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.

Timeline

1920’s – Albert Brumley composes the gospel song, “I’ll Fly Away.”

1932 – I’ll Fly Away purchased by a music publishing company; copyright registered.

1940’s – Albert Brumley buys the music publishing company; owns the song’s copyright.

1975 – Albert and wife Goldie sell Brumley & Sons music publishing company to sons William and Robert; William and Robert become the song’s copyright owners.

1977 – Albert Brumley dies.

1979 – Robert and William obtain a Bill of Sale and Assignment from Goldie, assigning and transferring all the right, title and interest in all rights to obtain renewals or copyrights in the future upon Works written or composed by Albert E. Brumley to Brumley & Sons.

1986 – Robert buys out William’s interest in Brumley & Sons; becomes the song’s sole copyright owner.

1988 – Goldie dies.

2008 – Four other siblings serve Robert with a termination notice regarding the song.

The Copyright Act of 1976 contains a termination right allowing an author or an author’s successors to terminate an earlier grant, providing the author or successors with a chance to recapture all interests in the copyright.  The termination right is designed to allow the author a second chance at ownership for works that become commercially successful.  For pre-1978 transfers, the author or author’s successors may terminate a previous grant any time between seventy-five and eighty years after the copyright was obtained.  The applicable statute is 17 USC §304(d)(2).

The termination right survives the author’s death as long as the author did not exercise the termination right.  Pre-1978 agreements purporting to bargain away all copyright rights cannot limit the termination right.

The Sixth Circuit considered this case more of a contract interpretation case than a statutory interpretation case.  What was the meaning of Goldie’s 1979 assignment to William and Robert?

What matters, then, is what the 1979 agreement did—and did not do. Consistent with the district court’s ruling, we interpret that agreement not to bargain away Goldie’s termination right and not to replace the 1975 contract. Her termination right thus went to her children when she died in 1988, and the 1979 document does not stop the siblings’ termination.

Robert offers several rejoinders. First, he argues that Goldie’s 1979 document ‘effectively exercised her termination interest.’  But Goldie never exercised her termination right because the Copyright Act does not allow the sort of unofficial termination that Robert proposes. The Act and its implementing regulations describe several requirements of a termination notice, including that it must state the effective date of the termination and be recorded in the Copyright Office. 17 U.S.C. § 304(c)(4)(A); see also 37 C.F.R. § 201.10. Goldie’s 1979 assignment did none of this. It does not give a termination date. It was never recorded with the Copyright Office. It does not even mention the word ‘termination.’

Even if that had not been the case, Goldie would have lacked the right to terminate on her own. In 1979 Goldie held a one-half share of the termination right because the other half passed in equal shares to the children when Albert died. 17 U.S.C. § 304(c)(2)(A). Only those who are entitled to exercise a total of more than one-half of the termination interest may terminate.  §304(c)(1). She thus could not have terminated the 1975 grant in 1979 without at least one of her children joining her. None did. The 1979 contract does not amount to a termination notice.

(Opinion pdf pages 7 – 8).

The Sixth Circuit set forth a second reason the 1979 document did not bargain away Goldie’s termination right.

The brief language of the 1979 document indeed nearly mirrors the assignment language of the 1975 assignment, which of course did not transfer any termination rights—because the concept did not yet exist and at any rate would not have been enforceable in view of the 1976 Act’s prohibition on prior agreements to the contrary. Last of all, the 1979 assignment does not purport to override the 1975 assignment, leaving a pre-1978 copyright agreement that could be terminated under the 1976 Act.

(Opinion pdf page 8).

The turning point of this decision in favor of the grant terminators is that the 1979 document did not revoke or replace the 1975 assignment.  That fact distinguishes this case from some of the other cases in which the assertion of copyright termination rights failed.  In those cases, the earlier contracts that were relied on to assert the termination rights no longer existed because the earlier contracts were replaced by later contracts.  “Because the earlier contracts no longer existed, they could not be terminated.” (Page 9).

The author can transfer the copyright and get it back without exercising the termination right.  In this case, Albert sold his work without a copyright in1932.  Under the 1909 Act, applicable in 1932, publication was the event that secured the copyright, as long as the notice requirements were met.  Albert then bought back his work with a registered copyright.  Albert sold the copyrighted work years later to sons Robert and William.  Albert got ownership of his work back without relying on operation of the copyright statute to reclaim his copyright.  An author can sell and buy back his copyrighted work and still preserve the termination right.  But the author has only one termination right and once that termination right is exercised, cannot reclaim his rights through termination again.  The successors’ rights flow from the author, so that a termination right exercised by the author will not be available for the successors.

The Sixth Circuit offered some provocative dicta on this sentence from §304(c)(5): “Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.”  The applicability of this sentence was not before the court because the parties did not argue it.

The parties appear to accept the decisions of the Second and Ninth Circuits that termination rights, once vested after 1978, may be extinguished or bargained away.  While the caselaw on this issue appears to be one-sided, it deserves mention that Nimmer on Copyright, now a father-son treatise that seems to have cornered the market on copyrights for works about copyright law, takes a contrary view.

(Opinion pdf page 11).

This case is Brumley v. Albert E. Brumley & Sons, Inc., No. 15-5429, Sixth Circuit Court of Appeals.

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