What Ren and modern music teach us about IP warranties in contracts

Intellectual property (IP) warranties – often considered a minor detail in licensing transactions – can have significant repercussions down the track.

On 5 September 2024, Eren Gill, a Welsh musician known professionally as Ren, released the diss track ‘Kujo Beat Down’, directed at music producer KujoBeats. The track highlights the value of (and issues with) contractual IP warranties and the ensuing problems that can arise from them.

The release of ‘Kujo Beat Down’ followed protracted negotiations between Ren and KujoBeats over the song ‘Sick Boi’, the title track of Ren’s critically acclaimed 2023, which includes a sample – ‘Yaga’ – produced by KujoBeats.

Ren had explained (via an earlier YouTube upload) that:

• Some years earlier he purchased an ‘unlimited-use’ licence to the Yaga sample for $99 using the music licensing platform Beat Stars;
• Under the terms of the Beat Stars licence, KujoBeats warranted that Yaga was an original work and did not infringe third party rights;
• Notwithstanding the warranty, Yaga included a sample of ‘Bre Petrunko’, a song released by the ‘Koutev Bulgarian National Ensemble’; and
• When Ren was notified of an issue by the Koutev Bulgarian National Ensemble, his lawyers wrote to KujoBeats.

Given the above history, I expect the initial correspondence to KujoBeats went to the tune of, ‘you warranted the sample was original, any problem with the sample is your problem to fix.’

From there a dispute arose that grew beyond the initial copyright issue with the Koutev Bulgarian National Ensemble, and the purpose of this article. However, some insights can be gleaned even from the above circumstances:

• When KujoBeats offered an unlimited licence to the Yaga sample for $99, he likely did not anticipate that it might be used on the title track of a fairly successful album;
• As such, KujoBeats may not have thought much about providing a warranty that the sample was original;
• Without knowing KujoBeats’ financial circumstances, he may not have been in a position to make good on his warranty were any song including the Yaga sample to ‘blow up’; and
• Perhaps most importantly, if KujoBeats were not in a financial position to make good on the warranty he provided, it could become as much an issue for any licensee (such as Ren) as for Kujobeats.

While this case – as with the track – highlights the complexities involved in licensing and IP rights in the music industry, there are broader learnings that can be applied in all fields involving IP.

In any transaction involving IP, obtaining IP warranties from the relevant party is of course advisable. But where possible it also cannot hurt to conduct some level of due diligence and verification of the truth behind the relevant warranties. For example, if a party warrants that they are the owner of certain IP, some due diligence into why they say they are the owner might be a good idea.

This is particularly true where the other party may not be in a position to make good on an IP warranty it provided if things go wrong.

While giving a particular warranty may seem like no big deal at the time, in matters involving a transfer or license to IP can occasionally become bigger than anyone envisaged. That is, even where you buy the rights to a music beat for US$99, you never know how big you (or the song you create from the beat) might later become and to use another music line “mo’ money” can often lead to “mo’ problems”.

Understanding IP warranties helps in negotiating contracts that protect both parties’ rights, ensuring businesses can use creative content without legal risk. For instance, for companies that rely on unique branding, product designs, and marketing materials, having solid IP warranties in contracts ensures they are protected from infringement claims and can maintain exclusive rights to their creations.

Another point is to say that many transactions involve IP and IP warranties, which can at the time seem a side issue covered by cookie cutter clauses. This can be for the supply of products, software, art, and any number of services such as collabs with designers, or influencers to enhance brand appeal.

Retail businesses should take care to specify ownership rights, usage restrictions, and potential IP-related liabilities in contracts. FAL can assist in managing issues, even where the transaction seems simple enough at the time.

Rhys Munzel is Partner with FAL Lawyers.