Music Law Weekly Case Update for Music Industry Executives - May 16, 2012

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Scorpio Music S.A. v. Willis, USDC S.D. California, May 7, 2012
 Click here for a copy of the full decision.

  • District court dismisses music publishers’ declaratory judgment action challenging the validity of co-author’s unilateral notice of termination of copyright grants, holding that a joint author who separately transfers his copyright interest may unilaterally terminate that grant.

Plaintiffs Scorpio Music S.A., a French music publisher, and Can’t Stop Productions, Inc., the exclusive U.S. sub-publisher and administrator of Scorpio’s musical compositions, brought a declaratory judgment action against defendant Victor Willis, the original lead singer of the Village People, challenging Willis’s attempt to terminate his post-1977 grants of his copyright interest in 33 musical compositions (the Compositions), including the hit songs, YMCA, In the Navy and Go West.

Plaintiffs alleged that from 1977 to 1979, they employed Willis to translate lyrics or create new lyrics for French musical compositions owned by Scorpio. The copyright registrations for those works list Willis as one of the writers. Under their Adaptation Agreement, Willis transferred the copyright interest in those works to Can’t Stop Music, in return for which Willis received between 12 and 20 percent of the gross receipts from the works. In January 2011, Willis served plaintiffs with a “Notice of Termination of Post-1977 Grants of Copyright on Certain Works of Victor Willis” with respect to his interests in the Compositions. Plaintiffs brought suit challenging the validity of the termination and seeking a declaratory judgment that Willis has no rights in the copyrights, requiring him to withdraw the notice of termination, and enjoining him from making any claims to the copyrights in the compositions. In the alternative, if the court found that Willis has the right to terminate, plaintiffs seek a declaration that defendant’s reversion of rights be limited to the same percentage ownership as he received under the Adaptation Agreements.

The court declined to rule in plaintiffs’ favor on both requests and granted Willis’s motion to dismiss the action, finding that Willis did have the right to terminate and that he was entitled to reversion of his undivided share in the rights as co-author of the works. Plaintiffs argued that Willis’s notice of termination was invalid because he was the only author who served a notice and that, under the Copyright Act, a majority of all of the authors who transferred their copyright interests in a joint work, whether their transfers were part of the same transaction or separate transactions, must join in a termination for it to be valid. Willis argued that since he was the only person who executed the grants of his copyright interests in the Compositions, he alone had the ability to terminate those grants.

The court agreed with Willis, holding that “a joint author who separately transfers his copyright interest may unilaterally terminate the grant." The Copyright Act of 1976 gives authors the right to terminate a transfer of copyright by serving an advanced notice of termination that complies with the specific requirements of the Act. An author may terminate the grant at any time during a period of five years beginning at the end of 35 years from the date of execution of the grant. The author must serve the termination notice on the grantee (or grantee’s successor) not less than two and not more than 10 years before the specified date of termination.

According to the court, the issue in the case was whether, 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. The court concluded that the language and purpose of the statute, in conjunction with the law governing the rights of joint authors, permits a joint author who separately transfers his copyright interest to terminate unilaterally that grant.

Section 203(a)(1) of the Copyright Act provides: “In the case of a grant executed by one author, termination of the grant may be effected by that author.” Further: “In the case of a grant executed by two or more authors of a joint work, termination of the grant may be effected by a majority of the authors who executed it.” Noting that, when referring to a grant executed by two or more authors of a joint work, section 203(a)(1) refers to a “grant” in the singular, not “grants,” the court reasoned that, under the plain meaning of the statute, if two or more joint authors join in a grant of their copyright interests, a majority of the authors is necessary to terminate that grant. If a single joint author grants his copyright interest, however, then he alone can terminate his grant.

According to the court, this interpretation is consistent with the law governing the rights of joint authors both before and after the enactment of the Act in 1976. Each co-owner of a joint work has an undivided interest in that work and may, in the absence of an agreement otherwise, transfer his ownership rights to a third party. Congress was aware that a single joint author may grant his interest in the joint work separately from his co-authors or may join in a grant with one or more of his co-authors, and the Act therefore provides that, when two or more authors of a joint work execute a joint grant, a majority of the authors who executed the grant is necessary for termination. Section 203(a)(1) does not require that a joint author enter into a joint grant with one or more of his co-authors, however. Nor does it provide that if two or more joint authors enter into separate grants, a majority of those authors is needed to terminate any one of those grants.

The court rejected plaintiffs’ argument that the singular “grant” means all transfers by joint authors, collectively, even if executed in separate transactions. It concluded: "It would be contrary to the purpose of the [Copyright] Act to require a majority of all joint authors who had, at various times, transferred their copyright interests in a joint work to terminate the legally permissible separate grant by one joint author of his undivided copyright interest in the work. The purpose of the Act was to 'safeguard authors against unremunerative transfers' and address 'the unequal bargaining position of authors, resulting in part from the impossibility of determining a work's value until it has been exploited. Under Plaintiffs' interpretation, it would be more difficult to terminate an individual grant than it would be to make it in the first place."

The court also declined to limit Willis’s ownership in the various compositions based on the percentage royalty compensation he received under the Adaptation Agreement – between 12 and 20 percent. Rather, it held that Willis would get back ownership based on the rights he granted, not the remuneration he received for those rights. Absent an agreement otherwise, joint authors shared equally in the ownership of the joint work, even if their respective contributions to the joint work were not equal. If Willis was one of three authors of a musical composition, he would have a one-third undivided copyright interest in the composition. If he granted his copyright interest in the composition and then later terminated that grant, Willis would get back his one-third undivided copyright interest, regardless of what percentage royalty he was paid during Can’t Stop Music’s ownership of the copyright interest.

 



For more information, please contact Barry Slotnick at bslotnick@loeb.com or at 212.407.4162.

Westlaw decisions are reprinted with permission of Thomson/West. If you wish to check the currency of these cases, you may do so using KeyCite on Westlaw by visiting http://www.westlaw.com/.

Published In: Art, Entertainment & Sports Updates, Civil Procedure Updates, Civil Remedies Updates, General Business Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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