Maintaining The Status Quo - Record Royalties: Protecting And ClaimingYour Share

In the sixties and seventies bands were formed with much less formality than they are these days. Recording royalties were a major source of income and bands with proven success commanded large advances and increasingly generous royalty shares. Often little thought was given to what should happen to this income if the band split or members left. Former band members have found difficulty getting continuing band members to pay over back catalogue royalties and have found themselves short changed. Such claims are often difficult to formulate and they become stale. Delay may eventually prove fatal. Many issues arise in such claims not least how to fund them in the courts.

In a recent case involving Status Quo1 a claim was made by two former band members (Alan Lancaster and John Coghlan) for payment of back catalogue royalties primarily against the two continuing band members (Rick Parfitt and Francis Rossi).The claims were essentially in respect of Pye royalties (going back to the sixties) and Phonogram royalties (going back to the seventies). The Pye contracts were relatively unsophisticated and made direct with individual band members. As the band became more successful the contractual arrangements became more sophisticated and during the time the Phonogram contracts were made the band's corporate vehicles came into the picture. The contracts made direct with individual band members "merged" with contracts made with the corporate vehicles.

At the end of the trial the Pye royalty claims were upheld and it was declared that the royalty shares belonging to the Claimants were held by the continuing band members on a class 1 constructive trust. As a result of this finding the limitation period was disapplied and royalties going back to the eighties were held to be recoverable. This bulletin is about the sort of problems likely to be faced pursuing back catalogue royalty claims in those cases where former band members have direct contracts with the record company and find, having left the band, they are not receiving their royalty share. A number of broad issues need to be considered in making such claims particularly:

The contractual arrangements with the recording company.

The ownership of the copyright in the sound recording.

The contractual arrangements, if any, within the band.

The contractual arrangements governing the departure from the band.

The contractual arrangements for recoupment of advances to the band.

Limitation issues.

Funding issues.

Back catalogue royalty claims are essentially contractual and the contract with the record company is the obvious starting point. A distinction must be drawn between contracts where band members perform in the studio in return for remuneration from the record company and contracts where the band itself (or one of its companies) acts as producer producing recordings, providing masters and assigning or licensing sound recording copyright to the record company. This latter type of contract usually fits in as part of a complex contractual and corporate structure where the companies rather than the individual band members are entitled to the income.

We are primarily concerned with contracts where royalties are paid by the record company in consideration for the band members having performed in the studio on the recordings. The level of remuneration is usually dependent on the ultimate success of the album being recorded. Since the record company owns copyright in the sound recording no question of copyright assignment or licences arise. The band is paid for performing in the studio and the recordings are produced and owned by the record company. Sometimes...

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