Mark Costello, BridgeTower Media Newswires
Paul McCartney commenced an action against Sony / ATV Music Publishing, LLC and Sony ATV Tunes, LLC on Jan. 18 to regain ownership of copyrights in songs he composed individually or co-wrote with John Lennon from 1962 to 1971. The road from composing the songs to this lawsuit, however, is a long, winding one worth retracing.
It is difficult to remember a time when Paul McCartney, John Lennon and the rest of The Beatles were unknown artists aching for a break in the business but they were and, as with many emerging artists, the deals they inked reflected their inferior bargaining position and those contracts long outlived The Beatles' short-lived obscurity. The publishing contract - the contract that controls the rights and revenues to their musical compositions - McCartney and Lennon signed with Northern Songs in 1963 just before the release of their first UK No. 1 hit, "Please Please Me," was such a contract. Their publishing contract assigned ownership of the copyrights forever and 50 percent of the royalties to Northern Songs, 20 percent of the royalties each to McCartney and Lennon and 10 percent of the royalties to NEMS Enterprises, their manager's company.
As anyone who has been awake at any moment since February 1964 knows, The Beatles became a pop cultural phenomenon the likes of which never had been seen or are again likely to be equaled. Their musical output - under contract to release two albums per year - was manically prolific, and Lennon and McCartney churned out hits faster than Land-O-Lakes churns butter. By 1965 Northern Songs, immensely rich from the creative output of Lennon and McCartney, went public, becoming the first music publisher ever floated on the London Stock Exchange.
After the offering, The Beatles' interests in the company remained unfavorable, particularly considering they were solely responsible for the company's only product, Beatles' songs, and because of their unparalleled popularity effectively served as the company's marketing and PR arm. Northern songs' principal function amounted to counting the money as it flowed through the door. Overtures by the Beatles for Northern Songs to increase the Beatles' royalty were rebuffed, with Dick James, the founder of Northern Songs, explaining that he had public stockholders to whom he was responsible.
Northern Songs' stock price remained high and steady until John Lennon's public and sometimes controversial exploits with Yoko Ono - such as their release of the Two Virgins album on which Lennon and Ono appeared in full frontal nudity - sent it into erratic fluctuation. Lennon and Ono's Amsterdam bed-in sent James into apoplexy, prompting James and his partner to sell their 37.5 percent interest in Northern Songs stock to Sir Lew Grade's Associated Television ("ATV").
John Lennon's murder by a delusional fan in 1980 sparked interest in The Beatles' catalog, hopes for a reunion dashed and the world recognizing their body of work was now complete. Simultaneously, Sir Lew Grade, having lost a boat load of money on his expensive and unremarkable film, "Raise the Titanic," was cash strapped and floated the idea of selling ATV Music, the division of his company that controlled copyrights to The Beatles' compositions. McCartney and Ono teamed up to buy back the Lennon-McCartney catalog and McCartney, likening the rights in his musical compositions to children, famously decried in a public interview, "Give me back my babies, Lew."
While negotiations with Sir Lew Grade stumbled, an Australian tycoon, Robert Holmes a' Court, began quietly acquiring shares of ATV Music's parent company, Associated Communications Corporation, until he controlled 51 percent of the company. Holmes a' Court, recognizing the value of the Beatles catalog, had no interest in selling, so negotiations for Lennon and McCartney's babies ceased.
At that point, McCartney's father-in-law, a New York entertainment attorney, schooled McCartney in the wisdom of investing in music publishing, setting Sir Paul on the road to amassing what today has become reportedly the largest privately held music publishing company, MPL Communications. At this point in time McCartney was well underway to acquiring a formidable stable of music written by others, including the entire catalog of songs written by McCartney's boyhood hero, Buddy Holly.
In the fall of 1981 through mid-1982, at Michael Jackson's invitation, McCartney and Jackson collaborated, co-writing and recording a few songs. McCartney, acting as mentor, educated the younger Jackson of the virtue of investing in music publishing to which Jackson joked that someday he would own all of McCartney's songs.
Intent on having his babies returned, McCartney in 1983 engaged Holmes a' Court in negotiations to recover ownership of the Lennon-McCartney catalog. McCartney, though, was not alone in his pursuit as EMI Music and ABBA's producer, Stig Anderson, entered the race for this publishing prize. But none of them was to win the prize as a fourth suitor lurked in the wings. Flush with cash from the immense success of his Thriller album, Michael Jackson swooped in to fulfill his prophecy, becoming the owner of McCartney's - and the Beatles' - music catalog. In 1995, Jackson merged his interest in ATV into Sony Music Publishing, bringing us to present day.
At the time McCartney composed his songs with The Beatles, U.S. copyright law granted copyright owners a 28-year copyright renewable for another 28 years. Effective Jan. 1, 1978 copyright law was amended to give composers a term of life of the author plus 50 years. Recognizing the inherent unfairness of extending the term after authors of works had long ago assigned all their rights, the law was amended to allow pre-1978 authors to recapture the rights of their works after 56 years - what would have been the normal maximum termination date of the copyright in their works. U.S. Copyright Law, 17 USC §304 (c)(3), provides that "at any time during a period of five years beginning at the end of fifty-six years from the date copyright was originally secured, or beginning January 1, 1978, whichever date is later" authors may terminate the aged assignment of a copyright.
Lo and behold 56 years have flashed like light through a keyhole and the rights to the first of the Beatles' compositions are subject to recapture in 2018. Beginning in 2008, through a series of notices served on Sony ATV and recorded in the US Copyright Office, McCartney exercised his statutory right to terminate his assignments of copyrights that began with the Lennon-McCartney composition "Love Me Do."
McCartney's notices appear to have been properly exercised and the law appears to require nothing more, but not wishing to risk a new loss of his now 56-year-old babies, McCartney's attorneys sought confirmation from Sony ATV that McCartney had properly exercised his rights and that Sony would be releasing the copyrights to McCartney on the required dates. Between the time McCartney served his termination notices and the present, Sony ATV had challenged the exercise of the right by the 1980s band Duran Duran (who had exercised a parallel right granted to post-1978 composers) and Duran Duran lost. Duran Duran litigated the issue in Great Britain and, by popular accounts, failed to admit testimony of an expert on U.S. Copyright Law, which contributed to their defeat. Nevertheless, the Duran Duran decision made the McCartney team nervous, which precipitated their demand for an admission from Sony ATV that McCartney had properly exercised his right to terminate.
A Dec. 19, 2016 written communication from Sony ATV's chairman seemed to remove doubt that McCartney had served proper notice to terminate, but McCartney's team, ever-cautious, interpreted room for ambiguity and demanded further clarification. The Sony ATV chairman referred the matter to a Sony attorney because he said it appeared to require a legal conclusion. A Jan. 9, 2017 email from Sony ATV's attorney proved equally unsatisfactory to the McCartney team. Nine days later McCartney commenced a declaratory judgment action in the Southern District of New York to determine whether his long-wandering children will be returned home. Time will tell.
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Mark Costello is a partner at Boylan Code LLP concentrating his practice in civil litigation and entertainment law who, when he sings, makes dogs howl.
Published: Thu, Feb 02, 2017
