In December, news broke that Bob Dylan had sold his entire songwriting catalog. While Dylan isn't the only songwriter to ink this sort of deal recently, his was notable--it included classics like “Blowin’ in the Wind,” “The Times They Are A-Changin’” and “Like a Rolling Stone”, and reportedly commanded a price tag in excess of $300 Million.
But, the news on this didn't end with the sale. In January, the estate of Jacques Levy, filed suit in New York claiming to be a co-owner of certain of the songs that were transferred in the sale and seeking $1.75 Million in damages plus more than that in punitive damages. In addition to a varied career as a director and clinical psychologist, Levy had co-written ten songs with Dylan, including "Hurricane", "Isis", "Mozambique", "Oh Sister", "Joey", "Romance In Durango", and "Black Diamond Bay", from Dylan's 1976 album Desire, along with "Catfish", "Money Blues" and "Rita Mae". He had also written for other artists of the era. The Estate claimed that Dylan's failure to pay them anything from the proceeds of the sale breached the original agreement between the parties.
The Court, in a decision by Justice Barry R. Ostrager, looked to the 1975 agreement between Dylan and Levy, and found it to be unambiguous. First, the Court found that the agreement, which referred to Levy as an "employee" no fewer than 84 times, was a work for hire. Indeed, the defined term used for Levy was the "Employee" and the agreement indicated that "the Compositions shall automatically be and become sole property of Publisher [Dylan], everywhere and forever, with all copyrights therein and all renewals and extensions thereof, throughout the world." The Court found that this language trumped affidavits submitted by Levy's wife and a writer who had interviewed Levy in the 1990's, both of which claimed that Levy viewed his work with Dylan as a "collaboration" rather than an employment relationship. The Estate thus could not claim any copyright ownership in the songs that Levy had co-written.
Second, the Court found that the agreement was clear that Dylan had the absolute right to sell the copyrights in the compositions without any compensation to the Estate. While the 1975 agreement indicated that Dylan's “right to assign, transfer, sell or otherwise dispose of the Compositions and all copyrights" was subject "to the payment of compensation to Employee as herein provided," that compensation was specifically limited to mechanical rights, electrical transcriptions, reproducing rights, motion picture synchronization and television rights--which defendants successfully argued are the common types of music licensing rights. In other words, the Estate got nothing from the sale itself, but would continue to receive royalty payments for any licenses as it had before. On this point, the Court found unavailing the 35-page affidavit of a transactional music attorney who interpreted the language of the agreement more broadly.
It's worth noting that the Court issued this decision on a motion to dismiss, finding that the 1975 agreement was "clear and unambiguous on its face". This was in the face of what it described as "voluminous" submissions by plaintiffs on their opposition, including the three affidavits identified above, none of which resonated with the Court. In rejecting these affidavits, the Court noted that the Estate would continue to receive royalties following the sale as they had before, and that granting them a portion of the sale price would therefore be a "windfall". The case also provides considerations for contract drafting now that catalog sales have become more common (and very lucrative).
The plaintiffs have already filed a notice of appeal.