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Legal Corner - Ladue News: Business & Wealth

Legal Corner

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Posted: Thursday, March 17, 2011 12:00 am | Updated: 10:44 pm, Tue Aug 9, 2011.

  It’s a typical high school story: A teenager learns to play the guitar and hooks up with some of his or her friends to start a band. Sounds harmless, right?

    Not always, says Jeff Michelman, an attorney at Paule, Camazine & Blumenthal. “I’ve met with many a parent whose progeny wants to be at the Grammys, and I have given the same advice to everybody,” Michelman says, noting that starting a band can create all sorts of legal risks, ranging from liability for accidents to copyright infringement, and those risks are present whether or not the band makes it big. “I don’t want to discourage people, but I believe the clients need to have all the information up front, particularly if it’s a situation where the parent is supporting the child’s interests.”

    The first area of concern is the cost of starting a band, Michelman says. Instruments and other equipment factor in, but costs associated with travel, such as hotel and food costs, can add up quickly if the band starts getting gigs out of town. Unexpected costs include liability for accidents, either on the road or at a venue. “If the child is under 18, the liability for the parents is more acute, but it still attaches if the child is older and in college,” Michelman says. “I urge clients to check the contract with the venue if one exists, or create one if it doesn’t exist.” Parents can sometimes get this liability insurance added to an existing policy if the band is being run out of their home, he says. Bands also can also get touring insurance on their own, and some venues require this step, adds Steven Bronson, who practices law in St. Louis and San Diego.

     Another up-front concern is registering copyrights for songs the band writes, Bronson says. This can be a complex process, as most people have no idea beforehand what is involved and what is actually protected. “I just start going through the steps with the client to get the protection of the law on their side,” he says. Getting a trademark on the band’s name is another important consideration. “There are endless questions that people can ask about the different facets—whether there is a risk it will be mistaken for another product, what you can put on T-shirts and whether you are infringing on someone else’s copyright,” he says. “My answer to these questions usually starts with, ‘It depends.’ ”

    After a band starts booking venues with some regularity, the next step is usually to produce a CD, Michelman says. This creates new areas of concern. “Youngsters have a real good knack at forgetting to pay taxes,” he says. “Kids who make CDs and sell them, either at the venues or out of the back of a truck, often don’t report that income.” If the child is over 18, Michelman notes, this can come back and bite them personally, and the income also could result in the parents losing the ability to claim that child as a dependent.

    In the music business, it’s more likely that a talented songwriter will be able to make a living off their work than a performer, Michelman says. So if one of the band members truly is a talented writer, it’s important to know who owns the songs. “Generally the owner is the creator, so if only one person created the song, they should be the copyright owner. But when you don’t have a written agreement and it becomes valuable, people start to say We played the song and helped get it produced into a record or I gave you a bunch of chords. It’s very hard to document what happened once something becomes valuable.”

    From a legal standpoint, it is much better for artists to determine who owns what in advance, Bronson says. As a practical matter, however, that almost never happens. “A lot of bands don’t want to determine it in advance, they just want to create,” he says.  He recommends speaking with an entertainment lawyer up front, especially as the band starts to generate interest.

    Despite the complications, only about one in 10,000 bands signs a record deal, Michelman says. In addition to being a good case for getting a day job, it’s also a reason to think about what will happen if the band breaks up. “Band breakups are like Hollywood weddings,” he says. “They happen all the time.”

    There have been some positive trends for artists, however, Bronson says. “Now the whole focus has gone to artists and maintaining their rights to the music. Kids can distribute their music all over the world through the Internet. That’s how these songs get on TV and go viral. It’s still a dream for it to happen, but it’s much more realistic than 10 years ago or back when I was in high school.” LN

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