Copyright Laws UK: Getting Out Of Bad Contracts

Percy Sledge, the well-known R&B singer, who is reputed to have written the song “When a Man Loves a Woman” died this week. While Sledge had a long and illustrious career in the music industry, his later works never reached the height of fame of his original song. Sledge is said to have composed the melody himself, however there are conflicting stories as to whether he just played a part and what part that was in writing the lyrics. The song reached number 1 on the US charts, after he signed away his rights to it.

Sledge has reportedly said that giving up the rights to the song was the ‘worst decision I ever made’, because ‘I didn’t know any better’.” Although there are debates as to how much of the song Sledge did actually write, what is clear is that if Sledge did indeed write a portion of the song he has since lost millions in royalties.

Understanding Copyright 

Copyright is a property right, like many other IP rights. So, it can be sold, bought, given away or left to someone in a will. The copyright owner is the one entitled to ‘exploit’ the work, such as by copying parts of it and selling copies to the public. The rights exclusively enjoyed by a copyright owner include renting or licensing the work to others, broadcasting it, transmitting it over the Internet, adapting it into other languages, and so on.

Understanding copyright is crucial to everyone in the digital world, and especially to those in the creative industries of music, publishing, film, software and more.

Owning copyright gives you a potential source of revenue. The copyright owner has the right to control the sharing of a copyright product, and to stop competitors from exploiting the investment you make in developing your product. As such, it is a right which should never be given away without first receiving proper advice from an IP lawyer.

Music Copyright disputes

Over the years there has been a fair bit of litigation over copyright law within the music industry, such as O’Sullivan v Management Agency & Music Ltd [1985] QB 428 where O’Sullivan ultimately succeeded in having a number of management, sole agency, recording and publishing agreements and transfers of copyright set aside for undue influence.

Undue influence is an equitable principle that prevents the enforcement of contracts that have been entered into unfairly or where the parties do not come to the table on an equal footing. This is particularly common in the music industry given that new talent is often willing to take their chances to reach fame by signing agreements which they may later regret.

Undue influence, duress and restraint of trade

Undue influence is often described as similar to the common law defence of duress. It is successfully applied where there is an unreasonable amount of pressure exerted by one of the parties to an agreement.

Undue influence has been a  common argument in the music industry when new talent entering into agreements have later regretted their agreements once they’ve had commercial success. So artists are now required, as a matter of course, to obtain independent advice before entering into agreements so their interests are protected and the label isn’t open to litigation.

“In the music industry there has been a blurring of the distinction between the doctrine of restraint of trade and undue influence“. This reflects the fact that both doctrines are used to protect the interests of artists who enter into restrictive agreements when their bargaining power is poor. Zang Tumb Tuum Records Ltd v. Johnson [1993] EMLR 61 is a case that dealt with both. Holly Johnson, the lead singer for the band Frankie Goes to Holloywood entered to a contract with Zang in the early 1980s. Johnson later sued Zang for royalties that were withheld because his contract required that the costs of producing the album be excluded from the profits. Johnson successfully argued that when he entered into the contract that he was subject to undue influence given that he had been a starving actor without much work.

One case where undue influence was not a successful argument was Elton John v. Dick James, where John and his writer sued their producer for additional royalties, claiming that when they signed their original contract, they were young, inexperienced and subject to undue influence.  The royalties in dispute were for over $14 million in 1985 with legal fees in excess of $2.2 million. John ultimately lost the case. The judge said that it was a “hard bargain, but that it would be unjust now to set aside”.

In Samuel v Wadlow [2007] is a good example of pressing your luck says the IPkat. Singer-songwriter Seal, having successfully renegotiated his obligation to pay commission to long-time manager Wadlow, stopped paying commission altogether on the basis that he had agreed the terms of the settlement contract through undue influence. The Court of Appeal upheld Mr Justice Gray’s refusal to accept that this was the case. Far from being oppressive, the terms of the settlement contract were beneficial to him and he entered into the deal having received independent legal advice.

Conclusion

These cases demonstrate the commercial importance of copyright. It is important that anyone who is transferring IP rights should first get independent legal advice. That is the best way to avoid the regrets that an artist like Percy Sledge might have borne throughout his career.