Termination Rights Class Action Against UMG Recordings to Proceed

Waite v. UMG Recordings, Inc., No. 19-cv-1091-LAK, 2020 WL 1530794 (S.D.N.Y March 31, 2020)

In 2018, John Waite and Joe Ely filed a copyright infringement class action against UMG Recordings based on UMG’s failure to stop marketing and selling sound recordings after being served with termination notices for such recordings. In response, UMG filed a motion to dismiss arguing that since termination rights do not apply to works for hire, whether a work was made for hire is a copyright ownership issue, and Plaintiffs claim to own the copyrights in issue, that the core of Plaintiffs’ claims revolve around ownership. Based on this, Defendants asserted that the presence of work for hire provisions in the Plaintiffs’ recording contracts signed in the 1970s and 80s alerted them of ownership issues at the time of signing, and that the statute of limitations has therefore run on the Plaintiffs’ claims. Refuting this argument, the court stated that while ownership is relevant to Plaintiffs’ claim, “the gravamen of plaintiffs’ claim is defendant’s refusal to recognize their termination rights,” and to apply a three year statute of limitations to claims involving termination rights, which do not vest until 35 years after copyright assignment, “would thwart Congress’s intent and eviscerate the right itself.” As a result, the court denied Defendant’s motion to dismiss as to all claims, except for those relating to declaratory relief, copyrights transferred by third parties, and sound recordings made prior to January 1, 1978.

Questions Whether "Iron Man" Comic Theme Song A Work Made For Hire Under 1909 Copyright Act; 2nd Cir.

Urbont v. Sony Music, No. 15-1778 (2d Cir. July 29, 2016).

Plaintiff, who claimed ownership rights in the composition of the "Iron Man" comic theme-song from the 1960s, raised sufficient questions of material fact to rebut defendants' "work made for hire" defense under the 1909 Copyright Act and its "instance and expense" test, holds the Second Circuit in reversing the district court's grant of summary judgment to the defendants on Plaintiff's copyright infringement claim.  Further, the defendants -- who were not the alleged employer (Marvel Comics was) and therefore a third-party to the alleged relationship -- had standing to assert the work made for hire defense.  However, the appellate court held that the lower court properly dismissed the plaintiff's state-law claims as pre-empted, rejecting the plaintiff's argument that there was a separate pre-1972 sound recording subject to state laws rather than the song as part of an audio-visual work and therefore preempted.

Copyright Termination By Majority Of Heirs Effective As To Lucrative Gospel Song; 6th Circuit

Brumley v. Albert Brumley & Sons, Inc., No. 15-5429 (6th Cir. May 16, 2016)

Four of six children of the author of the gospel song “I’ll Fly Away” successfully exercised their right to terminate the assignment of the song’s copyright to another one of their brothers, holds the Sixth Circuit.  The case centered on the 1976 Copyright Act’s termination right that allows an author to undo a prior transfer of his copyright and recapture all interests in the copyright for himself. 

In this case, Albert Brumley composed the song “I’ll Fly Away” (a gospel spiritual) in the late 1920s and owned the copyright through a publishing company.  In 1975, the publishing company was sold to two of Brumley’s sons, assigning and transferring all right title and interest in the song.  Brumley died in 1977, and in 1986 one of the sons bought out his brother’s interest.  In 2008, a sibling spat arose over the royalties for the song (approx. $300,000/year), and four of Brumley’s children served and filed a termination notice to share in the lucrative rights.  In December 2008, the four siblings filed a declaratory judgment action seeking a declaration that their termination notice was effective.  The owning brother (Robert) responded with two defenses, one of which – whether the song was a work made for hire – was tried before a jury, who found in favor of the four siblings.

On appeal, the Court found that the termination notice was effective.  Because the rights were transferred before 1978, the termination provisions in section 304 of the Copyright Act govern.  When Brumley’s wife passed away, each of his children held a one-sixth interest in the termination right.  Accordingly, the four siblings could exercise two-thirds of the termination interest with respect to the pre-1978 assingment.  Further, a post-transfer (1979) second “bill of sale and assignment” did not bargain away the wife’s termination replace and did not replace the 1975 contract.  The Court found that it should not lightly assume that a contract bargains away the centerpiece feature of the 1976 act.

Ray Charles' Foundation Can Challenge Notices His Heirs Served To Terminate Copyright Grants To The Foundation

The Ray Charles Foundation v. Robinson, No. 13-55421 (9th Cir. Opinion dated July 31, 2015).

The 9th Circuit holds that that the Ray Charles Foundation, the sole beneficiary of Ray Charles’s estate, had standing to challenge the validity and effectiveness of notices of termination of copyright grants conferred by Charles to the predecessors of Warnter/Chappell Music.  The Court found that the Foundation was a real party in interest because the termination notices affected its right to royalties, and its claims fell within the statutory zone of interests.  Accordingly, it had standing to sue to challenge whether the underlying works were made for hire and thus not subject to the termination provisions of 17 USC 203 and 304(c).

Ghostface Killa Case, Involving "Iron Man Theme" Sample, Dismissed

Urbont v. Sony Music Entertainment et al., No, 11-cv-94516 (S.D.N.Y. April 20, 2015) [Doc. 78].

The Court granted Sony Music summary judgment dismissing the claims of plaintiff, who alleged infringement of his rights to the musical composition and sound recording of the "Iron Man Theme" in a Ghostface Killa song.  Sony successfully challenged plaintiff's ownership of a copyright interest in the song by establishing that the composition was a "work for hire" and was therefore owned by Marvel Comics, for whom plaintiff created the composition.  Notably, the Court found that Sony -- a third-party to that transaction -- had standing to challenge plaintiff's ownership under the work for hire doctrine pursuant to the 1909 Act's "instance and expense" test.

The Court also dismissed Plaintiff's state law claims for common law copyright infringement, unfair competition, and misappropriation, finding that the claims were preempted by the Copyright Act.  Plaintiff argued that the recording fell within the exception to pre-emption as a sound recording fixed before February 15, 1972.  17 U.S.C. 301.  The Court disagreed, finding that the recording was an "audiovisual work" and not a "sound recording" because it was created purely to accompany the television show Iron Man and did not exist apart from the accompanying televisuals.  Under the 1976 Act, the claims were preempted because they involve an audiovisual work.

11th Circuit Clarifies Author's Standing When Publisher Registers Copyright As Author's Assignee

Smith v. Casey, No. 13-12351 (11th Cir. Jan. 22, 2014) (decision here).

At issue in this appeal is whether the author of a musical composition who assigned his rights in exchange for royalties may rely for purposes of standing to sue for infringement under the Copyright Act on a registration his publisher filed.  The 11th Circuit found that the lower court erred in concluding that the estate lacked statutory standing to sue for copyright infringement.

The basic facts are this.  Around the same time a song called "Spank" was recorded, Harrick Music, Inc. (Harrick Music), a publishing company affiliated with the record label Sunshine Sound, registered a copyright for the musical composition “Spank,” identifying Smith as composer and itself as claimant.  Harrick Music checked a box on the registration indicating the song was not a composition made for hire.  In the ensuing years, Smith acquiesced in Harrick Music’s administration of the “Spank” composition copyright, but, he alleged, the company never remitted a cent to him. According to the complaint, neither did Sunshine Sound. Under Smith's Recording Agreement with Sunshine and the form songwriter’s agreement attached to it,
however, Smith was owed percentage royalties for the song’s exploitation in exchange for assigning his rights to it. So on November 28, 2011, shortly before his death, Smith through counsel sent a cease-and-desist letter revoking Harrick Music’s authority to administer “Spank.” And Smith also filed with the Copyright
Office four Notices of Termination, seeking to formally record his revocation. Despite this, the defendants continued to commercially exploit the composition, and thereafter Smith's estate sued for infringement of the composition (not the sound recording).

Two defendants (not Sunshine or Harrick) moved to dismiss, and the district court concluded Smith lacked statutory standing to pursue his copyright claim and sua sponte dismissed that count with prejudice as to all of the defendants.  Harrick Music, not Smith or his estate, had registered the copyright, the district court noted, and registration was a necessary precondition to filing suit for infringement.

On appeal, the 11th Circuit first examined sections 411 and 501 of the Copyright Act: "The 1976 Copyright Act’s legislative history explains that Congress intended 'beneficial owner,' as the term is used in § 501(b), to 'include . . . an author who had parted with legal title to the copyright in exchange for percentage
royalties based on sales or license fees.'"  Continuing,

Under this definition, the estate has a sufficient ownership interest for standing under § 501(b). According to Smith’s allegations, he never signed any agreement giving Harrick Music the right to exploit the “Spank” copyright. But even were we to treat Smith’s agreement to permit Sunshine Sound to execute the form songwriter’s contract appended to his Recording Agreement as acquiescence to its terms for the “Spank” composition, Smith still would only have assigned his rights to the musical composition in exchange for royalties. Thus, he has at least a beneficial interest that satisfies § 501(b) of the Copyright Act.

The twist was that Harrick, not Smith, had filed the registration.  Nonetheless, the 11th Circuit found that "The district court’s construction of § 411(a) was too narrow. Harrick Music registered a claim to copyright in the 'Spank' composition, specifically identifying Smith as the composer and informing the Copyright Office the work was not made for hire. Nothing in § 411(a) indicates that a composer who has agreed to assign his legal interest in a composition, along with the right to register it, in exchange for royalties, may not rely on the registration his assignee files. Where a publisher has registered a claim to copyright in a work not made for hire, we conclude the beneficial owner has statutory standing to sue for infringement."  (Emphasis added).

Although the 11th Circuit reversed on the standing issue, it found that the District Court properly dismissed plaintiff's declaratory judgment claim.

Bob Marley Recordings Are Works Made For Hire

Fifty-Six Hope Road Music Ltd. v. UMG Recordings, 08 CIV. 6143 (DLC), NYLJ 1202472502152, at *1 (SDNY, Decided September 10, 2010)

"This dispute concerns the ownership of the renewal term copyrights in certain pre-1978 sound recordings embodying the performances of Jamaican reggae artist, Bob Marley (the "Sound Recordings"). The Sound Recordings were created pursuant to exclusive recording agreements between Bob Marley and the predecessor-in-interest to defendant UMG Recordings, Inc. ("UMG"). The plaintiffs—Bob Marley's widow, Rita Marley, as well as nine of Bob Marley's children (together with Rita Marley, the "Adult Beneficiaries"), and their wholly-owned company, Fifty-Six Hope Road (collectively, the "Plaintiffs")—allege that the renewal term copyrights in the Sound Recordings reverted to them under the Copyright Act of 1909 upon Bob Marley's death in 1981. Plaintiffs also assert claims for underpayment of royalties against UMG. Plaintiffs and UMG have cross-moved for partial summary judgment. For the following reasons, UMG's motion is granted in part and Plaintiffs' motion is denied."

The Court analyzed Marley's recording agreements, distinguished a Copyright Act "author" from a common-dictionary-usage "author," and after considering various factors determined that Bob Marley's recordings are "works made for hire" under the Copyright Act of 1909.

The royalties claim concerns digital downloads - the Court found that contract ambiguities precluded summary judgment

Blue Monk

Yesterday, members of the jazz ensemble The Thelonious Monk Quartet (John Ore and Frankie Dunlop) filed suit against Thelonious Monk's record label (and others) for alleged copyright infringement and bootlegging arising from the broadcast of live musical perfomrances of the artists while members of the ensemble.

OTCS imagines the following defense could be fatal to plaintiffs: WORK MADE FOR HIRE! Time will tell...

[John Ore; Francis Dunlop; Robin Dunlop v. Thelonious Records Inc.; Thelonious S. Monk Jr. aka TS Monk; Peter Grain; filed 11/29/2007; CV-10681 SDNY]