Clause & Effect

Agency Agreements/Commissions

The Supreme Court of New York, New York County, found valid the commissions and service-charge provisions of an agency agreement to procure commercial-marketing opportunities for musical artist Beyonce Knowles. Wilhelmina Artist Management LLC (WAM) v. Knowles, 601151/03. Knowles had signed for WAM to act as her “sole and exclusive representative” in the field of “Commercial Marketing Activities” defined as “modeling, runway, fashion, commercials, spokesperson deals, tour sponsorship, celebrity endorsements, merchandising … and product placements, and includes without limitation all licensing or other agreements with respect thereto.”

Knowles agreed to pay WAM 10% of “all gross monies or other consideration … relating to [Knowles'] modeling and all other Commercial Marketing Activities,” and from any “television commercials, industrials, usages and/or renewal fees” from activities covered by the agency contract. Knowles acknowledged in her agreement with WAM that the agency “will be entitled to receive a service charge or fee in the amount of twenty (20%) (but not more than 20%) of the overall payments made” for the services of Knowles' or her group Destiny's Child from “some and/or all of the clients who utilize” the services. The agency agreement stated that the service charge was “in addition to” WAM's commissions from Knowles and that an “entitlement to such a service charge or fee, [was] an additional inducement for [WAM] to act on [Knowles'] behalf.”

WAM obtained a celebrity-endorsement and tour-sponsorship deal for Knowles and Destiny's Child from L'Oreal cosmetics but later sued Knowles for its full 10% commission and for a declaration of its entitlement to the 20% service charge. Granting summary judgment for WAM, the court noted in an unpublished opinion: “Knowles does not dispute that she is obligated to pay the commission, and, in fact, paid it on a number of installments for the Initial Term. … [As for the service charge,] Knowles' argument that [the agency contract] language is ambiguous because it only establishes that WAM can receive such a fee, and does not give it an automatic entitlement to the fee, is rejected. … [The contract] clearly entitles WAM to seek out the fee from the client in addition to the 10% commission it receives from Knowles. No ambiguity exists on this point.”

The court went on to dismiss Knowles' counterclaims, including one for breach of fiduciary duty by noting that “Knowles engaged WAM to represent her with respect to obtaining modeling, endorsement, and other Commercial Marketing Activities for a commission. This is an ordinary business relationship, and does not involve any specific relationship of confidence.”

A Manhattan federal district court decided that a former member of the Isley Brothers didn't have the right to recapture an interest in the copyright renewal terms of recordings the group made under an agreement with CBS Records. Jasper v. Sony Music Entertainment Inc., 04 Civ. 7876 (CM). Christopher Jasper filed suit alleging that Sony Music, CBS Records' successor-in-interest, was infringing on Jasper's interest in four recordings the Isley Brothers made between 1973 and 1976. Jasper also claimed that Sony Music should be paying his share of the royalties directly to him, rather than to the Isley Brothers' companies. Jasper hadn't been a full member of the group until after the 1973 recording contract was signed. But all six members of the group signed modifications of the recording contract in 1980 and 1981. As part of the signing, Jasper initialed each page of the 1973 contract.

The 1981 modification contained a grant of rights clause similar to the one in the 1973 agreement that had stated:

All master recordings made hereunder and all matrices and phonograph records manufactured therefrom, together with the performances embodied thereon, shall be entirely our [ie, CBS's] property, free from any claims whatsoever by you or the Artist or any person deriving any rights or interests from you or the Artist; however, for purposes of Federal copyright registration, we shall copyright such master recordings in your name as the owner and author thereof and [we shall] secure any and all renewals of such copyright in your name. Without limiting the generality of the foregoing, we (including other divisions of our company) and/or our subsidiaries, affiliates and licensees shall have the unlimited right, from time to time, to manufacture, by any method now or hereafter known, phonograph records and other reproductions, on any mediums or devices now or hereafter known, of the master recordings made hereunder, and to sell, transfer or otherwise deal in the same throughout the world under any trademarks, trade names and labels, or to refrain from such manufacture, sale and dealing.

The three original Isley Brothers filed for bankruptcy in the 1980s. The trustee then sued Jasper as responsible for one-sixth of the group's debt. Under a settlement, Jasper received $175,000 in exchange for giving up any present or future claims against the group's companies, Bovina Music and T-Neck Records. When Jasper sued Bovina and T-Neck in the 1990s for a one-sixth share of royalties, the courts ruled that he had signed away these rights in the trustee proceeding. Jasper v. Bovina Music, 314 F.3d 42 (2d Cir. 2002). Jasper then filed the complaint against Sony Music, a suit that the district court described as “a second misguided attempt to obtain royalties he forfeited many years ago, when he settled the adversary proceeding in 1991. It must be, and is, dismissed.”

The district court found: that the 1973 and 1981 agreements explicitly gave CBS Records the right to renew the copyrights and pay royalties directly to T-Neck; that Jasper had agreed to the terms of the 1973 agreement; and that, in any case, Sony had received valid rights from Jasper's co-authors. The court noted in part: “Since a joint author has an equal and undivided interest in the whole work, and may use or license the work as he wishes, their signatures are sufficient to give Sony, as CBS's successor-in-interest, the exclusive license to exploit the Copyrighted Works throughout the life of the copyright, including the renewal term. … Thus, because [original group members] Ronald and Rudolph Isley legally surrendered the Older Isleys' right to renew the copyright for the Copyrighted Works when they signed the 1973 Agreement and 1981 Modification, and because they were alive at the commencement of the renewal period for each of the Copyrighted Works, Jasper has no right of recapture.”

Agency Agreements/Commissions

The Supreme Court of New York, New York County, found valid the commissions and service-charge provisions of an agency agreement to procure commercial-marketing opportunities for musical artist Beyonce Knowles. Wilhelmina Artist Management LLC (WAM) v. Knowles, 601151/03. Knowles had signed for WAM to act as her “sole and exclusive representative” in the field of “Commercial Marketing Activities” defined as “modeling, runway, fashion, commercials, spokesperson deals, tour sponsorship, celebrity endorsements, merchandising … and product placements, and includes without limitation all licensing or other agreements with respect thereto.”

Knowles agreed to pay WAM 10% of “all gross monies or other consideration … relating to [Knowles'] modeling and all other Commercial Marketing Activities,” and from any “television commercials, industrials, usages and/or renewal fees” from activities covered by the agency contract. Knowles acknowledged in her agreement with WAM that the agency “will be entitled to receive a service charge or fee in the amount of twenty (20%) (but not more than 20%) of the overall payments made” for the services of Knowles' or her group Destiny's Child from “some and/or all of the clients who utilize” the services. The agency agreement stated that the service charge was “in addition to” WAM's commissions from Knowles and that an “entitlement to such a service charge or fee, [was] an additional inducement for [WAM] to act on [Knowles'] behalf.”

WAM obtained a celebrity-endorsement and tour-sponsorship deal for Knowles and Destiny's Child from L'Oreal cosmetics but later sued Knowles for its full 10% commission and for a declaration of its entitlement to the 20% service charge. Granting summary judgment for WAM, the court noted in an unpublished opinion: “Knowles does not dispute that she is obligated to pay the commission, and, in fact, paid it on a number of installments for the Initial Term. … [As for the service charge,] Knowles' argument that [the agency contract] language is ambiguous because it only establishes that WAM can receive such a fee, and does not give it an automatic entitlement to the fee, is rejected. … [The contract] clearly entitles WAM to seek out the fee from the client in addition to the 10% commission it receives from Knowles. No ambiguity exists on this point.”

The court went on to dismiss Knowles' counterclaims, including one for breach of fiduciary duty by noting that “Knowles engaged WAM to represent her with respect to obtaining modeling, endorsement, and other Commercial Marketing Activities for a commission. This is an ordinary business relationship, and does not involve any specific relationship of confidence.”

A Manhattan federal district court decided that a former member of the Isley Brothers didn't have the right to recapture an interest in the copyright renewal terms of recordings the group made under an agreement with CBS Records. Jasper v. Sony Music Entertainment Inc., 04 Civ. 7876 (CM). Christopher Jasper filed suit alleging that Sony Music, CBS Records' successor-in-interest, was infringing on Jasper's interest in four recordings the Isley Brothers made between 1973 and 1976. Jasper also claimed that Sony Music should be paying his share of the royalties directly to him, rather than to the Isley Brothers' companies. Jasper hadn't been a full member of the group until after the 1973 recording contract was signed. But all six members of the group signed modifications of the recording contract in 1980 and 1981. As part of the signing, Jasper initialed each page of the 1973 contract.

The 1981 modification contained a grant of rights clause similar to the one in the 1973 agreement that had stated:

All master recordings made hereunder and all matrices and phonograph records manufactured therefrom, together with the performances embodied thereon, shall be entirely our [ie, CBS's] property, free from any claims whatsoever by you or the Artist or any person deriving any rights or interests from you or the Artist; however, for purposes of Federal copyright registration, we shall copyright such master recordings in your name as the owner and author thereof and [we shall] secure any and all renewals of such copyright in your name. Without limiting the generality of the foregoing, we (including other divisions of our company) and/or our subsidiaries, affiliates and licensees shall have the unlimited right, from time to time, to manufacture, by any method now or hereafter known, phonograph records and other reproductions, on any mediums or devices now or hereafter known, of the master recordings made hereunder, and to sell, transfer or otherwise deal in the same throughout the world under any trademarks, trade names and labels, or to refrain from such manufacture, sale and dealing.

The three original Isley Brothers filed for bankruptcy in the 1980s. The trustee then sued Jasper as responsible for one-sixth of the group's debt. Under a settlement, Jasper received $175,000 in exchange for giving up any present or future claims against the group's companies, Bovina Music and T-Neck Records. When Jasper sued Bovina and T-Neck in the 1990s for a one-sixth share of royalties, the courts ruled that he had signed away these rights in the trustee proceeding. Jasper v. Bovina Music , 314 F.3d 42 (2d Cir. 2002). Jasper then filed the complaint against Sony Music, a suit that the district court described as “a second misguided attempt to obtain royalties he forfeited many years ago, when he settled the adversary proceeding in 1991. It must be, and is, dismissed.”

The district court found: that the 1973 and 1981 agreements explicitly gave CBS Records the right to renew the copyrights and pay royalties directly to T-Neck; that Jasper had agreed to the terms of the 1973 agreement; and that, in any case, Sony had received valid rights from Jasper's co-authors. The court noted in part: “Since a joint author has an equal and undivided interest in the whole work, and may use or license the work as he wishes, their signatures are sufficient to give Sony, as CBS's successor-in-interest, the exclusive license to exploit the Copyrighted Works throughout the life of the copyright, including the renewal term. … Thus, because [original group members] Ronald and Rudolph Isley legally surrendered the Older Isleys' right to renew the copyright for the Copyrighted Works when they signed the 1973 Agreement and 1981 Modification, and because they were alive at the commencement of the renewal period for each of the Copyrighted Works, Jasper has no right of recapture.”