate with visiting D.C. Circuit Judge David Sentelle, who stated that royalty rights are created under the Copyright Act.
     “A contract can’t create royalty rights, can it?” Sentelle asked.
     “Yes,” Toberoff replied. “It can say we’re going to give you X profit participation every time we sell a book, or every time we sell a song.”
     As the debate dragged on, Sentelle lost his patience with the lawyer, flapping his hands in exasperation.
     “I don’t want to quibble with you over the points. Just forget it” Sentelle said.
     “I’m trying to answer the …” said Toberoff.
     “No you’re not,” Sentelle said cutting him off. “You’re not trying to answer the questions.”
     Toberoff did not appear to be in the mood to back down. He said that while transfer of copyright is an issue under the Copyright Act, royalties are a contractual one.
     “The termination provision specifically gives spouses, children and grandchildren an inalienable right after decades to recover their parents’ or spouses’ copyrights by simply serving notices of termination on the grantees,” Toberoff said.
     The court did not give any indication when it expects to rule.
     Toberoff is the founding partner of Toberoff & Associates, of Malibu.

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