a. What did Klein do wrong?
b. Klein felt he had been unfairly fired by the Beatles. What if he had simply told Bright Tunes information about "My Sweet Lord" out of spite, not to benefit him?
c. Suppose that, during his employment by the Beatles, Klein develops relationships with all the top music industry executives. After he leaves the Beatles, he represents other music groups, negotiating contracts, etc. If it weren't for his relationship with the Beatles, no one would return his phone calls, but now he has a thriving business. Has he violated his fiduciary duty to the Beatles by using information he learned while working for them to represent other groups?
Bright Tunes Music Corp. (Bright Tunes) owned the copyright to the song "He's So Fine." The company sued George Harrison, a Beatle, alleging that the Harrison composition "My Sweet Lord" copied "He's So Fine." At the time the suit was filed, Allen B. Klein handled the business affairs of the Beatles.
Klein (representing Harrison) met with the president of Bright Tunes to discuss possible settlement of the copyright lawsuit. Klein suggested that Harrison might be interested in purchasing the copyright to "He's So Fine." Shortly thereafter, Klein's management contract with the Beatles expired. Without telling Harrison, Klein began negotiating with Bright Tunes to purchase the copyright to "He's So Fine" for himself. To advance these negotiations, Klein gave Bright Tunes information about royalty income for "My Sweet Lord"-information that he had gained as Harrison's agent.
The trial judge in the copyright case ultimately found that Harrison had infringed the copyright on "He's So Fine" and assessed damages of $1,599,987. After the trial, Klein purchased the "He's So Fine" copyright from Bright Tunes and with it, the right to recover from Harrison for the breach of copyright.