>Tom Waits did not sue Frito-Lay for copyright infringement. At the time Waits didn't own the copyright (in the work of authorship) to the song "Step Right Up". This was, and is, owned by Fifth Floor Music Inc (controlled by Martin/ Herb, Evan Cohen). One might assume Frito-Lay did indeed obtain the "synch" license from Fifth Floor Music to use the song in the commercial. And as they were not using the song as recorded by Waits himself, they didn't have to worry about copyright in the musical work (owned by Elektra/ Asylum).

Is there any reason why Elektra/Asylum didn't license the actual recording copyright[0] to Frito-Lay? I'm assuming Tom Waits (like any other musical artist) wouldn't have veto rights over licensing the recordings, in the same way he apparently couldn't stop Fifth Floor Music from licensing the song itself to Frito-Lay.

The thing is, if Frito-Lay had actually licensed the recording, Tom Waits wouldn't have a leg to stand on in court, because of a very funny concept in copyright law called federal preemption. Any claim under any other law - state[1] or federal - that looks and quacks like a copyright is null and void. You only get to sue for copyright with copyright. So you can't, say, trademark a public domain work[2] and then sue people for reproducing it. Misappropriation, false endorsement and publicity rights are very much trademark-shaped laws, so they also lack any jurisdiction over copyright matters. There really just isn't room in the law for "I license you this work" but also "you reproducing this work is a false endorsement". The public is not confused when copyrighted works are used with permission.

However, I'm also not sure why suing for copyright infringement was off the table in the first place. The thing is, when you make a derivative work, you own what you added. If you and me both go to Disney and buy licenses to produce Avengers merch, but I decide to copy your design for the merch, you get to sue me. My license to make my own derivative version of something does not entitle me to copy other derivatives of that same work. So Frito-Lay, having a license to record their own version of Step Right Up, doesn't get the right to copy Tom Waits' recording of Step Right Up.

Who knows, maybe recording copyright is a lot narrower than other forms of copyright, but it's hard not to shake the feeling that he could have gone up against Frito-Lay for a lot more.

[0] Music copyright has two souls: the copyright over the song itself - lyrics, sheet music, and so on - and a separate copyright over a recording of a specific performance of the song. Originally you could only copyright the song and not the recording.

[1] The reason why federal preemption exists is that states started inventing their own recording copyrights for music. Which sounds absolutely wild to lawyers today, who are taught that copyright is inherently a federal question and that states have no say in how it works. What's even more wild is that some state recording copyright laws were actually perpetual, this somehow survived the "for limited times" language in the Copyright Clause, we didn't establish federal preemption and shut down these schemes until the 1970s, and we didn't extinguish already extant perpetual recording copyrights until the Music Modernization act in 2018.

[2] i.e. Disney putting Steamboat Willie in their logo