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Copyrights On the Auction Block?

Oh what a tangled web we weave! These copyright battles are getting more interesting by the day, I tell you. So, get this: Music producer Rob Fusari, who is responsible for producing hits for the likes of Destiny’s Child, Lady Gaga, Will Smith and Whitney Houston, was sued by Wendy Starland for breach of an oral agreement. Apparently Starland was tasked with finding the next female superstar and she found Lady Gaga, which sounds about right, but Fusari did not wish to hold up his end of the bargain. Starland was awarded $7.4 million by a jury, however the judgment was vacated by the trial judge and a new trial was ordered in September of 2015, and in the interim Fusari filed for bankruptcy.

Last month sometime, Fusari and his creditors met before a bankruptcy judge in New Jersey and they discussed settlement of their claims and informed the judge that an agreement had been reached. According to the agreement, Starland was to receive $3.2 million and the other creditors were to receive around $900,000 in fees and expenses. Allegedly as part of the settlement, Fusari was supposed to raise $450,000 by way of having his brother refinance a home that Fusari owned. Fusari’s brother did not go through with the refinance and Starland took action immediately.

On April 12, 2016, Starland filed a motion requesting the court to order a public auction to sell Fusari’s intellectual property rights, including the copyrights to “Bootylicious” by Destiny’s Child and “Love That Man” by Whitney Houston. Starland’s motion, if granted, would give the general public the opportunity to own a percentage of the publishing shares of popular songs in which Fusari has rights.

Last week, Fusari objected to the motion asserting that the parties did not reach a settlement, citing a lack of mutual assent. Sony/ATV jumped in on the action and objected to the motion as well. Sony/ATV has sole administration rights over the works Starland wants auctioned off to the public. Not to mention, Sony owns a one-half interest in each of the individual copyrights. Sony argues that its publishing contract with Fusari cannot be sold because it is a personal services contract that is dependent on Fusari’s future and continuing performance. Sony also argues that its consent would be required for the sale in order for Sony to adequately protect its ownership rights and interests with regard to the compositions.

I’m still tripping off the fact that it’s a possibility that any Tom, Dick or Harry with the right amount of money, can potentially own the publishing to some famous works. Initially I was thinking about the administrative nightmare that would result if the judge granted the motion, buuuuuut there may not be one here at all. Fusari would only be able to sell the rights that he has, and since his contract only grants him profit participation, it’s nothing to switch a name out on a check. There may be some underlying issues that cannot be worked out by the arrangement Starland proposes, but without seeing the contract, it’s hard to say. I think Sony’s argument only carries weight to the extent that those who win at the auction were being placed in Fusari’s place to perform Fusari’s duties. Fusari’s musical talent is unique and wouldn't be delegable, but his rights to receive money under the contract could most certainly be assigned without disrupting the arrangement between Fusari and Sony. Hopefully there’s some language in the agreement preventing assignment specifically in this instance, or Starland may get exactly what she’s looking for.

I can’t wait to see what happens here. I don't think it’s right, but it certainly is fair.

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