Clause & Effect: <b>Reclamation Clauses In Songwriting Agreements

Finding talent and being rewarded for it are common music industry pursuits. After Carl Jackson discovered singer/songwriter Bobbie Cryner while she was waitressing at a Tennessee restaurant, he negotiated an October 1991 songwriting deal for Cryner with the California-based Famous Music Corp., to whom Jackson was also signed. Though Jackson wasn't a contractual party to the Cryner/Famous Music agreement, with Cryner's knowledge he entered into a separate contract the same day with Famous Music for him to co-produce Cryner and to re-assign him a 50% of the copyrights that Cryner transferred to Famous Music. In 1993, Bobbie Cryner executed a copyright assignment for Famous Music to file with the U.S. Copyright Office. (See sidebar.)

A key provision of the Cryner/ Famous Music contract stated:

9. Anytime after three (3) years after expiration of the Term, upon fifteen (15) days written notice from Writer, accompanied by payment to Publisher of one hundred percent (100%) of any sums still unrecouped hereunder, if any, Publisher shall re-assign to Writer all Compositions that have not been commercially exploited prior to receipt of such notice by Publisher. Commercial exploitation, for the foregoing purposes, shall be satisfied for any Composition that has been:

(i) released for sale to the public on phonograph records, tapes, compact discs or any other “phonorecord” or “sound recording” (as such terms are defined under U.S. Copyright Law) on a “major label,” which shall be defined as any record label which either: (A) is distributed by or through one of the major distribution groups now constituted by MCA, CEMA, WEA, Polygram, Sony and BMG, or any subsequently established distribution group of relatively equal stature to the foregoing; or (B) has had a single or album listed in the top ten (10) chart positions on any chart published by Billboard Magazine during the two (2) periods prior to release of the recorded product embodying the Composition;

(ii) synchronized in the soundtrack of either: (A) a theatrical motion picture exhibited to the public; (B) a television program broadcast to the public; or (C) a home video program (as the state of such devices is now known or hereafter devised and developed) offered for sale to the public.

Three years after the Cryner/Famous Music songwriting contract ended, Cryner signed an agreement with Child Bride Music for her composition “Real Live Woman,” a song Famous Music hadn't commercially exploited. Cryner also notified Famous Music that she was reclaiming the rights to all her compositions that Famous Music hadn't exploited. “Real Live Woman” later became a hit for Trisha Yearwood. Meanwhile, Jackson, claiming he wasn't bound by the reclamation clause in the Cryner/Famous Music contract, refused to reassign his share of the song copyrights to Cryner. Child Bride Music and Cryner then sued Jackson seeking a declaratory judgment. The Chancery Court for Davidson County, Tennessee, ruled that Jackson was bound by the Cryner/Famous Music reclamation clause.

Affirming, the Court of Appeals of Tennessee at Nashville noted that both California and Tennessee follow the common law rule that an assignee (ie, Jackson) is in the same position as that of an assignor (ie, Famous Music). In the case at hand, the court of appeals noted, “The reclamation rights of Cryner under paragraph nine of the Cryner-Famous Music contract are unconditional and are written in unambiguous terms. Jackson was thoroughly familiar with the Cryner contract and, indeed, was responsible for the reclamation language that appears in paragraph nine. Jackson is not a party to the Cryner contract and has no rights thereunder and no obligations thereunder, except the rights and obligations of an assignee 'standing in the shoes of' his assignor. The rights of Jackson emanate from the Famous Music-Jackson contract alone as assignee of Famous Music Corporation. His rights can rise to no greater dignity than the rights of his assignor, Famous Music Corporation. As Famous Music Corporation is bound by paragraph nine of the Cryner agreement, so Jackson, as assignee of Famous Music, can acquire from his assignor no greater rights than his assignor has acquired under the contract with Cryner.” Child Bride Music Inc. v. Jackson, M2002-02789-COA-R3-CV.

But in a twist, the court of appeals cited the chancery court's recognition that Jackson's “initial contact with Ms. Cryner was one of friendship and you [Jackson] did her a great favor. I think she recognizes that and I think she's in a very awkward position right now. Money does a lot of strange things to people.”

“You did her a very good job because it worked to your detriment,” the chancellor had continued. “And had you had a lawyer looking solely out for you, you might have been able to include language that would have protected the interests you thought you were getting. But after having listened to everything that was testified to and reading the documents and learning a little bit more on my behalf about copyright, I find that I am not able to declare that you have any interest given her right to this reassignment. It may not be fair, but it is the law.

“And it is with regret that I issue this opinion,” the chancellor had added.

In addition to having transactional legal counsel, what else might Jackson have done? Jackson could have tried to have a clause inserted into his contract with Famous Music stating that he wasn't bound by the Cryner/Famous Music reclamation provision. But it's unlikely that Famous Music would have wanted Jackson to have greater rights than it did. Thus, alternatively Jackson might have signed Cryner to his own company first and included a non-reclamation clause in that agreement, though a consent by the artist on such a deal point, especially with unexploited songs, would be prompted by how great the artist's desire was to sign a songwriting agreement. But if such an arrangement had been made, it's less likely that the court would have seen Jackson's initial deal with Cryner as “a great favor.”

Assignment Filed With Copyright Office

For good and valuable consideration, the undersigned BOBBIE CRYNER (“Assignor”) hereby assigns, conveys, grants and transfers exclusively to FAMOUS MUSIC CORPORATION (“Assignee”) and LONESOME DOVE MUSIC (“Co-Publisher”) their successors and assigns, joint ownership in equal shares of the copyright in and to the musical composition presently entitled:

SEE ATTACHED SCHEDULE ________________________________________

(the “Composition”), which was written and composed in the following percentages:

Songwriter:

Creative Percentage:

SEE ATTACHED SCHEDULE

Said assignment is for the maximum term of copyright throughout the world (including any renewals or extensions thereof) available now or in the future under any law, other governmental regulation or judicial decision, but is subject to the terms of the agreement between Assignee and Assignor dated __________, and the agreement between Assignee and Co-Publisher dated __________.

Executed as of the ___ day of __________.

Finding talent and being rewarded for it are common music industry pursuits. After Carl Jackson discovered singer/songwriter Bobbie Cryner while she was waitressing at a Tennessee restaurant, he negotiated an October 1991 songwriting deal for Cryner with the California-based Famous Music Corp., to whom Jackson was also signed. Though Jackson wasn't a contractual party to the Cryner/Famous Music agreement, with Cryner's knowledge he entered into a separate contract the same day with Famous Music for him to co-produce Cryner and to re-assign him a 50% of the copyrights that Cryner transferred to Famous Music. In 1993, Bobbie Cryner executed a copyright assignment for Famous Music to file with the U.S. Copyright Office. (See sidebar.)

A key provision of the Cryner/ Famous Music contract stated:

9. Anytime after three (3) years after expiration of the Term, upon fifteen (15) days written notice from Writer, accompanied by payment to Publisher of one hundred percent (100%) of any sums still unrecouped hereunder, if any, Publisher shall re-assign to Writer all Compositions that have not been commercially exploited prior to receipt of such notice by Publisher. Commercial exploitation, for the foregoing purposes, shall be satisfied for any Composition that has been:

(i) released for sale to the public on phonograph records, tapes, compact discs or any other “phonorecord” or “sound recording” (as such terms are defined under U.S. Copyright Law) on a “major label,” which shall be defined as any record label which either: (A) is distributed by or through one of the major distribution groups now constituted by MCA, CEMA, WEA, Polygram, Sony and BMG, or any subsequently established distribution group of relatively equal stature to the foregoing; or (B) has had a single or album listed in the top ten (10) chart positions on any chart published by Billboard Magazine during the two (2) periods prior to release of the recorded product embodying the Composition;

(ii) synchronized in the soundtrack of either: (A) a theatrical motion picture exhibited to the public; (B) a television program broadcast to the public; or (C) a home video program (as the state of such devices is now known or hereafter devised and developed) offered for sale to the public.

Three years after the Cryner/Famous Music songwriting contract ended, Cryner signed an agreement with Child Bride Music for her composition “Real Live Woman,” a song Famous Music hadn't commercially exploited. Cryner also notified Famous Music that she was reclaiming the rights to all her compositions that Famous Music hadn't exploited. “Real Live Woman” later became a hit for Trisha Yearwood. Meanwhile, Jackson, claiming he wasn't bound by the reclamation clause in the Cryner/Famous Music contract, refused to reassign his share of the song copyrights to Cryner. Child Bride Music and Cryner then sued Jackson seeking a declaratory judgment. The Chancery Court for Davidson County, Tennessee, ruled that Jackson was bound by the Cryner/Famous Music reclamation clause.

Affirming, the Court of Appeals of Tennessee at Nashville noted that both California and Tennessee follow the common law rule that an assignee (ie, Jackson) is in the same position as that of an assignor (ie, Famous Music). In the case at hand, the court of appeals noted, “The reclamation rights of Cryner under paragraph nine of the Cryner-Famous Music contract are unconditional and are written in unambiguous terms. Jackson was thoroughly familiar with the Cryner contract and, indeed, was responsible for the reclamation language that appears in paragraph nine. Jackson is not a party to the Cryner contract and has no rights thereunder and no obligations thereunder, except the rights and obligations of an assignee 'standing in the shoes of' his assignor. The rights of Jackson emanate from the Famous Music-Jackson contract alone as assignee of Famous Music Corporation. His rights can rise to no greater dignity than the rights of his assignor, Famous Music Corporation. As Famous Music Corporation is bound by paragraph nine of the Cryner agreement, so Jackson, as assignee of Famous Music, can acquire from his assignor no greater rights than his assignor has acquired under the contract with Cryner.” Child Bride Music Inc. v. Jackson, M2002-02789-COA-R3-CV.

But in a twist, the court of appeals cited the chancery court's recognition that Jackson's “initial contact with Ms. Cryner was one of friendship and you [Jackson] did her a great favor. I think she recognizes that and I think she's in a very awkward position right now. Money does a lot of strange things to people.”

“You did her a very good job because it worked to your detriment,” the chancellor had continued. “And had you had a lawyer looking solely out for you, you might have been able to include language that would have protected the interests you thought you were getting. But after having listened to everything that was testified to and reading the documents and learning a little bit more on my behalf about copyright, I find that I am not able to declare that you have any interest given her right to this reassignment. It may not be fair, but it is the law.

“And it is with regret that I issue this opinion,” the chancellor had added.

In addition to having transactional legal counsel, what else might Jackson have done? Jackson could have tried to have a clause inserted into his contract with Famous Music stating that he wasn't bound by the Cryner/Famous Music reclamation provision. But it's unlikely that Famous Music would have wanted Jackson to have greater rights than it did. Thus, alternatively Jackson might have signed Cryner to his own company first and included a non-reclamation clause in that agreement, though a consent by the artist on such a deal point, especially with unexploited songs, would be prompted by how great the artist's desire was to sign a songwriting agreement. But if such an arrangement had been made, it's less likely that the court would have seen Jackson's initial deal with Cryner as “a great favor.”

Assignment Filed With Copyright Office

For good and valuable consideration, the undersigned BOBBIE CRYNER (“Assignor”) hereby assigns, conveys, grants and transfers exclusively to FAMOUS MUSIC CORPORATION (“Assignee”) and LONESOME DOVE MUSIC (“Co-Publisher”) their successors and assigns, joint ownership in equal shares of the copyright in and to the musical composition presently entitled:

SEE ATTACHED SCHEDULE ________________________________________

(the “Composition”), which was written and composed in the following percentages:

Songwriter:

Creative Percentage:

SEE ATTACHED SCHEDULE

Said assignment is for the maximum term of copyright throughout the world (including any renewals or extensions thereof) available now or in the future under any law, other governmental regulation or judicial decision, but is subject to the terms of the agreement between Assignee and Assignor dated __________, and the agreement between Assignee and Co-Publisher dated __________.

Executed as of the ___ day of __________.