Recent U.S. District Court Holding

Reinterprets U.S. Copyright Act, Sec. 304

And Could Result In TerminaAon and Recapture of both

US and Foreign Copyright Rights

By Celeste M. Moy

For the first time since 2009, a federal court has held that termination rights under Section 304 of the Copyright Act applies to both U.S. domestic and worldwide rights. The holding in the Vetter v. Resnik case is based on the court’s denial of the defendants Rule 12(b)(6) motion to dismiss. In July the VeNer plaintiffs also filed a motion for summary judgment that is still pending, so this case is far from being new settled law. Here’s a brief summary of what’s happened so far.

In 2009 a U.S. District Court in the Siegel v. Warner Bros. Entertainment Inc. case held that copyright terminations under Sec. 304 of the Copyright Act were limited to termination of U.S rights based on this language in Sec. 304(c)(6)(E): “Termination of a grant under this subsection affects only those rights covered by the grant that arise under this title, and in no way affects rights arising under any other Federal, State, or foreign laws.” The long-held Siegel decision has been followed by the Supreme Court, influential cases, music publishers, songwriters, and their statutory heirs alike based on that court’s interpretation of Sec. 304 and Article 5(2) of the Berne Convention for the Protection of Literary and Artistic Works that statesti the “extent of protection … shall be governed exclusively by the laws of the country where protection is claimed.”

Cyril VeNer and Don Smith were co-authors of the song “Double Shot (Of My Baby’s Love) that they assigned to Windsong Music Publishers. In 2019, Smith’s heirs, the sucessors-in-interest plaintiffs in the VeNer case who had previously sold their interests to VeNer, brought suit seeking a declaratory judgment that they successfully recaptured both the U.S. and worldwide rights to the song. Defendant Resnik, Windsong’s successor, filed a motion to dismiss the case asserting it is well seNled law that the plaintiffs had only recaptured the U.S. renewal term rights. The defendant’s motion to dismiss relied in part on the 1990 Supreme Court decision in Stewart v. Abend, that held only the U.S. domestic renewal rights that were terminated under Sec. 304 during the renewal term, vested in the heirs in that case.

Cyril VeNer and Don Smith were co-authors of the song “Double Shot (Of My Baby’s Love) that they assigned to Windsong Music Publishers. In 2019, Smith’s heirs, the sucessors-in-interest plain*ffs in the VeNer case who had previously sold their interests to VeNer, brought suit seeking a declaratory judgment that they successfully recaptured both the U.S. and worldwide rights to the song. Defendant Resnik, Windsong’s successor, filed a mo*on to dismiss the case asser*ng it is well seNled law that the plain*ffs had only recaptured the U.S. renewal term rights. The defendant’s mo*on to dismiss relied in part on the 1990 Supreme Court decision in Stewart v. Abend, that held only the U.S. domes*c renewal rights that were terminated under Sec. 304 during the renewal term, vested in the heirs in that case.

The VeNer court not only denied the motion to dismiss but concluded that the Supreme Court and other influential cases had not resolved whether termination under Sec. 304 that vests during the renewal term rescindtis domesc rights only or foreign rights as well. The court declined to follow the Siegel case and accepted as plausible Vetter’s novel claim that a grant of worldwide copyright rights is a “single copyright interest” grant under the U.S. Copyright Act, eligible for termination under Sec. 304 of U.S. copyright law, and not a “multiple and separate” grant of copyright interests that requires termination in each country. The court found that under the “single copyright interest” theory, both the domes*c and foreign rights to exploit the song were recaptured by Vetter. Of course, the defendants have argued that the court’s acceptance of the Vetter argument is a misinterpretation of Article 5 of the Berne Convention.

If the Vetter decision holds termination and recapture rights in the music industry in particular will be significantly impacted by reseeng treatment of copyright terminations to cover both U.S. and worldwide recaptured rights in songs that revert to songwriters and their heirs upon the applicable recapture dates.