Some of the most successful recent Broadway shows have been “jukebox” musicals. You know, shows that consist of taking a well-known recording artist’s hits and then staging them with a strung-together story. Think Jersey Boys, Motown: The Musical and Beatiful:The Carole King Musical. Shows like these are popular with producers because of the perceived minimized risk in promoting known musical quantities with a built-in audience.

However, producing such shows are not without risk, particularly when it appears that somebody may have either forgotten or conveniently ignored the distinction between copyright in a sound recording and copyright in the underlying song that’s embodied in the sound recording. I’ve previously written about these two separate copyrights in the synch licensing context:

To use pre-recorded music in an audio-visual work, whether it’s a feature film, TV show, video game or a video on a web site, like YouTube, you need the permission of both the copyright owner of the recording (typically a record label) and the permission of the copyright owner(s) of the underlying song that’s embodied in the recording (typically one or more music publishers).  Why? Because the Copyright Act says so.  The permission that you need is called a “synchronization” license – as you’re synchronizing music to picture – or a synch, for short.

So, for example, if you wanted to put the classic Otis Redding recording of (Sittin’ on the) Dock of the Bay in your next feature film, you’d need to get the permission both from the copyright owner of the song (Irving Music) and the permission of the record label (Stax). However, if you simply want to cover the song (as many artists, such as Sara Bareilles, have done), either live or on a recording, you only need the permission of the publisher, here obtained through BMI for a live gig or through Harry Fox to release a cover record.

This brings us to Evergreen Media Holdings, LLC v. Wood Creek Capital Management, LLC, a lawsuit that was recently filed in federal district court in Connecticut. This action involves competing plans to create a jukebox musical from megahits recorded on the legendary Stax label, such as songs written and recorded by Otis Redding and Isaac Hayes. The plaintiffs allege that they have obtained exclusive rights to create a stage show of songs recorded on Stax from the music publisher, Rondor Music, which controls the copyrights to the songs.

Defendants are alleged to have made a deal for both a live stage show and a film musical with Concord, which apparently owns the rights to many of the master recordings originally released on Stax – but not with Rondor. Defendants issued a press release touting their upcoming project and plaintiffs were naturally none too pleased by this.

Although the right to use copyrighted works are at the core of the dispute, the lawsuit is not a copyright infringement action as no theatrical production has yet been created or produced. Rather, the complaint alleges tortious interference by defendants, violations of the Connecticut Unfair Trade Practices Act and seeks a declaratory judgment that plaintffs have the sole right to create a Stax musical .

Taking the complaint at face value, it appears that with respect to the creation and performance of a live show, plaintiffs have obtained the rights to the songs (but not to any recordings of the songs) while defendants have permission to use the recordings but not the songs embodied in them. The creation of a book musical requires that the producers obtain so called “grand” or dramatic public performing rights to the songs. Such dramatic rights are controlled and licensed directly by the copyright owners of the songs (music publishers) and not through ASCAP, BMI or SESAC, which license only “small” or non-dramatic public performing rights. Small rights licensing by performing rights organizations include performing songs in concert or by way of broadcast or internet transmission. No permission from the record label is needed.

So, it would appear that plaintiffs have a pretty strong case as it looks like they have the necessary rights to put on a show and defendants don’t. However, defendants would not be without their own bargaining chips. Concord may well control the right to use the Stax name and logo and plaintiffs would be hard-pressed to market their musical without reference to the label. It’ll be interesting see if these parties can ultimately reach a harmonious accord.