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Lack of Logo Placement At Center of Ruling Over Meat Loaf Album Packaging

By Stan Soocher
To build visibility for its brand, a record label or production company will want its logo included on products containing its master recordings manufactured and distributed by third parties. This will be addressed in the agreement between the label or production company and manufacturer/distributor. The failure to include the logo may raise a host of issues, from the breadth of the logo-placement obligation ' such as whether it includes Internet downloads ' to the proper theory on which to base any damages and just which album-sales figures are subject to evidentiary discovery. A recent ruling by the U.S. Court of Appeals for the Sixth Circuit ' in a long-running dispute between Cleveland International Records and Sony Music Entertainment ' illustrated how these issues may be argued and decided. Popovich v. Sony Music Entertainment Inc., 06-3463 (6th Cir. 2007).

Plaintiff Stephen Popovich's company had signed a production deal with CBS Records in 1977. CBS promised to include the logo of Popovich's 'Cleveland International Records' 'with respect to records comprised exclusively of an Artists' performances' distributed in the United States, Canada and seven other countries, 'provided however, that the size of such Mark and the particular area on such label or jacket or advertisement onto which CBS places such Mark shall be determined solely by CBS.' But 'no failure on the part of CBS to comply with its [logo] obligations pursuant to this paragraph 7.05 will constitute a material breach of this agreement,' the production contract stated. Instead, if the logo wasn't included, Popovich's relief was limited to CBS 'rectify[ing] the error in all such materials prepared after its written receipt of written notice thereof from [Popovich].' Popovich and CBS Records renewed this agreement several times.

In 1977, CBS's Epic Records released 'Bat Out of Hell,' the debut album by Cleveland International artist Meat Loaf that has sold over 30 million copies. CBS subsequently released three more Meat Loaf recordings, including a greatest-hits package. Popovich's company sued Sony Music in 1995, alleging underpayment of royalties. In 1998, the parties entered into a settlement agreement that included the following clause:

'Sony Music will continue to place the Cleveland logo (in the design currently used on the tape configuration of 'Bat Out of Hell') on albums, CDs, cassettes, and all other forms and configurations of master recordings embodied on the [Meat Loaf] albums entitled 'Bat Out of Hell,' 'Dead Ringer,' 'Midnight at the Lost and Found,' 'Hits Out of Hell' and will add such logo to all forms and configurations on which it does not presently appear (including CDs) manufactured by Sony Music after September 1, 1998, provided, however, that Sony Music shall reasonably determine the size and location of such logo.'

Popovich and Sony Music otherwise ratified the original terms of the 1977 agreement. Then in 2002, Popovich sued again, later claiming in court documents that 'Sony omitted the Cleveland Logo on more than 10 million CDs between September 1, 1998 and March 8, 2005 (the date its last discovery responses were certified). This included 32 separate releases of Bat Out of Hell, 22 releases of Dead Ringer, Midnight at the Lost and Found, Hits Out of Hell and other Meatloaf albums, and literally hundreds of other compilation albums (that themselves sold millions of copies).' Popovich also insisted the 1998 logo clause included Internet download-purchase sites.

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