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9th Circuit Appeals Ruling Provides Hope for Ray Charles Foundation in Royalty Battle

— August 2, 2015

The Ray Charles Foundation, which supports vision and hearing-impaired youth, scored a victory on Friday from a three-judge panel in the 9th Circuit Court of Appeals in San Francisco in a legal battle against seven of Charles’s adult children. Royalties from Charles’s catalog of 51 songs, including hits like “I got a woman,” “Mary Ann,” and “What I’d Say” have financially supported the foundation, however a 1978 amendment to the U.S. copyright law have put those royalties in jeopardy. Shortly before his death in 2004 at the age of 73, Charles bequeathed each of his 12 adult children $500,000 in an irrevocable trust, provided that they waive any future rights to his estate. Following the agreement, Charles named his foundation as his sole heir. The 1978 amendment, however, sets a 35-year period, after which songwriters can terminate copyright grants to publishers. The termination provision went into effect in 2013, 35 years following the law’s adoption. As a result, seven of Charles’s children filed for termination in 2012 on 39 of his songs against the copyright holder, Warner/Chappell Music.

In response to the termination filings, the Ray Charles Foundation filed a suit later that year, claiming that the children breached their agreement with their father. A lower California district court dismissed the lawsuit for lack of standing in 2013, however, claiming that the children do have the legal right to terminate the agreement. This came after much debate about Charles’ employment agreement with his label, Atlantic Records, who maintained control over his recordings, and Warner/Chappell’s predecessor, Progressive Music, holding the songwriting copyrights. The foundation claimed that Charles was writing songs “for-hire,” meaning that the rights to the songs should have actually been owned by the publisher and not Charles, making the termination notices invalid. The lower court ruled that the family had the right to request the terminations regardless of the for-hire status; however the foundation appealed the case to the 9th Circuit. Five months since the foundation presented its oral arguments; Judge Morgan Christian wrote that although the foundation does not have the legal right to challenge the family’s rights to terminate the grants, the panel believed that “If the compositions are works made for hire, the termination statutes do not apply.”

Despite the ruling in its favor, the foundation still likely faces an uphill battle. The foundation will be able to continue its case against the children in lower court; however it will be nearly impossible for it to collect royalties until the battle is settled. Due to the fact that both courts ruled “true” that the children have the legal rights to termination, the decision will rely heavily on the “for-hire” debate. Despite the foundation not having legal recourse to stop termination, the appeals court let the case remain, calling the foundation an “interested party.” In the case of the for-hire determination granting rights to Warner/Chappell, the foundation would have the same rights to oppose the termination as the family members have to request it from the company. A ruling that gives the rights to Ray Charles would likely bankrupt the foundation, whereas the opposite will set an enormous precedent in a new tricky legal caveat. It would allow “beneficial owners” like record producers, who often receive a percentage of songwriting royalties, challenge termination attempts if the termination ends their royalty receipts. A ruling in the opposite direction however, will strengthen descendants’ legal rights to request terminations. Artists such as Bob Dylan, Tom Petty, and Tom Waits have also recently filed for terminations on several of their songwriting copyrights.



Billboard – Andrew Flanagan

Courthouse News Service – Austin Siegemund-Broka

Hollywood Reporter – Matt Reynolds




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