Entertainment Industry Liabilities

Liability: Ambiguous ownership of rights.

A recent article in the Hollywood reporter titled "Lawsuit Explores Who Owns Rights to a Stax Records Musical" points out the intricacies of publishing rights ownership and its importance.

The parties involved include plaintiff Evergreen Media, and defendant Concord Music Group. Both companies are planning to produce a Broadway musical about the artists whose careers were launched by Stax Records, a prolific record company that existed during the civil rights era. The question is who has the right to do so.

Evergreen Media has signed an agreement with Rondor Music, which holds the publishing rights to the music of Stax Records, however Concord Music Group holds the rights to the original sound recordings. Therefore, the likely outcome of the lawsuit appears to be that Evergreen will be able to produce their Broadway show (and related film), but will have to do so without using the original recordings of Stax Records’ artists. Instead, the actors in the play will actually have to be able to sing the songs rather than lip-sync to original recordings.

Based on lessons learned in our Negotiations and Deal-Making class, it would be my suggestion for Evergreen and Concord to enter into negotiations and brain storm ideas for a collaborative effort between the two companies that would likely result in a better overall musical and film so that both companies would reap greater rewards.

Liability: Insufficient knowledge of whom you are dealing with.

The article "Iggy Azalea Sues Ex-Boyfriend for Releasing Early Music, Foregoing Contract" reiterates the importance of federal registration of copyrights and trademarks.

At the age of seventeen, while working on her music, the young artist Iggy Azalea met a man who represented himself as an oil executive. Knowing very little about him (including the fact that he was married with children), she accepted his offer to be put up in an apartment in Houston, Texas. The following year, she moved to Atlanta, and the supposed successful oil tycoon decided to move with her.

Azalea’s lawsuit alleges that while the two lived together in Atlanta, the boyfriend copied the entire content of her computer’s hard drive, including music that she had not yet released. Years later, he formed a joint venture and began distributing her music via digital distribution claiming that he had “secured the rights” to her material. However, the contract that he submitted as evidence to those rights appears to be a fraudulently modified copy of an artist management agreement that Azalea had previously signed.

She is suing for copyright, trademark, and name and likeness infringement (among other things) against her former boyfriend and the other members of his joint venture.

The article does not indicate whether Azalea’s copyrights and trademark are registered, but in my opinion, her first mistake was having no real knowledge of the man with whom she was dealing. When she met him in 2008, and he offered to rent an apartment for her, all kinds of red flags should have gone up! A simple half-day of Internet research on this person could have saved her a lot of time, money, and aggravation.

Liability: Incomplete contracts (not paying attention to what is NOT in the contract).

"Glenn Danzig Loses Misfits Lawsuit Over Merchandise." This article touches on a subject discussed in this week’s video lesson – looking for what is NOT in a contract. Danzig was attempting to sue a former band mate, Jerry Only, for selling band merchandise with the Misfits logo on it without sharing profits with the other members of the band. In 1994, the members of the band had signed a contract that Danzig believed fully covered the equal distribution of profits on merchandise sold. He was wrong.

The judge through the suit out, indicating that the language in the contract did not prevent Jerry Only from entering into his own negotiations with retailers to sell Misfit merchandise.

My only suggestion regarding this case would be this: “If you have the means, have every contract reviewed by an attorney before you sign it, and make sure that the intent of all parties to the contract is understood.”

My business plan.

My business plan will include language that clearly describes how a legal budget reserve will be included and funded proportionately as the company grows. A few years ago, I worked for a very large mortgage lender, and one of my primary responsibilities was to calculate a monthly liability reserve, or reserve for loan loss.  I see no reason that my company should not do the same. While I appreciate the fact that “common law” trademark and copyright laws exist, they appear relatively useless, particularly in a situation where a great deal of money is involved. It will be my intent to protect all of my content to the extent possible without spending so much money on it that it makes the company financially incapable of operating.