A federal appeals court issued a first-of-its-kind ruling that says musicians can enforce U.S. copyright termination rules across the globe, adopting a novel legal theory that record labels and publishers have warned will disrupt “a half-century of settled industry norms.”
Upholding a lower court decision last year, the U.S. Court of Appeals for the Fifth Circuit ruled Monday (Jan. 12) that songwriter Cyril Vetter could win back full global copyright ownership of the 1963 rock classic “Double Shot (Of My Baby’s Love)” from publisher Resnik Music Group.
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What makes the ruling notable is the overseas reach. Termination, a crucial copyright provision that allows authors to recapture their rights decades after they sold them away, has only ever applied to American copyrights and had no effect on foreign countries. But the appeals court said that was not how Congress intended termination to work.
“The Copyright Act of 1976 enables authors and artists to recapture their copyrights in works they may have [sold away],” the Fifth Circuit wrote Monday. “The district court’s holding that Vetter is the sole owner of [the] copyright throughout the world … conforms with this purpose.”
The ultimate goal of termination, the court said, is to correct “unequal bargaining power” by giving artists and authors a chance to retake rights they’d sold away before they realized they were valuable. Applying that rule only to domestic copyrights would deprive artists of the “full set of rights” they had sold, the court wrote.
If adopted in courts across the country, the ruling will be a boon for songwriters. Under existing precedent, publishers often continue to own foreign rights even after a U.S. termination, giving them potential veto power over cross-border projects and a big bargaining chip in negotiations. Under the new ruling, songwriters would get back all of their rights, not just their American copyright.
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In a statement to Billboard, Vetter’s attorneys Tim Kappel and Loren Wells praised the court’s decision: “We are clearly pleased with this watershed ruling, and believe it is the correct result. The impact of this case will benefit creators in all disciplines, not just the music business.” An attorney for Resnik did not immediately return a request for comment.
In siding with Vetter, the appeals court adopted a novel approach to terminations. After the initial ruling by a lower judge last year, legal experts said the case was “breaking with existing precedent” and would be a “major upheaval” if upheld. One attorney said it might be “financially devastating” for large entertainment companies.
Ahead of Monday’s ruling, the major record labels and music publishers had strongly urged the Fifth Circuit to overturn the decision. In a legal brief filed in the case, the Recording Industry Association of America and the National Music Publishers’ Association had both warned that the case would deprive labels and publishers of previously-unquestioned rights to “control how their works are commercially exploited around the globe.”
“The district court’s decision unsettles the bedrock understanding of foreign exploitation rights against which tens of thousands of agreements respecting recorded music and music publishing copyrights have been drafted, negotiated, and executed,” attorneys for the two groups wrote.
Resnik can appeal the ruling, first by asking the entire Fifth Circuit to reconsider, and then by taking the case to the U.S. Supreme Court. Because the case splits with what other circuit courts have said about termination, the case could have better-than-normal odds of review by the high court.
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