Law Offices of Jonathan Franklin: Royalties

Showing posts with label Royalties. Show all posts

Monday, March 17, 2014

Fight Breaks Out Over #KISS Member #EricCarr Estate Representation

Newsflash from your Hollywood Attorney:

The Kiss Company, Gene Simmons Worldwide and Universal-Polygram were taken to New York Supreme Court by the claimed estate of Eric Carr, the KISS drummer who died in 1991. The action was reported in the media as a lawsuit, although technically what was filed was a petition for pre-action disclosure. In advance of a legal claim, the estate was seeking discovery. The filing regarded alleged missing royalty payments from representatives of Kiss and UMPG and the copyright re-registration of the composition "Little Caesar" without Carr's name.

Then on Wednesday, KISS' official website published a "statement from Eric Carr family," which quoted attorney Mark Abbattista, said to represent the Carr family.

"It came to our attention through a variety of different media outlets that a legal proceeding was filed against the band KISS purporting to be on behalf of the ‘The Estate of Eric Carr’ and the ‘late KISS drummer’s heirs,’" said Abbattista. "This proceeding was filed by a non-related third party without any knowledge, authorization or consent of anyone in the Carr family.”

Abbatista added that a cease and desist was sent out to stop further actions from the claimed Carr estate.

We spoke to Robert Garson, the attorney representing the petitioner. He calls the demand "complete rubbish" and maintains he was "validly instructed by executors of the estate." He adds that "this chap" Abbattista "represents Eric Carr's sister, Loretta Caravello," but that she's not in control.

Abbattista, the same entertainment lawyer who was featured in the 21st season of CBS' reality show The Amazing Race, declined to say anything more than the statement already given.

Although it's nearly impossible to verify the legitimacy of the petition filed in New York court, the petition does include fairly detailed notes about contract agreements and communications with Kiss parties. In addition, the petitioner has lodged exhibits including a pay statement, portions of the songwriter agreement, and emails from Universal Music Publishing Group and a Kiss representative.

Source.... HR

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Saturday, March 8, 2014

No #Royalties for #Pink's Producer

Newsflash from your Hollywood Attorney:

The singer and Sony Music prevail in a legal dispute over an administration error.

Most everyone is familiar with the classic excuse, "It got lost in the mail."

For Harold Frasier's Specialists Entertainment, the excuse triggered a lawsuit against pop superstar Pink and Sony Music over royalties owed more than a decade ago. This week, Specialists struck out in its attempt to recover the money.

Specialists did work on two of the singer's songs, "Hiccup" and "Can't Take Me Home" from Pink's 2000 debut album Can't Take Me Home. There was another company, Thunderstone Productions, that also contributed to the songs. The royalties for the production work was supposed to be split equally between the two producers.

But Sony Music, responsible for administering the royalty payments, made a clerical error when attempting to update Specialists' mailing address.

In 2012, Specialists contacted Sony about the owed royalties.

Sony responded by explaining the situation, saying that at one point the royalty share was put on hold because it didn't have a valid address, and then in 2004, Sony had erroneously released 100 percent of royalties to Thunderstone due to an administration error. The music giant attempted to do something about owed royalties after 2004 and correct the situation going forward, but Specialists demanded about $36,000 in royalties from the 2000-2004 time period.

Last September, a New York judge dismissed most of the plaintiff's claims due to the statute of limitations but allowed the plaintiff to amend the lawsuit with a breach of contract claim as a third-party beneficiary of Pink's direction to Sony subsidiaries to pay producer royalties to Specialist and Thunderstone. The judge also pointed to Sony's communications with Specialists in 2012 as having acknowledged the debt and responsibility for repayment.

Unfortunately for Specialists, a New York appeals court on Tuesday reversed the ruling because of what was expressly said in the agreement between Pink (born Alecia Moore) and Sony.

"Plaintiff cannot assert a claim as a third-party beneficiary of a letter agreement between defendants Moore and Sony," wrote the appellate judge. "The agreement, requesting and authorizing Sony to deduct a portion of royalties payable to Moore and to pay them directly to plaintiff, by its express terms, negates any intent to permit enforcement by third-parties."

The ruling is a victory for the Recording Industry Association of America, which submitted an amicus brief in the appeal. For others, it's a reminder to check the mail.

Source.... HR

Thursday, February 20, 2014

#AmericanIdol Lawsuit Claims #Sony Stiffed #CarrieUnderwood and #KellyClarkson

Newsflash from your Hollywood Attorney:

The legal claims from the company behind the hit reality TV show, seeking at least $10 million in damages, could ignite new controversies over whether recording artists are getting a proper share of digital income.

New lawsuit filed on Thursday by 19 Recordings against Sony Music, the story of how the industry has leveraged American Idol into one chart-topper after the next is not without allegations of greed and corruption. The complaint filed in New York federal court and obtained by The Hollywood Reporter also explores some cutting-edge issues on the digital side of the business.

19 Recordings was founded by American Idol creator Simon Fuller and is now controlled by the show's owner, Core Media Group. In the lawsuit, 19, and by extension all of the artists -- including Kelly Clarkson, Clay Aiken, Carrie Underwood and Chris Daughtry -- who have entered into deals as part of their participation on Idol, claim that Sony Music has been systematically robbing them of millions of dollars in royalties. The lawsuit, seeking at least $10 million in damages, was filed after 19 exercised the right to audit Sony's books pursuant to recording agreements, and the parties couldn't come to any settlement.

Read Full Complaint Here... http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/American_Idol_Clarkson.pdf

"We did not want to have to file this lawsuit, but Sony left us no choice, so this became necessary to protect our artists," says 19 Entertainment worldwide head of music Jason Morey. "Our complaint lays out the claims in great detail. Everything we have to say about the case is set forth in it."

Richard Busch at King & Ballow adds, "We have investigated this thoroughly and feel strongly about the claims."

Perhaps the biggest claim -- both monetarily as well as one that could impact record companies and musicians well beyond the Idol universe -- deals with the alleged underpayment of streaming royalties.

lawsuit says that Sony is accounting for the exploitation of master recordings here as "sales" or "distributions" rather than as "broadcasts" or "transmissions." The distinction might sound like semantics, but it is nevertheless important. By treating streaming music as sales, Sony is essentially saying that such deliveries are no different than downloads purchased on Apple or Amazon. And with that, Sony would be forking over significantly less money under the terms of the company's recording agreements -- the difference between a 50 percent royalty share for a "transmission/broadcast" versus a fraction of that for a "sale/distribution." The plaintiff says the discrepancy has resulted in at least $3 million in damages.

"Such exploitation can only be fairly described as 'transmissions' or 'broadcasts,' and, upon information and belief, are so described in the licenses or other agreements between Sony and the streaming services," says the lawsuit. "However, Sony has nevertheless accounted to 19 for all streaming income received at the lower Album rate as if the exploitation between the streaming service and the end user was described as a 'distribution' or 'sale' and, by so doing, Sony has breached the Recording Agreements."

The lawsuit then goes into other ways in which Sony is allegedly cheating on music from Idol alumni.

According to the lawsuit, "Sony's interpretation would lead to the absurd result of potentially allowing it the ability to conduct an unlimited number of TV and/or radio advertising campaigns in a given country for a particular Album without ever seeking 19's prior approval so long as each individual campaign, however limited, was within the specified required range."

The lawsuit says that Sony takes advantage by pretty much always delivering answers in its favor -- or, as the case may be, treating downloaded tracks as singles as much as possible. The plaintiff says this is unfair because there are no extra manufacturing, marketing or promotional costs associated with individual songs available for purchase separately. For its part, Sony claims that it has overpaid royalty participants on digital track downloads, according to the suit.

Source....hollywoodreporter

Wednesday, July 17, 2013

Marvel No Longer Pays Royalties to Inventor of a Spider-Man Toy

Newsflash from your Hollywood Attorney:

Marvel Enterprises will no longer have to pay royalties to Stephen Kimble, the inventor of a Spider-Man toy called the Web Blaster that allows users to mimic the character's web-shooting abilities with a foam string.

the Ninth Circuit Court of Appeals begrudgingly gave Marvel a victory on the basis that the Supreme Court has restricted the kinds of contracts that can be made with patent owners.

Real money was at stake here. Since the product's invention in 1990, Kimble has earned $6 million in royalties from an agreement with Marvel that allowed him three percent of net product sales.

Read Full Ruling here.... http://cdn.ca9.uscourts.gov/datastore/opinions/2013/07/16/11-15605.pdf

In 1990, after Kimble patented his idea for a toy that was activated via a trigger attached to a valve in the palm of a glove, the inventor met with the president of one of Marvel's predecessor companies.
Marvel passed on the idea, and after the company began manufacturing a similar Spider-Man role-playing toy, Kimble sued in 1997 for patent infringement and a claim that the company had breached a contract to pay him for use of his idea. The patent claim was dismissed, but a judge ruled there were genuine issues of fact precluding summary judgment on the contract claim, entering a judgment that awarded him 3.5 percent of sales. Both sides appealed.
In 2001, the parties came to a settlement agreement. As part of the deal, Marvel purchased the patent for more than $516,000 and also agreed to give him 3 percent of net product sales. (Kimble later sold an interest in his property to Robert Grabb, a co-appellant.)

Kimble then filed a new lawsuit for breach of contract, and Marvel submitted counterclaims that sought a declaration that it was no longer obligated to pay Kimble based on the sale of products after the expiration of his patent.

That has the Ninth Circuit reviewing Brulotte v. Thys Co., a 1964 Supreme Court decision which forbids patent holders from collecting royalties after the expiration date of the patent. Where it gets tricky is so-called "hybrid agreements" that allow for payments during the patent period and non-patent period. In baseball, this would be equivalent to the Los Angeles Dodgers agreeing to lock up a young superstar beyond his early restricted free agent years.
Courts around the nation have been dubious about royalty payments under hybrid agreements, not wishing to allow patent holders to use their leverage in the early years of a patent's issuance. The Ninth Circuit has been more careful on this topic, reviewing a later 1979 Supreme Court case and holding that there should at least be a discount in the post-expiration period.

On appeal, Kimble argued that the settlement agreement with Marvel distinguishes between patent and non-patent rights and that Brulotte did not apply.
Ninth Circuit Judge Consuelo Callahan writes, "We cannot agree because the agreement plainly involved one royalty rate for both patent and Web Blaster rights, with no discount or other clear indication that the Web Blaster royalties were not subject to patent leverage."

Read More.... http://www.hollywoodreporter.com/thr-esq/appeals-court-frees-marvel-spider-586148

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Law Offices of Jonathan Franklin
Open Evenings and Weekends this Summer
Call Us Now (310) 273-9600
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Friday, May 31, 2013

Court Ruling for Sly Stone's Financial Downfall

The psychedelic funk superstar alleged that in 1989, he was induced into giving up much of his song royalties by a manager and attorney fueling his drug addictions. Sony Music and Warner Music won't have to pay for that.

The subject of the ruling is Sly Stone, born as Sylvester Stewart, who as the front man for Sly and the Family Stone, blazed a path for a progressive mixture of funk, soul and psychedelic music and whose songs like "Everyday People" and "Hot Fun in the Summertime" remain well-played on radio.

Stone's troubles with drugs and the Internal Revenue Service are well known, but in a lawsuit over "tens of millions" of dollars in allegedly misappropriated royalties against nearly three dozen individuals and entities, including an ex-manager, a lawyer and Sony, Warner and Broadcast Music, Inc (BMI), he detailed the full extent of his financial troubles and poor deal-making. Unfortunately, for Stone, an appeals court isn't giving him much relief.

We'll pick up Stone's story in the mid-70's when already a successful musician, he began to run into some personal problems that required Ken Roberts, Stone's friend and one-time manager, to advance some money and pay off some debts. In return, Stone irrevocably assigned Roberts his BMI-administered performance-right royalties.

Then, in 1980, the IRS levied a multi-million dollar tax lien upon Stone's income. For about the next 15 years, much of the money that was derived from Stone's hit songs was routed to government tax collectors.

In 1985, Stone sold his publishing interest in most of his existing musical compositions to Michael Jackson's MiJac Music company, but retained the songwriter's share of the royalties. But that too ended up with the IRS.

Full Ruling Here... http://www.courts.ca.gov/opinions/nonpub/B236286.PDF

The California Appeals Court ruling on Thursday only addresses the liability of the big music companies -- Sony, BMI and Warner -- that allegedly allowed royalties to be diverted without doing the necessary due diligence.

In short, Stone may have made bad deals in lifetime, but for the purposes of holding these companies accountable, the appeals court affirms that he has no standing to sue. He can't allege breach of contract against BMI because he assigned his royalty payments to Roberts. He can't make various claims against Sony because the record label "properly relied on" those 1989 agreements presented when figuring out where to direct royalties. Similarly, he can't sue Warner. Quoting the trial judge, the appeals court notes "the royalty companies were simply doing what they were instructed to do for years upon years.”

In the ruling, an appeals court overturns the trial judge's ruling that Roberts lacked standing to sue BMI. It also waives away BMI's contention that his claim of breach of contract is barred by statute of limitations, although the appeals judge says he can only possibly collect for four years prior to the launch of the lawsuit for allegedly bad actions. Yes, BMI paid out to Majoken, but the appeals court says "that is neither the beginning nor the end of the story" as "BMI had a contractual duty to insist on written instructions from Roberts" when in 1996, it changed where the money was going.

Read More... http://www.hollywoodreporter.com/thr-esq/sly-stones-financial-downfall-detailed-561175