IP Holding Companies Will Tear Us Apart

I'm not sure it's love that's tearing these blokes apart.

Peter Hook has sued ex-bandmates Bernard Sumner and Stephen Morris, saying that Sumner and Morris have improperly cut him out of his rightful share of New Order revenues. Hook hasn't played with New Order since 2007, but he remains a shareholder in Vitalturn Company Ltd., the IP holding company that the three formed after New Order's label, Factory Records, filed for bankruptcy in 1992.

According to Hook, Sumner and Morris secretly formed a new company without his knowledge in 2011, and then improperly transferred all of New Order's trademark rights to said new company. For their part, Sumner and Morris contend that since they still perform as New Order, the trademark rights appropriately reside with the new incarnation of the band, not Hook, and they point out that Hook is still receiving everything he is due from New Order back catalog royalties.

This is a sticky one. Is an ex-band member entitled to a cut of the live-performance profits, when the ex-member hasn't plucked a string for the band in nearly a decade? What if the new New Order decides to launch a licensing campaign, a la the Misfits, putting the New Order name on all sorts of merch? Does Hook get a cut of those trademark royalties?

Given that there is no default rule under the law, the costs to fight the case will be considerable for both sides. As such the court is strongly encouraging the parties to work it out amongst themselves -- in other words: come to some sort of business compromise mates.

New Order, of course, was not Hook, Morris, and Sumner's first band. In the late 70s the three founded the now-apotheosized Joy Division, whose lifespan as a band was cut tragically short by the suicide of frontman Ian Curtis at the age of 23.

You can read more about the current lawsuit here and here.