Intellectual Property Attorney

Hotly Contested Issues Arise In Landmark Copyright Termination Case

Last week, we reported here about a recent copyright termination case involving Victor Willis, the lead singer and co-writer of many of the Village People’s most popular songs. We explained that the case is noteworthy because it is the first major dispute involving the termination of a grant of copyright rights in music under Section 203 of the Copyright Act, which became effective in 1978. Thus, the issues raised in this case have been anticipated for more than 35 years by music publishers and recording companies who stand to lose the copyrights that are the very lifeblood of the industry.

One highly anticipated issue is whether the musical compositions—and/or sound recordings, which had not been protected under the Copyright Act until 1978, and thus had never before been subject to termination—would be deemed works-for-hire, which are ineligible for termination as a matter of law. Whether a work is deemed a work-for-hire under the Copyright Act is a highly fact-dependent determination. The analysis under Section 101 takes into consideration several factors, including: (A) whether the hired party (the author) was an employee under the general common law of agency, which involves factors such as the hiring party’s right to supervise and control the manner and means of creation; or (B) if the hired party (the author) could not be considered an employee, whether the work was: (1) specially ordered or commissioned; (2) for use as a contribution to a collective work; (3) as part of one of nine types of works listed in the statute; and (4) if the parties had expressly agreed in a writing, signed by them, that the work shall be considered work made for hire.

Although the music publisher plaintiffs in this case initially argued that Mr. Willis’s lyrics were created as works-for-hire, they withdrew this claim before Judge Barry Ted Moskowitz of the Southern District of California could rule on it. The decision to withdraw may well have been tactical. An adverse ruling on works by the Village People, a group whose members were selected by the record company, would have set a very difficult precedent for the record companies to overcome in future cases. This issue remains likely to arise in legal battles to come.

The court did rule on another important issue anticipated to arise in future cases, particularly those involving sound recordings. Pursuant to Section 203, a termination notice must be signed by a majority of the grantors. The publishers argued that Mr. Willis could not terminate the grant of just his share of the rights, given that he was only one of several co-authors. Similarly, the recording companies are expected to argue that sound engineers and record producers are co-authors of sound recordings, thus hampering the ability of individual artists to serve valid notices of termination. However, Judge Moskowitz rejected this argument, holding that “a joint author who separately transfers his copyright interest may unilaterally terminate the grant.” If this ruling holds up, the record companies may well be out of luck too, as engineers, producers and artists typically sign separate contracts.

The only issue left to be decided at trial is whether Mr. Willis now owns 1/3 or 1/2 of the copyrights, which will depend on whether the record producer, Henri Belolo, is deemed a co-author of the works at issue.

The case is Scorpio Music S.A. et al. v. Willis, 3:11-cv-01557. We will continue to report on decisions in this hotly contested area of law.

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