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Ray Charles Foundation loses challenge of notices terminating rights to Charles songs

| Jan 30, 2013 | Estate Planning |

Back in April, we noted that the Ray Charles Foundation-an estate that has encountered numerous financial and legal problems since the singer’s death in 2004-was involved in a dispute with seven of Charles’ children. Specifically, the Ray Charles Foundation-established to fund education for hearing impaired children-had sought as much as $3.5 million in compensation for Charles’ children’s decision to terminate the transfer of copyrights to dozens of Charles’ songs to the foundation. That termination, the foundation argued, violated an agreement Charles had made with his children in 2002.

The federal court handling the matter recently ruled in favor of the children, allowing them to reclaim copyrights on roughly 60 Ray Charles classics, including “I Got a Woman,” “A Fool for You,” “Hallelujah I Love Her So,” and “Mary Ann.”

The agreement at issue in the suit was between
Charles and his 12 children in 2002, and stipulated that each would receive an irrevocable trust for $500,000 and waive the right to make any further claims against his estate. But after the singer’s death in 2004, seven of the 12 filed notices to terminate a copyright grant of the songs to Warner/Chappell Music in 2010. The latter didn’t challenge those notices, but the foundation subsequently sued the children claiming that the termination notices were invalid.

One of the issues in the suit was whether the songs were made for hire. Under copyright law, rights revert back to artists after 35 years for works created after January 1, 1978. Made for hire works, though, cannot be reclaimed. A separate provision says that pre-1978 works may be recovered for a five-year period from 56 years after the date the work was first published.

The foundation issue in the case is whether a party that receives a charitable gift may sue for that gift in court when it isn’t delivered. In this case, it was determined that the Ray Charles Foundation did not have a legal basis to challenge the termination notices. The ruling is significant loss for the charitable foundation, which was left with the rights to all Charles’ works.

Source: Billboard, “Court Rules For Ray Charles Children In Copyright Lawsuit,” January 29, 2013

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