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From the Village to the Arena: Copyright Termination Issues Left Unsung In Aftermath of the Village People Ruling

By Lisa A. Alter
lisa.alter@alterandkendrick.com
(212) 707-8377

The Los Angeles District Court ruling that Village People Songwriter Victor Willis is entitled to terminate his grants of rights in 33 musical compositions is being hailed as a landmark decision that "will send shock waves through the record industry." The case is the first to be decided under the provision of the U.S. Copyright Act that affords authors (including composers and lyricists) and their heirs the right to terminate grants under copyright made by the author on or after January 1, 1978. That provision, 17 U.S.C. Section 203, was specifically designed by Congress to allow creators the chance to recapture their creations 35 years after contracting them away (or 40 years after the works were first published, whichever date arrives sooner). While Section 203 of the Copyright Act (like Sections 304(c) and (d) which govern terminations of grants made prior to 1978) was intended to protect the interests of authors who all too frequently entered into inequitable contracts due to their unequal bargaining position, the lobbying efforts of book and music publishers anxious to hold on to these copyrights made the resulting legislation far more complex. Indeed, the termination provisions and the Copyright Office regulations that complement them are sufficiently confusing so that it is difficult for a creator to reclaim his or her rights without consulting with a lawyer specifically working in the copyright area.

That said, the question addressed by the court in Scorpio Music S.A. v. Victor Willis was actually quite simple: was it necessary for Willis' co-authors to join him in serving notice of termination on the publisher, Scorpio Music. This is an issue that never should have gone to court. The Copyright Act states plainly and succinctly that where 2 or more authors execute a grant of copyright a majority of those authors are required to terminate the grant. However, "In the case of a grant executed by one author, termination of the grant may be effected by that author." No other songwriters were party to the contracts entered into by Willis and Scorpio Music; presumably, his co-writers entered into separate agreements with the music publisher. Based on this fact and the "'plain meaning' of the statute's text" the Willis court held that "a joint author who separately transfers his copyright interest may unilaterally terminate that grant." While it is gratifying that the first time the Section 203 termination right (commonly referred to as the "35 Year Termination Right") has come under judicial scrutiny the court ruled in favor of the author, the very limited fact pattern reviewed in this case makes the decision fairly inconsequential. The law is quite clear as to how many authors must serve notice of termination based on the number of authors who are signatory to a specific grant, but there are other areas of ambiguity in the statute which, if litigated, will have a far greater impact on the music industry than Willis.

Foremost among the open issues is a question that goes straight to the heart of the record industry: may recording artists terminate agreements entered into with record labels and recapture the rights to their sound recordings? Since the enactment of the Copyright Act, many songwriters, composers and heirs have successfully invoked the statutory termination provisions. However, due to the fact that sound recordings were not within the scope of federalcopyright laws prior to February 15, 1972, until recently there has been little consideration of the application of the termination provisions to grants of rights in sound recordings. Clearly allowing recording artists to assert termination rights would further the intent of Congress to "safeguard authors against unremunerative transfers." If the balance of power in the negotiation between a songwriter and publisher is inequitable, how much more so is that of the negotiation between the artist and record company?

Yet record labels, concerned about imminently losing control of valuable sound recordings from the late '70s and early '80s, have mounted a 2-prong argument against allowing recording artists to exercise their statutory termination rights. First, claim the labels, sound recordings are by definition works made for hire and thus outside the scope of the statutory termination provisions. However, while in certain circumstances a sound recording may be found to be a work made for hire (meaning, in essence, that the record company is the "author" of the work), this is a factual determination that must be made (or potentially litigated) on a case by case basis. The Copyright Act does not state that sound recordings are by definition works made for hire and, indeed, most sound recordings would fail to meet the work for hire criteria set forth in the Copyright Act.

The record companies' second line of attack is that, in the event that sound recordings are not works made for hire, multiple parties may have authorship standing and thus be entitled to assert a termination right. These parties, the labels assert, could include not only artists, but also producers, mixers, sound engineers, and editors, among others. While this is an interesting question (the Copyright Act does not define "author" in any instance other than to state that the "author" of a work made for hire is the employer) it is clearly not grounds for preventing an artist from asserting the 35 Year Termination Right with respect to a contract entered into between the record company and that artist. Since this issue may also be the subject of litigation (one can envision the action brought by a record company served with notice of termination by a mixer or editor) it would certainly be prudent for Congress to circumvent the matter by amending the Copyright Act to provide a definition of the author of a sound recording as the featured artist or artists, or, in the event there is no featured artist, the featured producer.

While the recent decision in the Village People songwriter case is frequently mentioned in the same sentence as the record industry, the case involved the rights of a songwriter versus a music publisher with respect to musical compositions written by the songwriter. Record rights were not involved at all. The Willis case was a frivolous lawsuit brought by a desperate music publisher not well versed in the U.S. copyright law. It is probable, however, that more substantive cases will be brought under Section 203 of the Copyright Act, and highly likely that those cases will focus on the right of an artist to terminate a grant of rights in a sound recording.

Hopefully, the decision of Judge Moskowitz to uphold Willis' right to terminate the grant of rights in his songs based not only on the plain meaning of the law but also on the recognition of the Congressional purpose in enacting the termination provisions, will offer guidance to future courts examining the termination rights of recording artists.

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