Bands and Partnerships

It is common for bands to form a corporation or other juridical entity like a partnership. When preexisting works are transferred to such an entity, the ordinary provisions on individual ownership, duration, and termination of transfer apply. But what about works created after the juridical entity is created? This issue is presented, but not considered, in Lopez v. Musinorte Entertainment Corp., 2007 WL 579746 (9th Feb. 16, 2007).

In this case, band members created a partnership under Arizona law that owned both pre-existing recordings and recordings created in the future. The drummer later sued asserting that he was a co-owner both as a partner of the juridical entity and as a joint-author. The circumstances under which he could be both weren’t addressed by the court.

As to the works that were created before the juridical entity was formed, the drummer could be a joint author who had transferred his rights, making him a beneficial owner if he shared in royalties. Leaving aside the recording engineer part of the equation, for these works, the term is measured by the lives of the band members, there is a termination right under Section 203, and the drummer is both a beneficial owner and a co-owner as a general partner in the juridical entity.

For works created after the juridical entity was created, though, none of the band members are joint authors: the entity is the sole author, there is no termination right, and the duration is 95 years from first publication.

Here is the entire opinion:

*1 Alejandro Lopez, a former drummer in the band Los Hurricanes del Norte, appeals the district court's grant of summary judgment in favor of the defendants. We have jurisdiction pursuant to 28 U.S.C. § 1291, review the district court's grant of summary judgment de novo, Aalmuhammed v. Lee, 202 F.3d 1227, 1230 (9th Cir.2000), and reverse and remand.

Lopez argues that he came forward with sufficient evidence to create a genuine issue of material fact about whether he was a partner in the band pursuant to Arizona partnership law. We agree. Viewing the facts in the light most favorable to Lopez, the 1992 Artist Recording Agreement and 1994 extension of that agreement established the band members' intent to jointly own certain of the recordings and to share jointly in the profits of the new Unico recordings. These facts support a finding of the existence of a partnership. A.R.S. §§ 29-1012(C)(1) & (C)(3)(b). These agreements covered recordings made for 17 of the 20 years that Lopez was the drummer in the band. Moreover, the trademark application, signed under oath by Heraclio Garcia, asserted that the band was a partnership and that Lopez was a general partner. Taken together, the evidence was sufficient to create a genuine issue of material fact about whether Lopez and the other band member defendants associated “as co-owners [of] a business for profit” pursuant to A .R.S. §§ 29-1001(11) & 29-1012(A) (2007).

We also agree that Lopez came forward with sufficient evidence to create a genuine issue of material fact about whether he was a joint author of the band's master recordings for purposes of copyright law. First, Lopez came forward with evidence that he made an independently copyrightable creative contribution to the sound recordings on par with the other musicians when he developed and performed the rhythmic and percussion elements during the master recordings. The fact that Lopez did not write the songs is irrelevant. None of the band members wrote the songs. Lopez was not claiming copyrights in the songs, just in the recordings.

Second, Lopez came forward with evidence of the objective intent of the parties to be joint authors when the work was created. Absent a written contract among the parties, we apply the factors set forth in Aalmuhammed. 202 F.3d at 1234-25. Although the parties had not signed written contracts with each other, the individual band members jointly signed the 1992 Artist Recording Agreement and agreed that they owned the catalog of already-recorded albums and “retain[ed] all ownership rights, including copyright,” in those albums and in the three new “licensed albums.” In addition, Lopez testified that he exercised control over his part of the music-making by developing and performing the rhythmic and percussion elements during the studio recordings. Finally, the parties agreed that the band members were equally billed in recordings and performances for the 20 years that Lopez played as a drummer in the band. This evidence was sufficient to create a genuine issue of material fact regarding the parties' objective intent to be joint authors under the Aalmuhammed factors. Id.FN1

FN1. Because we reverse the summary judgment order, we need not address the appeal of the new trial order.