By Amanda Bronstad, From The National Law Journal

A federal appeals court has revived a lawsuit brought by The Ray Charles Foundation against the musician’s children who sought to terminate copyrights to 51 of his songs.

The case, brought in 2012, is among the first to test a provision of the Copyright Act that allows an artist, or his or her surviving family members, to terminate copyrights 35 years after they were granted.

The Ray Charles Foundation, the sole beneficiary of Ray Charles’s estate, sued after seven of the singer’s 12 children had sought to terminate rights he granted to a subsidiary of Atlantic Records now owned by Warner/Chappell Music Inc. A federal judge in Los Angeles dismissed the case based on standing, but the U.S. Court of Appeals for the Ninth Circuit reversed that ruling on Friday.

The decision could open the door for third parties in certain circumstances to challenge termination notices in copyright disputes, said David Gold, an attorney at Cole Schotz in Hackensack, New Jersey, who is following the case.

“This could expand the pool of people who could assert these rights going forward,” he said. “Given how hot this topic is, and how adversarial a lot of these termination disputes have become, it gives another bullet in the chamber.”

A lawyer for the foundation, Mark Passin, chairman of the entertainment and media litigation group in the Los Angeles office of Minneapolis-based Robins Kaplan, did not respond to a request for comment.

Marc Toberoff, founding partner of Toberoff & Associates in Malibu, California, who represents Charles’ children, wrote in an email: “We respectfully disagree with the opinion and are considering petitioning for en banc review of this important issue.”

The case involves termination notices that first became available in 2013 under Section 203 of the Copyright Act, which applies to works created after 1978. Artists such as Tom Petty and Bob Dylan have sought termination notices and, in 2012, a federal judge in San Diego ruled that Victor Willis, the original lead singer of the Village People, could file termination notices of copyrights over several of the band’s songs, including “Y.M.C.A.” (On March 9, a federal jury found that Willis owned 50 percent of many of those copyrights, but an appeal of that verdict is now before the Ninth Circuit.)

Before he died in 2004, Charles gave each of his children irrevocable trusts of $500,000 each as their only inheritance. In 2010, Charles’ children filed 39 termination notices for copyright grants made before and after 1978 pertaining to 51 songs, including “I Got A Woman” and “Hallelujah, I Love Her So.”

The Los Angeles-based foundation sought declaratory and injunctive relief, claiming the notices, the first of which became effective in 2012, had “immediately clouded its ability to assess its future income stream.” The foundation, which provides research and scholarship grants to the hearing impaired, doesn’t take private donations.

In its appeal on the standing issue, the foundation argued it was a “beneficial owner” under the termination provisions of the Copyright Act.

Charles’ children, in their brief, insisted that the foundation was attempting to improperly assert rights held by Warner/Chappell, which hadn’t challenged the notices, and that its loss of royalties wasn’t within the “zone of interests” protected under the act’s termination provisions.

The Ninth Circuit ruled that the foundation did not have standing to sue as a beneficial owner but found that its losses were within the “zone of interests” and that it was a “real party in interest” separate from that of Warner/Chappell.

“It is undisputed that copyright ownership lies with Warner/Chappell, but just as the termination notices affect Warner/Chappell’s ownership of copyrights, they also directly affect the foundation’s right to royalties,” wrote Circuit Judge Morgan Christen. “The Foundation is the sole recipient of royalties flowing from Charles’ copyright grants and effective termination would deprive it of the right to receive prospective royalties.”

IMAGE: Ray Charles at Salle Wilfrid-Pelletier of the Place des Arts during the Festival International de Jazz de Montréal in 2003. Photo: Victor Diaz Lamich via Wikimedia Commons

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