Recently,
I was at an entertainment law conference panel discussing current cases. At one
point, the panelists asked who in the room believed the Vetter v. Resnick case, which established that termination of a
copyright transfer in the U.S. also terminates the transfer in the rest of the world,
was properly decided by the district court in Louisiana. I was the only
attorney in the room to raise my hand.
This
isn’t to say that I was right and everyone else was wrong, but it is to
highlight that copyright law is still developing and changing. The law is
complicated, and the interpretation and applications of it can vary over time. The
Vetter v. Resnick case is a
particularly strong example of this. While the case may yet be appealed, the Fifth
Circuit Court of Appeals recently upheld the lower court’s decision.
Vetter v. Resnick involved a songwriter
who had previously assigned his rights to a song, Double Shot, to a music
publisher. Later, he filed a termination notice, reclaimed his copyright, and
also bought the copyright rights from his co-writer. A music publisher who had
previously acquired part of the copyright interest to Vetter’s work claimed
that the termination notice did not apply to foreign rights, and as such, the publisher
could still exploit the work internationally.
The
legal issues of the case revolves around how copyright ownership is treated in
the United States and how it is acknowledged around the world. The song was
created in the United States, and it was subject to U.S. copyright law. U.S. copyright
law, via the termination provision in the Copyright Act of 1976, allows authors
to terminate a copyright transfer and reclaim ownership. International treaties
protect domestic copyright interests worldwide, with a general proposition that
foreign works will not be treated worse in the country than works originally
created in that country. The question becomes: if U.S. law reverts copyright
ownership to the original author, should this also apply overseas?
The
Fifth Circuit decided it did. It based its analysis on the fact that the
termination provision applies to any work created under U.S. law, and the
language in the Copyright Act did not geographically limit the application of
the termination. Additionally, the court found the argument persuasive that
international copyright rights are recognized based upon the work’s creation in
the United States, and therefore, if the ownership reverts via the law in the U.S.,
it should revert worldwide. In short, if international protection and
recognition arises from the work’s creation in the United States, any change in
ownership in the United States should apply overseas.
The Fifth Circuit
addressed a number of cases and copyright law treatises in its decision, most
of which previously seemed to support the finding of a termination of transfer only
applying to the reclamation of domestic rights, i.e, U.S. only. In each case,
the Fifth Circuit found the arguments to be unpersuasive. It found that many of those who discussed the
topic did not properly evaluate the language of the Copyright Act regarding the
application of the termination of transfer, and the court also found that many
sources improperly conflated the inapplicability U.S. law on infringement actions
brought in other countries with how foreign countries recognize copyright ownership.
Interestingly, one
of the cases the court evaluated was Siegel
v. Warner Bros. Entertainment, Inc..
The court quoted the following section from the case, where the California
district court held that Superman’s heirs could only recapture U.S. copyright
rights:
Congress expressly
limited the reach of what was gained by the terminating party through
exercise of the termination right; specifically, the terminating party only
recaptured the domestic rights (that is, the rights arising under
title 17 to the United States Code) of the grant to the copyright in question.
Left expressly intact and undisturbed were any of the rights the original
grantee or its successors in interest had gained over the years from the
copyright through other sources of law, notably the right to exploit the work
abroad that would be governed by the copyright laws of foreign nations. Thus,
the statute explains that termination "in no way affects rights" the
grantee or its successors gained "under foreign laws."
The Fifth Circuit declined to adopt
the Siegel court’s reasoning because
it was from an out-of-circuit court. The Fifth Circuit also found that the Siegel court’s decision relied on
non-binding treatises, and as I described above, it found the reasoning in the treatises
to be flawed by conflating the applicability of extraterritorial infringement enforcement
actions with the extraterritorial applicability of copyright ownership. The
Fifth Circuit interpreted the language in the Copyright Act differently than
the Siegel court and other
commentators. As the Fifth Circuit explained in its opinion:
Based on the plain
language of "arise under this title," termination covers copyrights
that were granted under Title 17 of the U.S. Code, which includes the U.S.
Copyright Act, and excludes copyrights that were granted under "any other
Federal, State, or foreign laws." In other words, because termination
affects rights that "arise under" the U.S. Copyright Act, and because
Vetter's rights arose under the U.S. Copyright Act, the plain language of
section 304(c)(6)(E) dictates that his termination would be effective as to all
of his rights—including his copyright to the extent that it extends
internationally.
As
I stated above, copyright law is still evolving and changing. Until this case,
most attorneys would tell you that a termination of transfer under the
Copyright Act of 1976 would only apply to those rights exploited in the United
States. Now, it’s possible that it applies worldwide. It will require a Supreme
Court decision to fully decide the issue.
542
F. Supp. 2d 1098 (C.D. Cal. 2008)
You can find a copy of the decision here.
