CONTRACTING WITH MINORS REQUIRES JUDICIAL APPROVAL FOR BUSINESSES FROM MODELING AGENCIES TO TECH COMPANIES

Contracting with minors in the entertainment industry can be a legal minefield. From talent bookers and modeling agencies to technology start-ups and other computer software companies, the predicament of employing or contracting with a party under the age of eighteen has become an increasing problem. The minor is not bound by the contract and may disaffirm the contract at any time during minority or within a reasonable time after reaching majority. Without a valid written agreement the employment is “at will” under the law of most States which means the minor can depart at any time. The dilemma created by a minor’s ability to disaffirm a contract is that it may seriously jeopardize the employer’s financial investment in the services of the minor whether it is the ongoing efforts of an agency to develop the career of a young talent or the technology company’s expectation that is owns the copyright in the code created by the teenage whiz kid it employs.

The mere exercise of having the parent or guardian of the minor co-sign, approve or “guarantee” the contract does not resolve the problem. The minor may still repudiate the contract on the ground of infancy, asserting that the parent or guardian lacked authority to make the contract. In some jurisdictions, Courts deem it against public policy to even enforce such guarantee language against the parent or guardian since it would subvert the purpose of the laws concerning the judicial approval of contracts with minors. So-called “working papers” under State law might work for purposes of a fast food chain or similar hourly wage employment but are probably insufficient for talent agent, modeling agency or technology company purposes.

Several States, including New York and California, have laws specifically concerning judicial approval of contracts with minors. New York's Arts and Cultural Affairs Law §35.03 provides for judicial approval of certain contracts for services of "minors" under the age of 18. The procedure involved can be somewhat arduous to navigate, and may prove to be a difficult gauntlet to run for a lawyer inexperienced in this area. However, a company employing minors or contracting with minors should investigate the efficacy of pursuing court approval to protect their investment. Once the Court judicially approves the contract, the minor is held to a standard of adult responsibility for its contractual obligations assuring the employer company that it will get what it bargained for and that the contract is legally valid.

As a practical matter, a proceeding for judicial approval of a minor's contract in New York is commenced by the filing of a verified petition. It can be filed by a parent, the guardian, a relative of the minor or any interested person or entity such as the employer. The petition must contain a statement of the length of the employment term, compensation, and all other relevant, material terms of the agreement. A complete copy of the proposed contract must be annexed to the petition together with affidavits from the parents and/or guardians that consent to the petition and support the facts.

In addition to identifying the details of the nature of the minor's employment and the compensation to be paid, the petition must also contain a statement of who, other than the minor, is entitled to the minor's earnings and facts regarding the property and financial circumstances of the parent or parents so entitled. The petition may nominate a person to be appointed as limited guardian solely for purposes of establishing a trust account for the proceeding and should set forth the reasons why the person nominated would be proper and suitable. Although a lawyer is usually appointed, a parent or other petitioner is not precluded from being appointed as limited guardian by reason of his or her interest in any part of the minor's earnings or in the contract provided such interest is disclosed. The Court will designate how much is to be set aside and saved for the minor under guardianship until the minor becomes 18 years old. The court also has the option to appoint a special guardian to represent the interests of the minor at any time after the petition is filed.

As directed by the Court, before the time at which the petition is noticed to be heard, certain persons (other than the petitioner and anyone who has joined in the petition) must be served with an order to show cause why the petition should not be granted: (1) the minor; (2) the parents of the minor; (3) the minor's guardian(s); (4) each party to the contract; (5) any person having the care and custody of the minor; (6) the person with whom the minor resides; and, (7) the minor's spouse.

An order granting judicial approval of a contract for the services of a minor will rarely be granted on the papers alone. Usually a hearing is conducted at which the minor, the parent(s) and the various other interested parties may be questioned by the Judge regarding the contract. A Judge may require provisions in the Court’s order concerning how many hours the minor can work and may require that the employer provide tutors if regular schooling will be disrupted by the employment. Most terms and conditions of each arrangement will be affirmed as long as they are found by the Court to be reasonable and not contrary to the best interests of the minor. Once the court does grant approval, an order will be issued which will, in effect, declare the minor an adult for purposes of fulfilling his or her contractual obligations.

California law concerning the judicial approval of minors' contract for artistic or creative services (Ca. Family Code §6750, et seq.), although similar, differs in certain respects. For instance, under California law there is no limitation on the length of the term of a minor's contract where in New York the limit is seven years. A hearing is usually required in California as in New York but under California law a maximum of only 50% of net earnings will be set aside until the minor becomes 18 years old whereas New York has no limit on what portion the court can direct to be set aside.

Once a Court does grant approval, an order will be issued which will, in effect, declare the minor an adult for purposes of fulfilling his or her contractual obligations. Then all the results of the minor’s services, including commissions due on the bookings by a talent agent or modeling agency and any copyrights in code or apps created by a minor during employment by a tech company, will be properly transferred as bargained for by the employer.

 

WALLACE E.J. COLLINS III, ESQ. (Tel: 212 661 3656) is a New York lawyer practicing primarily in the areas of entertainment and intellectual property law. He was a songwriter and recording artist for Epic Records before receiving his law degree from Fordham Law School. T: (212) 661-3656; www.wallacecollins.com 

COLLABORATION AGREEMENTS FOR AUTHORS AND FILM/TV WRITERS: WHAT THEY MEAN AND HOW THEY WORK

            Under the US copyright law, although ideas alone are not protectable, an author or creator owns a copyright in his or her work the moment the author’s expression of the idea is 'fixed in a tangible medium' (i.e., when the expression of an idea is written down or recorded in some manner). Once created, a copyright extends for the life of the author plus 70 years, and in the case of collaborators on a copyright it extends for the life of the last surviving collaborator plus 70 years.

            This article will focus on the collaboration between and among creators of books, stories, theatrical plays and television shows. The essence of collaboration is working together to create a single work regardless of how or what each party contributes. Collaborators may work together in the same room at the same time, or not. The creative contribution of each co-author may be equal in quality or quantity, or not. Both authors may work together on the total work, or each might write separate chapters or scenes (or with a book or audio/visual production one might write words or dialogue while the other is an artist doing graphics and illustrations, etc.)  The long history of collaboration has shown that there are endless combinations. Co-authors do not need to have a written agreement concerning their joint work, but it is probably a good idea to do so given the myriad issues that can arise and become a problem under such circumstances.

            Co-authors can divide copyright ownership in whatever proportion they determine and that ownership concerns both rights (ownership and control) and revenues (income generated from the work). In the absence of a written agreement, under current case law concerning both copyright and partnership law, two or more collaborators are generally deemed to share equally on a pro-rata basis. This might be so even if it is clear that the contributions of the authors were not equal since the Courts generally prefer not to make decisions about the value of each author’s contribution to a copyright and simply divide it by the number of authors (and we probably prefer that Courts not be making decisions about whether the writing in one scene or a particular chapter has more or less value than that of another, etc.). Therefore, without a written agreement two authors would be deemed to own the song fifty-fifty, three writers one-third each, etc.

            Beyond the issue of just dividing the income, there arises the issue of copyright ownership and control. In the absence of a written collaboration agreement or other contract stating otherwise, each author retains control over its respective share of the copyright. In this way each writer retains some control over what happens with the work, the scope of any uses, contracts or licenses and how much is charged. Under US copyright law, co-authorship is akin to partnership and each joint copyright owner can exploit the work and also grant non-exclusive licenses to third parties, subject to the duty to account to the co-authors for any money that is generated.

            Another important question that can arise is what happens if two or more authors start to collaborate on a work and then one leaves before the work is completed. This can raise complex legal issues concerning whether the contribution of the departing author is copyrightable and whether the parties had a clear intent to work together to create an indivisible copyrighted work. There have been cases that have addressed this situation with differing outcomes depending on different circumstances. In one case, one party had the idea for the play and engaged another party to do more of the actual writing. There was no written agreement, and the parties had a dispute about the direction of the project. The idea party departed and the writing party continued on to complete and produce the work. Later, the departing party sued claiming authorship and co-ownership of the copyright in the work.  In this particular case, the Court determined that, since ideas alone are not protectable under copyright law, only the expression of the idea was subject to copyright, therefore, only the writing party had ownership. The departing party had proposed the original idea for the project and had made suggestions along the way but the contributions were insufficient to create copyrightable material. Therefore, since there was no written agreement to indicate otherwise, the Court determined that only the writing party had an ownership interest in the copyright to the work that the parties had started together. 

            All of these issues can be addressed in a written collaboration agreement. There are endless variations depending on the circumstances. A collaboration agreement can be as simple as a pie chart drawing made on a napkin at the dinner after the writing session, or as complicated as a writer’s publishing company or TV/film production company dictates that it be.

            At the end of the day, if you believe in yourself and your talents, give yourself the benefit of the doubt and invest in good legal representation - all the successful creators do. Your lawyer can create a fair collaboration agreement for you to use or 'translate' the documentation presented to you and explain its terms and then help negotiate more favorable terms for you as appropriate. My advice: never sign anything - other than an autograph - without having your lawyer review it first.

Wallace Collins is an entertainment lawyer and intellectual property attorney. He was a songwriter and recording artist for Epic Records before receiving  his law degree from Fordham Law School. T: (212) 661-3656; wallacecollins@gmail.com; www.wallacecollins.com 

URGENT NOTICE: Department Of Justice Deals Devastating Blow to America's Songwriters

The NMPA and other songwriter and music publisher organizations have come out strongly against the recent decision by the Department of Justice ("DOJ") which dealt a massive blow to America’s songwriters. After a two year review of the consent decrees that govern ASCAP and BMI, career lawyers who were never elected nor confirmed to their positions, led by a lawyer who previously worked with Google, determined that songwriters should have even fewer rights, less control over their intellectual property and be treated more unfairly than they already are being treated. The DOJ ignored the voices of copyright experts, members of Congress and thousands of songwriters and delivered a huge gift to tech companies who already benefit from egregiously low rates.

When the DOJ began its review of the consent decrees, songwriters and publishers hoped for updated modifications and relief in the face of dramatic market changes to performance rights licensing which made it clear that fair royalty rates were not being paid. At best, the songwriting community had hoped that the WWII-era decrees would be done away with to permit songwriters the same freedom to license works as other property owners enjoy in America. At worst, the decrees would be updated to reflect the current digital marketplace and give songwriters and publishers more flexibility to negotiate market-driven rates with global digital services. The existing consent decrees were put in place before the transistor radio was invented. They were never meant to, nor could they envision, existing in a world of iPhones, streaming and instant access to practically all music. Unfortunately, the DOJ went in the opposite direction and chose the outcome most harmful to songwriters and the creative community.

Not only did the DOJ decide that no changes will be made to the current decrees, they also now interpret those decrees to demand that all works must be licensed on a 100 percent basis (which means that the traditional and logical practice of fractional licensing - or licensing only the share of a song a PRO represents - by ASCAP and BMI will be done away with completely).

As the NMPA's David Israelite pointed out, regardless of how one feels about the profession of songwriting and the innate right a creator has to control their creation, any legal body should be deferential to the office created to examine and advise on copyright law. That body, the U.S. Copyright Office, was asked to weigh in on the DOJ’s proposed changes, and said that, “an interpretation of the consent decrees that would require these PROs to engage in 100-percent licensing presents a host of legal and policy concerns. Such an approach would seemingly vitiate important principles of copyright law, interfere with creative collaborations among songwriters, negate private contracts, and impermissibly expand the reach of the consent decrees.” The defiance displayed by these career antitrust lawyers in ignoring the legal opinion of the Register of Copyright is shocking.

In addition to disregarding the Copyright Office, the manner in which the decision was made and delivered was insulting to those most invested in the futures of songwriters. Members of Congress who had expressed interest in knowing the outcome of the review were apparently caught off guard and not given any chance to appeal to the DOJ - they were simply alerted that a determination had been made and given no recourse to reason with the DOJ.

Congressman Doug Collins of Georgia’s office said that the DOJ “sent an email to Congressional staff assuring that the review was not complete and that parties and stakeholders would have a chance to provide their views before the review was completed. However, reports from the meeting and DOJ’s own positioning appear to indicate that DOJ has already determined what direction they will take.” Additionally, Congressman Collins stated that the “Department of Justice’s position is arrogance at its worst.”

This move also threatens transparency because while songwriters may have chosen to join one PRO, now their payments may be coming from another. And if each PRO can license an entire song, even if it only controls a small portion of it, then licensees may have the ability to license where rates are lowest in a royalty race-to-the-bottom.

The DOJ does not have the protection of songwriters in their interest so the songwriting community needs to speak out loud and strong.  Public opinion is powerful and the antitrust attorneys at DOJ must understand that their decisions will have a ripple effect through the fields of creativity for decades. In the coming weeks and months, it will be more important than ever to express the problems associated with the DOJ’s declaration, which was conveniently disclosed just before the holiday weekend.

Washington bureaucrats should not be in the business of regulating music as they are neither capable of understanding nor fixing the problems they have created. Hopefully, the creative community's allies in Congress will work together with those most affected, the creators themselves, to navigate a workable path forward. Until then, there will be no justice for America’s songwriters.


Wallace Collins is an entertainment lawyer and intellectual property attorney. He was a recording artist for Epic Records before receiving   his law degree from Fordham Law School. T: (212) 661-3656; www.wallacecollins.com

BEWARE: Recent Decision in CBS Lawsuit Over Pre-1972 Sound Recording Could Wreak Havoc In The Copyright World

The recording artist and songwriter communities should take note of a recent decision in ABS Entertainment, Inc. v. CBS Corporation, et al., a case concerning pre-1972 copyrights - and raise an outcry! The Judge in this case held that remastered versions of old songs are entitled to a new copyright and owners of the originals are not allowed to stop the public performance of them.

Over the past few years, the public performance of songs authored before sound recordings fell under Federal copyright law has become a contentious legal issue. This ABS v. CBS ruling could help immunize terrestrial radio operators and others from lawsuits and disturb many preconceived notions about copyright law. The case arose from a dispute between ABS, owner of recordings by Al Green and others, and CBS Radio, which was dragged into court in this case after other plaintiffs had been successful litigating the theory that pre-1972 songs are protected under State law and could not be broadcast without permission. The ABS lawsuit cut against decades of precedent that songs on the radio served promotional purposes and should not generate compensation for owners. As times have changed, with sales becoming less meaningful to artists, owners have pushed lawsuits and lobbying efforts to shake up the system.

As its defense to the ABS lawsuit, CBS argued that it was not broadcasting the original analog recordings but rather remastered versions that came out after 1972. Under this specious argument, the specifically performed works would not be protected by State law and CBS would not have to pay anything. ABS argued that what sound engineers accomplish by tweaking timbre, balance and loudness is "mechanical" and not sufficiently original to be entitled to copyright protection. ABS further argued that to accept otherwise would mean owners of sound recordings would enjoy perpetual copyright over works.

Incredibly, the Judge accepted the position of CBS. On the issue of originality, the Judge gave credence to the CBS expert, an acoustic engineer and research scientist specializing in forensic investigation of audio evidence, and held that the plaintiffs' pre-1972 sound recordings "have undergone sufficient changes during the remastering process to qualify for federal copyright protection," adding that ABS did not offer sufficient evidence to even make this a contestable point for a jury to decide.  As a specific example, the Judge referred to the remastered version of Ace Cannon's 1961 recording "Tuff," which the expert found had additional reverberation, was played in a different musical key and at a faster tempo. The Judge accepted the proposition that these were not merely “mechanical changes or processes ... such as a change in format, de-clicking and noise reduction,” nor were the changes “trivial,” making note of the fact that experienced sound engineers were brought in for a reason. "Instead, the changes reflect 'multiple kinds of creative authorship, such as adjustments of equalization, sound editing and channel assignment,'” he writes. ABS also tried to argue that sound recordings authored before 1972 cannot serve as a "pre-existing work" for a later derivative work, but the Judge found that argument to be unpersuasive. And so, for now, based on this decision, the remastered versions are independently copyrightable.

The holding in this case determined that for some of the recordings in dispute, such as Green's "Let's Stay Together" and Jackie Wilson's "I'm Coming on Back to You": there is no disagreement that the version publicly performed is different from the pre-1972 versions; that for other songs there is no genuine dispute that CBS is performing the post-1972 versions; and that for the remaining songs ABS failed to offer up sufficient evidence that CBS is performing pre-1972 versions. It all adds up to huge victory for CBS as well as roadmap for how radio can publicly perform older sound recordings without liability... and it is a horrific, although hopefully temporary, decision for the recording  artist community.

Hopefully, this decision will be overturned on appeal so as not to wreak havoc on issues of copyright term, termination rights and its singular determination that sound engineers do copyrightable work when they remaster sound recordings.

* Wallace Collins is an entertainment lawyer and intellectual property attorney. He was a songwriter and recording artist for Epic Records before receiving his law degree from Fordham Law School. T: (212) 661-3656; www.wallacecollins.com 

SONGWRITER COLLABORATION AND CO-WRITER AGREEMENTS: WHAT THEY MEAN AND HOW THEY WORK

            Under the US copyright law, an author or creator owns a copyright in his or her work the moment it is “fixed in a tangible medium” (i.e., the moment the expression of an idea is written down or recorded in some manner). When it comes to the recorded music business there are two primary copyrights of interest: one in the musical composition or song; another in the sound recording of that song. A copyright extends for the life of an author plus 70 years, and in the case of collaborators on a copyright it extends for the life of the last surviving collaborator plus 70 years.

            This article will focus on the collaboration between and among the co-writers of the musical composition or song which is generally comprised of the music (e.g., melody, harmony, chords, rhythm, etc.) and the lyrics (i.e., the words). The essence of collaboration is working together to create a single work regardless of how or what each party contributes. Collaborators may work together in the same room at the same time, or not. The creative contribution of each co-author may be equal in quality or quantity, or not. Both authors may work together on the music and lyrics or one might write just music and the other lyrics. The long history of collaboration has shown that there are endless combinations. Co-authors do not need to have a written agreement concerning their joint work, but it is probably a good idea to do so given the myriad issues that can arise and become a problem under such circumstances.

            Co-writers can divide copyright ownership in whatever proportion they determine, and that ownership concerns both rights (ownership and control) and revenues (income generated). In the absence of a written agreement, under current case law concerning both copyright and partnership law two or more collaborators are generally deemed to share equally on a pro rata basis. This might be so even if it is clear that the contributions of the authors were not equal since the Courts generally prefer not to make decisions about the value of each author’s contribution to a copyright and simply divide it by the number of authors (and we probably prefer that Courts not be making decisions about whether the hook or chorus lyric has more or less value than the chorus melody, etc.). Therefore, without a written agreement two songwriters would be deemed to own the song fifty-fifty, three songwriters one-third each, etc. A typical music business guideline for dividing ownership has been to designate the music as 50% and the lyric 50% of the song copyright. Under this scenario, if one person creates the music and two others write the lyrics, they may agree to divide the ownership 50% to the music creator and 25% to each of the lyricists. However, this concept does not have any legal significance so if there is no written collaboration agreement then under this scenario each author would own 1/3^rd of the song copyright.

            Beyond the issue of just dividing the income there arises the issue of copyright ownership and control (sometimes referred to as the administration right). Many songwriters prefer that there be separate administration among the various writers and their respective publishing companies, if any. In other words, each author retains control over its respective share of the copyright. In this way each writer retains some control over what happens with the song, the scope of the licenses and how much is charged. Under US copyright law, each joint copyright owner can exploit the song and also grant non-exclusive licenses to third parties subject to the duty to account to the co-writers for any money that is generated. Each writer could also transfer some or all of their respective share of the copyright (e.g., to a publishing company) without affecting the ownership interests of the any other co-writer’s share in the copyright (although no one writer can grant an exclusive license nor transfer copyright ownership in the entire song without the written permission of each co-writer).

            All of these issues can be addressed in a written collaboration agreement. There are endless variations depending on the circumstances. Each author may retain his or her share of revenues and ownership but grant the administration rights to one party (e.g., the artist/co-writer and/or its label) so that the artist would have the right to record and exploit the song and grant third party licenses. Particularly in the world of synchronization licenses (i.e., using the audio with visual images such as in film, television or video games), it is usually more convenient for one party to have the right to grant licenses and to collect and divide all the income. Licensing can become complicated when a licensee has to seek the approval of, and document permission from, multiple writers and their respective publishers. However, each different scenario and the co-writers involved will need to determine and negotiate what arrangement works best for themselves in that particular situation.

            A collaboration agreement can be as simple as a pie chart drawing made on a napkin at the dinner after the writing session or as complicated as a writer’s publishing company dictates that it be. Over the years there have been many stories of writers agreeing, however reluctantly, to acknowledge a “co-writer” who did not even make a contribution to a song (e.g., featured artists, producers, record executives, band members, etc.). The exact contribution to a song is always a somewhat subjective measurement and if the price of getting a song on the record of a multi-platinum artist is to share writing credit then this pressure can be difficult, if not impossible, to resist. However, keep in mind that once a “co-writer” is acknowledged in writing it can be very difficult to undo. Most successful songwriters rarely, if ever, share credit in this context and every writer should try to follow this practice.

            At the end of the day, if you believe in yourself and your talents, give yourself the benefit of the doubt, and invest in good legal representation - all the successful songwriters do. Your lawyer can create a fair collaboration agreement for you to use or "translate" the documentation presented to you and explain its terms and then help negotiate more favorable terms for you as appropriate. My advice: never sign anything - other than an autograph - without having your entertainment lawyer review it first.

            Wallace Collins is an entertainment lawyer and intellectual property attorney. He was a songwriter and recording artist for Epic Records before receiving his law degree from Fordham Law School. T: (212) 661-3656; www.wallacecollins.com