Vetter v. Resnik Music Group

Breaking with existing precedent and adopting a “novel theory of recovery,” district court holds that statutory termination of copyright grant, as well as contingent copyright renewal rights, apply worldwide and are not limited to rights in U.S.

In 1962, Cyril Vetter and Don Smith cowrote a song titled “Double Shot (Of My Baby’s Love).” They then assigned all of their interests in the song—including their interests in the renewal term under the 1909 Copyright Act—to Windsong Music Publishers. Smith passed away in 1966, and decades later, Smith’s heirs and Vetter registered a renewal copyright in the song. The parties agreed that, although Vetter’s assignment of the renewal term to Windsong was effective because he survived into the renewal term, Smith’s assignment of the renewal term was not enforceable under Stewart v. Abend because Smith had died before the beginning of the renewal term. Windsong therefore owned 50% of the renewal copyright, and Smith’s heirs held the other 50%. Windsong later transferred its assets to Resnik Music Group, and the Smith heirs sold their interest to Vetter Communications.
 
In 2019, Vetter served on Windsong a notice of termination pursuant to Section 304 of the Copyright Act, seeking to recapture the rights he had previously assigned. However, when ABC sought to use the song on an episode of a TV show to be broadcast worldwide, Resnik argued that the Smith heirs’ renewal interest (now owned by Vetter’s company) and Vetter’s recaptured interest were limited to the United States. Vetter filed a declaratory judgment action asking the court to find that its rights extended worldwide, which he acknowledged was a “novel theory of recovery.” Resnik moved to dismiss. The court denied the motion, finding that Vetter stated a plausible claim that his interests encompassed both domestic and foreign rights.

The court first addressed whether Vetter’s renewal copyright interest under the 1909 Copyright Act (which Vetter acquired from Smith’s heirs) includes the right to exploit the song in foreign countries. Resnik argued that—under the initial assignment to Windsong—foreign rights are “vested and noncontingent,” meaning that the reversion of U.S. renewal interests to Smith’s heirs did not affect a transferee’s (i.e., Resnik’s) continued ownership of foreign rights. Underlying this argument was Resnik’s theory that there are “multiple and separate copyright interests in each country.” According to Resnik, this meant that Vetter’s renewal copyright interest only encompasses domestic rights in the song, while the copyright interests in other countries are “separate” and thus unaffected by the separate renewal term, which is unique to the 1909 Copyright Act in the United States. 

The court rejected this argument. It found plausible Vetter’s argument that, under the Berne Convention, there is only one globally recognized copyright, because the Berne Convention requires member countries to recognize and protect copyrights from other member countries. The court also drew support from Stewart, which stated that when an author dies before the renewal period commences, the author’s successors “obtain the renewal copyright free of any claim founded upon an assignment made by the author,” which the court read to include foreign rights. The court also relied on the Second Circuit decision in Itar-Tass Russian News Agency v. Russian Kurier, Inc., which held that the law of the place of infringement governs the scope of protection, but the law of the state where the work was created governs the issue of ownership. Accordingly, because Resnik’s “multiple and separate copyrights” theory failed, the foreign renewal interests granted under the assignment (like the U.S. interests) were contingent rights, and Smith’s early death resulted in the reversion of foreign rights to Smith’s heirs and their assignee, Vetter.

The court then turned to the scope of the interest Vetter recaptured under the termination provision of Section 304 of the Copyright Act. The court focused on the following language in Section 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.” Resnik argued that “arise under this title” means domestic rights only, as a district court in the Central District of California held in Siegel v. Warner Bros. Entertainment, Inc. The Siegel court explained that “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” and that the undisturbed right “to exploit the work abroad [] would be governed by the copyright laws of foreign nations.” The court here, however, declined to follow the Siegel court or other courts and the treatise that followed it. Rather, the court found persuasive plaintiff’s argument that “arise under this title” simply means “in accordance with the Copyright Act” and opined that—utilizing the same “single copyright interest” theory it previously adopted—both domestic and foreign rights to exploit the song originated under the Copyright Act and were therefore recaptured by Vetter. The court also read the statutory language “and in no way affects rights arising under any other Federal, State, or foreign laws” as applying only to laws other than copyright. Such a reading—which results in the recapture of both U.S. and foreign copyright interests under Section 304(c)—effectuated congressional intent to “provide the author a second chance to enjoy the benefits of his work and to mitigate the effects of early unremunerative transfers,” according to the court. 

Summary prepared by Tal Dickstein and Alex Loh