The Beat Goes On – and So Do the Royalty Payments

Stephen Carlisle June 7, 2024

The late Sonny Bono now adds his name to another chapter of copyright law. The first, of course, was the Sonny Bono Copyright Term Extension Act, ¹ which extended copyright protections for an additional 20 years. Now, his name gets attached to a very novel copyright fight: can the copyright termination provisions of Section 304 trump the terms and conditions of a State marital property settlement agreement?

The facts of the case are simple and largely not in dispute. Sonny Bono was half of the very popular 1960’s musical group “Sonny and Cher,” ² who in the 1970’s had their own TV Variety Show. ³ After their divorce, Cher became the far more popular and successful of the duo and is better known to modern audiences than Sonny. Indeed, Cher is so popular that she is now legally known only as “Cher” as the headings to this case indicate. ⁴ Sonny went into politics before dying in a skiing accident in 1998. ⁵ The epitaph on his gravestone is “And the Beat Goes On,” a nod to Sonny and Cher’s 1967 hit single “The Beat Goes On.” ⁶

As a result of their 1978 divorce, Sonny agreed that Cher would continue to receive “an undivided 50% interest” in the continuing royalties derived from sales and performances of their songs, less an administrative fee. ⁷ In 2016, Sonny’s widow Mary Bono served termination notices under section 304(c) of the Copyright Act to reclaim ownership of Sonny copyrights on “various music publishers to which Sonny had granted a transfer or license of copyright in musical compositions that had authored or co-authored.” ⁸ When the termination notices took effect, Mary stopped paying the royalties to Cher and in 2021 informed her that she no longer was entitled to any further royalties under the Marital Settlement agreement. ⁹

Cher sued in 2021 for declaratory judgement that “the notice of termination does not affect her royalty rights or approval rights under the [Marital Settlement Agreement].” ¹⁰ Both sides moved for summary judgement. On May 29, 2024, the District Judge sided with Cher, ruling that the MSA entitled Cher to a royalty stream, not necessarily an ownership interest in the copyrights themselves to which Section 304(c) termination would apply.

“Consequently, Plaintiff’s rights under the MSA are linked to the musical compositions and Sonny’s corresponding property interests. Because in granting the royalty and approval rights at issue, the MSA did not refer to a “grant of a transfer or license” of the underlying copyrights, Plaintiff’s rights under the MSA arise solely under state law. Further, because section 304(c) expressly provides that it “in no way affects rights arising under any other Federal, State, or foreign laws” (Citation Omitted) the Notice of Termination cannot affect Plaintiff’s contractual right to receive financial compensation in exchange for the release and permanent discharge of any and all claims arising out of her marital relationship with Sonny.

Notwithstanding the plain language of the MSA, Defendant argues that, under 17 U.S.C. § 304(c)(5), “[t]ermination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant,” and the MSA constitutes such an “agreement to the contrary.” (citation omitted) However, the only rights that are terminable under section 304(c) are copyright grants. (citation omitted). Therefore, an “agreement to the contrary” under section 304(c)(5) is only a “contractual device that purports to divest” authors and successors of the right to “terminate copyright assignments.” (citation omitted) Because the MSA does not refer to the underlying copyrights, it did not affect the ability of Sonny’s heirs to terminate the copyrights. Therefore, it is not an “agreement to the contrary.” ¹¹

In rendering this decision, the Judge has side-stepped one of the more thorny issues of copyright law: marital community property.

Under the laws of States that recognize “community property,” all assets acquired during the marriage belong equally to the parties to the marriage. This would include all copyrights to works created by one of the spouses during the marriage. So here, absent an agreement, Cher would be a 50% owner of all of Sonny’s copyrights due to the laws of community property. What the MSA agreement did was merely formalize this into an agreement where Sonny would keep 100% of the ownership of the copyrights, subject to Cher’s right to receive 50% of all future income.

If the Judge were to side with Mary Bono, it would mean that parties to a divorce proceeding could agree to a similar arrangement, only to have one party renege on that agreement years later, using the Copyright Act termination provisions of section 304.

“The MSA … assigned to Plaintiff a right to the “contingent receipts … from musical compositions and interests therein” in exchange for the release of “any and all claims … arising out of the marital status of the parties.” (citation omitted) Consequently, the conclusion “that an author-spouse in whom a copyright vests maintains exclusive managerial control of the copyright but that the economic benefits of the copyrighted work belong to the community while it exists and to the former spouses in indivision thereafter … is consistent with both federal copyright law and [California] community property law and is reconcilable under both.” ¹²

So, the beat goes on – and so do the royalty payments.