One of my all-time favorite singers is in the news this week. The Ray Charles Foundation, a charitable organization founded by Ray Charles to fund research and provide education relating to hearing loss, sued seven of Charles’ twelve children recently for allegedly breaching an agreement they made with their father regarding their rights to his musical compositions. According to the complaint, Mr. Charles gathered his children around him in December of 2002, except for the two that were then incarcerated, and told them that he intended to fund a $500,000 trust for each of them, and that he would pay all applicable taxes associated with it, if the children would relinquish their rights to his musical compositions and other intellectual property to his foundation. According to the complaint, all of the children accepted this deal. However, in March of 2010, the seven defendants in this lawsuit began to issue notices of termination of transfer with respect to certain of the compositions.
The 1976 US Copyright Act granted a right of termination to copyright holders who transfer their rights to others in order to ensure that artists have an opportunity to renegotiate deals they made earlier in their careers when the works had little to no value. There are certain exceptions to this provision, one of which is that a writer cannot undo a transfer if it was a “work made for hire.” For works assigned after 1978, terminations can begin 35 years after the date of the original transfer for a five-year window of time, with notices being served two years earlier than the first available termination date. That means 2011 was the first year termination notices for works assigned in or after 1978 were eligible to be served.
In March of 2010, the heirs served 39 termination notices upon various entities relating to 51 compositions either written or co-written by Ray Charles. According to the plaintiff, there are numerous things wrong with the notices of termination (mostly relating to the fact that the compositions were works made for hire, they served numerous notices for the same song, and they served the notices too early) and these actions have placed an “enormous cloud” over the title to the songs. In addition to these problems, which supposedly render the notices invalid, the foundation contends that the actions of Charles’ children put them in breach of the agreement they each made with their father during his lifetime in which they were each given the $500,000 trust in exchange for all of their interests in his songs. As sole beneficiary of his compositions, the Foundation claims it will be irreversibly damaged if the heirs are allowed to regain title to the compositions.
It’s hard to know what will happen in this case and we haven’t heard the heirs’ version of events yet. However, this case is just the latest in the expected wave of litigation arising from the termination provisions of the Copyright Act as compositions written in or after 1978 become eligible. However this turns out, there is no doubt this expensive and acrimonious suit would make Ray sing the blues.