Musical Bands – A Strategic approach to intellectual property issues
Like a marriage, a musical band can start out great and with a lot of promise but ultimately crash. As with marriage, while some musical groups successfully weather the storms of the music industry and come out relatively unscathed, others are not always so lucky.In 2013, fans of the Jonas Brothers, a popular American pop rock band that was formed in 2005,were shocked when the group announced that the band was breaking up. The split of the Jonas Brothers was particularly shocking because the group was made up of three brothers – same mother, same father, same upbringing and, one would assume, the same faith. The Jonas Brothers is not the first group to break up and will not be the last group to do so. Nigerian musical bands have had their own share of breakups: Remedies, Plantashun Boyz, KC Presh,Don Jazzy and D”banj, Kush, and X-Project to mention a few. On the Rolling Stone Magazine’s list of “The 10 Messiest Band Breakups” are: Nivarna, Guns N’ Roses, The Everly Brothers, Oasis, The Police, The Eagles, The Clash, Smashing Pumpkins, Rage Against the Machine, The Pixies, and Queensryche. In short, in the music industry, it is very common for bands to split up and/or reform with new members.While some separationsare amicable, often separationscan turn down-right ugly and what frequently follows are very nasty and messy fights. The question then is not whether or not a band will break up but how to ensure that break-ups are as amicable as possible and how to ensure that in the event of a break-up, valuable time and money is not wasted fighting over valuable assets. While the real assets of a band (e.g. capital, equipment, etc.) are worth fighting over, of paramount importance are the intangible assets of the band otherwise known as intellectual property (IP).For musical groups, a strategic and pragmatic approach to IP protection and management requires that long before trouble looms in the horizon, serious thought must be given to IP issues. Intellectual property audit (inventory) is an indispensable tool in the music industry for music bands as well as for solo artists.To minimize tension between band members and ensure that breakups, if and when they occur, are as amicable as possible, members of musical bands must adopt a strategic approach to intellectual property issues. Five basic steps are crucial: (i) understand intellectual property law and how it applies to the music industry; (ii) protect the band’s IP assets as required by the law in every jurisdiction where the band operates and does business; (iii) conclude a detailed and comprehensive band agreement immediately after the band is formed; (iv) carry out periodic audits of the band’s IP portfolio; and (v) review the band agreement periodically, such aswhen members of the band leave or die or when new members join the band.
What is intellectual property? What intellectual property issues arise withmusical bands? What is an IP audit?
What Is Intellectual Property?
According to the World Intellectual Property Organization (WIPO), an international organization based in Geneva, Switzerland, intellectual property “refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.” There are many different types of IP. Three widely-recognized types of IP are: patents, copyright, trademarks.Of the three main types of IP, trademarks and copyrights dominate in the music industry. Frequently, major legal battles in the entertainment industry are about copyrights and trademarks. Oftentimes the problem is plagiarism. However, other times, the battle is about ownership and control of copyrights. In Bright Tunes Music v. Harrisongs Music, 420 F. Supp. 177 (S.D.N.Y. 1976), a plagiarism lawsuit, the court found the late George Harrison liable for copyright infringement. Vincent Peters v. Kanye West, et al., 692 F.3d 629 (7th Cir. 2012) was a copyright case between hip-hop star Kanye West and rap artist, Vincent Peters (a.k.a. “Vince P.”) over the song “Stronger.” Currin, et al. v. Arista Records, Inc., et al., 724 F. Supp. 2d 286 (D. Conn. 2010) was also a copyright infringement action brought by plaintiffs Peter Currin and David Currin alleging that defendants, Arista Records Inc. and Sony BMG Music Entertainment, distributed a song that infringed the plaintiffs’ copyright.
What Is Copyright?
In general, copyright is the legal right that arises when original works of authorship are fixed in any tangible medium of expression. Under the Nigerian Copyright Act, six types of works are eligible for copyright: literary works; musical works; artistic works; cinematograph works; sound recordings; and broadcasts. Pursuant to the First Schedule to the Nigerian Copyright Act, copyright in literary, musical or artistic works lasts for a term of life of the author plus seventy years. The duration of copyright in sound recordings is fifty years after the end of the year in which the recording was first made. Copyright in cinematograph films and photographs last for fifty years after the end of the year in which the work was first published. A successful musical band is likely to own many copyrights including: (i) copyrights in musical compositions; (ii) copyrights in lyrics to songs; (iii) copyrights in sound recordings; (iv) copyrights in cinematographs; and (v) copyrights in characters created to project the image of the band.
In the music industry, copyright issues can be very complicated largely because music is frequently a collaborative process with two or more people contributing to the final product. On any given song, the following people may have supplied their talent: composer, lyricist, performer, sound engineer, and producer. The Nigerian Copyright Act states that copyright “shall vest initially in the author.” With musical bands, in the absence of an agreement, it is often difficult if not impossible to know who the author of a work is. One person may have written the music, another the lyrics, and yet another performed the song and recorded it in a mechanical form. Without an agreement detailing how each work was created and how ownership will be divided, litigation is often inevitable.
What Is a Trademark?
A trademark “is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises.” Trademarks are important for branding purposes. Trademarks can be licensed and otherwise exploited through merchandising and other means. Many musicians including Madonna, Lady Gaga, and Beyoncé Knowles have registered their personal names and/or stage names as trademarks.Madonna is the owner of U.S. Trademark Registrations for the mark MADONNA for entertainment services and related goods (Reg. No. 1,473,554 and 1,463,601). Lady Gaga holds trade mark registrations for “LADY GAGA” in the United States of America and in China. A successful musical band is also likely to have multiple trademarks and logos. In the area of trademarks, a band may have: (i) trademark rights in the name of the band; (ii) trademark rights in the band’s logo; (iii) publicity rights over the band’s image and likeness; and (iv) domain names that areidentical or very similar to the band’s name.
Why Is Intellectual Property Important in the Music Industry?
Intellectual Property is the life-blood of the music industry. Ownership of copyright and trademark determines who has rights to three important revenue streams in the industry: (i) Songwriter and Composer Revenue; (ii) Performer and Recording Artist Revenue; and (iii) Brand-related Revenue.
Songwriter and composer revenue can be extensive and depends largely on the popularity of a song as well as how savvy the copyright owneris about exploiting potential revenue streams. Song writer and composer revenue can include: Publisher Advance, Mechanical Royalties, Public Performance Royalties, Synch Licenses, Ringtone Revenue, and Sheet Music Sales.
Performer and Recording Artist Revenue can also be very extensive and includes Shows and Performance Fees, Streaming Concerts (e.g. Live, On Demand, Pay-Per View), Record Label Advance, Retail Sales, Sales at Shows, Digital Performance Royalties (SoundExchange),Digital Salesand Neighboring Rights Royalties.
Finally and, sometimes forgotten, is brand-related revenue that can come from Merchandise Sales, Product Endorsements, and even a YouTube Partner Program.
An Intellectual Property (IP) Audit: What Is It? Why Is It Important?
What IP issues are likely to emerge before and after a musical group breaks up? As with marriage, the type, number and range of issues that a musical band has to deal with in the event of a break-up depends on a number of factors including, the length of time the group has been in existence, the types of assets band members own as a group, and the total value of the assets the band owns. A strategic approach to IP protection and management demands that an IP audit (inventory) is conducted immediately after a band is formed and that the audit is repeated periodically.
An IP audit is like a stock audit or stock inventory except that the focus is exclusively on intellectual property. IP audits are important because they help individuals and businesses to identify their intangible assets and provides an incentive for IP owners to protect, value, and manage their assets more efficiently. A thorough IP audit can help a musical band to uncover areas of vulnerabilities and potential risks. In the music industry and focusing primarily on musical bands, at least five questions must be asked and answered in the course of any IP audit: (i) What copyrights do band members own individually and collectively? (ii) Does the band use any trademark(s) and who owns the trademark(s)? (iii) Does the band use any logo(s) and who owns the logo(s)? (iv) Which rights, copyright as well as trademarks, has the band licensed to other players in the industry such as music producers, music publishers, recording companies, performance rights societies and tour promoters? (v) Which rights, copyrights as well as trademarks, has the band assigned (sold) to other players in the industry? (vi) Are the band members clear about how copyrights ownership in joint projects is to be divided? and (vii) Is the band operating as a corporate entity and has the band’s assets been assigned to this entity?
Conclusion
Band members frequently spend considerable amount of time and resources on lawsuits when a band breaks up. Often the fight is over intangible assets such as copyrights and trademarks. As aptly noted in Rolling Stone Magazine: “A rock band can be a lot like a romantic relationship. People meet, sparks fly and, hopefully, magic is made. Some of these relationships end quickly, some last for decades, and some end in a flurry of lawsuits, flying fists and misguided solo projects.” To minimize tension between band members and ensure that band breakups are as amicable as possible, members of musical bands must adopt a strategic approach to intellectual property issues. Five basic steps are suggested: (i) understand intellectual property law and how it applies to the music industry; (ii) protect the band’s IP assets as required by the law in every country the band operates and does business; (iii) conclude a detailed and comprehensive band agreement immediately after the band is formed; (iv) carry out periodic audits of the band’s IP portfolio; and (v) review the band agreement periodically, such as when members of a band leave or die or when new members join the group. One thing to remember, although the break-up of a band may be unavoidable, long, messy legal battles over the band’s intangible assets can be prevented or minimized. Another thing to remember is, if protected and managed effectively, a band’s intangible assets can yield millions in revenue in the future leaving band members with plenty to smile about. In 1985, Michael Jackson reportedly paid $47.5 million for ATV Music Publishing, the company that owned many songs including The Beatles catalogue. For $95 million, Michael Jackson agreed to merge ATV Music Publishing with Sony and to form a new 50/50 joint-owned publishing company – Sony/ATV Music Publishing. Today, it is estimated thatSony/ATV is worth anywhere between $2-4 billion.
DR. UCHE EWELUKWAOFODILE
LL.B. (Nig.); LL.M. (London); LL.M. (Harvard); SJD (Harvard), Professor of Law, University of Arkansas School of Law