The US Ninth Circuit Appeals Court has overturned a ruling in a royalties dispute between former members of Supertramp. Last year a lower court ruled that band member Roger Hodgson was within his rights to stop sharing publishing royalties with his former bandmates, bringing to an end a 1970s band agreement. But the appeal judges do not agree.
In the original court case, Judge André Birotte Jr concluded that a 1977 agreement between Hodgson and his bandmates John Helliwell, Robert Siebenberg and Douglas Thomson did not state or imply how long that agreement was intended to run for. As a result, either party had the right to terminate the contract after a “reasonable time”.
But judges in the Ninth Circuit take a different position. Because the agreement related to royalties stemming from the copyrights in Supertramp songs, there was an implied time limit in the contract, because those copyrights will only exist for a finite period.
“At some point in the future”, the appeal judges write, “the copyrights in the works covered by the 1977 agreement will expire and the works will fall into the public domain”. Which means the contract does include an implied deadline. Because when the copyrights expire they “will cease to generate publishing royalties” and at that point “the obligations created by the 1977 agreement will terminate”.
Hodgson co-wrote Supertramp’s songs during the band’s heyday in the 1970s with fellow founder member Rick Davies. However, in the 1977 agreement the two co-writers agreed to share royalties generated by those songs with Helliwell, Siebenberg and Thomson.
Mainly because – at the time – the band’s recording royalties were paying off label advances, meaning the other band members were struggling financially, while Hodgson and Davies earned a living from the separate publishing royalties.
Helliwell, Siebenberg and Thomson received their cut of the song royalties for decades, but then the payments stopped in 2018. They sued both Hodgson and Davies in 2021, though Davies subsequently reached an out-of-court settlement.
However, Hodgson and his company Delicate Music insisted that they could unilaterally cancel the 1977 agreement if they so wished, and therefore allowed the dispute to proceed to court.
The Ninth Circuit judges confirm in their new ruling that, under Californian law, if a contract does not state or imply how long an agreement is binding for, then the courts should assume that the agreement is in force for “a reasonable time”.
In the lower court, Judge Birotte Jr asked the jury if the 41 years that the Supertramp agreement ran for before Hodgson stopped the royalty payments was “reasonable”, and they decided that it was.
However, because – as far as the appeal judges are concerned – the 1977 agreement did imply a time limit, ie when the copyrights expire, the “reasonable time” aspect is irrelevant. Which means Hodgson could not unilaterally stop sharing his publishing royalties in 2018.
Therefore, the appeals judges write, “we conclude that defendants have a continuing obligation to share songwriting and publishing royalties” with the other band members “in accordance with the percentage allocations set forth in the 1977 agreement, so long as such royalties continue to exist”.
