No Royalties are Owed to “The Bare Necessities” Composer in Lawsuit Against Disney Due to Express Language Used in Contract Agreements

Gilkyson v. Disney Enterprises, Inc.

Calif. Appeal Court, 2nd App. District, Div.7 July 21, 2021?

In 1963, Disney hired songwriter Terry Gilkyson to write songs in preparation of the upcoming release of Disney film “The Jungle Book.” Gilkyson signed single song contracts for each song that was written by him.

Each of the single song contracts classified his written songs as “work made for hire” which meant that legally, Disney would be considered the official author and copyright owner of the songs. In exchange, Disney agreed to pay Gilkyson royalties equal to fifty percent (50%) of the net amount received by its music publisher (Wonderland Music Company, Inc.) for licensing or other disposition of the mechanical reproduction rights?of the songs written by him.

A jury awarded songwriter Terry Gilkyson’s heirs, $350,000 finding that Disney Enterprises, Inc. and Wonderland Music Company, Inc., (collectively Disney) failed to pay contractually required royalties regarding particular limited uses of “The Bare Necessities” and other works written by Gilkyson in DVD, Blu-ray and VHS releases of “The Jungle Book.” In addition to the jury’s reward, the trial court awarded Gilkyson’s heirs an additional $699,316.40.

Disney appealed contending that their contract with Gilkyson left him entitled to fifty percent (50%) of net sums received by Wonderland for exploitation of the mechanical rights to the material Gilkyson composed. However, according to Disney, these profits were not received for the home entertainment releases of The Jungle Book after July 2009.

In agreement with Disney, the Court of Appeal found that the interpretation of the contracts between Gilkyson and Disney was subject to De Novo review. The Court reasoned that Gilkyson’s royalty rights were dependent on Wonderland receiving payment for?the exploitation of the mechanical reproduction rights for Gilkyson's composed material in “The Jungle Book." In the instant matter, Wonderland did not receive compensation which was justified by the express language in the contract agreements between Disney and Gilkyson.

The express language of the contracts granted Disney sole discretion to decide how to exploit the material, including whether a fee should be charged for Disney’s own use of the material in home entertainment releases.

In other words, the language used in the contracts between Disney and Gilkyson gave Disney the authority to decide how the material would be distributed as well as whether fees would be charged for Disney’s use of the material. In this instance, Wonderland did not charge Disney any fees for use of the songs written by Gilkyson. Essentially, this means that Wonderland did not collect any payment and therefore, according to both the Court of Appeal and Disney’s interpretation of the contract agreements, nothing was owed to Gilkyson or his heirs.

Author’s Note: Before signing any legal agreement ask yourself these three questions :

1. Did I read through this agreement thoroughly ?
2. Do I understand the language in the agreement ?
3. Do I fully understand the terms of the agreement and what each party is entitled to under the agreement ?

If you don’t know the answers to these questions, obtaining legal representation is a smart option.?In this instance, the contracts signed are 58 years old and as the Court mentioned, there is currently no principle in California law that justifies disregarding the parties' objective manifestation of their intent as expressed in the language of the contract.?It will be interesting to see how the precedent evolves surrounding the issue of interpreting well aged agreements pertaining to Intellectual Property rights.

Shana Dunning is an Intellectual Property attorney who specializes in trademark and copyright law. Connect with her about Intellectual Property matters on LinkedIn.

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