Erin M. Jacobson, Esq. has once again been named a Super Lawyers Rising Star! Thank you to Super Lawyers for this great honor!
Erin was also recently quoted in an article for The Fader: “Here’s What You Need to Know About Sharing Lyrics Online”
By: Erin M. Jacobson, Esq.
This article was originally posted on Synchtank.
The window is open for authors and heirs to recapture ownership of their copyrights. Terminations create a lot of new movement for copyrights in the marketplace and rights’ owners need to be just as knowledgeable as authors and heirs in order to stay competitive.
Statutory terminations come with many complexities, but the basics are as follows:
In the United States, termination of a grant can be effected during a five year period: (1) Beginning 56 years after the original copyright date of the work for grants made before January 1, 1978; or (2) Beginning 35 years after the date of the grant for grants executed on or after January 1, 1978.*
Both of these categories of termination require that proper notice be sent anywhere between ten and two years before the effective date of termination and notices must also follow strict requirements. Works for hire and grants by will are not terminable and terminations under U.S. copyright law only apply to U.S. rights.
Outside of the U.S., there are some other countries that have their own rules regarding terminations, most notably, the British Commonwealth countries. British Reversionary Rights are generally uniform throughout the Commonwealth, but vary slightly per country and must be assessed on a case-by-case basis. Other countries do not have any termination rights included in their copyright laws.
Information on the recapture of music rights usually refers to composition rights only, as whether master recordings rights can be recaptured is the subject of an ongoing debate in the U.S. that will only be solved by litigation or a change in copyright law.
Information on the recapture of music rights usually refers to composition rights only, as whether master recordings rights can be recaptured is the subject of an ongoing debate in the U.S. that will only be solved by litigation or a change in copyright law. The issue here is that, as stated above, works for hire are not terminable, and most recording agreements state that the masters are works for hire for the record company. However, U.S. law requires that for a work to truly be a work for hire, it must be either created by an employee within the scope of employment, or specially ordered or commissioned by the company, with an agreement in writing stating the work is a work for hire, and the type of work must fall within nine categories established in the law. The problem here is that artists are not employees of record labels and master recordings are not one of the nine categories required for works to qualify as works for hire. Until this point, labels have been successful in retaining the masters by arguing the masters qualify as collective works or compilations, and by giving artists a few additional royalty points. However, at the time of this writing, there is a class action lawsuit pending in California to decide this very issue.
The Real Reason Why Authors and Heirs Want to Recapture Their Rights
Although the legal requirements for termination are imperative to navigating the copyright recapture landscape, most discussions on this topic fail to address why authors and heirs are so keen to exercise their termination rights in the first place. The answer to this question is that authors and heirs are terminating because they are not happy with their current publisher or label. This unhappiness normally is caused by the companies’ lack of attention paid to the catalogues, which results in significantly decreased earnings for those catalogues.
Authors and heirs are terminating because they are not happy with their current publisher or label. This unhappiness normally is caused by the companies’ lack of attention paid to the catalogues, which results in significantly decreased earnings for those catalogues.
Large companies, typically the “majors”, tend to focus their efforts on acquisitions and growth, which is not bad, but they fail to increase staff and training at the same rate as their growth. This leaves many compositions lost at these large companies because they are not being actively exploited and, in many cases, the staff isn’t even aware of the compositions. Further, when creators or heirs do try to get a company’s attention, their efforts are often ignored because the company does not want to spend time and resources on low-earning compositions. To further exacerbate the situation, many of these companies are not even accounting properly to the creators or heirs, and again, won’t take the time to investigate or remedy the situation because their efforts are focused solely on the highest earning compositions and further growth.
On the master side, not only are the royalty rates from the labels paltry, but in many cases, the albums are out of print and not being sold, and therefore the creator or heirs really just want a chance to do something with the music again instead of accepting the music’s fate of being locked in a vault, with the original tapes rotting away, never to see the light of day again.
In my experience, independent publishers tend to receive fewer termination notices because they do a better job with attending to and exploiting their catalogues, and usually make fewer mistakes in collection and accounting. I work with many independent publishers (both those I represent and those who work for my author/heir clients) who do a fabulous job making sure these works continue to stay relevant and earn income.
Some companies think they can prevent authors from terminating their rights by inserting provisions in their contracts whereby the authors waive their rights of termination. However, this practice is completely ineffective because the right to terminate cannot be waived via contract. Some companies also try to prevent terminations by making new, and equally unfair, deals with aging authors and heirs. I’ve even seen major companies effectively force creators or heirs into a new deal by using the threat of litigation against them when these companies know full well that their opponents do not have the resources to fight to reclaim their rights.
The other tactic companies take is to ignore received notices of termination or wait until right before the effective date to raise objections in an effort to deprive the authors/heirs with ample time to respond. It’s a common joke throughout the subset of attorneys dealing with terminations that the fastest way to be ignored by a company is to send them a termination notice (or tell them they owe you money).
When rights’ owners receive a termination notice, they should address it and engage good counsel who knows how to deal with the dynamics of these situations. Typically, once companies can no longer ignore the notices, they then dispatch the same few lawyers to repeatedly make the same narrow deals. When I represent music publishers, I work with them on specific strategies to address the catalogue at issue and craft a deal that benefits both parties in each situation, whereby the company can retain the work and continue to reap the financial benefits, but whereby the author or heirs also feel their needs are satisfied.
Music will always be the foundation of the music business, but the music business is not the same as it was 56 or 35 (or even 10) years ago. Music has a life and legacy of its own and how these copyrights are handled can either set them up to flourish or be forgotten.
Music has a life and legacy of its own and how these copyrights are handled can either set them up to flourish or be forgotten.
The changing times require changing ways and my practice focuses on this innovation to benefit both the rights’ owners and creators so that both can continue to benefit from these magnificent musical creations.
* Technically, section 203 of the U.S. Copyright Law says the window opens at the end of 35 years after the date of execution of the grant, or if the grant covers the right of publication, then at the end of 35 years after the date of publication or at the end of 40 years after the date the grant was executed, whichever is earlier.
Note: This article does not constitute legal advice.
Erin M. Jacobson, known as “The Music Industry Lawyer”, represents and protects independent, established, and legacy songwriters and artists (including their heirs and estates), distinguished legacy catalogues, independent music publishers, Grammy and Emmy Award winners, and other music professionals at her law practice based in Beverly Hills, CA. For more information, visit www.themusicindustrylawyer.com.
The Truth About Legacy Catalogues and How to Avoid the Myths That Harm Them
By: Erin M. Jacobson, Esq.
This post was originally published on Billboard.com.
Now is the time when many legacy songwriters and their heirs have recaptured or are in the process of recapturing rights to their catalogues. However, the music business is not the same as it was 56 or 35 years ago when these songs were written. Many legacy songwriters and their heirs are misguided on how to proceed with these newly reacquired rights because the original advice they received does not reflect the nature of today’s music marketplace.
In this article, I’ve compiled seven myths that frequently circulate around and potentially harm legacy songwriters and their heirs, and have offered a new perspective based on my experience with making deals in this area and managing legacy catalogues.
Myth 1: All songs that were once famous still earn a lot of money.
Wrong! While some evergreen compositions are fortunate to continue earning substantial incomes, this is more the exception than the rule. Aside from a catalogue like that of The Beatles, there are usually only between one and five songs in a catalogue that still earn money, and in many cases those songs earn only a fraction of the income earned in their heyday. I can quote many examples of songs that hit the top 20 on the Billboard charts, some of which even No. 1, when released, but now earn less than $5,000 per year and are largely forgotten by anyone not around at the time of the song’s release.
Myth 2: Major publishers are the only companies with the power to exploit a catalogue.
This was true in the past, but it no longer the case. Unfortunately, many legacy songwriters and their heirs remain stuck on 30-year old advice from the family’s now-retired music lawyer. In today’s marketplace, major publishers have catalogues so large that they often cannot give personal attention to each individual composition within those catalogues. Because they also have major hits in demand, they tend to wait for licensing and other opportunities to come to them. The problem for older catalogues is twofold: (1) only a small number of these songs are still in the forefront of the public’s mind, and therefore the majority of songs from older catalogues are not requested, and (2) many companies are not willing to invest resources in pitching low-earning compositions. Therefore, these musical gems are neglected and remain lost in a company’s catalogue earning far less than their potential.
On the other hand, independent publishers with smaller catalogs are able to give each composition more personal attention and seek out the right opportunities for it. While an independent company might not be able to give as large of an advance, sale price, or signing bonus as a major, an indie will actively work harder to make its compositions earn more money over the long term because its livelihood depends on it.
Myth 3: A company’s market share will increase the success of a catalogue.
Market share reports look at the percentage of the compositions a company owns in the marketplace, as well as percentage of the top charting hits, and percentage of revenue from that company in relation to total income earned from all compositions in the marketplace. However, market share can be misleading because, top income and charting hits can come from a small percentage of all songs in the marketplace as well as a small percentage of a company’s catalogue. A company’s market share does not guarantee income production for a legacy catalogue because, as explained while debunking Myths 1 and 2, many of these songs are lost in a large catalogue and those forgotten songs will not be actively exploited. Therefore, it is often the case that only a catalogue that already earns substantial income without effort will thrive at a company focused on market share. Further, any bulk funds allocated to major publishers based on market share that the company splits with its songwriters will be allocated to the top earning catalogues, again neglecting under-performing legacy compositions.
Myth 4: A larger company is better at collecting income.
Again, this is not necessarily the case because a larger amount of data to process means more chance for error. I’ve seen countless catalogues at major companies not earning what they should because of mistakes in information that have never been fixed. I’ve seen major publishers not correct information for low-earning compositions because it’s not important to them. I’ve seen companies pay writers and their heirs the wrong royalty rates because no one bothered to look at the original contract rates and the writer’s heirs had to settle for much less than what they should have earned in order to avoid expensive litigation. I’ve also seen companies not take the steps to collect the income — even for high earning songs — because for whatever reason their staff never got around to it. All of these actions hurt the earnings of the compositions and hurt the writers and heirs that benefit from — and sometimes rely on — that income.
Myth 5: It’s too hard to move to an independent publisher from a major.
As explained above, an independent publisher will typically work harder than a large company to make its catalogues earn money. Independent publishers want notable cuts, work the sync market and typically are more diligent about properly collecting income — again, because each dollar matters. The challenge really lies with finding the right independent partner for a catalogue — someone who knows the music, understands the legacy, and has the right connections to exploit the catalogue properly. The right partners are out there, and in this case, it is actually more important to have the right advisors to assist the catalogue owners with making the best decisions for the catalogue.
Myth 6: Writers and heirs can’t self-publish.
Writers and heirs can self-publish if they have the right team in place. Publishing a catalogue with no experience doing so and no connections in the business is not a recipe for success. However, writers and their heirs can maintain ownership of the rights and have the right advisors in place to manage and promote the catalogue. I regularly manage and/or administer catalogues for my clients who have chosen to retain ownership and self-publish.
Myth 7: Heirs will know what to do with a catalogue.
Heirs will not automatically know what to do with the catalogue they have inherited just because their parent/grandparent/aunt/uncle/child was a songwriter. In many cases, these heirs were not exposed to the business side of their relatives’ career and in most cases have no experience with music publishing or managing compositions. Typically, heirs that inherit a catalogue are overwhelmed by the vast amounts of information and don’t know where to start in getting a handle on the catalogue. The heirs that are more adept at navigating the music industry have typically learned over many years and from astute advisors.
Legacy songwriters still living can make arrangements for their catalogues now and clean up the catalogue’s governing information and paperwork so that heirs will inherit an organized packet of information. The right advisors in place can guide legacy songwriters in managing the issues surrounding the catalogue and setting it up to benefit the heirs for the remainder of the copyright term. Many of my living legacy writers will designate me to continue managing the catalogue after their death and I regularly work with heirs to assist them with navigating how to manage the issues regarding their catalogue and maintain and grow what they’ve inherited.
Erin M. Jacobson represents and protects independent, established and legacy songwriters and artists (including their heirs and estates), legacy catalogues, independent music publishers, Grammy and Emmy Award winners, and other music professionals at her law practice based in Beverly Hills, California.
Disclaimer: This article does not constitute legal advice.
By: Erin M. Jacobson, Esq.
Seriously. Call me. I regularly work with legacy artists/songwriters/composers, heirs, and estates to protect and revitalize their catalogues. I assess what they own, what the current state of the catalogue is, and the various options for the catalogue to increase income while protecting the legacy of the creator and the works.
Decisions involving how to move forward with a catalogue can’t be made if one doesn’t know what (s)he has to work with. The first step is to know what compositions are in the catalogue, what agreements are in place, and who is collecting the income.
If the details are fuzzy, don’t worry. Most heirs and estates do not have previous experience with music catalogues and start with a vague idea. It’s my job to assist in making those fuzzy details become clear so that my clients know what they have, what options are available, and implement a plan to move forward.
Not only are the details of most inherited catalogues fuzzy, but the money is too. Most older catalogues have a lot of mistakes in the maintenance and management of the catalogue which prevents the catalogue from reaching its earning potential. I’ve worked on catalogues with 50-year old mistakes not corrected by the current owner, problems with chain of title, improperly handled derivative works, and more. I fix the problems and get income flowing again.
Copyright law provides a valuable gift to authors and heirs, which is the right to recapture ownership of copyrights. That’s right — authors and their heirs can reclaim ownership and control over their rights and how they are exploited. However, this gift comes with strict requirements as to when and how rights can be recaptured. (See articles with more information hereand here.) An attorney with extensive experience in copyright terminations is essential here, because there is only one chance to recapture rights – and that chance is lost if deadlines are missed or the procedure isn’t followed correctly.
I frequently see legacy artists and songwriters, and their heirs, who have been misguided in the management of their catalogues, who have lost rights to recapture, who don’t realize their catalogues are under-earning, and who don’t know where to start. The right advisors are tantamount to a successful recapture process and future for the catalogue. Each catalogue is unique and each client has different goals for the catalogue, its income, and the preservation of its legacy. Some options include negotiating a new deal for the catalogue, selling the catalogue, or self-publishing the catalogue. I work specifically to achieve what is best for each catalogue and each owner of that catalogue, and the results most often include clarity of mind and increased income for beneficiaries of the catalogue.*
There is only one chance to reclaim ownership of a catalogue and revitalize it – and the catalogue deserves it.
Please contact me to assist you in taking care of your legacy catalogue.
* Information stated is based on past experiences. Results are not guaranteed.
I am proud to announce that my most recent article, Attention Legacy Artists: 6 Things You Need to Know to Recapture Your Copyrights, has been published by Billboard!
By: Erin M. Jacobson, Esq.
This article was first published on Billboard.com.
There has been a lot of buzz recently about songwriters and artists (or their heirs) recapturing copyright ownership of their songs – and youcanbelieve the hype. Copyright law provides a chance for authors (or heirs of authors) to recapture ownership of the copyrights to works granted away many years ago, and the window allowed by the law to recapture those rights is now. Recapturing rights can allow for an author or author’s heirs to negotiate better deals with higher royalty splits in their favor, sell catalogues for large sums of money, or finally regain control of how a catalogue is exploited and increase profits with the right team in place.
However, recapturing rights is a complicated business filled with many requirements and nuances. Here are six things authors need to know about recapturing rights.
An author (or author’s heirs) can terminate grants of copyrights made before January 1, 1978 during a window beginning 56 years and ending 61 years from the original copyright date. However, notice of termination must be served on the current owner anytime between ten and two years before the date the author intends the rights to revert. For grants made after January 1, 1978, the calculation of when rights can be recaptured is based on the date of the grant, not the original copyright date. These post-1978 grants may be terminated beginning at 35 or 40 years after the grant date (depending on the language in the grant)with a five-year termination window. Again, notice of termination must be served on the current owner anytime between ten and two years before the date the author intends the rights to revert.
Being proactive is one of the most important factors when it comes to recapturing rights. As mentioned above, serving notice on the current owners of the copyrights is required to recapture rights. Because of the additional requirement that this notice must be sent between ten and two years beforethe date the rights will revert, anyone intending to recapture rights must look at leasttwo years ahead. If someone intending to recapture rights misses the notice window – rights cannotbe recaptured and the opportunity is forever lost.
The termination provisions that are the subject of this article are part of United
States Copyright Law and therefore only apply to U.S. rights. That means one can recapture U.S. rights, but not foreign rights. Also, as of this writing, the chance to recapture is only applicable to U.S. contracts.
Most discussions around recapture of copyrights refer to composition copyrights because compositions are generally more straightforward to recapture than master recordings. Most record company contracts say that masters are works made for hire for the record company, and as explained above, works made for hire are not eligible to be terminated. However, copyright law dictates that works made for hire must meet certain requirements to qualify as a work made for hire: (a) it must be made by an employee within the scope of their employment, or (b) it must be specially commissioned by the owner of the work for hire, it must be agreed in writing, and the type of work must fall within one of nine categories designated by the law. “Master recordings” is not one of those nine categories.
While there have been a few instances where labels have quietly relinquished rights to masters and sworn all parties to secrecy, most record labels refuse to release rights to masters and instead negotiate with the artist to increase their royalty rates. A higher royalty rate does not help artists whose masters are not being exploited and not earning money, but it is all in an effort for the labels to avoid setting a precedent. Master recordings are record labels’ main assets and businesses cannot give away their assets without also giving away power and profit.
Unfortunately, this is an issue that will only be decided by litigation and/or copyright reform, and neither of those has happened yet.
For pre-1978 grants, one author’s share may be terminated, rather than requiring co-writers to terminate together. However, if an author’s heirs are the ones effecting termination, then a majority of those heirs must terminate together.
Post-1978 grants signed by more than one author require a majority of those authors to terminate the grant together, and if any one of more of those authors is deceased, then a majority of the heirs of each deceased author must sign instead. However, there are exceptions to this rule if separate grants were signed.
Requiring multiple parties to sign the termination notices can be problematic if co-writers, or heirs fighting about estate issues, no longer speak. Even if the parties may have lost touch over the years, it benefits everyone involved to coordinate and cooperate to recapture rights.
If not already apparent by reading this article, assessing eligibility for filing terminations and carrying out the proper procedures to recapture rights is extremely complex. Furthermore, there are numerous nuances and requirements not discussed here that could also affect whether an author or an author’s heirs may recapture rights. Anyone seeking to recapture copyrights needs an attorney specifically focused on the music industry that also has extensive experience with assessing these issues and recapturing rights. Not all entertainment attorneys understand music and not all music attorneys are experienced with terminations.
I regularly recapture rights for my clients, as well as advise them on protecting and revitalizing their catalogues, as I am in a unique position where I am deeply familiar with both older music and how to navigate those catalogues within today’s marketplace. Being in this space also means I frequently see legacy artists and their heirs who have been misguided, who have lost their chance to recapture their rights, who don’t realize their catalogues are under-earning, and who don’t know where to start. The right advisors are tantamount to a successful recapture process and future for the catalogue.
There is only one chanceto recapture copyrights, one chanceto regain control of one’s legacy, and one chance to get it right. Choose wisely.
Post-1978 grants are terminable at 35 years after the date of the grant, however, if the grant’s language includes the right of publication for the work, then that five-year period begins either on 35 years after the date of publication, or 40 years after the date of the grant, whichever is earlier.
U.S.C. 17 §203(a)(3) (1998).
There have been a couple of high profile disputes on this matter involving U.K. contracts (namely Duran Duran in one instance and Sir Paul McCartney in another), but Duran Duran lost in a U.K. lower court and subsequently settled, and McCartney settled without litigation. Some other countries do have their own provisions for recapture of rights, but they vary by country and differ from U.S. law.
Disclaimer: This article does not constitute legal advice.
I am happy to announce that I have been re-elected to the LA Board of Directors of the Association of Independent Music Publishers (AIMP).
AIMP is an industry group focusing on independent music publishers and songwriters. Members (my colleagues in the industry) vote for Board members, so I am honored to have been chosen. Keep an eye on the AIMP website for future events and to become more involved with this great organization.