Every breath you take, every pound you make: Lessons from The Police’s royalty dispute

The Police frontman, Sting, is currently embroiled in a music royalties dispute with his former bandmates, Andy Summers and Stewart Copeland. Summers and Copeland claim that they have been underpaid for their contributions to the band's hit songs and are owed millions of pounds in unpaid royalties and arranger's fees, despite not being credited as writers on most of the songs in the band’s back catalogue.

Summers and Copeland claim an oral agreement was made back in 1977 (Oral Agreement) when the band was established, in which the pair would receive a percentage of the income made from songs in which Sting was the chief composer. 

In this article, Megan McCaughey and David Wozniak from our commercial team look at the lessons businesses can learn from this case.

Written agreements are best

Summers and Copeland's claim was based on the fact that they occasionally made ‘crucial contributions’ to the Police's songs, such as the famous guitar riff in ‘Every Breath You Take’. The parties can't agree on the specifics of how the Oral Agreement was formed. Summers claims the agreement was made outside the Police's manager's office in Notting Hill. However, Sting argued that there was no Oral Agreement, and it was a suggestion made by their manager as a way for Sting to ‘keep things sweet’ with his bandmates.

Summers and Copeland contend that the terms of the Oral Agreement were later formalised in a written contract (2016 Agreement), entitling them to 15% of publishing income generated from the music (in the form of an ‘arranger fee’). They also argued that they are entitled to receive ‘performance royalties’ and ‘mechanical royalties’.

Performance royalties are generated when the song is played in public, on the radio or, as is relevant in this case, via a streaming service (such as Spotify or Apple Music). Mechanical royalties, on the other hand, are generated when a song is downloaded or physically sold (such as a CD or vinyl record). However, Sting's case is that the agreement only applies to mechanical royalties and that this does not include income generated from streaming, which he claims is a public performance.

Since the dispute started, Sting is alleged to have paid his former bandmates approximately £595,000 in acknowledgement of some unpaid royalties; however, Summers and Copeland contend that they are still owed between £2 million and £8 million for royalties generated from streaming services. The dispute is now expected to proceed to trial.

So, what lessons can be learned from this case?

1.      Make sure that any agreements are made in writing

The basis for the claimant's claim arises from an oral agreement which dates back almost 50 years. Where a claim stems from an oral agreement, it can be hard to prove that there was an intention by each party to enter into a legally binding agreement. In this case, Sting's position is that no such agreement was made and instead was simply an idea suggested by his manager during a personal conversation, in the absence of his other bandmates. Having a formal written agreement will put you in a stronger position than just relying on a historic conversation.

2.      Ensure the ownership of IP is clearly established and not subject to debate

IP is often among the most valuable assets a business owns. In some cases, it is a business’s most valuable asset, and without clear ownership, a business may not be able to operate effectively (or in some cases, at all). Therefore, if there is any uncertainty about where your company’s IP ownership lies, it is important that you seek legal advice and arrange for the appropriate protections to be put in place. We can help you with this.

3.      Review your contracts regularly to ensure they still work 

It is essential to review your contracts regularly to ensure they remain up to date and continue to work as intended. In this example, the parties’ position on royalties generated from streaming services was never expressly set out and has resulted in costly litigation for all parties. This highlights how important it is to ensure your contracts are still fit for purpose. 

As many of us appreciate, the technological landscape is evolving rapidly. With each new development comes the risk that your existing contracts are no longer fit for purpose, and do not adequately protect your interests or account for new scenarios. 

If you want to understand more about how you can protect your brand's intellectual property, contact Tom Justice using [email protected] or 0191 211 7913.