Bring Down the Walls: Heard v. Trax Records and the Fight to Protect Artists’ Rights

In May 2022, after two years of litigation, legendary dance music artists Larry Heard and Robert Owens reached a settlement with the notorious record label Trax Records that allowed Heard and Owens to reclaim ownership rights over many of their 1980s house music recordings.[1]  This settlement agreement marks a substantial legal, financial, and culturally significant victory for the two artists who, for decades following a predatory record agreement, lost their rights to own, control, and profit off of their creative works.  While worthy of celebration, this victory ultimately represents an outlier outcome amidst an all-too-common music industry problem with no easy solutions.

Heard, Owens, and Trax Records’ Allegations and Settlement Agreement

Widely regarded as pioneers of house music, Heard and Owens co-wrote and recorded many of the genre’s seminal tracks, including “Can You Feel It,” “Never No More Lonely,” “Mystery of Love,” and “Bring Down the Walls.”[2]  The two artists, both Black and now in their early sixties, emerged out of the burgeoning house music scene in Chicago in the mid-1980s.  As the disco mania of the 1970s dwindled due largely to racist backlash, a generation of young, Black artists mutated disco’s propulsive, four-on-the-floor rhythms, and hedonistic ethos into a new, electronic sound produced entirely on drum machines and synthesizers.  Record labels quickly sprang up around Chicago seeking to capitalize on the music’s growing popularity.  Trax Records established itself as one of the central labels, signing many of the scene’s rising stars, including Heard and Owens, and releasing house music’s earliest hit records.[3]  

Founded in 1984 by Lawrence Sherman, Trax Records developed a reputation for allegedly refusing to pay artist royalties and using “dodgy contracts and dirty tactics to falsely maintain ownership of musical copyright.”[4]  In 2020, Heard and Owens sued Trax Records and others, arguing that the label “would have music artists and songwriters ‘sign away their copyrights to their musical works for paltry amounts of money up front and promises of continued royalties through the life of the copyrights.’”[5]  The lawsuit, Heard v. Trax Records, Inc., included numerous counts of direct and contributory copyright infringement, breach of contract, and unjust enrichment related to several of the tracks Heard and Owens wrote, recorded, and released with Trax Records.[6]

Copyrights define and protect ownership rights for “sound recordings,” “musical works,” and “any accompanying words.”[7]  Music recordings embody two discrete, protected copyrights: the sound recording, or “master”, which is what you hear when you stream a song on Spotify, and the musical composition, like the written-out sheet music notation of a song.[8]  Copyright ownership guarantees certain exclusive rights to the author including the right to publicly perform, reproduce, distribute copies, and prepare derivative works based on the copyrighted work (i.e., a remix).[9]  Ownership of musical copyrights can be re-assigned, licensed, and defined by contract.[10]

In the Heard case, Heard and Owens argued that they recorded and composed the tracks in question but never “received a single accounting or payment from Defendants for monies derived from their musical works” that now add up to “millions of dollars in income” since 1986.[11]  They alleged that Trax Records fraudulently claimed complete copyright ownership of four of the recordings, “sold, distributed, or exploited” the recordings and the compositions “many times over to licensees throughout the world,” and permitted material preparations of derivative works of the original records without Heard’s and Owens’s knowledge or permission.[12]  Further complicating these claims, both parties argued that they owned official copyright registrations for the same compositions and recordings.[13]  Defendants also pointed to copyright assignment agreements that purportedly granted ownership interests to Trax Records.[14] 

Defendants moved to dismiss the case for failure to state a claim, which the district court ultimately granted in part and dismissed in part.[15]  In its ruling, the court did not definitively weigh in on the merits of the copyright infringement allegations or many of the other claims.  Instead, the parties reached a settlement agreement granting Heard and Owens complete ownership of the musical composition and sound recording copyrights for all of their music.[16]  According to Heard’s lawyer, “after two years of litigation, Trax could not provide any material proof of copyright ownership and ‘the parties amicably resolved their disputes.’”[17]

In practice, this decision means Heard and Owens can now re-release their music independently, issue synchronization licenses for the music to appear in commercials and films, profit from streams of their tracks, and generally maintain creative control over their most celebrated works.  Unfortunately, Heard and Owens will likely never receive any royalty payments rightfully owed to them by Trax because, after decades of mismanagement, the nearly bankrupt record label likely lacks the funds to pay out any of the money owed.[18]  

The Ongoing Dilemma: A Myriad of Obstacles, and Potential Solutions

The Heard case offers a redemptive story and a much-deserved victory for two men who arguably “changed dance music forever.”[19]  However, this case represents a rare win amidst an ongoing predicament with no easy solution.  Contractual exploitation of artists by record labels—especially the exploitation of Black artists by White-owned labels—dates back to the beginnings of the music industry.[20]  Countless other artists, including other Trax Records artists, continue to fight to reclaim rights and monies deprived by similarly rapacious record deals.[21]  Even pop stars like Taylor Swift find themselves unable to collect money or claim ownership rights due to predatory record contracts entered into as young adults.[22]

For artists caught in these deals, the remedial channels seem limited and often inaccessible.  Litigation provides one way to fight back, but lawsuits and lawyers can be prohibitively expensive, especially for young, rising artists.  Heard and Owens received crucial financial support from TAP Publishing, a major management and publishing company that represents huge pop stars including Dua Lipa.[23]  Alternatively, another Trax recording artist facing the same dilemma resorted to online crowd funding in an effort to compensate himself for thirty-four years of unpaid royalties.[24]  Whereas Trax seemingly lacked the resources to continue fighting the case in court, major record companies can almost certainly afford to fight multiple lawsuits through drawn-out appeals processes.[25]

Additionally, potential plaintiffs may struggle to bring and prove applicable legal claims.  Federal copyright law recognizes a three-year statute of limitations for infringement claims, so timing alone may nullify many cases.[26]  In hindsight, it is easy to see that these record labels acted in a predatory and unfair manner, subjecting young artists to lopsided record deals that deprived them of deserved rights.  However, contract claims like overreaching and duress—that could allow artists to invalidate these record agreements—would almost certainly fail given that these artists often willingly and enthusiastically entered into these deals.

Short term solutions seem few and far between but hardly unachievable.  Companies like TAP offer their support to artists facing similar situations.[27]  However, such magnanimous acts may be rare, and it feels naïve to suggest that richer music companies will regularly rise up to defend artists in this way.  As a potential solution, lawyers could offer discounted rates to younger artists navigating their first record deals.  Artists could likely avoid many of these issues with a mere hour’s review of a contract and a meeting to explain the terms of the agreement.  Larger law firms could even schedule windows where they provide such services pro bono.  Additionally, companies, institutions, and artists with disposable resources could contribute to legal defense funds and legal aid groups that could help support artists facing or pursuing possible litigation.

Education may provide the best long-term solution.  Many young artists do not even know that their work embodies two distinct copyrights that each generate multiple potential sources of revenue and separate ownership possibilities.  To this end, seasoned celebrity artists could use their platforms to speak up about essential music industry legal concepts and contractual terms.  Additionally, local venues, music publications, music camps, and schools could offer workshops and seminars exploring these issues and concepts.  

Ultimately, even if the Heard case represents an outlier victory, it still shines an important light on a recurring problem.  Hopefully, Heard and Owens’ success leads to the kinds of widespread solutions and educational opportunities that will allow young artists to avoid similar predatory agreements.  

[1] Lauren Martin, ‘It Gives Me Peace’: House Legends Larry Heard and Roberts Owens on Winning Their Trax Legal Battle, The Guardian (Aug. 25, 2022, 11:06 AM), https://www.theguardian.com/music/2022/aug/25/ihouse-legends-larry-heard-robert-owens-trax-legal-battle-copyright.

[2] Id.

[3] Id.

[4] Id.

[5] Heard v. Trax Recs., Inc., No. 20-CV-03678, 2021 WL 3077668, at *1 (N.D. Ill. July 21, 2021).

[6] Id.

[7] 17 U.S.C. § 102(a)(2).

[8] Id.

[9] 17 U.S.C. § 106

[10] Donald S. Passman, All You Need to Know About the Music Business 305-328 (10th ed. 2019).

[11] Heard v. Trax Recs., Inc., No. 20-CV-03678, 2021 WL 3077668, at *2 (N.D. Ill. July 21, 2021).

[12] Id.

[13] Id.

[14] Id.

[15] Id. at *4.

[16] Martin, supra note 1.

[17] Id.

[18] Id.

[19] Louis Anderson-Rich, Justin Listen: Larry Heard Is the Deep House Pioneer Who Changed Dance Music Forever, Mixmag (Aug. 1, 2017), https://mixmag.net/feature/humble-hero-house-pioneer-larry-heard-is-the-house-pioneer-best-left-unsolved.

[20] Martin, supra note 1.

[21] Lazlo Rugoff, New Campaign Launched to Cover Adonis’ Unpaid Royalties from Trax Records Releases, The Vinyl Factory (June 8, 2020), https://thevinylfactory.com/news/adonis-missing-royalties-trax-records-campaign/.

[22] Rhea Rao, Explained: Why Taylor Swift Is Re-Recording Her Studio Albums, and What It Says About Copyright Battles with Mega Music Labels,Firstpost (Nov. 16, 2020, 8:33 AM), https://www.firstpost.com/entertainment/explained-why-taylor-swift-is-re-recording-her-studio-albums-and-what-it-says-about-copyright-battles-with-mega-music-labels-10138211.html.

[23] Martin, supra note 1.

[24] Rugoff, supra note 21.

[25] Martin, supra note 1.

[26] 17 U.S.C. § 507(b).

[27] Martin, supra note 1.