No Such Thing as Unintentionally Giving Up a Copyright Termination Right

Albert Brumley wrote the gospel song, “I’ll Fly Away,” in the late 1920’s.  The music publishing company he sold his song to registered the copyright in 1932.  Albert later purchased the music publishing company that bought his song, regaining ownership of the song.  Albert’s sons, Robert and William, became the owners of both the copyright to the song and the music publishing company by buying the company from Albert and his wife, Goldie, in 1975.  Albert died in 1977.  In May 1979, Goldie signed an agreement assigning all rights to obtain renewals of works composed by Albert to Brumley & Sons.  Robert bought out William’s interest in the company and became the sole owner in 1986.  Goldie died in 1988.

Robert’s four other siblings (excluding William) served Robert with a copyright grant termination notice in 2008.  The siblings later filed a lawsuit against Robert and Brumley & Sons to obtain a declaration that their termination notice was effective.  Robert argued that Goldie relinquished any terminating rights by making the 1979 assignment to Robert and William.  The district court ruled in the siblings’ favor on the termination right.  On appeal, the case was returned to the district court for a new trial on the work made for hire issue.  The district court again ruled in the siblings’ favor on the termination issue.  The Sixth Circuit Court of Appeals affirmed.  The work made for hire question was not an issue in the second appeal.

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Santa Song Reverts to the Author’s Heirs in Grant Termination Bid

J. Fred Coots and Haven Gillespie wrote the musical composition “Santa Claus is Comin’ To Town” (the Song) in the 1930s.  Through a series of grants, EMI came to own the copyright in the Song.  Coots’ heirs brought suit against EMI to terminate EMI’s copyright interests in the Song.  The district court ruled in EMI’s favor, determining that EMI owns the copyright until it expires in 2029.  My post Santa Claus Song Copyright Grant Not Terminated and Under Copyright Until 2029 details the district court’s ruling.

Copyright grant termination gives authors or their heirs a “second estate” in a copyright by allowing the author or heirs to reclaim the rights that the author previously assigned to someone else, usually a publishing company.  That way, the author or heirs can share more broadly in the financial benefits of a successful copyrighted work.

The Second Circuit concluded that Coots’ heirs’ 2007 termination notice will terminate a 1981 grant in 2016.  The Second Circuit reversed the district court’s judgment and remanded for the entry of a declaratory judgment in favor of Coots’ heirs.

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Smack Dab in the Middle of a Termination Rights Dispute!

This case addresses the standing required to challenge a copyright grant termination.  Standing is the legal ability to sue another person or entity in a particular court.  Ray Charles entered into agreements with his twelve adult children that he would set up irrevocable trusts for each of them and that that gift would be their entire inheritance from him.  Ray Charles’ will named The Ray Charles Foundation as the sole beneficiary to his estate.  The Foundation received Charles’ copyright royalties upon his death in 2004.  Later, seven of Charles’ children filed notices under 17 USC §§ 203 and 304(c) with the Copyright Office, terminating Charles’ copyright grants to Warner/Chappell.  The copyright termination rights provide authors with a second chance to exploit their works. My Power Point presentation Copyright Grant Termination Rights – Ghosts of Copyright Grants Past, Present and Future discusses copyright grant termination in detail.

The Foundation’s only source of funds is through Charles’ estate.  The Foundation challenged the Terminating Heirs’ termination notices.  The district court dismissed the Foundation’s complaint, ruling that the Foundation did not have standing to challenge the copyright grant terminations.  The Ninth Circuit overruled and remanded the case to district court.

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Spank Author’s Estate Whacks Music Publishers on Appeal

This case centers on rights to the musical composition “Spank.”  Ronald Louis Smith, Sr. wrote Spank in the late 1970s.  Smith’s estate later sent a cease and desist letter to one of the music publishers and filed copyright grant termination notices.  Smith’s estate followed up by suing the music publishers and others in federal court.  The Eleventh Circuit faced this question:  Can the author of a musical composition rely on the registration filed by the publisher for standing to sue under the Copyright Act, when the author assigned his rights in the sound recording to a different publisher in exchange for royalties, but that agreement is silent regarding the ownership of the musical composition rights?  The Eleventh Circuit ruled that, yes, the author does have standing to sue under such circumstances and reversed the district court’s ruling.

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Can’t Stop Won’t Stop Challenging Willis’ Copyright Grant Termination

When Victor Willis served Scorpio Music (Black Scorpio) and Can’t Stop Productions with a copyright grant termination notice for lyrics he wrote as the original lead singer of the Village People, Scorpio and Can’t Stop sued to challenge the validity of the termination notice.  My post Village People Cop Morphs into Copyright Grant Terminator describes Scorpio’s and Can’t Stop’s first three unsuccessful attempts to invalidate Willis’ copyright grant termination notice.  Scorpio and Can’t Stop recently met with a fourth rejection by the district court in their attempt to invalidate Willis’ copyright grant termination notice.

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Santa Claus Song Copyright Grant Not Terminated and Under Copyright Until 2029

Watch out, but don’t pout or cry, because the grantee of the copyright to “Santa Claus Is Comin’ To Town” owns the copyright until it expires in 2029.  This case is full of action, involving an ineffective termination notice, two agreements transferring copyrights, termination notices filed under §§304(c), 304(d) and 203 of the Copyright Act of 1976, and the application of both the Copyright Act of 1976 and the Copyright Act of 1909, the precursor to the 1976 Act. 

John Frederick Coots and Haven Gillespie co-authored “Santa Claus Is Comin’ To Town” (the Song) in 1934, transferring their copyrights in the Song that year to Feist.  In 2012, Coots’ heirs, Gloria Coots Baldwin, Patricia Bergdahl, and Christine Palmitessa, brought suit against grantee EMI Feist Catalog (EMI).  The plaintiffs sought a declaratory judgment that their copyright grant termination notices were valid and enforceable, terminating EMI’s interest and returning the rights to themselves.  This case demonstrates both the complicated process of terminating a copyright grant and the complicated analysis involved in determining ownership in copyright grant termination dispute cases.   This matter was decided in the U.S. District Court, Southern District of New York.

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Village People Cop Morphs into Copyright Grant Terminator

September 13, 2013, was the effective date for Victor Willis’ termination of copyrights granted to Scorpio Music (Black Scorpio) S.A. and Can’t Stop Productions, Inc. for Willis’ hit songs YMCA, I’m a Cruiser, Hot Cop, Ups and Downs, My Roomate and The Women.  Willis was the original lead singer for the group, the Village People.  He appeared onstage with the Village People dressed as either a cop or a naval officer.

These songs and others with lyrics written by Willis were registered with the U.S. Copyright Office in the late 1970’s in Willis’ name and the names of his co-authors.  Willis transferred his interest in the songs to Can’t Stop, the exclusive U.S. sub-publisher and administrator for Scorpio, a French corporation.  After Willis notified Scorpio and Can’t Stop in early 2011 that he was terminating the transfer of his copyrights, Scorpio and Can’t Stop sued Willis, challenging the validity of the termination and seeking a declaratory judgment that Willis has no rights in the copyrights to the songs.  The district court ruled in Willis’ favor on the three major motions filed by Plaintiffs Scorpio and Can’t Stop to date.  Early in the litigation, Scorpio and Can’t Stop claimed that Willis created the lyrics under a work made for hire agreement, but later abandoned that claim.

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Ray Charles Foundation Loses Challenge to Heirs’ Copyright Termination Notices

Musician and composer Ray Charles signed several agreements in the 1950s regarding recording songs for Atlantic Records and composing songs for Progressive Music Publishing Co.  In 1980, Charles purportedly renegotiated his agreement with Progressive’s successor-in-interest, receiving royalties and a cash payment.  The rights that Charles transferred to Progressive are now owned by Warner/Chappell Music.  Charles entered into an agreement with each of his twelve children in 2002.  In exchange for an irrevocable trust funded with $500,000, each child agreed to waive any right to make a claim against Charles’ estate.  When he died eighteen months later, Charles left all of his rights in this works to The Ray Charles Foundation, including the right to receive royalties. 

Seven of Charles’s children served copyright termination notices in 2010, under 17 U.S.C. §304(c)(5) for transfers occurring before 1978 and §203 for transfers occurring in 1978 and later.  The Foundation brought a federal declaratory judgment action against the seven children who filed termination notices (defendants), seeking to invalidate the termination notices.  The U.S. District Court for the Central District of California granted the defendants’ motion to dismiss the Foundation’s declaratory judgment claim, ruling that the Foundation lacked standing to bring the declaratory judgment action.

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Loan-Out Corporations Ambush Copyright Grant Termination Rights

I previously discussed the copyright termination of transfer provisions in my post, Termination of Transfer Provision Applies to All Authors, Not Just Musicians17 U.S.C. §203 provides for the termination of a copyright grant 35 years after the grant was made, if the grant was made after January 1, 1978.  Section 304(c) creates a similar right of termination for copyrights that were registered before January 1, 1978.  The law on copyright termination of transfers recognizes the unequal bargaining power between publishers and authors and is an attempt to allow authors and their families the opportunity to reclaim and benefit from the authors’ commercially successful works. 

The effect of loan-out corporations on the implementation of the §203 grant termination provision adds a potentially fatal wrinkle to an author’s ability to successfully terminate a copyright grant.  A loan-out corporation is corporation that is usually wholly owned by one person and is used to “loan-out” that person’s services to employers.  Actresses, musicians and professional athletes often provide their services through loan-out corporations.  Loan-out corporations generally limit the liability of the employee and provide tax benefits.  The use of loan-out corporations dates back to the 1930’s. 

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Marybeth Peters Speaks About Ongoing Copyright Issues

This week I had the opportunity to hear former United States Register of Copyrights Marybeth Peters speak about ongoing copyright issues in the United States.  Her talk was entitled “Looking Back and Moving Forward:  Copyright’s Biggest Issues.”  Ms. Peters spoke at a Lewis & Clark Law School lunch in Portland, Oregon.  The lunch was co-sponsored by the Intellectual Property Section of the Oregon State Bar and the Copyright Society of the U.S.A., Northwest Chapter.  Lewis & Clark Law School is nationally recognized for its intellectual property law program, something I did not realize until I heard Dean Robert Klonoff’s remarks.

Ms. Peters must be the ultimate authority on events occurring at the Copyright Office since 1966, when she began working there.  It was fascinating to hear her speak about copyright issues.  Anyone who has a chance to hear Ms. Peters speak should jump at the opportunity.

Ms. Peters was the Register of Copyrights from 1994 to 2010.  The Register of Copyrights is the director of the Copyright Office of the Library of Congress. 17 U.S.C. §701

Ms. Peters stressed that copyright is a balance of interests and that compromise is essential in reaching that balance.  Here are some of the major issues she sees moving forward:

  • Recording artists’ public performance rights in the non-digital broadcasts of their sound recordings
  • Orphan works
  • Section 108 Reproduction by libraries and archives
  • Termination of rights
  • Section 104A restoration of copyrights for foreign works
  • Registration of photographic works by photograph licensing companies

Musical recordings are complicated because there are a number of independent copyrights associated with a single song.  Currently, recording artists and companies have no public performance right in non-digital broadcasts of their sound recordings.  17 U.S.C. §114.  Royalties for music broadcasts by a radio station, for example, go to the copyright owners of the musical compositions, but not to the recording artist or production company.  Recording artists and production companies are compensated through the sale of their recordings, but since there are now many ways to listen to a song without buying it, the possible revenue streams for recording artists are shrinking.  The Administration’s White Paper on Intellectual Property Enforcement Legislative Recommendations that I discussed in my post entitled “Illegal Streaming” a Felony? White House White Paper Directed at Activity that is Already Criminal proposes creating a right of public performance for copyright owners for sound recordings transmitted by over-the-air broadcast stations.

Orphan works are works for which the copyright owner cannot be located.  The problem is that these works are still protected by copyright law, even though their owners cannot be found, and are protected to the same extent as works for which the copyright owner is known.  The Importance of Orphan Works Legislation further describes the magnitude of the orphan works problem.

17 U.S.C. §108 allows libraries to reproduce copyrighted works under limited circumstances.  The problem is that the statute was designed to address reproduction by photocopying and does not adequately address the prevailing practice of making digital copies.

Termination of rights under 17 U.S.C.§203 was the subject of my blog post entitled Termination of Transfers Provision Applies to All Authors, Not Just Musicians.  This statute provides a mechanism for authors to terminate transfers or licenses granted on or after January 1, 1978, thirty five years from the date the grant was made.  Ms. Peters’ questions included:  What is an author?  What law governs works created after January 1, 1978, for contracts signed before that date?  Are the rights granted when a contract is executed or when the works are created?  The answers to the two previous questions determine whether the 1909 Act or the 1976 Act applies.  The Acts differ in important respects, so it matters which Act applies.

Section 104A restores lost copyrights to foreign authors under certain conditions.  In essence, it removes works from the public domain and gives foreign authors back their copyrights in those works.  It was enacted to bring the U.S. into compliance with the agreement on Trade Related Aspects of Intellectual Property (TRIPs).  Golan v. Holder challenges the restoration of copyrights to foreign authors under the Copyright Clause and on First Amendment grounds.  It is currently set for review before the U.S. Supreme Court.

The issue regarding the registration of photographic works by photograph licensing companies, such as Corbis Images, is that these companies were allowed to register photographs in batches, without listing each photographer individually.  The validity of some of these registrations is now being challenged.  Many of these photographers did not independently register their works.  Copyright exists from the moment a work is fixed in a tangible medium (17 U.S.C. §102), so these photographers still have their copyrights in these photographs.  Statutory damages are what is at stake in this issue.  17 U.S.C. §412(2) provides that statutory damages are not available unless the work was registered within three months after the first publication of the work.  If statutory damages are not available, the copyright owner must prove her actual damages and the infringer’s profits (17 U.S.C. §504), a fact intensive and extremely expensive process.

Ms. Peters discussed the Google book settlement case in the context of the orphan works and the §108 library reproduction issues.  She stated that the Google book settlement case has changed the way people view copyright throughout the world.  See my blog post entitled Google Book Settlement Rejected – For Good Reason for the highlights of the Google book settlement case.  Related to the Google book settlement case, but not directly involving Google, is a lawsuit filed by author groups against the HathiTrust and several universities for creating digital copies of books without the permission of the authors or other copyright holders.  Ms. Peters pointed in particular to the part of the lawsuit that objects to the HathiTrust’s plans regarding orphan works.  Authors, Copyright, and HathiTrust by Kenneth Crews briefly summarizes the issues involved in the litigation and provides numerous relevant links.

Ms. Peters obviously enjoys discussing copyright issues and is an entertaining speaker.  It was well worth my trip to Portland from the Seattle area to hear her speak.