On November 9th, 1998, the U.S. Supreme Court rejected an appeal from record companies in the case brought by the Kingsmen to regain the copyright and recover unpaid royalties for their famous party-song "Louie, Louie."
A California District Court found that because royalties due under a contract were never paid, the plaintiffs could rescind their contract and get back the copyright to their recorded performance of the song. They would also get overdue royalties from the date the suit was filed. F.Y.I. A rescission of a contract is to put all the parties back into the positions they would have occupied if there had never been a contract. It does not end the contract. Instead the law treats the contract as never coming into existence.
This is an important case in my mind, because I have litigated a number of arts/entertainment breach of contract cases as well as copyright infringement cases. In the breach of contract cases, the courts usually will not give back the copyright due to the breach as that is a very drastic remedy. Instead, the simpler remedy of paying the overdue royalties, plus interest, is awarded. This result forces the artist/author/performer to continue to deal with a publisher that has stiffed them in the past, and often will again.
Now, maybe the creator of a work can get back the rights in their work if the purchaser of those rights breaches its contract with the creator. This case was decided initially in U.S. District Court, affirmed by the U.S. Circuit Court of Appeals and now, the U.S. Supreme Court has rejected the appeal without comment.
I am in the process of obtaining a copy of the lower courts' decisions and they will be posted here, along with an analysis ASAP. Thank you for your patience.
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copyright 1998 David M. Spatt, All rights reserved
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