BY:Michael I. Rudell and Neil J. Rosini
Originally published in the Entertainment Law column in the New York Law Journal on February 2, 2018.
Nostalgia-soaked fans who crave to hear performances of silver-maned musicians on tour or on public television during pledge week prove that the names of at least some 50-year-old bands still have value. But while the popularity of a band’s name might endure, the original performers might not. Over the decades some die, leave to pursue solo careers, or simply find something else to do. Substitutes for original band members in still-popular groups often perform as members for as long or longer than the founders.
When a band name retains its value notwithstanding changes in band personnel, a recurring legal question arises: Who among the band members retains the right to continue performing under the name of the original band? The question has particular significance for founding members who might feel a stronger entitlement than those who came after. The answer to that question depends on details such as when band members came and left and whether or not the band had an agreement (preferably written) that addressed ownership and use of the group’s name in anticipation of those comings and goings.
The Grammy-Award winning blues, funk and soul band known as “The Commodores,” was formed 50 years ago. During the 1970s, it released over 40 albums and numerous hits including “Three Times a Lady,” “Easy,” “Brick House,” and “Too Hot ta Trot.” A dispute arose when one founding member, Thomas McClary, began using the name in 2013 to describe his then-current band while two other “original” members continued to perform as “The Commodores” with other musicians. Last month, the Court of Appeals for the Eleventh Circuit resolved the dispute against McClary in a 50-page decision. (Commodores Entertainment Corp. v. Thomas McClary, Fifth Avenue Entertainment, No. 16-15794, Jan. 9, 2018.) The result hinged on “two independent but mutually reinforcing reasons”: Common law trademark rights belonged to the evolving group that continually performed as “The Commodores” and several contractual agreements through the years contemplated joint but not several ownership of the group’s marks.
For bands that never sign a written agreement that governs ownership and control of their group name, the court’s analysis of common-law rights is elucidating: Original band members who stay with the band hold the rights, to the exclusion of a departing member even though he originally co-owned them. For bands that follow their lawyers’ advice and address that ownership in a signed writing, the decision highlights one way to go about it.
The Band’s History
McClary co-founded “The Commodores” in 1968 along with Lionel Richie and six other members. By the end of 1969, three members had departed and two were replaced, leaving six members who were referenced by the court as “original members.” They and their manager entered into a general partnership agreement in 1978 that provided “Upon the death or withdrawal of less than a majority of the Partners, the remaining majority of the Partners shall continue to have the right to use the name THE COMMODORES for any purpose.” Also that year, the plaintiff Commodores Entertainment Corporation (CEC) was formed, which in 1979 entered into an agreement with Motown Record Corporation. Like the partnership agreement, it provided that if a member withdrew, he would not have the right to make individual use of the name. Instead, remaining members automatically would own the name “jointly and not severally”.
After Lionel Richie left the group to pursue a solo career in 1982, CEC and Motown entered into a new agreement in which CEC again represented that no member who “separated from or ceased to perform with” the remaining members of the band, would have the right to make any separate use of the name. About the same time, a band member died and the remaining members again amended the group’s partnership agreement to provide that upon the death or withdrawal of less than a majority of the partners, the remaining majority would own the name. Years later, the only two original members who remained with the group transferred their common-law trademark rights in the name and logo to CEC.
In 1984, McClary also “split from the band” to find his own way “in the world of music.” He released two solo albums and formed his own recording label, but for 25 years, he did not perform with “The Commodores.” In 2009, he did appear in a show at the Superdome with Lionel Richie and another former band member, which McClary’s wife advertised as a “Commodores reunion.” And the following year, he was asked to fill in with “The Commodores” as a guitar player several times. He also hosted a “listening session” in which he and other original group members attempted to develop new songs together, but none was released.
In 2013, real trouble began when McClary formed a group called “Commodores Featuring Thomas McClary” and began performing under that name and “The 2014 Commodores.” The manager of the two remaining original “Commodores” contacted the director of a venue that booked the McClary group and learned that he thought he was getting the “Grammy Award-winning Commodores – not a tribute or cover band featuring a former member.” McClary’s wife wrote to CEC that McClary’s band name constituted fair use and demanded that CEC cease and desist from contacting anyone thinking about booking McClary’s band. In 2014, CEC obtained a preliminary injunction against McClary’s uses that was upheld on appeal. And at a trial that began in July, 2016, CEC was awarded judgment as a matter of law on the question of mark ownership. McClary appealed again, resulting in the January, 2018 decision against him.
The appellate court asked whether “The Commodores” mark can be used by McClary as a founding member while performing individually. It answered in the negative, holding that the common-law trademark rights in the name were “initially jointly owned, could not be divided for simultaneous use by multiple independent parties, and remained in the group continually known as ‘The Commodores.’”
The court began with the principle that common-law rights to a mark are “initially acquired through priority of appropriation” including “use of the mark in commerce,” as opposed to registration. (Although CEC eventually obtained a federal registration of the mark—which McClary unsuccessfully challenged—it had no impact on whether CEC or McClary owned a common-law mark independently of the registration.) Priority is established by adoption and then use in “a way sufficiently public” to identify goods or services “in an appropriate segment of the public mind as those of the adopter of the mark,” quoting an earlier decision from the same Circuit.
In this instance, those criteria were satisfied by the original group—including McClary—when it adopted “The Commodores” “around 1969. By performing under the name and releasing “many records (including hits),” the group achieved the requisite level of public association of the mark with the group. McClary argued that members, like himself, who left the group, maintained common-law rights to use the name. But with supportive precedent from the Ninth Circuit, the panel determined otherwise: when McClary left the group, ownership of the marks “remained in, and could not be divided from the group,” which continued to control what the group did in connection with the mark. That control included deciding where and when the group would perform, the songs to be sung, costumes to be worn and production details. Two original members who remained with the group maintained that control and retained common-law rights to the mark.
Even though McClary performed with “The Commodores” several times in 2010 and hosted those “listening sessions” with “some hope of a possible reunion or collaboration,” he was not invited to rejoin the group. And even if he did rejoin, he still wouldn’t be able to use the group’s name while performing separately. The case was distinguished from others in which there was an issue as to who originally appropriated the mark; here, the group originally appropriated the mark and, with two original members still included, continued to use the mark. Further, those two original members continued to exert “complete control” over that use “to the exclusion of others, in particular McClary.” Nor was there any question that those two other original members assigned their rights to CEC.
The court’s second and “mutually reinforcing” reason favoring CEC was that “the various contractual agreements executed by the parties confirm the group members contemplated that the works were to be jointly but not severally owned and, in addition, that a member leaving the group would cease using the group’s name as an identifier.”
This didn’t mean that McClary couldn’t identify himself as an original member of the group in a “historically accurate” way; but he couldn’t use group’s name to “identify himself in commerce”. In particular, he was barred in the United States and abroad from using names like “The Commodores featuring Thomas McClary” and “The 2014 Commodores,” which would sow confusion with the group that continually performed as “The Commodores.”