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..[1] 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."[2]
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.
[1] 542 F. Supp. 2d 1098 (C.D. Cal. 2008)
[2] Id. at 1104.
You can find a copy of the decision here.
[1] 542 F. Supp. 2d 1098 (C.D. Cal. 2008)
[2] Id. at 1104.
