Disney Reverses Defeat in Lengthy “Jungle Book” Dispute Over Royalties
Steven T. Lowe
On July 7, 2021, the California Court of Appeals for the Second District ruled that Disney does not owe royalties to the adult children and heirs of the songwriter behind “The Bare Necessities,” a song featured in “The Jungle Book.” This decision overruled a lower court’s award of over $1 million in damages.
The 1963 contract between Gilkyson and Disney underlying the dispute classified the songwriter’s work as “work-made-for-hire” which means that legally, Disney would be considered the author and copyright owner of the song. In exchange, Disney agreed to pay the songwriter (Gilkyson) royalties equal to fifty percent (50%) of the net amount received by its music publisher, Wonderland Music Company, Inc. (“Wonderland”) for licensing or other disposition of the song.
In 2013, Gilkyson’s heirs sued Disney alleging Disney had breached its contractual obligation to pay the Gilkyson heirs royalties in connection with the use of Gilkyson’s songs in the release of “The Jungle Book” on digital video formats for home entertainment use.
In 2016, a jury awarded the Gilkysons $350,000 based on its finding that Disney had failed to pay contractually required royalties, and the trial court later tacked on an additional $699,316 for the period following the jury’s verdict through the duration of the song’s copyright.
On appeal, Disney argued that it was entitled to judgment as a matter of law because its agreements with Gilkyson only required royalties in an amount equal to 50% of net sums received by Wonderland and that these revenues were simply not received by Wonderland for the home entertainment releases of “The Jungle Book” after July 2009.
The California’s Second Appellate District said that the 1963 contract did not obligate the media giant to pay royalties when licensing the song to one of its affiliates. Thus, the court held that the media giant wasn’t obligated to pay royalties to writer Gilkyson and his heirs since they did not actually collect such amounts for licensing the rights for home entertainment, including permitting its home entertainment affiliate to use the songs for free.
According to the decision, the interpretation of the contracts between Gilkyson and Disney 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.
California Appellate Judges Dennis M. Perluss, John L. Segal, and Gail Ruderman Feuer sat on the panel for the Second Appellate District.
The Gilkysons are represented by John L. Hunter of Hunter Salcido & Toms and Craig Barker. Disney is represented by Rollin A. Ransom, David R. Carpenter, and Sheri Porath Rockwell of Sidley Austin.
The case is Eliza Gilkyson et al. v. Disney Enterprises Inc. et al., case number B300971, in the Court of Appeal of the State of California, Second Appellate District.
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