Legal Document

469 U.S. 153 105 S.Ct. 638 83 L.Ed.2d 556 MILLS MUSIC, INC., Petitioner,v.Marie SNYDER and Ted Snyder, Jr., etc. No. 83-1153. Argued Oct. 9, 1984. Decided Jan. 8, 1985. Rehearing Denied March 18, See 470 1065, 1782. Syllabus This case involves a controversy between petitioner publisher respondent heirs of the author 1923 copyrighted song "Who's Sorry Now" over division royalty income that sound recordings have generated. In 1940, assigned his entire interest in all renewals copyright to exchange for an advance petitioner's commitment pay cash on sheet music 50 percent net royalties received mechanical reproductions. 1951, registered renewal copyright. Thereafter, directly or through agent issued 400 licenses record companies authorizing use phonograph records, obligating petitioner, who turn was obligated those author. Separate were then prepared generated disputed income. After author's death, respondents succeeded arrangement with petitioner. Pursuant § 304(c)(2) Copyright Act, as revised 1976, terminated grant rights Under 304(c)(6), this termination caused "covered by grant" revert respondents, except under 304(c)(6)(A) "derivative work authority before its may continue be utilized terms after termination." The question come within statutory definition work." When demanded remitted them, placed funds escrow brought interpleader action Federal District Court, which entered judgment court held had been "prepared from statute made no distinction grantees themselves make own derivative works license others do so, therefore agreement effect prior governed companies' obligation royalties, agreements each entitled share royalty. Court Appeals reversed, holding exception preserved only grants companies; reversion carried it right collect payable grants; 304 enacted benefit authors designed protect "utilizers" works; because neither nor "utilizer," not member either class intended benefit; legislative history indicated Congress contemplated situation prepare derived two successive rather than single "utilizer." Held: Petitioner is pursuant dispute 1940. A consistent reading word "grant" text encompasses grant. Nothing language indicates draw authorizations are based direct grants. Rather, consequences authorizes apply protected exception. boundaries defined reference scope privilege authorized time prepared. involved unquestionably boundaries. Pp. 164-178. 720 F.2d 733, reversed. Marvin E. Frankel, New York City, Harold R. Tyler, respondent. Justice STEVENS delivered opinion Court. 1 publisher, Mills Music, Inc. (Mills), author, Snyder (Snyder), (the Song) outgrowth general revision law 1976.1 1976 Act gave Snyder's reacquire copyright2 previously granted Mills; however, also provided termination."3 Song, dispute, kind.4 Thus, raises whether publisher's terminates contractual such works. 2 key will unlock puzzle understanding phrase "under used 304(c)(6)(A)—the so-called exception" Exception) "termination transfer licenses" provisions found 304(c).5 Before focusing meaning phrase, we shall describe chain title copyright, circumstances surrounding Congress' adoption how pertinent affected relationship among interested parties 1978 when Mills. We begin early factual history. 3 * one three persons collaborated creating Now."6 Although actually one-third agree should treat if sole original Song name Waterson, Berlin & Co., publishing company partly owned.7 That went into bankruptcy 1929, 1932 trustee Mills.8 4 1909, 35 Stat. 1075, musical composition lasted 28 years date first publication, could renew additional term years.9 acquired ownership bankruptcy, needed cooperation order acquire 28-year term. Accordingly, 1940 written defining their respective essence, Mills' reproductions.10 5 obtained 1951. filing required notice,11 directly, Harry Fox Agency, Inc., specific reproductions records. Using variety different artists arrangements, these separate works," independently copyrightable.12 Because reproduction issued, contractually Mills, turn, Snyder.13 acted performing service collecting licensed and, deducting charges, remitting receipts Snyder. widow son II 6 massive necessary began 1955, perhaps stimulated part country's help development of, subsequent membership in, Universal Convention.14 year, approved several appropriations Office. Office building foundation series 34 studies major issues law; published included history.15 issuing report 1961, conducted numerous meetings representatives many affected.16 1963, preliminary draft bill, contained essence Exception today.17 Additional discussions followed.18 Two bills supervened, both containing Exception.19 Interested submitted commentary following 1964 bill.20 7 lengthy hearings 1965 bill.21 bill occupied weeks during 3-month period well 100 witnesses. Moreover, supplementary accompany bill.22 sessions,23 next 10 years,24 discussion provisions, Exception, essentially completed at time. virtually same form they appeared bill.25 III 8 Section significantly Snyders ways. First, 304(b) automatic extension life copyright; instead expiring 1980 end second period, endure until 1999.26 9 Second, 304(c) surviving terminate copyright.27 effected any 5-year January 1, 1978, serving notice recording copy became effective. Third, 304(c)(6) would cause son. was, subject permitted grant."28 IV 11 On 3, complied 304(c); identified stated applied "[g]rant proprietor, including publication rights." Additionally, become effective 1980.29 August 11, 1980, advised them. initiated United States Southern York. therein, agreed relevant facts, filed cross-motions summary judgment. v. 543 F.Supp. 844 (1982). 12 exhaustive opinion, noted did "any so." Id., 854. concluded various contracts arrangements royalties. 867-869. 13 Relying "propositions," Second Circuit 733 (1983). reasoned relying grants—the later companies—but set Snyders' underlying viewed carrying companies. 738-740. determined benefit. 739-740. read indicating 740-741. felt confronted situation, wanted "publishers other noncreative middlemen 743. 14 Having petition writ certiorari resolve important law, 466 903, 104 1676, 80 151 (1984), now reverse. persuaded believe simply 304(c)(6)(A). V 15 construing federal appropriate assume ordinary employed "accurately expresses purpose."30 start examination text. 16 critical subparagraph—§ 304(c)(6)(A)—carves out takes place exercises termination. sentence uses times defines Exception. It states: 17 "A termination, but does extend preparation upon covered grant." U.S.C. (emphasis supplied). 18 third "the which, case, must refer logical has twice earlier sentence.31 beginning Again, agent, 400-odd while owner expressly works.32 encompass grant, inescapable Mills.33 19 allows utilize To give meaning, again even though evident particular licensee include license. 20 nothing more As briefly earlier, rested conclusion propositions, merits discussion. Grants 21 prevail largely view entirely "grants" reasoned: 22 "Since define Mills-record grants, preserves, giving 50% royalties." F.2d, 739. 23 undisputed itself specify work. Fox, executed contain terms. But licenses, nullities. examined separately merely require payments collection Mills.34 terms, provide Snyders. source entitlement fair construction necessarily individual thereto. 24 If documents created licensee's distribute "terms purposes obtain instance thereafter remit revenues If, held, limits appearing glaring incongruities result. inconsistent meanings sentence, fact, entirety remainder 304. greater importance, there basis paying derivative-works Snyders.35 25 royalties; apart confer although Snyders, gives them preserves. status virtue users Stating point perspective licensees, clear new licensees agreed. cannot fairly regarded assignment rights.36 26 Appeals' propositions "utilizer" "[a]ll owned licensing create works." Building erroneous proposition, determined: 27 "The supports conclusion. provides excluding, therefore, unauthorized authorize creation here involved. then, protects creators Ibid. adopting proposition regarding "two grants," expand court's urging utilization reverted Brief Respondents 3-8. 29 protection not, unlimited. "utilized" separated context isolation. confined survives identifies whom payment made. narrowly exclude coverage, thus protecting wish, crucial link missing, preserve total relationship, duly works, bound requiring Legislative History 30 third, last, "Congress specifically address where grantee himself subleased subgranted copyright." 740. considered ambiguous "speaks . dealing distinct grants." 740, n. 12. review disclose consideration problem presents, further overlooked possibility might depend Appeals, predicated evaluation purpose: "protect owners like film producers copyrights books plays." 741. 31 Unlike aware prevalence multiparty music-publishing industry, industries vitally affected, Act. There references importance role publishers marketing songs. These dissipate force argument consider precise today.37 Indeed, reason typical example prevalent industry years.38 Rather assuming unaware common practice most think probable saw party produces middleman given producers. For analyzed producer equally served case. 32 principal purpose amendments added benefits authors. duration existing 75 years, provision longer plus years) copyrights, concept itself, obviously rewards creativity substantial. More particularly, relieve ill-advised unremunerative opportunity appreciate true value product.39 plainly indeed, inferable itself. 33 designed, category grants—even manifestly unfair author—from broad objective. "preserve exploit it, notwithstanding reversion."40 Therefore, person already means unfavorable bargain excluded bundle he exercised right. determining utilizing "prepared" Pretermination works—those Derivative extended exemption provisions. matter indifference—as far concerned—whether sublicenses. what makes factors determine statute's countervailing control.41 renegotiation it. govern receive seek resell unimpeded commitment. character right—not number instruments distinguish two-party transactions involving multiple parties. frequently discussed concerning sale story motion picture producer.42 explained need large investment produce picture, recognized similarly significant compensating vocalists, musicians, arrangers, engineers. clearly protects. felt, publishers—as middlemen—were situated, 742-743. fact—or judicial notice—we position evaluate function performs song. our history,43 interpreting find differentiate book motion-picture company. Neither discloses, producer, can see why limit composer, preceded companies.44 VI 36 Finally, argue demonstrates accomplish well-identified purpose—to enable accessible public exercise rights.45 Specifically, discloses concern about films publishers. Without power prevent films, possibly demand unwilling pay. addressed potential confrontation utilizers recaptured response affect interests. 37 unpersuasive. explains utilizer being increased support, expected able contrary, applicable remain effect. preserving quo respect respondents' Respondents' sheds light Surely justify replacement unambiguously directing instead. 38 dispute. 39 40 so ordered. 41 WHITE, BRENNAN, MARSHALL, BLACKMUN join, dissenting. 42 I accept assertion "terminated referred trouble notion issue grant," Snyder-Mills endowed Song. And obvious rephrasing say observations reclaimed 43 under" Subsection (6) reiterates point, stating "all revert, termination," heirs. straightforward reclaim formerly bargained away, extends recapturing grantee, paid licensees. 44 displace appears complete, enumerated exceptions. One these, (A), accords continuing companies—not works.1 utilization, insulate renegotiate higher utilizers' maintaining rate prevailed grant; identity receives indifference utilizers, They beyond point. strange, least, hold, today, divide irrelevant 45 majority attempts tension interpretation stretch fit hand, explain royalty-division Even includes utilized. governing licensees' certain rate, 46 claims essential identify recipient surely this, surprisingly weak reed rest mean that, wishes so. fee, forward rightful Snyders.2 47 majority's statute, awkward clumsy is, conceivably accepted supported not. scanty, contains express multiple-grant confronts us attention creator copyrightable 1967 House Representatives Report, example, discussing version grant.3 Committee apparently assumed same. 48 places great emphasis indications movie industries, positing awareness intention cites indicate fact contemplate result drafted Office, hypotheticals offered illustrate operation cast work, novel, deal film.4 asserts, application indeed odd phrased ambiguously. 49 conferred strongly statements themselves, took protested. representative Music Publishers Association proposed exception, resulting presumably rever[t] author."5 spokesman Protective construed "for everyone acquiring publisher."6 lends support claimed evidences concedes, actual producers, having novels plays based. formulated, enacted, prevailing 1909 veto continued performance first-term grant.7 Motion studios, fearing infringement actions authors' successors assignees, removed circulation highly successful films.8 protests commentators whose goal allow distribution movies despite play novel.9 Barbara Ringer, Assistant Register Copyrights, described "permit using it."10 Report explanation elucidating Exception: "In words, contract remake cut off."11 51 carry users, unnecessary well, indication whatsoever majority, unaccountably rejects broadly effectuate intent.12 ignores principle purpose.13 acknowledges, concomitant provisions—to clause forms exception—was subsisted available underestimated outset reap some eventual success.14 purpose, substantially thwarted Court's decision Fred Fisher Co. M. Witmark Sons, 318 643, 63 773, 87 L.Ed. 1055 (1943). decision, assign, initial assignees uncertain. 52 correct situation. guarantee "notwithstanding contrary."15 accompanying "[a] sort unequal bargaining authors, impossibility work's exploited."16 favor interests publishers.17 53 reflects accommodation competing concerns: providing compensation promoting access concludes justice concerns. promote go disseminate enter balance; regardless unimpeded. 54 By going arts, frustrates congressional who, infancy, struck bargains. frustration clearest uncommon one-time, lump-sum payment.18 publisher-middleman free accruing 19-year term, nothing. While my results receiving very objective 55 recover full amount slight arts. Achieving fundamental laws requires incentives art dissemination.19 inapposite attached agreement, reliance reaped bargain, windfall Congress. considerations allocation compensation. compensate grantees. attempting claim bears burden proof.20 view, fallen short burden. §§ 101-810. generally 1978. 304(c)(2). quoted 5, infra. work" follows: 'derivative work' preexisting translation, arrangement, dramatization, fictionalization, version, recording, reproduction, abridgment, condensation, recast, transformed, adapted. consisting editorial revisions, annotations, elaborations, modifications whole, represent authorship, work.' " 101. fixed master, embodied distributed phonorecords. distinguishes "sound recordings" "phonorecords." former 'Sound recordings' fixation musical, spoken, sounds, sounds audiovisual nature material objects, disks, tapes, phonorecords, embodied." contrast, "phonorecords": 'Phonorecords' objects method known developed, perceived, reproduced, otherwise communicated, aid machine device. 'phonorecords' object fixed." 'fixed' tangible medium expression embodiment phonorecord, sufficiently permanent stable permit communicated transitory duration." reads composed music, Burt Kalmar Ruby wrote words. App. 52. 49. 38. expiration predeceased last year renewal. (1976 ed.) (1909 Act); 644, Marie signed, catalog provided, part: hereof, covenant promptly compositions hereafter fall due your [Mills'] catalogue, thereof vest me applications right, control whatsoever, whole part, you stand seized possessed therefor, exclusive automatically vested thereof, assigns. "After heretofore above for, sums advanced customary semi-annual (3¢) cents per every regular pianoforte copy, (2¢) orchestration sold, returned herein acquired, sum equal fifty (50%) cent said player-piano rolls, disks ." 41-42. course, predated supra, assigning secured 657, S.Ct., 779. 1(e) Act). 1958. 103(b); reveals renditions Judy Garland Liza Minelli, Nat King Cole. 22, 81. 10, supra. Judiciary Committee, Copyrights H.R.Rep. 94-1476, p. (1976), U.S.Code Cong. Admin.News 5659, 5660. Several revisions failed "partly private differences Berne Convention law." Studies Prepared Subcommittee Patents, Trademarks, Senate Judiciary, 86th Cong., 1st 2d Sess., Law Revision (H. Comm. Prints 1960-1961). 47. General Law, 87th Print 1961); Discussion Comments 88th Revision, Part 1963). Preliminary Draft Revised Discussions Draft, pp. (Alternative A), 1964). twin citations elsewhere codified similar 203(b)(1). sections opinion. Further H.R. 11947, 16(b)(1), 22(c)(3)(A) (1964) (1964 bill); S. 3008, 4347, 89th 203(b)(1), 304(c)(5)(A) (1965) (1965 1006, bill). Bill Comments, 1965). Hearings 5680, 6831, 6835 Sess. (1965); 1006 (1965-1966). Supplementary Law: Bill, 48-50. Compare, 203, (1965), 304(c). section provides: subsisting December 31, 1977, inclusive, registration seventy-five originally secured." Relevant portions hire, nonexclusive designated proviso subsection (a) section, will, conditions: "(2) Where dead, her owned, exercised, widower children grandchildren "(3) Termination five fifty-six secured, whichever later. "(4) writing grantee's successor title. "(5) future 54. Belwin-Mills Publishing Corp. terminated; entity "Mills." Park 'N Fly Dollar Fly, 189, 194, 658, ----, 582; American Tobacco Patterson, 456 63, 68, 102 1534, 1537, 71 748 Erlenbaugh States, 409 239, 243, 93 477, 480, 446 (1972) ("[A] body context"). Of remaining, unexercised portion constitute encompassed repeatedly too long quote full, consistently way 22-27. WHITE's dissent adopt He identifying payable. refers grant"—not absent companies, infringers. 844, 850-851 (SDNY 1982). 738, 8. self-executing compulsory 115; 1(e), 101 contended wholly inapplicable rejected contention, F.Supp., 851-852, finding licenses; self-executing. contention renewed (The comment compulsory-license mechanism dissent, post, 185, 12, incorrect seems licenses.) 850-851, challenge pretermination acknowledges "Utilizer" Work See, e.g., supra 16, ("In assign publishers, instances secure thereby avoiding mechanics accounting license"); H. Henn, Compulsory License Provisions Study 1960) ("[T]he composer common-law publisher") (footnote omitted); A. Kaminstein, Divisibility ("[I]n custom publisher"); Revision: 6835, 21, 680 ("Copyrights almost invariably songwriters customarily exploitation rights. Attempts occasionally image innocent pure myth; turns manuscript latter proprietor get rights") omitted) (statement Record Industry America, Inc.); id., 1743-1744 Robert Nathan, Association, cf. 2223 Courts, Civil Liberties, Administration 94th 1369 (1975) ("There groups people bringing recorded music. artist records distributes record") (testimony Vincent T. Wasilewski, President, National Broadcasters); 1651-1653 (letter Leonard Feist, Publishers' 1653 ("I feel compose 'A Chorus Line.' writer Ed Kleban. proven yet. subsidized few money live allowed write. say, help, vast tell getting without yet, know, material, just faith individual, obviously, Kleban proved good, worth investment. want sure understand plight up against success dealings seem trouble") Hamlisch, composer). W. Blaisdell, Size Industries, 2, ("Music composers lyricists usually assignment. composer-lyricists less gross returns sales whatever form"); 781, ("[E]qual split fees practice") John Desmond Glover). explaining comparable exploited. 203 practical compromise objectives recognizing problems legitimate needs involved." 124, 5740. Ringer). accompanied certainly persuasive history, affirmatively view. Regarding 203(b), 304(c)'s counterpart, stated: "This 'continue utilized' conditions 127, 5743. balancing 140, 5739, 5740, 5756; S.Rep. 94-473, 108 (accompanying Sess.). "[N]otwithstanding adds, enough off. 'preexisting incorporated picture." 17, 278 Copyrights). usual practice: "Book taking contract. computed percentage price sold volume sales." 38, 48. Later, study indicates: production creative storywriters used. employ talent employee-for-hire freelance basis. However, business adaptation Picture Producers Writers Guild America exclusively employees hire unusual cases purchase hold novels, stories, cases, goes author; retains equivalent agent's fee." 54-55 added). "creative" WHITE appear distinction. assert alienated renewal-term died vested, nullity exercisable successors. according original-term transferee enjoined infringe Some observers believed acknowledged G. Ricordi Paramount Pictures, 189 469, 471 (CA2), cert. denied, 342 849, 72 77, 96 641 (1951), creates estate, dealt estate rights, confusion derivative-work prohibited observed, attempt selling copies phono-records public, infringing copyrights. 739 (CA2 1983). finds perpetuation because, assumes deprives change ----. 83, 90th (1967) (discussing negotiation current holder then-current proposal) 361 1963) (Statement America); 6, 76 284-285 1964) Phillip Wattenberg). 296-297 (termination clause, 100% royalties) Mr. Kaminstein). 318-319 (written submission Julian Abeles). were, where, here, legislation interests, 90, weight. Dawson Chemical Rohm Haas 448 176, 202-212, 2601, 2616-2621, 65 696 (1980); Chicago N.W.R. Transportation Union, 402 570, 576, 91 1731, 1735, 187 (1971). testimony whereas publishers' much arm Committees 90; 64 (1965). Especially absence treatment ignored. "broad interpretation" (1951). courts commentators, extracted rule cease Bricker, Renewal Extension Copyright, S.Cal.L.Rev. 23, (1955); Melniker Melniker, Transfers Licenses N.Y.L.S.L.Rev. 589, 612, 117 (1977). endorsed connection drafting B. 169 (Comm.Print 1961). narrower eventually prevailed, passage Rohauer Killiam Shows, 551 484 431 949, 97 2666, 266 "Thanks Memory," "You Can't Take With You," Man Who Came Dinner." Others, "Gone Wind," remained willing substantial holders Jaszi, Works Collide: Underlying Rights, Public Interest, UCLA L.Rev. 715, 740 (1981). safely release previous rendered null. Miller Charles N. Daniels, 362 373, 792, 804 (1960). Movies taken Note, Act—New Clarity Confusion?, Brooklyn 905, 928, 125 (1978). 4, (submission 265 Seymour Bricker); 16(b) Alternative A; 22(c)(3) (insertion Draft). 278. 127 (1976) analogue copyrights). thesis "where doubt inclusively apply, mischief remedy perceived remedy." 2A C. Sands, Sutherland Statutory Construction 54.04, 358 (4th ed. 1973). inconsistency established 115. 115 sell permission owner, 115(c)(1). agree, Sony City Studios, 464 417, 431-432, 774, 783-784, 78 574 (1984); Bacto-Unidisk, 394 784, 799, 89 1410, 1418, 726 (1969) ("[W]here seem[s] insufficiently precise, 'natural way' line 'is purpose' ") (quoting SEC Ralston Purina 346 119, 124-125, 73 981, 984-985, 1494 (1953)). 203(a)(5) (grants 304(c)(5) system substitutes enduring years. 302(a). 56 75. 304(a), (b). 124. instrumental Nimmer, Preface Comprehensive Treatise vi, "mark[s] break two-hundred-year-old tradition closely author." First Thoughts 490-493 transfers target Act's 58 1961) (proposing "would lengthened term," transfer). Twentieth Century Aiken, 422 151, 156, 95 2040, 2043, 84 (1975). principles construction, "[o]ne prohibition proving comes exception." 47.11, 90 1973); Bank Houston, 386 361, 366, 1088, 1092, (1967).

Classification Label: 7