Breaking Up is Hard to Do (Buck McKinney)

7/31/2019 Breaking Up is Hard to Do (Buck McKinney)

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BREAKING UP IS HARD TO DO

John C. Ale, Houston

Skadden, Arps, Slate, Meagher & Flom LLP

Buck McKinney,AustinLaw Office of Buck McKinney, PC

Copyright 2007 John C. Ale and Buck McKinney

All rights reserved

State Bar of Texas

CHAPTER 13

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Breaking Up Is Hard To Do Chapter 13

TABLE OF CONTENTS

I. Partnership Issues..................................................................................................................................1A. What Law Governs.........................................................................................................................1B. So What Do I Have.........................................................................................................................1

1. Has Something Been Filed?2. What If Nothing Has Been Filed?

C. So What Does It Mean to be a Partnership............................................................................ .........21. What Rules Apply?

2. Key Default Rules

II. Copyright Issues....................................................................................................................................4A. Governing Law...............................................................................................................................4B. Ownership in Copyrighted Works..................................................................................... .............5

1. Work For Hire.................................................................................................................52. Transfer of Ownership.....................................................................................................63. Authorship and Co-Authorship........................................................................................6

C. Disputes Among Collaborators.......................................................................................................6

1. Joint Works................................................................................................................ .....62. Who Qualifies as an Author?.......................................................................................63. Independent Copyrightability..........................................................................................7

a. The Current Scenario.................................................................................................7b. Gaiman v. McFarlane A Relaxing Standard?.........................................................8c. Fifth Circuit Stance....................................................................................................8

4. Intent...........................................................................................................................9a. Must the Co-Authors Understand the Legal Consequencesof Co-Authorship?...........................................................................................................9b. When Must Intent Be Manifested?............................................................. ............10

5. Independent Fixation................................................................................................... ..11

D. Rights of Co-Authors and Co-Owners..........................................................................................11

III. Some Hypothetical Scenarios..............................................................................................................12A. The Jilted Bass Player...................................................................................................................12

a. Discussion................................................................................................................121. Partnership Issues.........................................................................................................122. Copyright Issues.......................................................................................................... .12

B. The Troublesome Bandmate....................................................................................................... ..13a. Discussion................................................................................................................13

1. Partnership Issues.........................................................................................................132. Copyright Issues.......................................................................................................... .13

C. The Spurned Angel.......................................................................................................................14a. Discussion................................................................................................................14

1. Partnership Issues.........................................................................................................142. Copyright Issues.......................................................................................................... .14

Appendix Texas Business Organizations Code, Chapter 151, 152 & 154......................................................16

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The persons must associate asowners. Principal and agent, lender andborrower, and other persons may associateand intend to make a profit, but they arenot partners. Ownership implies jointcontrol, which often is the most importantfactor in determining if a relationship is apartnershipand can be the most difficult

to analyze.8

b. Factors suggesting a partnershipThe statute goes on to provide that the following

factors suggest a partnership:

Receipt of or right to receive profits

Expression of intent to be partners

Participation in the right to control thebusiness

Sharing of or agreement to share losses orliabilities

Contributions of or agreements to contributemoney9

c. Factors insufficient to establish a partnershipAt the same time, any of the following by itself is

not sufficient to find a partnership:

Receipt of or right to receive profits inrepayment of debt, as wages, as rent, inliquidation of a former partners interest, orin consideration of the sale of a business

Co-ownership of property

Sharing of or right to share gross returns

Ownership of mineral property even ifsubject to a joint operating agreement10

3. Common scenario with artists.Applying these principles to a common scenario

a group of musicians in a band or otherperformance artists who have not entered into awritten agreement and have not made any filing with agovernment agencyit is easy to conclude that theirrelationship is a partnership. Two or more personshave associated to carry on a business (live orrecorded performances) making or hoping to make a

profit, and in most circumstances they make decisionsjointly or by ceding control to one or more members.They may have never used the word partner or

8See J. ALE,supra note 1, 2.2.

9 TBOC 152.052(a); TRPA art. 6132b-2.03(a).

10 TBOC 152.052(b); TRPA art. 6132b-2.03(b). See,e.g., State v. Houston Lighting & Power Co., 609 S.W.2d263 (Tex. Civ. App.Corpus Christi 1980) (co-owners ofnuclear power plant sold power separately, so relationshipwas mere co-ownership).

partnership to describe themselves or their relationship.Yet they probably have contributed cash or otherproperty to their joint enterprise, have shared profitsfrom their successful performances or recordings, andhave shared losses from their unsuccessful ones. Thatis a partnership.

Of course, it may not be just the performersthemselves who advance funds, share in cash received,

and/or participate in making decisions. A manager orangel very well might be involved in all thesefeatures. It is possible that relationship is one ofprincipal and agent, or of lender and borrower.Depending on the degree of ownership and control,however, they too may be partners.11

C. So What Does It Mean to be a Partnership?

1. What Rules Apply?The TBOC and TRPA set out many principles to

govern the partners relationship with one another andthe partnership and to govern the partnerships

relationship with third parties. Partners have broadfreedom to design their own agreement amongthemselves.12 In most informal partnerships, however,they have not done so, at least not through a writtenagreement that unambiguously states the rules thatapply. Where a written agreement is absent and an oralagreement is not proven, the statutory rules wouldcontrol.

2. Key Default RulesBelow are some statutory rules that frequently are

relevant. Almost all may be changed by agreement of

the partners. That agreement can be inferred fromconduct as well as a written signed, instrument. But ifnot changed these are the rules that apply by default.

a. Sharing of profits and lossesSharing of profits is per capita. Sharing of losses

follows sharing of profits; thus if the partner did notagree to a different sharing of profits, losses also areborne per capita.13

b. One partner, one vote

11See, e.g., Minute Maid Corp. v. United Foods, Inc. 291F.2d 577 (5th Cir. 1961) (purported lender that madedecisions and shared in profits was a partner; applying Texaslaw), discussed in J. ALE,supra note 1, 2:4.

12 TBOC 152.002; TRPA art. 6132b-1.03. The partners,however, may restrict rights of third parties, entirelyeliminate duties of one another, or eliminate the power towithdraw.

13 TBOC 152.202; TRPA art. 6132b-4.01(b).



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Each partner has an equal vote in management ofthe partnership.14 Ordinary decisions are controlled bysimple majority; actions outside the ordinary courserequire unanimous approval.15

c. Apparent authorityEach partner is an agent of the partnership with

apparent authority to bind the partnership in the

ordinary course of its business. 16

If the partner actsbeyond any limitations on that scope imposed byagreement with or vote of the other partners, thenunless the third party with whom the partner is dealingis aware of that lack of authority, the partnershipnonetheless is bound.

d. Joint and several liabilityEach partner is jointly and severally liable with

the partnership and the other partners for the debts andobligations of the partnership. 17

e. DutiesPartners owe duties of care and loyalty to oneanother and the partnership.18 The latter embracesimportant concepts such as using partnership propertyonly for partnership purposes, not competing, andbringing business opportunities within thepartnerships scope to all the partners.

f. No ownership of partnership propertyPartnership property belongs to the partnership,

not any individual partner.19

g. Unanimous vote to admit new partnersAll partners must agree to the admission of anynew partner.20

h. No right to expel

14 TBOC 152.203(a); TRPA art. 6132b-4.01(d).

15 TBOC 152.209; TRPA art. 6132b-4.01(h).

16 TBOC 152.301-.302; TRPA arts. 6132b-3.02, -3.03.

17 TBOC 152.304(a); TRPA art. 6132b-3.04. Thereare exceptions for registered limited liability partnerships,

see TBOC 152.801, TRPA art. 6132b-3.08, but it isunlikely in the scenarios this paper discusses that theindividuals registered as an LLP.

18 TBOC 152.205-.206; TRPA art. 6132b-4.04.

19 TBOC 152.101; TRPA art. 6132b-2.04.

20 TBOC 152.201; TRPA art. 6132b-4.01(g).

Ordinarily a group of partners may expel anotherpartner only if they have an agreement providing forexpulsion and follow its requirements and procedures.21

i. Power to withdrawA partner has the powerto withdraw at any time.22

If the partner has agreed not to withdraw, or if thepartnership has a definite term or is for a particular

undertaking and the withdrawal occurs before the termor the undertaking is complete, the withdrawalnonetheless is effective but the partner may be liable fordamages and subject to other remedies.23

j. Redemption of withdrawn partners interestIf a partner withdraws, then unless the remaining

partners wind up the business, the partnership mustredeem the withdrawn partners interest for its fairvalue.24 If the partnership and the partner have notreached agreement on this fair value within 120 days,the partnership must pay its estimate of the amount

owed, and either the partnership or the withdrawnpartner may institute a legal action to determine thecorrect amount. 25

21 TBOC 152.501(b)(3); TRPA art. 6132b-6.01(b)(3). Amajority-in-interest may expel a partner in certain extremecircumstances, such as its being unlawful to carry on thebusiness with that partner, TBOC 152.501(b)(4); TRPA art.6132b-6.01(b)(4), and partners may apply to a court to expela partner in cases of misconduct, TBOC 152.501(b)(5);TRPA art. 6132b-6.01(b)(5).

Often a partnership agreement provides that a partner maybe expelled simply on the vote of some fixed percentage of

the other partners, with no reference to facts or conditionspermitting exercise of the right. If no conditions exist, acourt will not impose them, although as with any right a courtmight refuse to enforce an expulsion if exercised in bad faith;e.g., to deprive a partner of expected profits so as to increasethe other partners shares. See, e.g., Bohatch v. Butler &Binion, 977 S.W.2d 543 (Tex. 1998); cases cited in J. ALE,

supra note 1, 2:24 n.7.

22 TBOC 152.501(b)(1), .503(a); TRPA arts. 6132b-6.01(b)(1), -6.02(a).

23 TBOC 152.503(b); TRPA art. 6132b-6.02(b).

24 TBOC 152.602(a); TRPA art. 6132b-7.01(b). If thewithdrawal was wrongful, the price is the lower of the fairvalue and the amount the partner would have received had thepartnership commenced winding up at the time the partnerwithdrew. TBOC 152.602(b); TRPA art. 6132b-7.01(b).The partnership also may offset against the redemptionpayment to a wrongfully withdrawing partner any amountsthe partner owes on account of the withdrawal. TBOC 152.604; TRPA art. 6132b-7.01(d).

25 TBOC 152.607(a), .609; TRPA art. 6132b-7.01(g),(l). The partnership may defer the payment if the withdrawalwas wrongful. TBOC 152.607(b), .608; TRPA art. 6132b-



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an oral partnership agreement to produce and sellrecords. The financier assumes that the copyrights inthe sound recordings belong to the partnershipbecause production was financed with partnershipfunds.38 To his dismay, he learns that the copyrightscould not have become the property of the partnershipwithout a written instrument of transfer or work-for-hire situation; and that his partneras the sole

author of the sound recordingsis therefore thesole owner of the copyrights.39

B. Ownership in Copyrighted Works

There are two ways in which a partnership mayacquire ownership in copyrighted material: (1) underthe so-called work-for-hire doctrine40 or (2) bymeans of written transfer of ownership.41

There are three ways in which ownership ofcopyrights might vest in the individual partnersthefirst two of which are identical to the manner in whicha partnership may acquire rights: (1) if the partner

acquires the rights in his own name42

under the so-called work-for-hire doctrine,43 (2) if he acquires therights in his own name44by means of written transferof ownership,45 or (3) if he is an author or co-author of the work.46

These three issues are discussed in further detailbelow.

38 A perfectly logical conclusion given the relevantprovisions of the Texas Business Organizations Code. SeeTBOC 152.102(b); TRPA art. 6132b-2.05(c) (Property ispresumed to be partnership property if acquired with

partnership property . . . .).

39 See Brown v. Flowers, 297 F. Supp. 2d 846(M.D.N.C. 2003) (involving similar, albeit morecomplicated facts), affd 196 Fed. Appx. 178 (4th Cir.2006).

40 17 U.S.C. 201(b).

41Id. 204(a).

42 Property acquired in the name of one or morepartners, without an indication in the instrumenttransferring title to the property of the persons capacity asa partner or of the existence of a partnership, and withoutuse of partnership property, is presumed to be the partnersproperty, regardless of whether the property is used forpartnership purposes. TBOC 152.101(c); TRPA art.6132b-2.05(d).

43 17 U.S.C. 201(b).

44Seesupra note 42.

45 17 U.S.C. 204(a).

46Id. 201(a).

1. Work For HireThere are two categories of work-for-hire: (1) a

work created by an employee within the scope of hisemployment47 and (2) a specially commissionedwork, evidenced by written contract, in one of ninestatutorily enumerated categories.48

Thus, if an employee creates a work during thecourse and scope of his employment, the copyright is

presumptively owned by the employer.49

It is importantto note that, because a partner ordinarily is not anemployee of the partnership, works created by apartnerin the scope of his duties for the partnership donot become partnership property under this doctrine.50

Without a written agreement conferring rights to thepartnership, at most it will have acquired an impliedlicense to use the work.51

With respect to specially commissioned worksfor hire, the important issues to consider are: (1)whether there is a written contract evidencing therelationship and (2) whether the work falls under one of

the nine statutorily enumerated categories of workssubject to such protection. Absent both conditions, bydefinition there is no specially commissioned work-for-hire.52

2. Transfer of Ownership

47Id. 101 (definition of work made for hire).

48 Id. The nine statutorily enumerated categories ofspecially commissioned works subject to the work-for-hiredoctrine are: works specially ordered or commissioned for

use as a contribution to a collective work, as a part of amotion picture or other audiovisual work, as a translation, asa supplementary work, as a compilation, as an instructionaltext, as a test, as answer material for a test, or as an atlas.

49 17 U.S.C. 201(b). See also Saenger Organization, Inc.v. Nationwide Ins. Licensing Associates, 119 F.3d 55 (1stCir. 1997).

50 Brown v. Flowers, 297 F. Supp. 2d 846, 852 (M.D.N.C.2003), affd 196 Fed. Appx. 178 (4th Cir. 2006). See alsoMeyers v. Cole, 1998 WL 485667, *5 (Tenn. App. 1998)(The Copyright Act includes no indication that Congressintended the works made for hire doctrine to apply to

works created by a partner during the course of thepartnership).

51 See, e.g., Oddo v. Ries, 743 F.2d 630, 634 (9th Cir.1984). Note that, if the license has been accompanied byconsideration it is irrevocable. See Lulirama Ltd., Inc. v.Axcess Broadcast Services, Inc., 128 F.3d 872, 882 (5thCir.1997). This is so because a nonexclusive licensesupported by consideration is a contract.Id.

52 17 U.S.C. 101 (definition of work made for hire).See also Konigsberg International Inc. v. Rice, 16 F.3d 355,357-58 (9th Cir. 1994).



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Rules applicable to transfer of copyrightownership are fairly straightforward. If there is awritten instrument evidencing transfer of ownership,the transfer is valid. Otherwise, there is no transfer ofownership.53

3. Authorship and Co-AuthorshipThe most direct manner in which copyrights may

be acquiredand perhaps the most common insituations involving musical groups and otherinformal entertainment partnershipsis by virtue ofauthorship. The Copyright Act provides that initialownership of copyrights vests in the author orauthors of same.54 The authors of a joint work areco-owners of copyright in the work.55

C. Disputes Among Collaborators

In accordance with the foregoing principles,where a dispute has arisen among collaboratorsunless a putative co-owner can prove that he gained

rights by written contract (e.g., by written transfer orwork-for-hire)the endgame will be the successfulassertion of a claim ofco-authorship.

In common with many issues arising in thedomain of copyrights, the determination of whether torecognize joint authorship in a particular case requiresa sensitive accommodation of competing demandsadvanced by at least two persons, both of whom havenormally contributed in some way to the creation of awork of value.56 In other words, in most casesinvolving a dispute of co-authorship, both parties willhave actually collaborated on the work. The

question is whether each collaborator is legallyentitled to a copyright interest.A warning in advance: This area of copyright

law is fraught with competing policy arguments,conflicting decisions, and differing tests in variousfederal circuits, or no developed position at all. Ofcourse, this is what makes it all so interesting.

1. Joint WorksUnder the plain language of the Copyright Act,

[t]he authors of a joint work are co-owners of thecopyright in the work.57 A joint work is defined asa work prepared by two or more authors with the

53 17 U.S.C. 204(a) provides that copyright ownershipmay be transferred only by means of a written instrumentsigned by the copyright owner, or by operation of law (i.e.,a work-for-hire).

54Id.. 201(a).

55Id.

56 Childress v. Taylor, 945 F.2d 500, 504 (2d Cir. 1991).

57 17 U.S.C. 201(a) (emphasis added).

intention that their contributions be merged intoinseparable or interdependent parts of a unitarywhole.58

That definition is easily stated, but its applicationhas vexed many a court. Obvious questions arise. Forinstance, who qualifies as an author? Will anycreative contribution suffice, or is something morerequired?

The inquiry has not stopped there. When facedwith a fact pattern that appears deserving of a morenuanced test of co-authorship, courts have askedadditional questions. For instance, regarding intent,is it necessary that the parties fully comprehend thelegal consequences of their relationship, or is itsufficient that the parties simply intend to create aunified work? When must this intent arise? Must it becontemporaneous with initial creation, or is subsequentintent to merge efforts sufficient?

Some of these issues are fairly well settled. Forbetter or worse, many are not.

2. Who Qualifies as an Author?Given that a persons status as an author is a

principal benchmark in determining both ownershipof a work59 and whether a joint work has beencreated,60 one would expect to find a definition of theterm in the Copyright Act. Incredibly, Congress failedto include one. As a result, definition of that pivotalterm has become the unenviable job of the courts.

3. Independent Copyrightabilitya. The Current Scenario

Under the bulk of the relevant jurisprudence, eachputative co-author must have made a contribution thatcould stand on its own as the subject matter ofcopyright.61 In other words, it is not enough that theend product may be copyrightable: for any contributorto claim a copyright interest, his contribution must havebeen independently copyrightable.62

This so-called rule of independentcopyrightability may be appropriate in a number ofsettings: e.g., preventing those who have made no morethan de minimus contributions from participating in theownership of a work. However, there are othersituationsparticularly in the entertainment industry in which a strict application might lead to theevisceration of copyright protection for persons making

58Id. 101 (emphasis added).

59Id. 201(a).

60Id. 101.

61 P. GOLDSTEIN, GOLDSTEINON COPYRIGHT 4.2.1.2 (2d ed.2000 and Supp. 2005), and cases cited therein.

62Id.



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significant artistic and expressive contributions.Consider, for example, a sound engineer who capturesthe live performance of a musical group, or a producerwho collaborates with an artist in the studio. May thecontributions of either of these parties be said tostand on their own as the subject matter ofcopyright?63 Consider further the example of thedrummer and bass player who, as part of a musical

group, regularly contribute their creative efforts tosongs brought in by the groups songwriters.64

Should those persons occupy the status ofcoauthors, or be relegated to some lesser statuswhere only a written contract would insureremuneration? Under an ordinary definition ofauthorship, all of these collaborators should beaccorded co-authorship status.65 However, a numberof courts have used the test of independentcopyrightability to deny authorship in such cases. 66

Fully acknowledging the uphill battle, theNimmer treatise has argued for some time against a

63 This author suggests that, intuitively, the answer isno. As a practical matter, an engineers or producerscontribution cannot stand on its own. If there is noperformanceall the knob-twisting, microphoneselection and effects processing in the world will be fornaught. Significantly, a recent court opinion out of theFourth Circuit used the independent copyrightability testto deny authorship status to a producer/engineer. Brown v.Flowers, 297 F. Supp. 2d 846 (M.D.N.C. 2003) (allegationsthat plaintiff acted as recording engineer and producerfailed to state claim of joint authorship), affd 196 Fed.Appx. 178 (4th Cir. 2006). The decision has been criticizedin the Nimmer series, and appears to run counter to thelegislative history and case law on the subject. See H.R.REP. NO. 94-1476, 94th Cong., 2d Sess. 56 (1976),reprinted in 1976 U.S.C.C.A.N. 5659 (The copyright in asound recording will usually, though not always, involveauthorship both . . . [by the artist and by] the recordproducer responsible for setting up the recording session,capturing and electronically processing the sounds, andcompiling and editing them to make a final recording.).See also Forward v. Thorogood, 985 F.2d 604 (1st Cir.1993); JCW Investments, Inc. v. Novelty, Inc., 289 F. Supp.2d 1023 (N.D. Ill. 2003); Systems XIX, Inc. v. Parker, 30 F.Supp. 2d 1225, 1228 (N.D. Cal. 1998). Certainly, as amatter ofpractice in the record industry, the authorship

rights of producers and engineers are routinely recognizedthrough written producer agreements, work-for-hireagreements, and the like. Indeed, a primary purpose ofsuch agreements (in addition to memorializing financialterms) is to acquire the authorship rights of the producer.

64 The abundance of drummer and bassist jokesnotwithstanding, this author casts no aspersions on theseworthy contributors.

65 See Childress v. Taylor, 945 F.2d 500, 506 (2d Cir.1991) (Author is not defined in the Act and appears to beused only in its ordinary sense of an originator.).

strict requirement of independent copyrightability ofeach authors contribution.67 Nimmer observes thatneither the plain language of the Act nor its legislativehistory requires the conclusion that each putativeauthors contributions must be independentlycopyrightable.68 Rather, as Nimmer notes, the intentionto merge each putative authors contributions into aunitary whole appears to be the touchstone.69

Nimmer notes that the copyrights goal of fosteringcreativity is best served . . . by rewarding all partieswho labor together to unite idea with form.70 As such,the test Nimmer would employ is whether the putativeauthors contributions were more than de minimus.71

b. Gaiman v. McFarlaneA Relaxing Standard?As indicated above, the bulk of the relevant

jurisprudence adheres to Professor Goldsteins test,requiring each putative authors contributions to beindependently copyrightable.72 However, the landscape

66Seee.g. BTE v. Bonnecaze, 43 F. Supp. 2d 619(E.D.

La. 1999) (denying co-authorship in musical compositions tothe drummer of the musical group Better Than Ezra);Brown v. Flowers, 297 F. Supp. 2d 846 (M.D. N.C. 2003)(denying co-authorship status to producer/engineer), affd196 Fed. Appx. 178 (4th Cir. 2006), discussed supra note 63.

67 See M. NIMMER & D. NIMMER, NIMMER ON COPYRIGHT 6.07.

68Id. 6.07[A][3][a].

69 Id. (citing H.R. REP. NO. 94-1476, at 120 (1976),reprinted in 1976 U.S.C.C.A.N. 5659, 5736). The House

Report states, in pertinent part, as follows:

[A] work is joint if the authors collaboratedwith each other, or if each of the authorsprepared his or her contribution with theknowledge and intention that it would bemerged with the contributions of otherauthors as inseparable or interdependentparts of unitary whole. The touchstone hereis the intention, at the time the writing isdone, that the parts be absorbed or combinedinto an integrated unit . . . .

70 M. NIMMER & D. NIMMER, supra note 67, 6.07[A][3]

[a].

71Id. 6.07[A][1].

72 See Aalmuhammed v. Lee, 202 F.3d 1227, 1234 (9thCir. 2000) (A joint work in this circuit requires each authorto make an independently copyrightable contribution to thedisputed work.; internal quotation marks omitted); Childressv. Taylor, 945 F.2d 500, 507 (2d Cir. 1991) (It seems moreconsistent with the spirit of copyright law to oblige all jointauthors to make copyrightable contributions, leaving thosewith non-copyrightable contributions to protect their rightsthrough contracts.) (citing cases). See also Brown v.



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changed a bit in 2004 with the Seventh Circuitsdecision in Gaiman v. McFarlane,73 which appears tohave adopted Nimmers interpretation of co-authorship.

In Gaiman, the creator and illustrator of a comicbook series invited plaintiff to write a script for oneissue.74 Subsequently, the plaintiff wrote a script inwhich he introduced three new characters to the

series.75

Based on the plaintiffs oral description ofthe characters and his written dialogue, thecreator/illustrator drew those characters into theseries.76 Thereafter, plaintiff brought suit, contendingthat he was entitled to an ownership interest in thecopyright to the three characters by virtue of theCopyright Acts joint-work provision.77

Although Judge Posner recognized that acontribution of some original expression is requiredfor authorship status, he rejected the notion that suchcontributions must always be independentlycopyrightable.78 He reasoned as follows:

[W]here two or more people set out tocreate a character jointly in suchmixed media as comic books andmotion pictures and succeed increating a copyrightable character, itwould be paradoxical if though theresult of their joint labors had morethan enough originality and creativityto be copyrightable, no one couldclaim a copyright. That would bepeeling the onion until it disappeared.The decisions that say, rightly in the

generality of cases, that eachcontributor to a work must make acontribution that if it stood alonewould be copyrightable werentthinking of the case in which itcouldnt stand alone because of thenature of the particular creativeprocess that had produced it.79

Flowers, 196 Fed. Appx. 178 (4th Cir. 2006) (indicatingthat the Fourth Circuit has now adopted this approach,albeit in an unpublished opinion).

73 360 F.3d 644 (7th Cir. 2004).

74Id. at 649.

75Id.

76Id.

77Id. at 650.

78Id. at 658.

79Id. at 660.

Applying this logic, Judge Posner concludedthat the plaintiffs creative contributions, although notindependently copyrightable, were sufficient to accordhim authorship status.80 Regarding one of the comicbook characters, Judge Possner noted that Gaimanscontribution may not have been copyrightable by itself,but his contribution had expressive content withoutwhich [the character] wouldnt have been a character at

all, but merely a drawing.81

In supplements to the Nimmer series after JudgePosners opinion, one can sense a bit of triumphantvindication.82 Will this be the beginning of a trend? Ifa recent decision on the subject is any indication, thetide has not yet turned;83 however, curiosity andthoughtful judicial inquiry into the issue has certainlybeen piqued.84

c. Fifth Circuit StanceThe Fifth Circuit has yet to announce whether

independent copyrightability is a requisite element of

joint authorship.85

As discussed above, one judge fromthe Eastern District of Louisiana has announced therequirement.86 However, that decision predatedGaiman, and because it was a district court opinion, ithas no binding precedential value on other trial judges.87

80Id.

81Id. at 661.

82See M. NIMMER & D. NIMMER, supra note 67, 6.07[A][3][c] (observing now that the camels nose is under the tent,it is ripe to re-examine the rejectionist point of view).

83 See Brown v. Flowers, 196 Fed. Appx. 178 (4th Cir.2006)

84 One of the judges inBrown v. Flowers issued a forcefuland extensive dissenting opinion on the issue of co-authorship, arguing for the expansive approach espoused byNimmer. Id. at 183-194.

85 The Fifth Circuit came tantalizingly close in Quintanillav. Texas Television Inc., 139 F.3d 494 (5th Cir. 1998), whereplaintiff attempted to assert a claim of joint authorship, butfailed to timely plead the cause of action. The Fifth Circuitupheld the District Courts decision to deny leave to amend,

and thus never reached the issue.

86See BTE v. Bonnecaze, 43 F. Supp. 2d 619 (E.D. La.1999). In addition, the test is mentioned (although notapplied) in at least one other case emanating from a districtcourt within the Fifth Circuit. See Clogston v. AmericanAcademy of Orthopedic Surgeons, 930 F. Supp. 1156, 1159(W.D.Tex. 1996).

87 Bridgeport Music, Inc. v. Dimension Films, 410 F.3d792, 804 n.16 (6th Cir. 2005). Indeed, the court in

Bonnecaze itself refused to follow precedent from theWestern District of Texas on a different issue, adopting



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As such, practitioners are free to urge either side ofthe argument, and depending on who they represent,should certainly consider both approaches.

4. Intenta. Must the Co-Authors Understand the Legal

Consequences of Co-Authorship?The Copyright Act requires putative authors to

intend that their contributions be merged intoinseparable or interdependent parts of a unitarywhole.88 There is nothing in that definition thatrequires a putative author to understand the legalconsequences of joint authorship or to manifest thatunderstanding by his conduct. Nonetheless, a numberof courtsincluding several district courts within theFifth Circuitappear to have adopted theserequirements.

The trouble started with the Second Circuitsopinion in Childress v. Taylor.89 That case involved aclaim of co-authorship of a play about comedienne

Jackie Moms Mabley. The putative co-authorcontracted the playwright to create the script, andallegedly contributed the results of her research intothe comediennes life.90 The district court deniedplaintiffs claim of co-authorship, finding that theparties did not share the requisite intent to be co-authors.91

On appeal, the Second Circuit observed that theCopyright Act limits its analysis of intent to the co-authors state of mind regarding the unitary nature ofthe finished work. 92 It nevertheless decided that thislimited inquiry may not be sufficient in all cases,

particularly those involving a dominant author.93

Insuch cases, the court believed that it was necessary toplumb the co-authors awareness and understanding ofthe concept of joint authorship94 and to adducewhether the putative authors had evidenced such an

instead principles established in the Second Circuit. 43 F.Supp. 2d at 620.

88 17 U.S.C. 101 (definition of joint work).

89 945 F.2d 500 (2d Cir. 1991).

90Id. at 503.

91Id. at 504.

92Id. at 507.

93 Id. at 507-508. The court specifically mentionswriter-editor and writer-researcher relationships, notingthat what distinguishes the writer-editor relationship andthe writer-researcher relationship from the true joint authorrelationship is the lack of intent of both participants in theventure to regard themselves as joint authors. Id.

94Id. at 508.

understanding through their conduct.95 Although thecourt insisted that it was not requiring an understandingof legal consequences,96 it would be difficult toimagine a situation in which the authors could evidencean understanding of the concept of co-authorshipwithout some notion of the legal consequences.

The most recent opinion emanating from a districtcourt within the Fifth Circuit acknowledging the

reasoning of Childress is BTE v. Bonnecaze.97

InBonnecaze, a former drummer for the musical groupBetter than Ezra claimed co-authorship in the groupssound recordings and musical compositions. Thedrummers alleged authorship contributions weresignificant, consisting of harmony, lyrics, percussionand song rhythms, melody and song and musicalstructure.98 Despite the weighty nature of thealleged contributions, and the undeniable fact thatcollaborators merged their contributions into a unitarywhole when they recorded the works, the court insistedthat a specific finding of [subjective] mutual intent

remain[ed] necessary.99

The court did not clarifywhether proof of the parties understanding of the legalconsequences of co-authorship was required; however,its identification of the factual indicia of ownershipand authorship suggests that it was. For instance, thecourt insisted that it was necessary to examine how theparties bill[ed] or credit[ed] themselves with regard tothe work, and whether the drummer had entered intoany written agreements with third parties involvingthe work.100

The problem with this formulation of the mutualintent requirement is that it is impractical, particularly

in situations involving informal partnerships such asmusical groups. To put it mildly, musicians (and otherartists) seldom comprehend all of the legalramifications of their actions. It is therefore absurd torequire them to acquire such an understanding (and to

95Id.

96Id.

97 43 F. Supp. 2d 619(E.D. La. 1999). See also VisitorIndustries Publications, Inc. v. NOPG, L.L.C., 91 F. Supp. 2d910, 914 (E.D. La. 2000) (mentioning the test, but failing to

specifically apply it).

98 43 F. Supp. 2d at 621.

99Id. at 624.

100 Id. at 624-625. Interestingly, although the courtdiscussed the intent requirement at length, it eventuallydecided that joint authorship didnt exist for a different

reasonspecifically, that the putative author neverindependently fixed his contributions. Id. at 628. Asdiscussed in Section IIC(4) above, that is a conclusion ofdubious merit.



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manifest that understanding in their affirmativeactions) in order to enjoy co-authorship status.

A recent opinion from the Western District ofTexas shows just how dangerously restrictive thisapproach can be. In Clogston v. American Academyof Orthopedic Surgeons,101 a photographer brought aclaim of co-authorship, based upon his contribution of90% of the photographs appearing in an instructional

textbook comprising some 450 photographs.102

Thecourt cited deposition testimony of the putative authorin which he opined that the issue of joint authorshipwas a legal question (a perfectly reasonableresponse). Based on that testimony, the courtconcluded that the photographer did not have therequisite intent to become a co-author.103 Obviously,that sort of logic is circular and is not in the least bitcompelled by the Act itself which requires only thatco-authors intend to merge their efforts into a unitarywhole. The plain language of the Copyright Act infact mirrors the test first announced by an English

court 100 years prior: to constitute joint authorship,there must be a common design.104 Obviously, acommon design is a far cry from a pre-manifestedintent to enjoy the legal status of a co-author.

Happily, a universal application of themutual intent requirement set forth in Childressdoes not appear to have been suggestedeven by thatcourt. Thus, those courts that have slavishly applied itas astrictrequirementmay have overreacted. Indeed,the Childress courts announcement of theconceptual understanding test was in response toconcerns over special cases involving a dominant

author, such as a writer-editor or writer-researcherrelationship (the later of which was precisely the casebefore the court).105 Perhaps confined to thosesituations, the conceptual understandingrequirement is helpful, but the problem with the test isthat it quickly falls downhill into situations in which ithas no business, including co-songwriter cases likeBonnecaze. As the Childress court properly noted, thetest requires less exacting consideration in thecontext of traditional forms of collaboration, such asbetween the creators of words and music of a song.106

Evidently, the court in Bonnecaze overlooked that

portion of the opinion. Fortunately, other courts have101 930 F. Supp. 1156 (W.D. Tex. 1996).

102Id. at 1157, 1162.

103Id. at 1160-1161.

104 Levy v. Rutley, 6 L.R.-C.P. 523, 529 (1871)(emphasis added).

105 945 F.2d at 507. Seesupra note 93.

106 945 F.2d at 508.

been more observant of the limited application of theChildress test. A good example is Systems, XIX, Inc. v.Parker.107 In that case, a recording studio brought aclaim of co-authorship against the performer KRS-ONEand his record company, claiming rights in a liverecorded performance that had been specificallyrequested and authorized by the performers roadmanager.108 Citing Childress, the defendants raised the

defense of mutual intent, asserting that the parties didnot share the subjective intent to be co-authors.109

Noting that the Childress court itself suggested that itstest should be applied only in circumstances not likelyto have been within the contemplation of Congress andnoting further that the producer/performer relationshiphad been under the specific contemplation ofCongress when it enacted the Copyright Act, the courtdeclined to apply the Childress test.110

b. When Must Intent be Manifested?The intent to merge contributions into a unitary

whole111

must exist at the moment in time when thework is created, not at some later date.112 However, therule is somewhat broader than it appears. First of all,the actual identity of a co-author does not need to beknown, nor must the respective contributions be madeat the same time.113 Thus, a lyricist who intends for hislyrics to be set to music may be considered a jointauthor of a composer who even years later, with thepermission of the lyricist (or his agent), eventually setsthe lyrics to music.114

Here, it is instructive to go back to the example ofthe bass player and the drummer who, as part of a

musical group, regularly contribute their creative effortsto songs brought in by the principal songwriter. Inthis instance, the question of intent would appear tobe relevant, perhaps determinative. If there is evidencethat the songwriter intended for his song to becomplete upon the addition of drums and bass, then onecould argue that he had the requisite level of intent for

107 30 F. Supp. 2d 1225 (N.D. Cal. 1998).

108Id. at 1226-27.

109Id. at 1228.

110Id. (citing H.R. REP. NO. 94-1476). See note 63 abovefor further discussion of this House Report.

111 17 U.S.C. 101 (definition of Joint Works).

112 M. NIMMER & D. NIMMERsupra note 67, 6.03 (citingH.R.REP. NO. 94-1476 at 120 (1976), reprinted in 1976U.S.C.C.A.N. 5659, 5736).

113Id. (citing Edward B. Marks v. Jerry Vogel Music Co .,140 F.2d 266 (2d Cir. 1946)).

114Id.



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joint authorship. On the other hand, if the evidencesuggests that he intended for the song to stand on itsown (e.g., as lyrics with guitar accompaniment only),the better argument might be that the songwriterlacked the intent to create a unitary whole with thebass player and drummer (although he may haveintended to create a derivative work).115 Regardless,if the musicians subsequently collaborated on a

recordingof the song, a logical conclusion could bedrawn that all parties intended to collaborate in aunitary whole (the sound recording). Thus, aclaim of co-authorship in the sound recording wouldappear to be the easier argument.116

5. Independent FixationIn addition to the hard line it took on intent, the

Court inBonnecaze announced that it is necessary foreach putative coauthor to fix his contributions into atangible form of expression in order to be entitled toco-authorship status.117 That conclusion would appear

to be in error. Even Professor Goldstein a strongproponent of the independent copyrightabilityrequirement opines that it is not necessary to thecreation of a joint work that each collaborator actuallyfix the work in a tangible medium of expression.118

One could imagine the difficulties of applyingsuch a strict test in the field of music, where musicianscommonly write parts by ear. In fact, that appearsto have been the exact context in which theBonnecaze court applied the rule. The courts denialof co-authorship was all the more curious given thatthe claimant did in fact fix his contributions in the

groups sound recordings.119

D. Rights of Co-Authors and Co-Owners

Absent a written agreement to the contrary, co-owners of a copyrighted work (including co-authors)

115 See M. NIMMER & D. NIMMERsupra note 67, 6.05(Alternatives to Joint Authorship: Derivative Works andCollective Works).

116See BTE v. Bonnecaze, 43 F. Supp. 2d 619 (E.D. La.1999) (recognizing drummers rights in sound recordings,but not in musical compositions).

117Id. at 626 (citing Community for Creative Non-Violence v. Reid, 490 U.S. 730, 737 (1989)).

118 P. GOLDSTEIN, supra note 61, 4.2.1.2 (citing EasterSeal Society For Crippled Children & Adults of Louisiana,Inc. v. Playboy Enterprises, 815 F.2d 323, 337 (5th Cir.),

rehg denied, 820 F.2d 1223 (5th Cir. 1987), cert. denied,485 U.S. 981 (1988).

119 The court ruled that this fixation was sufficient toestablish rights in the sound recording, but not in themusical composition.

share equally in the ownership of the work.120 In thecase of co-authors, this is true regardless of whethertheir respective contributions to the joint work areequal.121 Indeed, one court has held that the varyingofthis general rule amounts to a transfer of copyrightownership that will be valid only if it is confirmed by asigned instrument.122

A joint author (or joint owner) of a copyrighted

workregardless of his ownership percentagemay,without obtaining the consent of the other joint owners,either exploit the work himself, or grant nonexclusivelicenses to third parties.123 However, he must accountto other co-owners for any profits he earns from thelicensing or use of the copyright . . . . 124 This duty toaccount does not derive from the copyright lawsproscription of infringement. Rather, it comes from . . .general principles of law governing the rights of co-owners.125 Inasmuch as these joint tenancyprinciples are rooted in state law, courts will look tostate law for resolution of these issues.126

An interesting aspect of joint authorship is the so-called duality of rights.127 Under this concept, eachauthor obtains an undivided ownership in the whole ofthe joint work, including any portion thereof.128

Consequently, one joint author thereby obtains theright to use or license that portion of the joint work thatwas the sole creation of the other joint author.129

120 P. GOLDSTEIN,supra note 61, 4.2.2; M. NIMMER & D.NIMMER,supra note 67, 6.08.

121Id.

122 Papas June Music, Inc. v. McLean, 921 F. Supp. 1154,1158 (S.D. N.Y. 1996).

123See M. NIMMER & D. NIMMERsupra note 67, 6.10[A].

124 Goodman v. Lee, 78 F.3d 1007, 1012 (5th Cir. 1996)(quoting Oddo v. Ries, 743 F.2d 630, 633 (9th Cir. 1984),and citing other cases, including Community for CreativeNon-Violence v. Reid, 846 F.2d 1485, 1498 (D.C. Cir.1988)(Joint authors co-owning copyright in a work are deemed tobe tenants in common, with each having an independent rightto use or license the copyright, subject only to a duty toaccount to the other co-owner for any profits owned

thereby.) (internal quotations omitted), affd on othergrounds, 490 U.S. 730 (1989)).

125Id. (quoting Oddo v. Ries, 743 F.2d at 633 (internalquotes omitted)).

126Id.

127See M. NIMMER & D. NIMMERsupra note 67, 6.06[A].

128Id. See Section III(A) below for a practical applicationof the doctrine.

129 M. NIMMER & D. NIMMERsupra note 67, 6.06[A].



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A co-owner of a copyright cannot be liable toanother co-owner for infringement of thecopyright.130 Rather, as set forth above, a co-authorsremedy for non-payment of his share of royalties is anaction for an accounting under state law.

III. SOME HYPOTHETICAL SCENARIOS

Below are discussions of hypothetical situations

involving band break-ups and other disputes amongcollaborators.

A. The Jilted Bass Player

Your client is a bass player that has just beenousted by his group. Historically, the group has madebusiness decisions collectively and split profitsequally. However, after a secret meeting of the othermembers of the band, the decision was made toterminate the bass player.

The ouster comes at a time when the group is innegotiations with a major label. Initial interest from

the label was spawned by several demos whichwere recorded in the bass players studio, and were infact engineered and mixed by him. The advanceunder the record deal is purported to be $300,000,which would include purchase of the demos.

The bass player comes to you for help. There isno written agreement.

1. Discussiona. Partnership Issues

As an initial observation, the band almostcertainly constitutes a partnership under Texas law.131

As such, without a written agreement authorizingexpulsion, the band has no right to oust the member.132

Moreover, given the circumstances, the bands actionslikely violate the duty of loyalty owed by each partnerand the partners obligations to share profits.133

Of course the band by majority vote could windup the partnership, but this would be impractical giventhe circumstances. Equally impractical would be anyattempt to reinsert the bass player into the partnershipgiven the obvious acrimony. One solution might befor the bass player to offer to withdraw,134 subject toan acceptable redemption of his interest.135 Thecalculation of the redemption should be predicated

130 Goodman v. Lee, 78 F.3d at 1012 (quoting Oddo v.Ries, 743 F.2d at 632-33).

131See supra Section I(B)(3).

132Seesupra note 21.

133 TBOC 152.202, .206; TRPA arts. 6132b-4.01(b),-4.04.

134 TBOC 152.501(b)(1), .503(a); TRPA arts. 6132b-6.01(b)(1), -6.02(a).

upon the fair value of the partners interest,136 andyour client should specifically request an explanation ofthe bands computation of the estimated paymentobligation, and supporting documents (including astatement of partnership property and liabilities fromthe date of withdrawal, and the most recent partnershipbalance sheet and income statement).137 Note that afterreceipt of these items, your client has one year to bring

an action to challenge the sufficiency of the tender.138

The same one-year statute of limitations does notapplyto claims involving breach of partners duties of loyaltyand the like.

b. Copyright IssuesInasmuch as the label has expressed an interest in

purchasing the sound recordings, special attentionshould also be given to the bass players rights in therecordings. An important question is whether he is ajoint author with ownership rights.139 The facts wouldindicate that he is, with an independent right to a pro

rata share of all income.140

Unless there has been awritten assignment of the copyrights to thepartnership141unlikelythe bass players rightsshould be intact. Here, rather than requesting aredemption of interests for the value of the copyrights(as the partner may do with respect to the partnershipsproperty), the bass player should consider maintainingan ongoing interest in the works, or at least using hisright to do so as leverage to obtain a favorablesettlement.

One should also keep in mind that, as co-author,the bass player has an independent right to exploit the

recordings, subject only to a duty to account to his co-authors for profits.142 This fact could similarly be usedas leverage during negotiations.

An interesting question is whether the band mayreplace the bass players parts on the recordings,thereby avoiding his copyright interest. The answer isno, because each co-author owns an undivided interestin the whole of the joint work.143

135 TBOC 152.602, .604; TRPA art. 6132b-7.01.

136 TBOC 152.602(a); TRPA art. 6132b-7.01(b).

137

TBOC 152.607(c); TRPA art. 6132b-7.01(i).138 TBOC 152.607(d)(1)(B); TRPA art. 6132b-7.01(j)(1)

(B).

139Seesupra Section II(C).

140Seesupra Section II(D).

141 17 U.S.C. 204.


143Id. (discussing duality of rights).



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A more difficult issue is the bass players rightsin the musical compositions. An argument regardingco-authorship could probably be made either way, thestrength of which would likely depend upon thesubstance of the bass players contributions144 and theintent of the parties at the time the songs werewritten.145

B. The Troublesome BandmateA bandleader has financed numerous recordings

and essentially managed the band for several years. Apercussionist in the band has grown more and moretroublesome, is not particularly talented, and nobodylikes him. The bandleader wants to expel the memberand comes to you for advice.


Careful attention should be paid to the elementsdetermining the existence of a partnership to

determine if the band actually constituted such anentity.146 Important elements to consider are whetherthe percussionist participated in the control of thebusiness, and whether there was any agreement toshare profits and losses. The fact that the bandleaderfinanced recordings may suggest no partnershipexisted.

If the analysis indicates that the band did, in fact,constitute a partnership, then as with the precedingfact scenario, your client has no right to oust thepercussionist.147 Likewise, one option would be towind up the partnership and start anew.148 Given that

this particular band is not on the verge of signing a bigdeal and may have insignificant assets, this may bemore feasible than in the earlier example. However, itis certainly worth attempting to negotiate a buyout ofthe percussionists interests.149 In such case, be sure toinclude language in the buy-out agreement settlingany and all claims arising under the partnership,including claims to determine the terms ofredemption,150 claims for breach of the partnership

144Seesupra Section II(C)(3).


146See supra Section I(B)(2).

147Seesupra Section I(C)(2)(h).

148See supra Section I(C)(2)(k).

149 Although not specifically provided under thepartnership statutes, the parties could agree to a buyout as amatter of contract law.

150 TBOC 152.609; TRPA art. 6132b-7.01(l).

agreement and/or claims for breach of any duties underthe partnership.151

b. Copyright IssuesAgain, copyright issues should be carefully

considered. Given the percussionists limited role, it isdoubtful that he would be considered a co-author of themusical compositions;152 however, you should carefully

interview your client to gather facts related to thatpotential claim. A case that may be helpful to yourclients cause is BTE v. Bonnecaze153 (denying adrummers claims of authorship rights in a musicalgroups musical compositions).

Regarding the bands sound recordings, althoughyour client financed the recordings, this does not byitself make him the exclusive owner of the copyrightstherein. Rather, ownership is vested in the authors ofthe recordings,154 which presumably would include thepercussionist.155 Absent assignment by thepercussionist of his co-authorship rights, or a work-for-

hire agreement, the percussionist likely will have a co-authorship interest in the recordings. That having beensaid, there is no reason your client could not attempt tobuy the percussionists rights in the sound recordings aspart of the buy-out of your clients interests in thepartnership. Alternatively, your client could offer toaccount to the percussionist for his share of profits.156

However, a clean break may be desired by both partiesat this point.

C. The Spurned Angel

A friend advances $20,000 to record an album

for a talented artist with the hopes of securing arecording contract. Under the deal, the friend willspend a portion of these monies to shop therecordings. If that fails, the parties have agreed to starttheir own record label and sell the record themselves.The parties have agreed that the angel will be repaidhis investment out of any initial advance (in the case ofa record deal) or initial proceeds in the event they sellthe record themselves. Thereafter, the parties will splitproceeds 50/50.

The relationship sours, and the artist moves to LosAngeles. Miraculously, he is discovered and signs arecord deal. Under that deal, the artist sells the prior

151 TBOC 152.211; TRPA art. 6132b-4.06.

152Seesupra Section II(C).

153 43 F. Supp. 2d 619 (E.D. La. 1999).

154 17 U.S.C. 201(a).

155See BTE v. Bonnecaze, 43 F. Supp. 2d 619 (E.D. La.1999).




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recordings to a record company under a deal that willentitle him to a continuing royalty interest in therecordings after recoupment by the record company ofthe purchase price. The artist refuses to shareproceeds of the sale with the angel.

The angel comes to you for advice. There isno written agreement.


This would appear to be a classic partnershipscenario.157 Because the partnership was formed inTexas and operated in Texas, your client should beable to bring suit here if necessarya decidedadvantage given the artists location.

Initially, your client should tender demand for anaccounting under the partnership and/or a right ofaudit,158 and payment of his share of any proceeds. 159

If that is ignored or refused, your client has the rightto bring an action against the artist for breach of the

partnership agreement, an accounting, and/or breachof the partners duties.160

As an alternative and/or fallback, you may wishto initiate negotiations for withdrawal and redemptionof your clients interests.161 If no agreement isreached, your client may wish to initiate an action todetermine the terms of the redemption.162 Rememberthat you have only one year to bring such a claim afterthe artist has tendered his proposed redemption andsupporting documentation.163

b. Copyright Issues

On the surface, your client would appear to haveno claim under copyright law. As set forth above,ownership vests initially in the author(s) of a work.164

In the case of the musical compositions, there are nofacts indicating that your client participated in theauthorship thereof.

With respect to the sound recordings, the resultmay be different. Again, the artist wouldpresumptively have authorship rights in the recordings

157Seesupra Section I(B)(2).

158

TBOC 152.212-.213; TRPA art. 6132b-4.03(a)-(c).

159 TBOC 152.202(a)(2); TRPA art. 6132b-4.01(b).

160 TBOC 152.211; TRPA art. 6132b-4.06.

161 TBOC 152.601-.608; TRPA art. 6132b-7.01.

162 TBOC 152.609; TRPA art. 6132b-7.01(l).

163 TBOC 152.607(d)(1)(B).

164 17 U.S.C. 201(a).

by virtue of his recorded performance.165 However,you should query your client as to his relationship withany of the other participants in the recording process.For instance, assume that the angel is also a studioowner and engineer. If he participated in the creation ofthe masters (e.g. as producer or engineer), then he mayhave a claim of co-authorship.166 Even if he did notengineer or produce the recordings, if one of his studio

employees did, the angel may have rights by virtue ofwork for hire.167 Another theory under which he mayhave acquired rights by work for hire is if he personallycontracted the producer, engineers, side musicians, etc.,and secured written work for hire agreements withthem.168 In summary, a thorough interview of yourclient will be necessary in order to determine if he hasany rights in the sound recordings.

If it turns out that your client does in fact havecolorable claims as a co-author, then the artist has evenbigger problems. The artist has no right to assign thecopyright in the sound recordings to the record

company or to grant any exclusive licenses with respectto them without the permission of your client.169

Moreover, as co-author, the angel would have theindependentright to exploit the recordings, subject onlyto the duty to account to the artist for his share ofproceeds.170 This may provide you with the means tonegotiate directly with the record company in thelikely event the record company wants to ensure itsexclusive rights in the recordings. Finally, in additionto your clients right to profits and accountings underTexas partnership law, your client will have acorresponding right as co-owner of the copyright for an

equal share of profits and an accounting.171

As a final consideration: suppose the artistsuccessfully mounts a challenge to your clients co-authorship rights, arguing, for instance, that the partiesdid not share the requisite mutual intent to be co-authors.172 In such a case, provided your clientscontributions were nonetheless independently

165Id. See also H.R.REP. NO. 94-1476, cited and discussedsupra atn. 63.

166 17 U.S.C. 201(a).

167

17 U.S.C. 101 (definition of work made for hire).See alsosupra Section II(B)(1).

168 17 U.S.C. 101.

169See M. NIMMER & D. NIMMER,supra note 67, 6.10[A].To the contrary, his rights to deal in the copyright arelimited to non-exclusive licenses.


171Id.




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copyrightable, he may have a cause of action forcopyright infringement, related to the unauthorizeduse of his contributions!173 Considering the troublethe artist has put the angel to, that would certainly bejust desserts.

173 This intriguing prospect is discussed in Thomas v.Larson, 147 F.3d 195, 206 (2d Cir. 1998), and Johnson v.Arista Holding, Inc., 2006 WL 3511894 (S.D.N.Y. 2006).Neither court actually reached the issue, but neverthelessacknowledged the possibility.



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BUSINESS ORGANIZATIONSCODE (TITLE 4. PARTNERSHIPS)

As amended through September 1, 2007

CHAPTER 151. GENERAL PROVISIONS

Sec. 151.001. DEFINITIONS.

In this title:(1) Capital account means the amount computed by:(A) adding the amount of a partners original and

additional contributions of cash to a partnership, the agreed valueof any other property that that partner originally or additionallycontributed to the partnership, and allocations of partnership

profits to that partner; and(B) subtracting the amount of distributions to that partner

and allocations of partnership losses to that partner.(2) Distribution means a transfer of property, including

cash, from a partnership to a partner in the partners capacity as apartner or the partners transferee.

(3) Foreign limited partnership means a partnershipformed under the laws of another state that has one or moregeneral partners and one or more limited partners.

(4) Majority-in-interest, with respect to all or a specifiedgroup of partners, means partners who own more than 50 percentof the current percentage or other interest in the profits of the

partnership that is owned by all of the partners or by the partnersin the specified group, as appropriate.

(5) Partnership agreement means any agreement, writtenor oral, of the partners concerning a partnership.

Sec. 151.002. KNOWLEDGE OF FACT.

For purposes of this title, a person has knowledge of a factonly if the person has actual knowledge of the fact.

Sec. 151.003. NOTICE OF FACT.

(a) For purposes of this title, a person has notice of a factif the person:

(1) has knowledge of the fact;(2) has received a communication of the fact as provided

by Subsection (c); or(3) reasonably should have concluded, from all facts then

known to that person, that the fact exists.(b) A person notifies or gives notice to another person of a

fact by taking actions reasonably required to inform the otherperson of the fact in the ordinary course of business, regardless ofwhether the other person actually has knowledge of the fact.

(c) A person is notified or receives notice of a fact when

the fact is communicated to:(1) the person;(2) the persons place of business; or(3) another place held out by the person as the place for

receipt of communications.(d) Receipt of notice by a partner of a fact relating to the

partnership is effective immediately as notice to the partnershipunless fraud against the partnership is committed by or with theconsent of the partner receiving the notice.

CHAPTER 152. GENERALPARTNERSHIPS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 152.001. DEFINITIONS.

In this chapter:(1) Event of withdrawal or withdrawal means an event

specified by Section 152.501(b).(2) Event requiring a winding up means an event specified

by Section 11.051 or 11.057.(3) Foreign limited liability partnership means a

partnership that:(A) is foreign; and(B) has the status of a limited liability partnership pursuant

to the laws of the jurisdiction of formation.(4) Other partnership provisions means the provisions of

Chapters 151 and 154 and Title 1 to the extent applicable topartnerships.

(5) Transfer includes:(A) an assignment;(B) a conveyance;(C) a lease;

(D) a mortgage;(E) a deed;(F) an encumbrance; and(G) the creation of a security interest.(6) Withdrawn partner means a partner with respect to

whom an event of withdrawal has occurred.

Sec. 152.002. EFFECT OF PARTNERSHIP AGREEMENT;NONWAIVABLE AND VARIABLE PROVISIONS.

(a) Except as provided by Subsection (b), a partnershipagreement governs the relations of the partners and between the

partners and the partnership. To the extent that the partnershipagreement does not otherwise provide, this chapter and the other

partnership provisions govern the relationship of the partners andbetween the partners and the partnership.(b) A partnership agreement or the partners may not:(1) unreasonably restrict a partners right of access to books

and records under Section 152.212;(2) eliminate the duty of loyalty under Section 152.205,

except that the partners by agreement may identify specific types ofactivities or categories of activities that do not violate the duty ofloyalty if the types or categories are not manifestly unreasonable;

(3) eliminate the duty of care under Section 152.206, exceptthat the partners by agreement may determine the standards bywhich the performance of the obligation is to be measured if thestandards are not manifestly unreasonable;

(4) eliminate the obligation of good faith under Section152.204(b), except that the partners by agreement may determine the

standards by which the performance of the obligation is to bemeasured if the standards are not manifestly unreasonable;

(5) vary the power to withdraw as a partner under Section152.501(b)(1), (7), or (8), except for the requirement that notice bein writing;

(6) vary the right to expel a partner by a court in an eventspecified by Section 152.501(b)(5);

(7) restrict rights of a third party under this chapter or theother partnership provisions, except for a limitation on an individual

partners liability in a limited liability partnership as provided bythis chapter;

(8) select a governing law not permitted under Sections1.103 and 1.002(43)(C); or

(9) except as provided in Subsections (c) and (d), waive ormodify the following provisions of Title 1:



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(A) Chapter 1, if the provision is used to interpret aprovision or to define a word or phrase contained in a sectionlisted in this subsection;

(B) Chapter 2, other than Sections 2.104(c)(2), 2.104(c)(3), and 2.113;

(C) Chapter 3, other than Subchapters C and E of thatchapter; or

(D) Chapters 4, 5, 10, 11, and 12, other than Sections11.057(a), (b), (c)(1), (c)(3), and (d).

(c) A provision listed in Subsection (b)(9) may be waived

or modified in a partnership agreement if the provision that iswaived or modified authorizes the partnership to waive or modifythe provision in the partnerships governing documents.

(d) A provision listed in Subsection (b)(9) may be waivedor modified in a partnership agreement if the provision that ismodified specifies:

(1) the person or group of persons entitled to approve amodification; or

(2) the vote or other method by which a modification isrequired to be approved.

Sec. 152.003. SUPPLEMENTAL PRINCIPLES OF LAW.

The principles of law and equity and the other partnershipprovisions supplement this chapter unless otherwise provided by

this chapter or the other partnership provisions.

Sec. 152.004. RULE OF STATUTORY CONSTRUCTION NOTAPPLICABLE.

The rule that a statute in derogation of the common law isto be strictly construed does not apply to this chapter or the other

partnership provisions.

Sec. 152.005. APPLICABLE INTEREST RATE.

If an obligation to pay interest arises under this chapter andthe rate is not specified, the interest rate is the rate specified bySection 302.002, Finance Code.

SUBCHAPTER B. NATURE AND CREATION OFPARTNERSHIP

Sec. 152.051. PARTNERSHIP DEFINED.

(a) In this section, association does not have themeaning of the term association under Section 1.002.

(b) Except as provided by Subsection (c) and Section152.053(a), an association of two or more persons to carry on a

business for profit as owners creates a partnership, regardless ofwhether:

(1) the persons intend to create a partnership; or(2) the association is called a partnership, joint

venture, or other name.(c) An association or organization is not a partnership if it

was created under a statute other than:(1) this title and the provisions of Title 1 applicable to

partnerships and limited partnerships;(2) a predecessor to a statute referred to in Subdivision

(1); or(3) a comparable statute of another jurisdiction.(d) The provisions of this chapter govern limited

partnerships only to the extent provided by Sections 153.003 and153.152 and Subchapter H, Chapter 153.

Sec. 152.052. RULES FOR DETERMINING IF PARTNERSHIP ISCREATED.

(a) Factors indicating that persons have created a partnershipinclude the persons:

(1) receipt or right to receive a share of profits of thebusiness;

(2) expression of an intent to be partners in the business;(3) participation or right to participate in control of the

business;

(4) agreement to share or sharing:(A) losses of the business; or(B) liability for claims by third parties against the business;

and(5) agreement to contribute or contributing money or

property to the business.(b) One of the following circumstances, by itself, does not

indicate that a person is a partner in the business:(1) the receipt or right to receive a share of profits as

payment:(A) of a debt, including repayment by installments;(B) of wages or other compensation to an employee or

independent contractor;(C) of rent;(D) to a former partner, surviving spouse or representative

of a deceased or disabled partner, or transferee of a partnershipinterest;

(E) of interest or other charge on a loan, regardless ofwhether the amount varies with the profits of the business, includinga direct or indirect present or future ownership interest in collateralor rights to income, proceeds, or increase in value derived fromcollateral; or

(F) of consideration for the sale of a business or otherproperty, including payment by installments;

(2) co-ownership of property, regardless of whether the co-ownership:

(A) is a joint tenancy, tenancy in common, tenancy by theentirety, joint property, community property, or part ownership; or

(B) is combined with sharing of profits from the property;(3) the right to share or sharing gross returns or revenues,

regardless of whether the persons sharing the gross returns orrevenues have a common or joint interest in the property from whichthe returns or revenues are derived; or

(4) ownership of mineral property under a joint operatingagreement.

(c) An agreement by the owners of a business to share lossesis not necessary to create a partnership.

Sec. 152.053. QUALIFICATIONS TO BE PARTNER;NONPARTNERS LIABILITY TO THIRD PERSON.

(a) A person may be a partner unless the person lackscapacity apart from this chapter.

(b) Except as provided by Section 152.307, a person who is

not a partner in a partnership under Section 152.051 is not a partneras to a third person and is not liable to a third person under thischapter.

Sec. 152.054. FALSE REPRESENTATION OF PARTNERSHIPOR PARTNER.

(a) A false representation or other conduct falsely indicatingthat a person is a partner with another person does not of itself createa partnership.

(b) A representation or other conduct indicating that aperson is a partner in an existing partnership, if that is not the case,does not of itself make that person a partner in the partnership.



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Sec. 152.055. AUTHORITY OF CERTAIN PROFESSIONALSTO CREATE PARTNERSHIP.

(a) Persons licensed as doctors of medicine and personslicensed as doctors of osteopathy by the Texas State Board ofMedical Examiners and persons licensed as podiatrists by theTexas State Board of Podiatric Medical Examiners may create a

partnership that is jointly owned by those practitioners to performa professional service that falls within the scope of practice ofthose practitioners.

(b) When doctors of medicine, osteopathy, and podiatrycreate a partnership that is jointly owned by those practitioners,the authority of each of the practitioners is limited by the scope of

practice of the respective practitioners and none can exercisecontrol over the others clinical authority granted by theirrespective licenses, either through agreements, bylaws, directives,financial incentives, or other arrangements that would assertcontrol over treatment decisions made by the practitioner.

(c) The Texas State Board of Medical Examiners and theTexas State Board of Podiatric Medical Examiners continue toexercise regulatory authority over their respective licenses.

Sec. 152.056. PARTNERSHIP AS ENTITY.

A partnership is an entity distinct from its partners.

SUBCHAPTER C. PARTNERSHIP PROPERTY

Sec. 152.101. NATURE OF PARTNERSHIP PROPERTY.

Partnership property is not property of the partners. Apartner or a partners spouse does not have an interest inpartnership property.

Sec. 152.102. CLASSIFICATION AS PARTNERSHIPPROPERTY.

(a) Property is partnership property if acquired in the name

of: (1) the partnership; or(2) one or more partners, regardless of whether the name

of the partnership is indicated, if the instrument transferring title tothe property indicates:

(A) the persons capacity as a partner; or(B) the existence of a partnership.(b) Property is presumed to be partnership property if

acquired with partnership property, regardless of whether theproperty is acquired as provided by Subsection (a).

(c) Property acquired in the name of one or more partnersis presumed to be the partners property, regardless of whether the

property is used for partnership purposes, if the instrumenttransferring title to the property does not indicate the personscapacity as a partner or the existence of a partnership, and if the

property is not acquired with partnership property.(d) For purposes of this section, property is acquired in the

name of the partnership by a transfer to:(1) the partnership in its name; or(2) one or more partners in the partners capacity as

partners in the partnership, if the name of the partnership isindicated in the instrument transferring title to the property.

SUBCHAPTER D. RELATIONSHIP BETWEENPARTNERS AND BETWEEN PARTNERS AND

PARTNERSHIPS

Sec. 152.201. ADMISSION AS PARTNER.

A person may become a partner only with the consent of allpartners.

Sec. 152.202. CREDITS OF AND CHARGES TO PARTNER.

(a) Each partner is credited with an amount equal to:(1) the cash and the value of property the partner contributes

to a partnership; and

(2) the partners share of the partnerships profits.(b) Each partner is charged with an amount equal to:(1) the cash and the value of other property distributed by

the partnership to the partner; and(2) the partners share of the partnerships losses.(c) Each partner is entitled to be credited with an equal share

of the partnerships profits and is chargeable with a share of thepartnerships capital or operating losses in proportion to thepartners share of the profits.

Sec. 152.203. RIGHTS AND DUTIES OF PARTNER.

(a) Each partner has equal rights in the management andconduct of the business of a partnership. A partners right to

participate in the management and conduct of the business is not

community property.(b) A partner may use or possess partnership property only

on behalf of the partnership.(c) A partner is not entitled to receive compensation for

services performed for a partnership other than reasonablecompensation for services rendered in winding up the business ofthe partnership.

(d) A partner who, in the proper conduct of the business ofthe partnership or for the preservation of its business or property,reasonably makes a payment or advance beyond the amount the

partner agreed to contribute, or who reasonably incurs a liability, isentitled to be repaid and to receive interest from the date of the:

(1) payment or advance; or(2) incurrence of the liability.

Sec. 152.204. GENERAL STANDARDS OF PARTNERSCONDUCT.

(a) A partner owes to the partnership, the other partners, anda transferee of a deceased partners partnership interest asdesignated in Section 152.406(a)(2):

(1) a duty of loyalty; and(2) a duty of care.(b) A partner shall discharge the partners duties to the

partnership and the other partners under this code or under thepartnership agreement and exercise any rights and powers in theconduct or winding up of the partnership business:

(1) in good faith; and(2) in a manner the partner reasonably believes to be in the

best interest of the partnership.(c) A partner does not violate a duty or obligation under thischapter or under the partnership agreement merely because the

partners conduct furthers the partners own interest.(d) A partner, in the partners capacity as partner, is not a

trustee and is not held to the standards of a trustee.

Sec. 152.205. PARTNERS DUTY OF LOYALTY.

A partners duty of loyalty includes:(1) accounting to and holding for the partnership property,

profit, or benefit derived by the partner:(A) in the conduct and winding up of the partnership

business; or



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(B) from use by the partner of partnership property;(2) refraining from dealing with the partnership on behalf

of a person who has an interest adverse to the partnership; and(3) refraining from competing or dealing with the

partnership in a manner adverse to the partnership.

Sec. 152.206. PARTNERS DUTY OF CARE.

(a) A partners duty of care to the partnership and theother partners is to act in the conduct and winding up of the

partnership business with the care an ordinarily prudent personwould exercise in similar circumstances.

(b) An error in judgment does not by itself constitute abreach of the duty of care.

(c) A partner is presumed to satisfy the duty of care if thepartner acts on an informed basis and in compliance with Section152.204(b).

Sec. 152.207. STANDARDS OF CONDUCT APPLICABLE TOPERSON WINDING UP PARTNERSHIP BUSINESS.

Sections 152.204-152.206 apply to a person winding upthe partnership business as the personal or legal representative ofthe last surviving partner to the same extent that those sectionsapply to a partner.

Sec. 152.208. AMENDMENT TO PARTNERSHIPAGREEMENT.

A partnership agreement may be amended only with theconsent of all partners.

Sec. 152.209. DECISION-MAKING REQUIREMENT.

(a) A difference arising in a matter in the ordinary courseof the partnership business may be decided by a majority-in-interest of the partners.

(b) An act outside the ordinary course of business of apartnership may be undertaken only with the consent of allpartners.

Sec. 152.210. PARTNERS LIABILITY TO PARTNERSHIPAND OTHER PARTNERS.

A partner is liable to a partnership and the other partnersfor:

(1) a breach of the partnership agreement; or(2) a violation of a duty to the partnership or other

partners under this chapter that causes harm to the partnership orthe other partners.

Sec. 152.211. REMEDIES OF PARTNERSHIP ANDPARTNERS.

(a) A partnership may maintain an action against a partnerfor a breach of the partnership agreement or for the violation of aduty to the partnership causing harm to the partnership.

(b) A partner may maintain an action against thepartnership or another partner for legal or equitable relief,including an accounting of partnership business, to:

(1) enforce a right under the partnership agreement;(2) enforce a right under this chapter, including:(A) the partners rights under Sections 152.201-152.209,

152.212, and 152.213;(B) the partners right on withdrawal to have the partners

interest in the partnership redeemed under Subchapter H or toenforce any other right under Subchapters G and H; and

(C) the partners rights under Subchapter I;(3) enforce the rights and otherwise protect the interests of

the partner, including rights and interests arising independently ofthe partnership relationship; or

(4) enforce a right under Chapter 11.(c) The accrual of and a time limitation on a right of action

for a remedy under this section is governed by other applicable law.(d) A right to an accounting does not revive a claim barred

by law.

Sec. 152.212. BOOKS AND RECORDS OF PARTNERSHIP.

(a) In this section, access includes the opportunity toinspect and copy books and records during ordinary business hours.

(b) A partnership shall keep its books and records, if any, atits chief executive office.

(c) A partnership shall provide access to its books andrecords to a partner or an agent or attorney of a partner.

(d) The partnership shall provide a former partner or anagent or attorney of a former partner access to books and records

pertaining to the period during which the former partner was apartner or for any other proper purpose with respect to anotherperiod.

(e) A partnership may impose a reasonable charge, coveringthe costs of labor and material, for copies of documents furnished

under this section.

Sec. 152.213. INFORMATION REGARDING PARTNERSHIP.

(a) On request and to the extent just and reasonable, eachpartner and the partnership shall furnish complete and accurateinformation concerning the partnership to:

(1) a partner;(2) the legal representative of a deceased partner or a partner

who has a legal disability; or(3) an assignee.(b) A legal representative of a deceased partner or a partner

who has a legal disability and an assignee are subject to the duties ofa partner with respect to information made available.

Sec. 152.214. CERTAIN THIRD-PARTY OBLIGATIONS NOTAFFECTED.

Sections 152. 203, 152.208, and 152.209 do not limit apartnerships obligations to another person under Sections 152.301and 152.302.

SUBCHAPTER E. RELATIONSHIP BETWEENPARTNERS AND OTHER PERSONS

Sec. 152.301. PARTNER AS AGENT.

Each partner is an agent of the partnership for the purpose of

its business.

Sec. 152.302. BINDING EFFECT OF PARTNERS ACTION.

(a) Unless a partner does not have authority to act for thepartnership in a particular matter and the person with whom thepartner is dealing knows that the partner lacks authority, an act of apartner, including the execution of an instrument in the partnershipname, binds the partnership if the act is apparently for carrying on inthe ordinary course:

(1) the partnership business; or(2) business of the kind carried on by the partnership.

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Breaking Up is Hard to Do (Buck McKinney)

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