DION V. ZENIMAX: WILL VALID MUSIC LICENSES EXPERIENCE A NEGATIVE FALLOUT?

(This post was contributed by Kaylee Sauvey, a rising 3L at the Fowler School of Law and intern for Roger Quiles, Esq.)

On July 2, 2017, recording artist Dion DiMucci (“Dion”) sued Zenimax Media, Inc. for failing to obtain his consent before using his song “The Wanderer” in advertisements for Fallout 4, the newest installment in the Fallout video game franchise.  
 
The Complaint acknowledges that a valid contract was executed between the makers of Fallout and Universal Music, who owns the song’s copyright, for the song’s use in advertisements for Fallout 4. Despite this, the following elaborate argument details why Dion believes that he was entitled to personal consultation before the song’s public use.
 
THE ARGUMENT    
Dion authored “The Wanderer” for Laurie Records in 1961, which had adopted AFTRA’s National Code of Fair Practice for Phonograph Recordings (modernly “SAG-AFTRA National Code of Fair Practice for Sound Recordings,” hereinafter “Phono Code”). Dion argues that because of this, he is entitled to benefit from any collective bargaining agreements made under AFTRA; because his music was being used in a commercial advertisement, Dion alleges that the SAG-AFTRA Commercials Contract – formed for the benefit of SAG-AFTRA members to regulate compensation and working conditions on the set of a commercial – applies to him.
 
In the Commercials Contract, there is a provision stating that the producer of a commercial must separately negotiate with a “principal performer” before a photograph or audio recording in which he is featured can be released to the public in a commercial advertisement.
 
The Universal/Zenimax contract guarantees that Dion would be paid at least the minimum amount offered under an applicable collective bargaining agreement, as well as “other economic benefits having a substantially equivalent cost.” These “economic benefits,” he argues, include the ability to be consulted before his songs are used in any public way. Dion alleges that the Commercials Contract “affords the artist the right to control the use of his performance to the same extent as a copyright or trademark owner licensing his intellectual property,” and because the “goodwill attached to a recording artist’s performance is his asset,” this qualifies as an economic benefit covered under the agreement for the song’s use in Fallout 4.
 
MUSIC LAW
In the Dion case, the existence of a valid contract with the record company for the use of “The Wanderer” is procedurally accurate.  Song use requires consent from the artist’s record company and/or publisher – those that hold the copyrights to songs. Obtaining a license for use from the copyright holder is the procedurally correct method of legally using a song.
 
The argument that personal consultation with a recording artist is required goes against the established principles of music law. If an artist had a legal right to object to any use of their music, then the proprietary function of record companies and publishers would cease to exist. This argument – disregarding a valid contract and saying that the Commercials Contract is binding – is unique, but inaccurate.
 
ISSUES WITH COMMERCIALS CONTRACT/PHONO CODE
On its face, the Commercials Contract is not even applicable to a recording artist in Dion’s situation. The Contract is specifically applicable to “principal performers” operating under the jurisdiction of SAG-AFTRA. The multi-part description of “principal performers” in the body of the Contract makes reference to actors and stuntmen of all varieties, but never makes reference to recording artists. In fact, in the Complaint, Dion has included the seemingly-applicable provisions of the Contract, but has replaced the phrase “principal performer” to instead say “Plaintiff.” This certainly appears to be a technique to manipulate the court into believing the provision applies to recording artists, even though, in reality, it does not. 
 
Like the Commercials Contract, the Phono Code does not grant a recording artist permission to control his music, but is instead used to regulate compensation by establishing a royalty rate.

PROBLEMS WITH THIS ARGUMENT
Ultimately, there are many problems with Dion’s argument.
 
First, the argument that the Commercials Contract and the Phono Code overwrite the valid license for the use of “The Wanderer” is unsound because this suggests that the copyrights retained by the record company and publisher are secondary to the moral right vested in a recording artist. If this is true that a recording artist could overwrite valid agreements made to use their music, what purpose would it serve to have another entity hold the copyright to a recording artist’s music? Furthermore, Dion argues that he has the right to control his music “to the same extent as a copyright or trademark owner,” which, by its very nature is absurd, as he has surrendered the rights to his music to other entities that thereafter dictate how the music is used. Ultimately, the end result of this argument is that anyone following the proper procedure and obtaining a valid license for song use could still potentially face litigation by a recording artist.
 
Secondly, the applicability of the Commercials Contract to “principal performers” at no point specifically includes recording artists. However, the Complaint suggests that the relevant provisions of the Contract are applicable to “Plaintiff,” a recording artist, even though the original provision suggests otherwise.
 
Third, the attempt to label personal negotiation with an artist as an “economic benefit” is a creative argument at best. The argument is problematic in the sense that, while true that the “goodwill” attached to an artist’s image is vital, it is not by default an “economic benefit” that would be owed to him under a collective bargaining agreement.
           
Finally, both the Commercials Contract and the Phono Code are procedural agreements created to ensure fair treatment under a union standard. They regulate compensation and working conditions for those covered by SAG-AFTRA. They are not meant to ensure that a recording artist can bypass the rights of a copyright holder with respect to creative content.
 
CONCLUSION
If Dion’s argument is accepted by the court, it has the potential to change the way the world licenses music for videogame and advertisement use, as well as the function of music entities and the rights they hold to a recording artist’s music. It may invalidate otherwise valid licenses and result in a wave of litigation by disgruntled artists seeking to control their music even without possessing a valid copyright to do so. It seems unlikely that the court will accept Dion’s argument, but we will have to wait for a resolution to see what the court holds.