Whether the estate gave permission would have depended on whether it retained the mechanical rights to the recorded performance or if those rights (and the associated rights to use her name, voice, and likeness) were given to the record company that released the album. If the rights were sold to the record company, it would have had to approve the use of the recording for Bolton's version.
Music licensing is one of the most complex areas of copyright law. There are different rights in the song (i.e., the music and lyrics) and the performance. And, in the performance, there are special licensing requirements for use in other recordings (samples, soundtracks) and other media (TV, films, video games). On top of that, there are separate rights under most state laws regarding the use of a person's name, likeness, or voice without their permission. It can be a real quagmire.
One of the things about music that makes it unusual from a legal standpoint is that there is not a very well-established body of law about things that you would expect to be in a work. For instance, if someone is going to make a film about George Washington, it could be expected that the film might depict Washington crossing the Delaware. So it would be difficult for the maker of a prior film or a writer of a book claiming that the film violatde a copyright to point to that scene and say it proves the earlier work was copied. I suspect a lot of musicians would say that there are certain musical phrases that come up over and over and that certain notes just work well together. But that doesn't create the same kind of
What was most odd about the My Sweet Lord case was that the court held that George Harrison violated the copyright for My Sweet Lord, but did it unintentionally, i.e., it held that he had almost certainly heard the song and, when he wrote My Sweet Lord, the combination of notes sounded right because they were in his subconscious.



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