Source: http://www.dcba.org/mpage/vol240412art2
Timestamp: 2017-12-13 14:49:42
Document Index: 24018772

Matched Legal Cases: ['§203', '§101', '§304', '§203', '§203', '§ 203', '§ 203', '§ 203', '§ 203', '§ 203', '§ 101', '§304']

Mayhem Looming in the Music Industry in 2013
By Michael A. Biederstadt
In 2010, a New York trial court determined that the five albums created, written, and recorded by Bob Marley during his lifetime were not actually owned by Marley.[1] Instead, the District Court determined that the “largest record company in the world” was actually the legal “author” of Marley’s music.[2] Throughout history, many musicians have been admired for their ability to bring about change, including Bob Marley. Surprisingly, through litigation that is currently ongoing it may now be a member of the Village People’s turn to pave the way for artists throughout the United States to regain “authorship” of their music and potentially, forever change how courts interpret certain aspects of copyright law.
Historically, courts have provided unbridled power to major record companies over their artists based upon the common law that has evolved pursuant to the Copyright Act of 1909. Yet, as a result of the Copyright Act of 1976, the long-standing traditions of our common law may soon change. On January 1, 2013, the floodgates will be opened and the entertainment industry in the United States will face a phenomenal challenge. Pursuant to §203(a) of the Copyright Act of 1976, an individual artist will now be capable of terminating the record companies copyright ownership of their music thirty-five years after signing after the contract.[3] Unfortunately for artists, the protections created in support of authorship under the Copyright Act of 1976 will be limited to material created after January 1, 1978.[4] If an artist is lucky enough to fall into this category, the age-old power-struggle between the artist and the record company may begin to dramatically swing in favor of our most influential musicians, whose music has the ability to endure the test of time.
Copyright Ownership within the Entertainment Industry. On September 10, 2010, the United States District Court for the Southern District of New York issued an opinion that denied Bob Marley’s widow and nine of his children the ability to regain copyright ownership over five albums created by the prolific reggae artist from 1972 until his death in 1981.[5] In that decision, the Court classified Bob Marley’s creation of said music as works “made for hire” and determined that Universal Music Group (UMG) was the statutory author and owner of both the initial and renewal copyrights for each of the five albums created.[6] Due to the fact that each of the recordings were copyrighted and published prior to January 1, 1978, the Copyright Act of 1909 applied and dictated the judicial outcome in favor of UMG. [7]
Commencing January 1, 2013, a songwriter, a cartoonist, an author, or other artist of a creative work, who executed an agreement to transfer or grant a copyright license after January 1, 1978, may regain ownership and control of their copyright, regardless of the deal they may have entered into thirty-five years ago.[8] The intent behind such legislation was to protect the disadvantaged artist, who licensed their music, character, novel or logo to a corporate media giant when they were young and unknown, possessed little to no bargaining power, and may have simply been ecstatic to receive any compensation whatsoever to pursue their dream.
Consider the deal struck in 1938 when two young men from Cleveland, Ohio, Jerome Siegel and Joseph Schuster, signed over all of their rights to the character of Superman for $130.[9] After taking into account the astronomical amount of money generated from decades of comic sales, movies, video games, toys, clothes, costumes, parade floats and corporate licensing, no one can reasonably argue that $130 was reasonable compensation for this character. Likewise, consider the unbelievable contribution of Jack Kirby to our current string of CGI summer box-office blockbusters. Kirby is credited as a co-author and creator of the original comic book characters “The Fantastic Four,” “Spiderman,” “X-men,” “The Incredible Hulk,” and “Thor.”[10] In addition, when John Steinbeck sold the publishing rights to “The Grapes of Wrath” and “Of Mice and Men,” could he have contemplated the long-term success and influence that these novels would have upon American society? [11] It is undeniable that each of these artists and authors failed to comprehend the level of success and multi-billions of dollars that said material would generate over the next century. Hence, why each of these individuals or their heirs are currently in the process of attempting to terminate their copyright assignments pursuant to the Copyright Act of 1976 or have recently concluded litigation associated therewith.
The Copyright Act of 1976. After reviewing the top selling albums of the late 1970’s, few would have guessed the artist to valiantly be leading the public charge to exercise their right to terminate their copyright license based upon the fast-approaching date of January 1, 2013. Yet, it turned out to be the original lead singer of “The Village People.” Victor Willis (the Cop and occasionally, the Sailor) has filed for termination of his personal grant of copyright credit for 33 of the band’s songs, including the hits “Y.M.C.A.,” “Macho Man,” and “In the Navy.”[12] Although it is publicly known that many artists from the late 70’s and early 80’s have filed the required notice of termination pursuant to the Copyright Act of 1976, none have received as much media-attention as the Village People’s front man. The litigation resulting from Willis’ attempt to terminate is quickly bringing the looming issue surrounding the Copyright Act of 1976 into the spotlight.
The Honorable Judge Barry Moskowitz, who is overseeing Willis’ case, acknowledges that this is one of the first cases regarding the termination of copyright grants to be litigated in Federal Courts.[13] As a result, the Court has taken an unconventional approach in permitting amicus briefs from the Songwriters Guild of America and various other associations at a very early stage in the litigation.[14]
Termination Provisions of Section 203. Section 203(a) of the Copyright Act of 1976 provides, “In the case of any work other than a work made for hire, the exclusive or nonexclusive 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 under certain conditions.[15] In the case of a grant executed by one author, termination of the grant may be effected by that author or their heirs. In the case of a grant executed by two or more authors of a joint work, termination may be effected by a majority of the authors who executed it.[16] Termination of the grant may be effected at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant; or, if the grant covers the right of publication of the work, the period begins at the end of thirty-five years from the date of publication of the work under the grant or at the end of the forty years from the date of execution of the grant, whichever term ends earlier.[17]
As a result of sections 203, January 1, 2013 has become the focal point associated with termination rights governed by the Copyright Act of 1976. In the event that artists executed a copyright transfer or grant with a record label on January 1, 1978 (the first eligible date for protection under the Copyright Act of 1976), they are entitled to effectively terminate that copyright transfer or grant on January 1, 2013, which is thirty-five years after executing the grant, provided that they have fulfilled all of the statutory notice requirements.
However, the Act provides additional requirements beyond the passage of time. The termination shall be effected by serving an advance notice in writing, signed by the number and proportion of required owners of termination interests, or by their duly authorized agents, upon the grantee or the grantees successor in title.[18] The notice must state the effective date of termination and the notice shall be served not less than two or more than ten years before the date termination. A copy of the notice shall be recorded in the Copyright Office before the effective date of termination.[19] Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.[20]
Work Made for Hire. The definition of a “Work Made for Hire” is at the center of the controversy over copyright termination. Under Section 101 of the Copyright Act of 1976, a “work made for hire” is defined as “(1) a work prepared by an employee within the scope of his or her employment (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. . . .”[21] If the copyrighted material is deemed to be a “work made for hire,” then the legal “author” of that material is the employer and not the artist for all copyright purposes. Termination rights are specifically exempted from a work that is deemed to be a “work made for hire” and the employer will retain all copyright ownership of what is created by their employees.
From the major record labels perspective, they have exclusive ownership and recording rights to music that is created by the artist. The courts have traditionally supported the major labels’ position and justified their decisions by finding that the labels as “employers” have the ability to control when and where an artist records; they have invested all of the capitol to create, publish and market the music that is created; and they have the right to object to certain lyrics or decline publishing any song or album that may be submitted by the artist. Therefore, it is the position of the RIAA and all major record labels that they are in a position to contractually deem themselves to be the author of music created by the artists on their label. By virtue of the terms of their contractual relationship, the artists have historically been deemed to be employees of the label. As a result, the master recordings created by the label during the term of the recording contract then belong to the company in perpetuity.
Where the System Failed the Marley’s, the Village’s Cop May Triumph. Over the course of the past century, application of copyright law within the United States has supported the record companies in defining a “work made for hire.” The well established common law concerning copyright “authorship” is clearly laid out in the case of Fifty-Six Hope Road Music Ltd., v. UMG Recordings, Inc.[22] This decision, discussed in brief at the beginning of this article, centered around the definition of an “author” and a “work made for hire” in determining whether the heirs of Bob Marley were entitled to claim ownership of the renewal term copyrights in Bob Marley’s recordings by virtue of reversion after Bob Marley’s death. The Court determined that Universal Music Group (UMG), as the successor-in-interest of Island Records, is the statutory author and owner of the initial and renewal term copyrights of said music.[23] Universal Music Group argued that based upon the executed recording agreements, Marley’s records were “works made for hire” and that they are therefore entitled to the financial rewards copyright law traditionally grants upon corporations to encourage such efforts.[24] The heirs of Bob Marley argued that the recordings were not traditional commissioned works and therefore, should not be considered “works made for hire.” [25] Further, Bob Marley’s heirs argued that he would have created his music even if he had not entered into a contractual agreement with Island Records.
In making its decision, the Southern District of New York’s District Court determined that because the recordings in dispute were recorded prior to January 1, 1978, they are governed by the 1909 Act.[26] Under the 1909 Act, the work made for hire definition of §101 of the Copyright Act of 1976 does not strictly apply. If a work is determined to be a “work made for hire,” the employer is legally regarded as the “author,” and the creator of the work is not.[27] In making its determination, the court applied the Second Circuit’s common-law “Instance and Expense Test.”[28] On its face, that test does not consider whether the work was created by a traditional “employee” or an “independent contractor.” Under the “Instance and Expense Test,” an employer merely needs to induce the creation of the work and possess the right to direct and supervise the manner in which the work is carried out (even if the employer does not direct or supervise its creation) in order to attain work-for-hire status. The Second Circuit acknowledged in this holding “that its jurisprudence concerning the status of commissioned works under the 1909 Act has created an almost irrebuttable presumption that any person who paid another to create a copyrightable work was the statutory author under the work for hire doctrine.”[29]
Although the court’s decision was correct under the Copyright Act of 1909, the reasoning behind the Second Circuit’s decision is not consistent with the intent clearly set forth in the Copyright Act of 1976. Bob Marley is an independent contractor in the most general sense of an independent contractor, as opposed to an employee. Bob Marley is the “author” of his artistic musical creations. Regardless, UMG properly renewed their grant of copyright after twenty-eight years and as a result, UMG will retain copyright ownership until another termination period should arise. Pursuant to §304(c) of the Copyright Act of 1976, the Marley family will be entitled to seek termination of the copyright grant to UMG fifty-six years after it was originally secured, which will occur in 2028.[30]
Conclusion. The arguments in the Marley decision and the pending litigation involving Victor Willis of the Village People are eerily similar. Counsel for each of the record companies argue that termination rights do not apply to the disputed sound recordings because the master recordings belong to the record companies in perpetuity as they were “works made for hire” and the company is the “author” for copyright purposes. Further, the Village People were a concept group formed and created by the record company. The record company controlled what, when, and where the group recorded. So in turn, from the record company’s perspective, the master recordings were “works made for hire,” with the label as the statutory author, and not subject to termination rights.
The Copyright Act of 1976 may be the linchpin to a new approach in defining and understanding copyright law. The distinction of an employee and an independent contractor within the entertainment industry will no longer be grounded in common law and subject to the “Instance and Expense Test.” Instead Federal Courts will need to establish a sound foundation to justify the decisions that will be made concerning termination rights under the Copyright Act of 1976. Victor Willis’ case may lead to precedent that re-defines the definition of a “work made for hire” or joint authorship and effectively change the way our legal system views various nuances of copyright law.
[1]Fifty-Six Hope Road Music Ltd. v. UMG Recordings, Inc., No. 08 Civ. 6143 DLC, 2010 WL 3564258 (S.D.N.Y Sept. 10, 2010).
[2] Id. at *1 and *11.
[3] 17 U.S.C.A. §203 (West 2010).
[5] Fifty-Six Hope Road Music Ltd., 2010 WL 3564258 at *1.
[6]Id. at *11.
[7]Id. at *1, *7.
[8] 17 U.S.C.A. §203.
[9] Siegel v. Warner Bros. Entertainment Inc., 658 F.Supp.2d 1036 (C.D.Cal. 2009).
[10]Marvel Worldwide, Inc. v. Kirby, 777 F.Supp.2d 720 (S.D.N.Y. 2011).
[11]Penguin Group (USA) Inc. v. Steinbeck, 537 F.3d 193 (2nd Cir. 2008).
[12]Larry Rohter, A Village Person Tests the Copyright Law, The New York Times, August 16, 2011., at http://www.nytimes.com/2011/08/17/arts/music/village-people-singer-claims-rights-to-ymca.html?pagewanted=all.
[13]Eriq Gardner, Judge in “Y.M.C.A.” Copyright Termination Battle Asks to Hear More Information, The Hollywood Reporter, December 19, 2011, at http://www.hollywoodreporter.com/thr-esq/ymca-village-people-lawsuit-judge-copyright-275293.
[14]“The Songwriters Guild of America asked for permission to submit an amicus brief that argued that recipients of termination notices shouldn’t be permitted to engage in protracted litigation and legal gamesmanship to block the effect of clearly meritorious termination claims by creators.” Id.
[15]17 U.S.C.A. § 203 (2010).
[16]Id. at § 203(a)(1).
[17]Id. at § 203(a)(3).
[18]Id. at § 203(a)(4).
[20] Id. at § 203(a)(5).
[21]Id. at § 101.
[22]Fifty-Six Hope Road Music Ltd., 2010 WL 3564258.
[23]Id. at *11.
[24]Id. at *6.
[25]Id. at *9.
[26]Id. at *7.
[29]Id. at *8.
[30] 17 U.S.C.A. §304.
Michael Biederstadt is a graduate of Valparaiso University School of Law and received his undergraduate degree from Loyola University Chicago. Michael is an associate at Abear Law Office and his practice is primarily concentrated in family law. As an avid music lover and someone who has dabbled in entertainment law throughout his career, Michael continues to pursue his interest in the field of entertainment law.