Music publishing rights dispute throws “Lady Marmalade” songwriter's royalties into a black box

Patti LaBelle's 1974 earworm may have made “Lady Marmalade” famous, but the song’s lyrics and music were created by co-writers Nolan and Bob Crewe and Nolan wrote numerous famous songs during the 1970s as a singer-songwriter, particularly as co-writer with Crewe and others. Many of the songs, including “Lady Marmalade” and the Frankie Valli chart-topper “My Eyes Adored You”, were huge hits.

Nolan has had a simmering dispute with Sony/ATV Publishing and various other music publishers (defendants) over copyright ownership, royalties and reporting for many years. In 2016 he became aware that the defendants had acquired his music publishing rights and had not been accounting for, or paying him, his music publishing income. He sued the defendants later that year and the case ended prior to discovery and was dismissed without prejudice. Now it appears that Nolan's dispute is boiling over again.

In 1973 Nolan assigned his rights to 77 co-written songs to Crewe (Nolan-Crewe Songs) under a split publishing agreement for 50% of the net income from music published by Nolan-Crewe Songs. Crewe, who was an early mentor to Nolan, in turn licensed those songs to publisher Stone Diamond. Nolan had assigned 53 additional songs (Nolan-Coral Songs) to a series of other music publishers, including Coral Rock Music Corp. Both the 77 Nolan-Crewe songs and the 53 Nolan-Coral songs eventually ended up with Sony/ATV Publishing.

Music publishers are persons or companies that are responsible for ensuring that songwriters receive payment when their songs are commercially used. The songwriter assigns the copyright of their songs to a music publisher who in return licenses the songs to third parties, monitors where songs are used, collects royalties and provides statements of account and payments to the songwriters. Music publishers look for opportunities to obtain commissions for music and promote existing songs to recording artists and film and television producers. When screenwriter Baz Luhrmann created Moulin Rouge! in 2001, the film’s music director contacted Sony/ATV Publishing (or its predecessor) to obtain a licence for a derivative work (ie, a modification of an existing work) from “Lady Marmalade” to update the song and sync it to the film.

When Nolan became aware that his songs were being handled by Sony/ATV Publishing and various other defendants, he sued the defendants with a litany of claims. The 2016 lawsuit was dropped without prejudice prior to discovery. However, Nolan refiled the suit on 10 April 2019. The new complaint alleges a breach of music publishing contract for failure to report foreign small performance and mechanical income and deposit to a suspense account, failure to report "black box" income, improper deduction of creditable foreign withholding taxes or net income taxes, improper deduction of administration fees, failure to report music publishing income "at the source”, improper allocation of music publishing income among musical composition written by other persons and those written or co-written by him and failure to report guarantees and advances as income when received. It demands:

• a complete and proper accounting of all monies payable to him;
• copyright infringement from exploitation made by the defendants;
• at least $20 million in damages;
• the rescission of the split publishing agreement between Nolan and Crewe;
• restitution of all music publishing rights in the Nolan-Crewe Songs; and
• disgorgement of profits from the defendants.

All of the Nolan-Crewe Songs and Nolan-Coral Songs were published during the 1970s. Under current US copyright law, a musical composition that includes music and lyrics is automatically protected by copyright for the life of the songwriter and for 70 years after their death. However, back in 1974 copyright terms were less straightforward. Under the Copyright Act 1909, between 1 January 1964 and 31 December 1977, a musical composition had to be registered upon publication to have a copyright for the song. The duration of copyright was calculated differently in that period, insofar as copyright commenced upon registration and was protected for an initial term of 28 years. It could be extended for an additional term of 67 years upon filing a renewal registration. If this was not timely filed, the song fell into the public domain. In 1992, Congress granted an amendment to automatically extend the copyright of songs in their initial term for the additional term of 67 years.

Nolan alleged that the split publishing agreement was for the initial term of copyright only due to a lack of a proper assignment of copyrights and therefore the defendants infringed Nolan's music publishing rights.

It is difficult to see how Nolan can overcome the language of the split publishing agreement, which states:

The term of this agreement shall be for the term of the copyright of the Compositions in the United States of America and throughout the rest of the world and for the term of any renewals or extensions thereof and of any derivative copyrights in the Compositions, in the United States of America and throughout the rest of the world.

* * *

… It is understood that no termination of this agreement shall diminish, alter or affect any right of Company in and to any Composition subject to the terms hereof.

Most of the riders and agreements in the split publishing agreement were signed by Nolan and include agreements and riders that used similar language to the above language. Nevertheless, if the defendants are found with unclean hands, Nolan could take back his music publishing rights and free his royalties from suspense accounts and black boxes, which hold uncollected or unnamed royalties.