That’s Mine! – Why Intraband Agreements are a MUST!
“I started the band, I should own the name”… “He acts like a drunken idiot on stage”… “I wrote those lyrics, they should be 100% mine”… “I invested $1000 in our tour and should recoup that money before profits are split”…..
If you are in a band and have ever had a discussion with me as to band priorities, you have undoubtedly heard from me 1) register your copyrights with U.S. Copyright Office (which I have touched upon in previous articles) and 2) negotiate and execute an intraband agreement (or something similar) that governs the relationship between band members, and attempts to account and address as many hypothetical situations as possible. As to the latter, you have likely also been encouraged by me to “be proactive, not reactive.” What does that mean, you ask? Well, it means everyone’s best interests, peace of mind and frankly, sanity, are best served when intraband agreements are discussed and formed while everyone is hunky-dory. Trust me, resolving these issues without a formal writing that provides the appropriate course of action in a particular situation, after things have gone awry, can make for a gruesome, lengthy and often expensive resolution. This article serves to provide a very general outline of some of the topics to be addressed and delineated in an intraband agreement. Some may not be applicable to all bands and of course, this article and its recommendations are not all-encompassing. Discuss with your band mates these topics and other topics of importance to each individual band member and make sure they are properly accounted for in your intraband agreement. Your legal counsel can then draft an intraband agreement that memorializes the same. Here are a few provisions, to get the discussion with your band mates started:
- General Provisions. Including but not limited to the following: effective date, who the intraband agreement is by and between (i.e. all members of the band) and the purpose of the intraband agreement (i.e. to address the band’s engagement in the entertainment, music, recording and publishing industries as a musical group known as “X”, including without limitation, recording music, public performance, etc.) I am also a proponent of having a “Definitions” section in nearly all agreements, entertainment related or not. Words can be misconstrued, vague and ambiguous and left up to interpretation. It is best to be as clear as possible as to what is meant by the use of a term in the intraband agreement.
- Band Name. Who owns the band name? Is there now, or is there potential for, federal trademark protection (i.e. a trademark or servicemark) related to the band name or the band as a performing act? If so, who owns it? I would also suggest providing a picture of the trademark and/or servicemark in the intraband agreement itself. Who can use the band name and under what circumstances (i.e. what happens when the lead vocalist who started the band, leaves the band? Does he or she only have the limited right to be known as an ex-member of the band while the remaining members can move forward with a new lead vocalist, and still use the original band name?)
- Copyright ownership. Who owns the underlying compositions and who owns the sound recordings? To what extent? Who is responsible for registering the works and how should those works be registered? Who administers the rights in the works? Involvement with performing rights associations?
NOTE: There are many variations to these types of provisions that may hinge on who actually composes works and, who has actual ownership and control over the musical compositions.
- Responsibilities of the Band Members.
a. Substance abuse (i.e. refraining from alcohol, narcotics);
b. Illegal activity (any act that would constitute a violation of state or federal law);
c. Abuse by member against another member (i.e. no physical, verbal, emotional and/or psychological abuse, including disparaging one’s reputation or the reputation of the band itself). NOTE – this is an obligation that should continue in perpetuity, worldwide;
d. Performance responsibility. Each band member should agree to perform to his or her best abilities and agree to practice and contribute to practice (i.e. elements of creativity and productivity, and ability to effectively play instrument, etc.), be present and fully prepared at designated times and locations for live performances and be present and fully prepared to record at designated locations.
- Band Contributions. To the extent capital contributions are made by band members, language reflecting the same should be stated in the intraband agreement. This also applies to instruments, equipment and software owned by each band member. You can attach an addendum to the intraband agreement that shows each band member’s respective financial contribution and equipment ownership. You should also address under what circumstances, if any, a band member can withdraw a contribution.
- Band Assets. These provisions should specifically state how certain assets are to be divided among the band members (i.e. percentages, how often, via what means, caveats?). The language should also clearly define gross and net and which term is applicable to a particular provision. Assets may include, but are not limited to the following:
a. Live performances (i.e. what constitutes a reasonable cost to be recouped prior to splitting proceeds with band members – advances, traveling costs, videographers, photographers, engineers, etc.)
b. Record contracts (i.e. how to split monies derived from recording contracts as well as responsibility in ensuring the label recoups its costs?). The language should also state what the band is to do if presented with a recording contract (i.e. agree on an attorney and retain him or her to review and negotiate the terms, etc.)
c. Publishing contracts. This provision, to the extent applicable and not excluded from the intraband agreement, should provide language as to publishing splits (i.e. who derives what from these types of deals), as well as language that provides each band member’s respective share in ensuring the publishing company recoups its costs. Again, I suggest language that requires the band to agree upon and retain counsel to negotiate these types of agreements on the band’s behalf. NOTE: There are many variations to these types of provisions that hinge on who actually composes works and who has ownership and control over musical compositions.
- Band Management. Here is where you can provide language as to how the band is to be managed, what capacity each member may serve (i.e. in addition to being a writer, performer, etc.) and what is required in order to make band decisions (i.e. majority v. unanimous vote). Do the band members share equally in the control, management and direction of the band business? Who maintains the band books and how/when/where are they accessible to band members?
- Leaving Band Member. These provisions should address what happens when a band member leaves and what rights and/or obligations, if any, she or he has and/or maintains, pursuant to the intraband agreement. You can have separate provisions that address a member who leaves (i) voluntarily and (ii) involuntarily. For example, what happens to monies received after a member leaves, but that derive from something that actually involved the leaving member, while he or she was still a member of the band?
- New Members. This provision should address what happens should the band elects to add a new member. For example, will the intraband agreement be modified in writing to include the name of the new band member, who will also be bound by the terms of the intraband agreement?
- Miscellaneous. Most contracts provide what is often referred to as “boilerplate” provisions that address issues such as governing law, waiver, how and where to give notice to each band member, the use of headers/titles in the agreement, that the agreement is the full and complete understanding between the band members and supersedes all prior oral and/or contemporaneous agreements, no duress or undue influence in executing the agreement, terms not to be construed against the drafter, enforcement of the agreement (i.e. agreeing to arbitrate), validity of the agreement (and what happens if a court strikes a part of the agreement as unenforceable), etc.
The above “discussion points” are among those you and your band mates should hash out when preparing to execute an intraband agreement. That being said, please keep in mind, intraband agreements are not the only method to address the issues referenced in this article. For example, some bands operate as a business and have correlating agreements that address these concerns (i.e. operating agreements for LLCs, partnership agreements for general partnerships, and the like). Some of the issues addressed above might require amendments to Illinois business form filings when certain circumstances occur pursuant to the intraband agreement (i.e. revisions to operating agreements, LLC Articles of Organization, etc.) and the same should be provided for in the intraband agreement. I strongly encourage you to discuss your business form options with your CPA, a tax attorney and/or a corporate attorney so you can make an educated decision as to which business form, if any, is most appropriate for your band’s interests and goals. Good luck!!
By: Michelle M. Wahl, Esq.
Above image courtesy of stockimages at http://FreeDigitalPhotos.net
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Michelle is a Partner at Swanson, Martin & Bell, LLP and is licensed in Illinois and Indiana state and federal courts. With a Masters of Law in Intellectual Property, Michelle is the Vice Chair of the firm’s Entertainment and Media Practice Group and a member of the firm’s Intellectual Property Litigation and Transactional Services Practice Group. Her copyright and trademark practice focuses on intellectual property prosecution and related transactions, including performing trademark availability searches and providing advisory opinions, as well as preparing and filing trademark applications with the United States Patent and Trademark Office, and copyright registrations with the United States Copyright Office. Michelle also assists with the oversight of the firm’s extensive trademark docket and conducts required monitoring and maintenance of clients’ trademark portfolios, as well as provides clients with corporate counseling and innovative corporate solutions to address their respective needs.
Michelle further provides comprehensive representation in the drafting, negotiating and executing of various entertainment-related contracts and licenses, including but not limited to band member agreements, artist management agreements, session player agreements, performance agreements, sound engineer agreements, recording and personal services agreements, publishing agreements and licensing agreements. As a former artist manager, she has implemented many facets of national and regional tours, assembled benefit and charity concerts, communicated with various industry personnel, facilitated radio and internet publicity campaigns, arranged radio, print and internet interviews, and assisted in the development of press kits and websites promoting local talent. Michelle has also guest lectured on entertainment and intellectual property-related topics at The John Marshall Law School, DePaul University College of Law, Chicago-Kent College of Law and Azusa Pacific University (CA), as well as served as a panelist on various other entertainment-related continuing legal education courses. Michelle is an author and editor of the Litigation and Industry Updates Column of the ABA’s Entertainment & Sports Lawyers Journal and has also had numerous articles published by the Chicago Music Guide.
In addition, Michelle serves as Chair of Swanson Martin & Bell, LLP’s Community Service/Pro Bono Committee and proudly volunteers her time as President of the Associate Board and as a pro bono attorney to Lawyers for the Creative Arts, a non-profit organization that provides free legal services to eligible clients in all areas of the arts. She also currently serves as Events Chair for the Chicago Chapter of Women in Music, a non-for-profit organization dedicated to fostering equality in the music industry through the support and advancement of women. She recently served as Chair of the Young Lawyers Division for the Illinois Association of Defense Trial Counsel, where she was recognized as the Rising Star recipient and received a Meritorious Service Award and President’s Commendation.
DISCLAIMER: The information contained in these articles constitutes general information and guidance and shall not be construed as legal advice applicable to or provided for any particular person or entity, and shall not be deemed to create an attorney-client relationship between Ms. Wahl and anyone who elects to read and/or rely, to any extent, on the material provided herein. In that respect, Ms. Wahl hereby expressly and specifically disclaims any such legal relationship, but encourages any person or entity seeking a legal advocate pertaining to the issues addressed and discussed herein to contact her directly for further information. Ms. Wahl may be reached at Swanson, Martin & Bell, LLP (330 N. Wabash, Suite 3300, Chicago, IL 60611 or via telephone at her direct line: (312) 222-8585 or e-mail at: email@example.com.