Termination of Assignments in Sound Recordings, Works Made for Hire and The Need For Certainty

We are all looking for certainty in a world full of chaos.  One of the resources that I often turn to for reassurance is the 1976 Copyright Act, a roadmap to  a world where everything makes sense and if it doesn't make sense, at least it has a definition.  Except for Sections 203 and 302.

 

When the Copyright Act was amended in 1976, it provided for the first time for a termination provision which allowed authors to terminate earlier assignments of their works.  This right of termination is deemed inalienable (i.e. you can’t sign it away)  except in the case of a so-called "work made for hire," in which case the employer is deemed to be the author of the work for copyright purposes.  Like all important terms "work made for hire" is specifically defined by the Copyright Act: 

        (1) a work prepared by an employee within the scope of his or her employment; or

(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation , as an instructional text , as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an instructional text is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities

Notice  that you don’t see the words “sound recordings”  in there. The big issue for years has been whether or not sound recordings can be deemed to be "works made for hire" and therefore, incapable of termination of assignment.  Every  recording agreement drafted after January 1, 1978 states that the sound recordings being assigned thereunder are, in fact, works made for hire.  But copyright practitioners have assumed that because the Copyright Act does not include sound recordings under the definition of works  made for hire, then they are no such animal.  The problem is that we have had no court decision on the issue-only anecdotal stories and rumors.  

That may be about to change. 

Recently, lawyers in New York have filed two class action lawsuits, one in which my friend, John Waite, is the lead plaintiff.  This is a suit against Universal Music Group.  There is a companion case filed against Sony which lists Southside Johnny as one of the lead plaintiffs.  In each case, the facts are similar.  The record artist sought to exercise their statutory termination rights only to be rebuffed by the record companies for a number of reasons.  

This caused the plaintiffs to seek declaratory relief from the court--  essentially asking the question "whether sound recordings can ever be considered 'works made for hire' as that term is defined by the Copyright Act because the definition set forth in Section 101 of the Copyright Act does not include sound recordings as being one of the types of works that can be a work made for hire."   and “whether the release of sound recordings that were created by a particular recording artist in "album" form, as is typical in the musical industry, constitutes a contribution to a collective work-or creates a "compilation" as that term is used in Section 101 of the Copyright Act, thereby transforming these sound recordings into "works make for hire".  

There are several important issues poised by these lawsuits but these are the most important.  I don't know the status of these cases but they appear to have major implications for the United States recording industry (it being understood that this is a function of U.S. Law and has no real application to the rest of the world).  I look forward to having a little more certainty and clarity on the issue regardless of the outcome.  

Obviously, Pianos Do Not Sing: The Happy Birthday Decision

            I have just finished the most complicated mystery story that I have read in a long time.  It involves three sisters, a multi‑national corporation, books published in the 1920s, lost contracts, lawsuits filed in the 1930s and a rarely used exception to the hearsay rule of evidence.  Is this the latest John Grisham thriller?  No, it is the summary judgment ruling in the case Marya, et al. v. Warner Chappell, Music Inc. – the recent decision which held that Warner Chappell did not in fact own a valid  copyright to the song "Happy Birthday to You".

            Lawyers and copyright enthusiasts have speculated for years as to how this ancient song could still be subject to copyright protection. It turns out that the real story is more  interesting than anything we could have imagined.

            The decision is complicated but it basically boils down to the fact that the copyright to the music of the song (actually a song entitled "Good Morning to All") expired in 1949.  The opinion is not entirely clear as to who wrote the lyrics to "Happy Birthday" (Did Patty Hill create the lyrics in 1893 at the same time as she and her sister Mildred created the music?  If so why did she wait until 1935 to come forward with this information in a deposition?) but the court does find that the Hill sisters never assigned the lyrics to Clayton F. Summy, the publisher whose company ultimately sold  the song to Warner Chappell.  Part of the proof in the case comes from a Time Magazine article discussing the 1935 lawsuit filed against the producers of a motion picture entitled As Thousands Cheer who allegedly used "Happy Birthday" without obtaining a synchronization license.  This article was admitted into evidence over a hearsay objection by utilizing the "ancient records” exception.

            Ultimately, the Court found that Warner Chappell had put forth no viable argument that the Hill sisters ever assigned the copyright in the lyrics to the song to Mr. Summy.  The Court's investigation of various assignments between the parties led them to conclude that one particular document, gave Summy the right to create "piano arrangements" of the composition but "…obviou

sly, pianos do not sing."

            I doubt that we have heard the end of this case, especially as the Court has not considered damages.  The plaintiffs are asking that the publisher be compelled to "return millions of dollars of unlawful licensing fees".  Could this happen? Nonetheless, this is a fascinating look at how a contemporary court deals with evaluating facts which date back almost 125 years and how these facts have significant economic consequences to major music publishers today

Firefly and Fan Art

Have you ever seen Firefly?  Yeah, me neither.  In fact, the only way I know about the TV show was through my wife and her super smart friends.  Nevertheless, I was fascinated to read about a legal skirmish that had broken out over a particular orange and yellow ski cap that one of the show's characters wore.

            Apparently, fans of the short-lived show began knitting copies of this cap and selling them on such websites as Etsy and Café Press leading Fox Television to send cease and desist letters to the sellers because sales of the homemade caps were interfering with their own licensed version of the cap. 

            An article in last month's American Bar Journal  by Anna Stolley Persky explored the whole complex  area of fan art – where the desires of obsessive fans to replicate artwork from their favorite movies, books  or television shows runs into copyright infringement claims from the creators of those works.  All of this is a little vague.  For example, can a yellow and orange cap actually be capable of copyright protection?  Even so, is the fan's creation a derivative work or a protected fair use?

            This reminds me of stories I heard when I was younger of the Walt Disney Company going after mom and pop bakeries who innocently put Mickey Mouse on a birthday cake or ASCAP going after the Girl Scouts for singing songs around the campfire without a license. It is an interesting dilemma for all parties.   One thing a copyright owner must consider is that by trying to stop the fans from creating fan art they risk alienating their fan base.  Also, this is a question of degree – I still can't fathom why Fox would have a problem with a guy selling a Firefly inspired cap but I can of course understand by DC Comics would sue to stop the sale of unauthorized Batman costumes. 

            The article ends with two very good pieces of advice for those who want to create and market fan art.  Quoting Attorney Ruth Carter, the author states:

First, don't base your entire business on using somebody else's copyrighted work without permission; and

Second look at the history of the copyright holder: Does he or she have a record of going after people who make fan art?

            This is sound advice (especially the first part!)  because at the end of the day if a copyright holder (or trademark owner) has the will and the resources to stop the distribution of fan art, all of the fair use arguments in the world will be of little practical value.  I remember that years ago I represented a gentleman who was marketing a piece of memorabilia associated with    a recently deceased celebrity.  He had received a very serious cease and desist notice. Because of the facts of the case my client had some strong arguments on his side. When I made these arguments to the estate’s  lawyer, he politely listened and then invited me to review the list of recent litigation targets they had gone after.  It was impressive and needless to say my client ceased and desisted. 

            With the proliferation of media outlets and the endless growth of the internet, the rise of fan art culture will continue to grow and thrive, from caps to fan fiction and beyond.  I think this is an area to keep an eye on.

Why Do You Notarize Copyright Assigments?

            This comes from either the “learn something new every day” or blatantly obvious department. 

            Years ago a very smart attorney told me that a notarized signature was not required for a valid copyright assignment.  It is true that § 204(a) Copyright  Act  states “a transfer of copyright ownership other than by operation of law is not valid unless an instrument of conveyance, or a note or memorandum of the transfer is in writing and is signed by the owner of the rights conveyed…”.  There is specifically no requirement of notarizing the signature.   

            So,  I have wondered for years why publishers and others require copyright assignments to be notarized.  While researching something else I seem to have found that the answer is right there in § 204(b) of the act which states “a certificate of acknowledgement is not required for the validity of a transfer but it is prima face evidence of the execution of the transfer if (i) in the case of a transfer executed in the United States a certificate is issued by a person authorized to administer oaths within the United States. 

            Once again I find the Copyright Act  of 1976 incredibly illuminating.  In essence, it is not a legal requirement that your copyright assignment be notarized, it’s just a very good idea from an evidentiary standpoint.  No one ever discusses the validity of copyright assignments except in the context of evidence. So, I conclude that despite the language of § 204(a), copyright assignments need to be notarized.

Don't Mess With Lessig

Lawrence Lessig is not the kind of guy you want to piss off.  Lessig, a Harvard law professor, is one of the world's leading experts in copyright law; more to the point he is one of the pre‑eminent thinkers in the ever-expanding area of fair use and intellectual freedom. 

Lessig recently gave an online lecture and used part of the song "Liztomania" by the band Phoenix to illustrate a point about dance music and global Internet phenomenons. The lecture was posted on You Tube.  Liberation Music, an Australian company sent Lessig a letter claiming copyright infringement and threatening to sue for violating its exclusive rights. They apparently also sent a takedown notice to You Tube, under the DMCA provisions.  Lessig neither ignored the letter nor did he bother to send a reasoned response outlining his position.  He instead filed suit asking for a declaratory judgment that his use was a protected fair use.  He is asking for damages and legal fees

Lessig's suit is one of what appears to be a growing number of copyright cases using the concept of "copyright abuse" to challenge what might be accepted norms in copyright law.  To be sure, few would disagree that Lessig's use of the song in an academic lecture is almost certainly fair use; it's right there in the statue.  What is more interesting is that Lessig is using the courts and assuming the role of plaintiff to prove his point.  Robin Thicke has done the same thing with his lawsuit against Bridgeport Music and the Estate of Marvin Gaye, filed in response to their claims of copyright infringement with his song “Blurred Lines”. The Lessig case, if it goes to trial, may help academics gain a better understanding of what is permissible in the area of fair use and scholarship.  It might also give copyright owners pause before sending cease and desist letters and sending take down notices to YouTube and other outlets.