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What does this song…
…have in common…
…with this song?
Termination Rights:
How Artists May be Able to Undo Old
Deals and Reclaim Copyrights
Mike Matesky
November 8, 2012
Copyright © 2012 Christensen O’Connor Johnson KindnessPLLC
Popular Press
Popular Press
Popular Press
Two Sentence Summary
• Artists who transferred their copyrights in the
late 70s and early 80s are giving notice that
they are taking their copyrights back.
• Such notices may or may not be valid.
Presentation Overview
• Before the Break: The Legal Background
– Copyright Basics
– Copyright Ownership & Works Made for Hire
– Termination Rights
• After the Break: Are Sound Recordings
Subject to Termination Rights?
– The Case Law So Far
– Considerations for Artists Getting Paid
– Considerations for People Paying Artists
Copyright Basics
•
•
•
•
•
•
Exclusive Right to Reproduce
Exclusive Right to Prepare Derivative Works
Exclusive Right to Distribute Copies
Exclusive Right to Publicly Perform*
Exclusive Right to Display*
Exclusive Right to Perform Publicly by Digital
Audio Transmission*
*Does not apply to all types of works
Music Copyright Basics
• Every musical recording involves two
copyrights:
– Copyright in underlying musical composition
– Copyright in particular recording
Copyright Ownership
• Copyright exists when work is fixed in a
tangible medium of expression
• Ownership of copyright initially vests in the
“author”
• The author is typically the person who creates
the work
• Exceptions:
– Joint Works
– Works Made For Hire
Joint Works
• A Joint Work is “a work prepared by two or
more authors with the intention that their
contributions be merged into inseparable or
interdependent parts of a unitary whole.”
• Joint Authors are Joint Owners of Copyright
– Tenants in common
– Each own an undivided, proportional interest in
the copyright
Joint Works
• Second & Ninth Circuit: Contributors must
intend to create a joint work
• Seventh Circuit: Contributing more than “de
minimus” amount to unitary work creates
joint work.
Joint Works
“With audio recording of a live musical
performance, and the making of sound
recordings, the performers and the sound
engineer/producer, are, absent any special
circumstances classic joint authors.”
– William Patry
Works Made For Hire
• Party paying for the work is deemed the
“author” and therefore the copyright owner
• This means the creator never owns the
copyright in the work
• Can apply in two situations: (1) employee, or
(2) independent contractor
Work Made For Hire: Employee
•
•
Creator is an employee; and
Creates the work within the scope of
employment
Work Made For Hire:
Independent Contractor
• The work is specially commissioned for use as
one of nine specifically identified types of
works; and
• The parties sign a written work-made-for-hire
agreement
Work Made For Hire
• Work Made For Hire Categories:
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–
–
–
–
–
–
–
–
A contribution to a collective work;
Part of a motion picture or other audiovisual work;
A translation;
A supplementary work;
A compilation;
An instructional text;
A test;
Answer material for a test;
An atlas;
What About Sound Recordings?
• Sound recordings were added to the statutory
work-made-for-hire categories, then removed
after an artist-led uproar.
• Congress said neither the explicit addition nor
subsequent removal of sound recordings to
the work-made-for-hire categories should be
used to interpret whether any sound
recording can be considered a work-madefore-hire
Written, Signed Agreement
• Seventh Circuit: Written agreement must be
signed prior to creation of the work
• Second Circuit: Later written agreement that
confirms original work-made-for-hire
understanding may be sufficient
Assignment v. Work Made for
Hire
• Even if a work cannot be considered a work
made for hire, the party commissioning the
work could still require assignment of the
copyright
• That assignment could be subject to
termination rights
What are Termination Rights?
• In the case of any work other than a work
made for hire, the grant of a transfer or
license of copyright or of any right under a
copyright, executed by the author on or after
January 1, 1978, otherwise than by will, is
subject to termination.*
• Termination can occur notwithstanding any
agreement to the contrary.
*A separate provision deals with terminations of transfers that occurred prior to 1978
When Can Termination Rights be
Executed?
• Termination can occur during a 5-year window
beginning 35 years after the transfer (with
certain exceptions).
Who Can Exercise Termination
Rights?
• If one author granted the transfer, that author (or
that author’s heirs under certain conditions) can
terminate the transfer.
• If two or more authors of a joint work granted the
transfer, majority of authors who executed the
transfer (or their heirs, subject to certain conditions)
can terminate the transfer.
• Query: if multiple authors each granted separate
transfers, do you need a majority of authors to
terminate, or can each author terminate their
individual transfer?
How Can Termination Rights be
Exercised?
• Notice of termination can be sent between 2
and 10 years prior to termination date.
• Notice must contain certain information,
including the date of termination (which must
fall within the 5 year window beginning 35
years after the transfer).
• A copy of the notice must be recorded in the
Copyright Office before the effective date of
termination.
So, Then What Happens?
• All copyright rights under this title that were
previously granted revert to the author or
authors, including those owners who did not
join in signing the notice of termination, but…
– A derivative work prepared in the meantime can
continue to be utilized; and
– Only U.S. copyright rights are affected (other
provisions of the grant/contract still in place);
What about Re-Negotiating?
• After you serve a notice of termination (2 to
10 years prior to termination date), you can
enter into a valid, binding grant or agreement
to grant further rights.
• Some authority suggest a revocation and regrant could also be valid.
So….What?
• What does all this mean for recording artists
and others involved in the creation and
distribution of sound recordings?
…We’ll discuss that after the
break!
Can Sound Recordings Be Works
Made For Hire?
• There is a very limited amount of legal
precedent discussing whether or when sound
recordings can be considered works made for
hire
Work Made for Hire: Case Law
• Poindexter v. EMI, No. 11 Civ. 559 (LTS)(JLC) (S.D.N.Y. Mar. 27,
2012).
• Pro se plaintiff was co-producer of the sound recording, and
co-author of composition, of Thin Line Between Love and
Hate.
• Plaintiff sued EMI for using a sample.
• Plaintiff signed agreement “confirming” the recording would
be property of Atlantic, and Atlantic would be author and
owner as work-made-for-hire.
• Court accepted the recording as work made for hire without
analyzing the statutory work made for hire categories.
Work Made for Hire: Case Law
Greenwich Film v. DRG Records, No. 91 Civ. 0546 (JSM), 1992 WL
279357 (S.D.N.Y. Sept. 25, 1992).
• Greenwich Film hired a composer to create a film score.
• Greenwich Film later sued DRG for distributing the soundtrack
without permission.
• DRG argued that Greenwich Film didn’t own the copyright.
• The court said the soundtrack was commissioned for use in a
motion picture, so it could have been a work made for hire,
but there was no written agreement signed by the parties.
• However, the court said that the composer did assign his
copyright to Greenwich Film.
Work Made for Hire: Case Law
Axcess Broadcasting v. Lulirama, 128 F.3d 872
(5th Cir. 1997).
• Axcess hired Lulirama to write advertising
jingles that Axcess would sell to television and
radio clients.
• Billing statement signed by parties with
handwritten notation that works for “for hire”
• It was not clear which jingles would be for
radio, television, or both.
Work Made for Hire: Case Law
Axcess Broadcasting v. Lulirama, 128 F.3d 872 (5th Cir.
1997).
• The court held that it couldn’t determine whether
any particular jingle was a work made for hire,
because it was not clear if jingles were specially
commissioned for use in an audiovisual work
(instead of just for radio).
• The court suggested that, at a minimum, a jingle had
to be commissioned at least in part for use in an
audiovisual work to meet that standard.
Work Made for Hire: Case Law
• Ballas v. Tedesco, 41 F. Supp. 2d 531 (D.N.J. 1999).
• Ballas, a ballroom dancer, hired Tedesco to create a
recording.
• The parties had a falling out and Tedesco later used
the recording as part of a larger audio work.
• Ballas sued, and argued that he owned the copyright
in the recording as a work made for hire.
• The court held the recording was not a work made
for hire because it did not fit any statutory work
made for hire category, and there was no written
work made for hire agreement signed by the parties.
Work Made for Hire: Case Law
• Staggers v. Real Authentic Sound, 77 F.Supp.2d 57, 63
(D.D.C. 1999).
• Record label hired a producer, who hired Staggers to
write, arrange, and perform music for an album.
• Staggers later sued the record label for copyright
infringement.
• The record label argued that it owned the copyright
in the recording as a work made for hire.
• The court disagreed, stating that sound recordings
don’t fit into any of the “specially commissioned”
work made for hire categories.
Work Made for Hire: Case Law
• Warren v. Fox Family, 328 F.3d 1136 (9th Cir. 2003).
• Fox hired someone to compose music for the
Remington Steele television show
• The composer later sued Fox for, among other things,
copyright infringement
• The court held that there was a sufficient signed,
written work-made-for-hire agreement (even though
it was called something else), and the compositions
were contributions to an audiovisual work
Termination Rights: Case Law
• Scorpio Music v. Willis, No. 11-CV-1157- BTM (RBB),
2012 WL 1598043 (S.D. Cal. May 7, 2012)
• Scorpio and Can’t Stop Music (CSM) hired Victor
Willis to write or translate lyrics for several
compositions
• After 1978, Willis assigned his copyright interest in
the compositions to CSM by written agreement, in
exchange for 12% to 20% in royalties.
Termination Rights: Case Law
• In January 2011, Willis served a termination notice
on CSM
• Scorpio and CSM filed suit challenging the validity of
the termination notice, because Willis was the only
author to sign the notice
• The copyright registrations for the works named
several co-authors
• Willis and the Songwriters Guild of America argued
that only Willis needed to sign the termination
notice, because he executed a separate transfer of
only his own individual interest
Termination Rights: Case Law
• “The issue before the Court is whether, in a case
where joint authors of a work transfer their
respective copyright interests through separate
agreements, a single author may alone terminate his
separate grant of his copyright interest in the joint
work or whether a majority of all the authors is
necessary to terminate that grant…[T]he Court
concludes that a joint author who separately
transfers his copyright interest may unilaterally
terminate that grant.”
Termination Rights: Case Law
• Scorpio had originally advanced a work made
for hire argument, but abandoned it.
• The court also noted that there could be
further dispute regarding whether Willis gets a
1/3 interest or a ½ interest in the copyrights.
Termination Rights: Case Law
• Ray Charles Foundation v. Robinson, No. 12-cv-2725 ABC
(FFMx) (C.D. Cal.)
• Warner-Chappel owned copyrights to the Charles works
• Charles gave his heirs a flat sum as their sole inheritance
• Charles gave his Foundation the right to receive royalties from
Warner-Chappel’s exploitation of the works
• The Charles heirs served termination notices on WarnerChappel
• The Foundation sued the Charles heirs saying the termination
notices breached the heirs’ agreement to accept the flat sum
as their sole inheritance
Termination Rights: Case Law
• The court is currently considering the Charles
heirs’ motion to dismiss for lack of standing.
Termination Rights: Case Law
• DC Comics v. Pacific Pictures, CV 10-3633 ODW
(RZx) (C.D. Cal. Oct. 17, 2012).
– Heirs of Superman authors unable to terminate
1938 transfer, because 1992 agreement already
superseded 1938 transfer.
• Marvel Worldwide v. Kirby, 10 Civ. 141 (CM)
(KNF) (S.D.N.Y. Jul 28, 2011).
– X-Men and other comic characters were works
made for hire under 1909 Copyright Act, such that
termination rights did not apply
Considerations For Artists
• Assignments are better than work made for hire agreements
• Without a signed writing, it’s not a work made for hire
• Be skeptical of statements that a work fits a work-made-forhire category if not accurate
• If possible, sign a separate agreement transferring your
personal interest in the work
• If someone wants to renegotiate a deal, get some legal advice
before doing so
• If you contributed to a successful work (or you are the heir to
someone who contributed to a successful work) around 1980
or earlier, get some legal advice regarding your rights!
Considerations for
Commissioning Parties
• Always get a written, signed work-made-for-hire
agreement (before creation of the work, if possible)
• Always include an assignment clause as well
• If work is intended to fit a work-made-for-hire
agreement, include language to that effect in the
agreement
• Have everyone who participated in the work sign an
agreement…preferably the same agreement
• If renegotiating prior to termination notice period,
clarify that new deal is a revocation of the old deal
Mike Matesky
Christensen O’Connor Johnson KindnessPLLC
206.695.1740
[email protected]