Charter Challenges Copyright Registrations of Music Recordings

Facing a billion-dollar lawsuit, the internet service provider questions whether a big percentage of sound recordings have been improperly registered as works for hire.
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Record giants scored a coup late last year when a Virginia jury not only held Cox Communications liable for copyright infringement but also returned a $1 billion verdict punishing the internet service provider for contributing to music piracy. Warner, Sony, Universal, EMI and other record labels are now looking to follow up on this win with another in a similar case against Charter Communications, but the defendant is pushing back with a broad challenge to ownership rights.

In Colorado federal court, Charter and the record labels have each briefed the judge on the issue of whether record labels improperly registered recordings as works for hire with the U.S. Copyright Office.

According to Charter, it examined 110 of the nearly 7,000 sound recordings alleged to have been infringed in the suit and found that the record companies "falsely registered at least 40 works" as works for hire.

"It is thus highly probable that a significant number of additional sound recordings in suit were also inaccurately registered," states Charter, adding, "It is black-letter law that an applicant’s knowing misstatement to the Copyright Office regarding a work’s author can invalidate the copyright registration, which deprives the applicant of standing to sue for infringement of that work."

The record labels respond that Charter can't identify any cases in which a court invalidated the registration of a plaintiff who owned a copyrighted work because it was incorrectly designated a work for hire on the registration. They add that work-for-hire designations are "complex" and "cannot give rise to the kind of bad faith necessary to invalidate a registration as a fraud." 

The budding dispute has implications even beyond this case thanks to termination provisions under copyright law. Authors can reclaim rights after waiting a period of time — typically, 35 years for newer works — but can't terminate any work made for hire. That's because the employer is seen to be the statutory author of the work. Right now, there are putative class actions against Sony and UMG for resisting termination notices — and if that case gets past a motion to dismiss, discovery may ensue.

The piracy case against Charter may provide an alternative avenue to resolving the big issue over whether record labels have skeletons in the closet. In seeking additional discovery, the ISP even nods to how some artists are now suing.

"In reality, due to Plaintiffs’ systematic practice of misrepresenting authorship status to the Copyright Office, artists are routinely forced to institute disputes, which the labels vigorously challenge in order to defend their much more beneficial claim as 'author,'" states Charter. "While Plaintiffs’ counsel shrugged off any suggestion that the underlying artists may take issue with Plaintiffs’ WFH designation or rights, the many cases artists have filed against them regarding this scheme belies that claim."