Judge Will Clarify Whether Many Musicians Can Later Reclaim Rights From Record Labels

Vinyl Record Player - H 2012
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Vinyl Record Player - H 2012

A lawsuit that seeks to vindicate the copyright termination rights of UMG recording artists continues to take shape. On Monday, a New York federal judge allowed an amended complaint that includes a request for declaratory relief for a proposed class of musicians who in the coming decade may have the ability to reclaim rights to their recorded works.

The case concerns the Copyright Act of 1976, under which many authors can terminate copyright grants after 35 years. John Waite and Joe Ely are two UMG musicians who allege that UMG systematically refuses to honor termination notices. Sony is facing a similar putative class action. The record labels have a range of arguments why the terminations are invalid. In many instances, they contend the recorded songs were "works for hire" and that makes them as employers — not the artists — the statutory authors of said works. In other instances, they say the musicians are challenging authorship way too late.

In March, U.S. District Court Judge Lewis Kaplan decided that the lawsuit wasn't time-barred and agreed to move it forward. His ruling did, however, include some setbacks for the plaintiffs. He said that Waite and Ely may not be eligible to terminate copyright grants wherever they used loan-out companies to grant rights. Additionally, he rejected an initial request for a declaratory judgment by reasoning that there was nothing he could decide that would guarantee that UMG would accept termination notices going forward.

But in his latest decision, Kaplan has now ruled that for some recording artists, a declaratory judgment may be useful.

The plaintiffs amended the suit and explained the necessity of such relief for a musician like Syd Straw, once a member of a band called Golden Palominos. She wants to reclaim rights to the recorded music on her album, Surprise, which was released by Virgin in 1989. Her contract stated she was an employee at the record label and that she was producing "works for hire," which she alleges is merely artifice. In other words, Straw claims there is no real employer-employee relationship. She's served a Notice of Termination upon UMG, and it doesn't become effective until June 2024.

Judge Kaplan now rules that "resolving certain legal issues prior to the effective dates of termination would be useful even if not a complete solution."

For recording artists whose termination is between the date of class certification in this case and December 31, 2030, Kaplan is willing to consider declaring these notices to be provisionally valid based because the works weren't really "made for hire." That, of course, will depend on further fact-finding and legal arguments in the case. But it figures to be especially important to musicians from the late 1980s into the 1990s.

In the meantime, Kaplan's opinion (read here) also provides a win for suing musicians on the topic of gap grants, meaning instances where works were produced after 1978 in accordance with contracts signed before then. There's two separate termination sections of the Copyright Act (one for newer works, one for older works) that taken together raise the prospect that these works fall into a "gap" not covered explicitly by either provision. As such, ambiguity has long existed without a court fully addressing the situation. Here, though, the judge rules that gap grants are indeed terminable under the "broader context" of the copyright law and what Congress intended.