Baldwin v. Emi Feist Catalog, Inc.

805 F.3d 18 (2nd Cir. 2015)

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Nature of the Case

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Facts

'Santa Claus is Comin' to Town' Song) was written by J. Fred Coots and Haven Gillespie in the 1930s. In 1976, Congress enacted a complex statutory regime that gave authors and their statutory heirs the right to terminate previously made grants of copyright under certain circumstances, and thereby recapture some of the value associated with the authors' works. See 17 U.S.C. §§ 203, 304(c). Ps represent Coots's statutory heirs. Since 2004, they have attempted to terminate rights in the Song held by D. Ps sought a declaration that either a notice of termination served in 2007 or another served in 2012 will terminate D's rights in the Song. Coots and Gillespie sold the Song and 'the right to secure copyright therein' to D in an agreement dated September 5, 1934. D agreed to 'publish the Song in saleable form . . . within one (1) year,' and to pay Coots and Gillespie certain royalties. On September 27, 1934, D registered its copyright in the Song with the Copyright Office. Under the Act of 1909 authors were entitled to copyright in their work for an initial twenty-eight-year period beginning on the date the work was published. They had the right to renew their copyright for an additional twenty-eight-year 'renewal term,' a right that they could exercise even if they had granted their rights in the initial copyright term to a publisher. Authors could (and often did) grant their rights in the renewal term to publishers before the initial copyright term expired. Coots granted his renewal rights separately, in the 1951 Agreement. The 1951 Agreement assigned to D a number of 'musical compositions' by Coots, including the Song, 'and all renewals and extensions of all copyrights therein,' in exchange for certain royalties to be paid 'during all renewal periods of the United States copyright in each of said compositions.' D renewed its copyright in the Song on September 27, 1961, at which point its rights were set to expire 1 fifty-six years after the copyright was originally registered-September 27, 1990. In 1976, Congress enacted the 1976 Act. For works created on or after January 1, 1978, the 1976 Act did away with the 1909 Act's dual-term structure, replacing it with a single copyright term lasting for the life of the author plus fifty years. For works created before January 1, 1978, the 1976 Act retained the 1909 Act's dual-term structure and for works already in their renewal term, it extended the renewal term to 'seventy-five years from the date copyright was originally secured.' Now the rights in the Song were scheduled to expire in 2009. The 1976 Act also contained a mechanism for giving authors and their families, as opposed to publishers who had come to own the renewal term rights, an opportunity to benefit from the extended term. Section 304(c) permitted authors-or, if the author had died, certain statutory heirs designated in § 304(c)(2)-to terminate 'the exclusive or nonexclusive grant of a transfer or license of the renewal copyright . . . executed before January 1, 1978.' The 1976 Act granted authors (or their statutory heirs) the right to terminate grants 'executed by the author on or after January 1, 1978.' This § 203 termination right can be exercised during a five-year period 'beginning at the end of thirty-five years from the date of execution of the grant,' but if the grant 'covers the right of publication of the work,' that five-year period begins at the earlier of (1) thirty-five years from the work's publication or (2) forty years from the execution of the grant. Termination under § 203 'may be effected notwithstanding any agreement to the contrary.' Under § 304(c), the 1951 Agreement was, as a pre-1978 grant, subject to termination starting on September 27, 1990, so Coots could serve a termination notice as early as ten years before that date. On September 24, 1981, Coots served D, a termination notice naming October 23, 1990, as the termination date for the 1951 Agreement. D was the new 1981 'Grantee' of the remaining rights in the Song. The 1981 Termination Notice was never recorded. When the 1981 Agreement was signed, the copyright in the Song was scheduled to subsist until December 31, 2009, the end of the year seventy-five years after the copyright was initially secured. The parties did not anticipate that § 203 termination-which is available only against grants executed after January 1, 1978, and lasting longer than thirty-five years-would be available against the 1981 Agreement, which they thought would come to an end in 2009, less than thirty-five years later. In 1998, Congress passed the Sonny Bono Copyright Term Extension Act. For copyrights still in their renewal term at that time, the 1998 Act extended the renewal term to last '95 years from the date copyright was originally secured.' The Song's copyright was now set to expire on December 31, 2029. The 1998 Act added a new termination right to allow authors and their heirs to extract value from the new twenty-year extension of the renewal term. For copyrights still in their renewal term, authors (or their statutory heirs) could effect termination in the same general 1 way as under § 304(c) if 'the termination right provided in [§ 304(c)] has expired by such date' and 'the author or owner of the termination right has not previously exercised such termination right.' Termination pursuant to § 304(d) can 'be effected at any time during a period of 5 years beginning at the end of 75 years from the date copyright was originally secured,' -in the Song's case, starting on September 27, 2009. In 2004, Ps served on D a § 304(d) termination notice with an effective date of September 27, 2009. The parties agreed that in light of the 1981 Agreement, D's rights in the Song were more appropriately terminated under § 203. Ps served and recorded the 2007 Termination Notice, which indicated that the 1981 Agreement would terminate pursuant to § 203 on December 15, 2016. D offered the statutory heirs $2.75 million for those rights, an offer that was rejected as insufficient. In 2012, Ps served and recorded the 2012 Termination Notice. On December 16, 2011, Ps sued D seeking a declaration that the 2004 Termination Notice had terminated EMI's rights in the Song on December 31, 2009, or, alternatively, that the 2007 Termination Notice would terminate EMI's rights on December 15, 2016. The parties cross-moved for summary judgment. The court granted D's motion and denied Ps', holding that since the 1981 Termination Notice was never recorded, D owns its rights in the Song under the 1951 Agreement-which, as a pre-1978 grant, is not terminable under § 203. D's rights would survive until 2029. P’s appealed. Ps argue that the 1981 Agreement superseded the 1951 Agreement and, upon doing so, became the operative source of D's rights. D responds that the 1981 Agreement did not supersede the 1951 Agreement and that P's failure to record the 1981 Termination Notice means that the 1951 Agreement was never terminated and therefore remains in effect.