Copyright Termination Rights: Giving Artists Their Second Bite at the Apple

BY: DANA HALBER

Boom! The copyright time bomb that has been ticking since January 1, 1978 has exploded.  Although they’ve tried hard to de-fuse the bomb and/or delay its eruption, record labels, music publishers and the like simply could not avoid the bomb’s inevitable detonation once the fuse was lit thirty-five years ago.  Metaphorically speaking, the explosive device is a termination interest and Section 203 of 1976 Copyright Act is its fuse.

When Congress enacted the 1976 Act, which went into effect on January 1, 1978, the intent of Section 203 was to give authors and artists a “second bite at the apple,” as it’s commonly heard throughout the industry; a chance for artists and authors to recapture rights to their now successful works that they may have granted to an industry giant, like a record label or publishing house, for a nominal fee when they were in a position of little bargaining power.  Now, as a result of this provision in the Act, artists have the opportunity to file termination notices against their copyright holders and reclaim these rights for themselves.

Victor Wills, lead singer and songwriter for the music group The Village People, was one of the first musicians to lead the charge in exercising termination rights.  Thirty-five years ago, Willis transferred the publishing rights to 33 of his songs, including the 70s hits “YMCA,” “Macho Man,” and “In the Navy,” to music publishers Scorpio Music and Can’t Stop Music. (A “song” refers to the lyrics and underlying musical melody of work, which are referred to as musical compositions in the music industry).  In January, 2011, Willis served the publishers with timely notice of his intent to terminate their copyright right interests in his songs when he became eligible to do so in 2013.[1. Scorpio Music S.A. v. Willis, No.11cv1557, 2012 WL 1598043, at 1 (S.D. Cal. May 12, 2012).]  In response, the publishers commenced the first copyright termination lawsuit on July 14, 2011, by challenging the validity of Willis’ termination notices.[2. Id.]  They argued that since Willis was one of two or more authors of a musical composition, known as a “joint author” of a work, he could not individually terminate the publishers’ holding of his copyright interests unless the other authors did so, as well.[3. Id. at 2.]  The court looked to the specific language of Section 203 and disagreed with the publishers, holding that “a joint author who separately transfers his copyright interest may unilaterally terminate that grant.”[4. Id.]   This case is significant for artists because it represents their first copyright termination lawsuit win and establishes a precedent against one of the record labels’ and music publishers’ defenses against the joint author’s exercise of his termination interest.

On the heels of the Willis decision, at the end of January 2013, the second copyright termination case was decided.  “Hit the Road, Jack” was exactly what Ray Charles’ twelve children told the Ray Charles Foundation, among others, when they served thirty-nine termination notices on entities who held copyright interests in Charles’ work.[5. Ray Charles Foundation v. Raenee Robinson, No. CV 12-2725, WL 358174, at 2 (C.D. Cal. Jan. 25, 2013).]  Charles granted all of his copyright interests in his works to the Foundation; however, the Foundation is not the owner of Charles’ copyrights.[6. Id.]  Warner-Chappell Music holds the copyrights to Charles’ works as the result of a 1980 renegotiation; the Foundation is simply the recipient of Charles’ share of royalties to the works held by Warner-Chappell.[7. Id. at 1.] Subsequently, the Foundation moved to get the termination notices invalidated, but under Sections 304(c) and 203 of the Copyright Act, only an author’s statutory heirs, his widow, children and grandchildren, can assert a termination right should he no longer be alive.  Consequently, the court concluded that the Foundation lacked the standing to assert its own interests nor could it assert Warner-Chappell Music’s interests on the label’s behalf.[8. Id. at 9-10.]  Therefore, it was a win for the artist’s family as the Charles children’s termination notices are still effective unless Warner-Chappell decides to challenge them in a separate action.

Perhaps one of the most interesting things to note is that Warner-Chappell Music has stayed silent throughout the litigation.  As the copyright holder, they have the standing to challenge the children’s termination notices.  Will they?  Will the next termination case we read about be titled Warner-Chapell Music v. Renaee Robinson? Or is the label using this as an opportunity to renegotiate with the Charles children to hold onto the rights, which would certainly be more favorable to Warner-Chappell than termination?  So far, the artists seem to be coming out ahead in the courtroom.   Who wins next, however, could be anybody’s guess.  We will just have to wait and see as the effects of the 1976 Copyright Act on artist’s termination rights continues to unfold…

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