[romwell]

>So a deal is a deal, if one agrees to the terms of a deal (oral or written), it must be honoured

Sure thing. The deal was for an album cover. Perhaps $1500 in 1970s money is a fair sum for that, even for an iconic album.

Did the deal also include T-shirts, posters, and exclusive prints of the said cover signed by the band's front man?

That's where the contention is. Some people would say yes - work for hire is work for hire. Some people would say no. Pre-1978 copyright law is one side, later versions - on the other.

A deal must be honored - so it was, and then it was not.

[tyng]

Good point. I'm not familiar with the American copyright law, but you're right, nowadays in most countries even if a piece of art is sold to another person, the artist still holds the copyright (the right to make copies) unless copyright transfer is specified in the contract.

But another way to look at this is, if the artwork is commissioned by the company for commercial purpose - much like if someone is commissioned to create a logo for a company - then the copyright is generally transferred to the company.

In the absence of a written contract, one can argue both ways, which I think is why the lawyers didn't think there was a strong case.