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The children of Ray Charles did not inherit the rights and interests to his musical compositions; rather, these intellectual property rights were given to The Ray Charles Foundation. The Ray Charles Foundation, created in 1986, by the renowned singer-songwriter, is a non-profit organization that provides funding to education programs and institutions focused on the hearing impaired. The organization relies on income it receives from its intellectual property rights, which include, for example, the right to receive royalty payments from songs written by Ray Charles. To ensure the continued vitality of the foundation, in 2002, just 12 months before his death, Ray Charles created irrevocable trusts in the amount of $500,000 for each of his children in exchange for their express waiver of all intellectual property rights. However, his children are now violating that agreement. They seek to reclaim the copyrights to over 50 Ray Charles compositions through the termination of transfer provisions of the 1976 Copyright Act.
The termination of transfer provisions, 17 U.S.C. SS 203 and 304, allow authors or their surviving family members to terminate grants of copyright interests after 35 years. The purpose of the provisions is to allow authors who initially were in poor bargaining positions the opportunity to recapature the increased value of their work.
This intent is exemplified by Superman. Many decades ago, Jerome Siegel and Joseph Shuster, the creators of Superman, sold their rights to the comic-book hero for just $130. They were teenagers at the time and did not know that the comic-book hero would become so popular. The termination of transfer provisions allowed their family members to regain control of the copyright and then renegotiate the terms of the copyright transfer such that it better reflected the increased value of Superman. Thus, the provisions provide artists an opportunity to benefit from the unforeseen popularity of their work.
In March 2010, the children of Ray Charles served notices of termination of transfer on over 50 publishers of Ray Charles compositions in the hopes of recapturing ownership of the copyrights. However, The Ray Charles Foundation, in the complaint it filed, explains that these notices are invalid for the following reasons: (1) Ray Charles already took advantage of the provisions–he re-negotiated his contracts with his publishers in 1980 to better reflect the increased value of his music; (2) Some of the compositions addressed in the notices are works made for hire, and the termination of transfer provisions do not cover works made for hire. Finally, even if the notices are valid, they constitute a breach of the agreement Ray Charles made with his children in exchange for the $500,000 trusts.
The 1976 Copyright Act went into effect in 1978, and because the termination of transfer provisions require artists to wait 35 years before reclaiming their copyrights, the first case will not be heard until 2013. Many artists, including Tom Petty, Bryan Adams, Loretta Lynn, and Kris Kristofferson have already filed termination notices in the hopes of reclaiming their copyrights, but their recording studios will not relinquish these rights without a fight. Many predict that the fate of the recording industry, which stands to lose millions, will be decided by these cases. But the lawsuit filed by The Ray Charles Foundation shows us that it is not just the music industry that stands to lose a great deal. Charitable organizations, like The Ray Charles Foundation, that rely on income from intellectual property rights, and the people and communities they support, will also be effected.
- Francie Kammeraad
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