Fred Ahlert Music Corp. v. Warner/Chappell Music, Inc.

155 F.3d 17, 47 U.S.P.Q. 2d (BNA) 1356, 1998 U.S. App. LEXIS 16091
CourtCourt of Appeals for the Second Circuit
DecidedJuly 14, 1998
Docket97-7705
StatusPublished
Cited by7 cases

This text of 155 F.3d 17 (Fred Ahlert Music Corp. v. Warner/Chappell Music, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fred Ahlert Music Corp. v. Warner/Chappell Music, Inc., 155 F.3d 17, 47 U.S.P.Q. 2d (BNA) 1356, 1998 U.S. App. LEXIS 16091 (2d Cir. 1998).

Opinion

155 F.3d 17

1998 Copr.L.Dec. P 27,804

FRED AHLERT MUSIC CORP., doing business as Olde Clover Leaf
Music, Plaintiff-Counter-Defendant-Appellee,
v.
WARNER/CHAPPELL MUSIC, INC., Defendant-Counter-Claimant-Appellant.

Docket No. 97-7705.

United States Court of Appeals,
Second Circuit.

Argued Jan. 8, 1998.
Decided July 14, 1998.

Robert C. Osterberg, Abelman, Frayne & Schwab, New York City, for Plaintiff-Counter-Defendant-Appellee.

Alan L. Shulman, Silverman, Shulman and Baker, P.C. (Scott L. Baker, Jonathan J. Ross, on the brief), New York City, for Defendant-Counter-Claimant-Appellant.

Frederick F. Greenman, Deutsch, Klagsbrun & Blasband (Alvin Deutsch, Kay Murray, on the brief), New York City, for Amici Curiae The Songwriters Guild of America and The Authors Guild, Inc.

Before: VAN GRAAFEILAND, WALKER, Circuit Judges, and RAKOFF, District Judge.*

JOHN M. WALKER, Jr., Circuit Judge:

This appeal requires us to consider the scope of the "Derivative Works Exception" of the Copyright Act of 1976, 17 U.S.C. § 304(c)(6)(A). The Copyright Act of 1976 ("the 1976 Act") expanded the rights of authors and their heirs by automatically extending the life of their copyrights by 19 years, for a total of 75 years, see 17 U.S.C. §§ 304(a)-(b), and by allowing authors (or, if the authors are deceased, their statutory heirs) to terminate, for the period of the extended copyrights, any domestic copyright interests in their work that they may have granted to others, see 17 U.S.C. §§ 304(c)(1)-(3). The purpose of the termination provision is to protect the interests of authors, who may have bargained away their rights without a full appreciation of the value of their work, as well as the interests of authors' surviving spouses and children. See Woods v. Bourne Co., 60 F.3d 978, 982 (2d Cir.1995); Larry Spier, Inc. v. Bourne Co., 953 F.2d 774, 778-80 (2d Cir.1992). Thus, the 1976 Act creates a completely new property right in the copyright for 19 years, and allows the author and his or her heirs to exploit it. See id. at 779; H.R.Rep. No. 94-1476, reprinted in 1976 U.S.C.C.A.N. 5659, 5756 (1976).

However, an author's termination rights are not unlimited. The 1976 Act's Derivative Works Exception permits a grantee or licensee who prepares a derivative work before termination to continue to utilize the derivative work during the extended renewal term "under the terms of the grant." 17 U.S.C. § 304(c)(6)(A). A derivative work is "a work based upon one or more preexisting works, such as a ... sound recording.... A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a 'derivative work.' " Id. at § 101. The Exception seeks to protect public access to the derivative work as well as the rights of persons who have invested in creating the derivative work. See Woods, 60 F.3d at 986; Donald A. Hughes, Jr., Jurisprudential Vertigo: The Supreme Court's View of "Rear Window" is for the Birds, 60 Miss. L.J. 239, 251-52 (1990).

In this action, both the appellee, Fred Ahlert Music Corp. ("Ahlert"), and the appellant, Warner/Chappell Music, Inc. ("Warner"), claim the right to license the use of a 1969 Joe Cocker recording, a derivative work based on the copyrighted musical composition "Bye Bye Blackbird" (the "Song"), in the soundtrack and soundtrack album of the motion picture "Sleepless in Seattle." Warner's predecessor in interest authorized preparation of the Cocker derivative pursuant to a grant from the Song's co-authors, Mort Dixon and Ray Henderson.

The statutory heirs of Mort Dixon terminated, pursuant to the 1976 Act, the rights held by Warner in the Song that were attributable to Dixon; the termination was to be effective in 1982. Warner claims a continued right to royalties, however, on the basis that the inclusion of the Cocker derivative on the movie soundtrack and soundtrack album is a post-termination utilization of a derivative work within the meaning of the Derivative Works Exception. Ahlert, successor-in-interest to Dixon's heirs, argues that Warner has no rights pertaining to the use of the Cocker derivative on the "Sleepless in Seattle" soundtrack or on the soundtrack album because those uses were not authorized "under the terms of the grant," and thus do not fall within the Exception. We agree with Ahlert, and affirm.

BACKGROUND

"Bye Bye Blackbird" was written by Mort Dixon and Ray Henderson, who registered their copyright in the Song on May 3, 1926. Under the Copyright Act of 1909, Pub.L. 60-349, 35 Stat. 1075 (1909) (previously codified at 17 U.S.C. §§ 1-216) (repealed 1976), the copyright in a musical composition was effective for 28 years and renewable for an additional 28 years by the author. See Mills Music, Inc. v. Snyder, 469 U.S. 153, 157, 105 S.Ct. 638, 83 L.Ed.2d 556 (1985). On May 6, 1953, the copyright was effectively renewed in the names of both authors; it was to have expired on December 31, 1982. Prior to renewal, each author assigned his interest in the copyright to Remick Music Corporation ("Remick"), the predecessor in interest to Warner. On March 23, 1956, Dixon died.

On or about May 2, 1969, Warner granted a non-exclusive mechanical license to A & M Records ("A & M").1 This license authorized A & M to record and manufacture a phonorecording of the Song performed by recording artist Joe Cocker. The agreement "cover[ed] only the particular recording mentioned herein of said musical composition." That recording was identified in the agreement as "RECORD NO. SP 4182" by "RECORDING ARTIST Joe Cocker." Pursuant to this license, A & M produced a version of the Song performed by Joe Cocker (the "Cocker derivative").

In 1976, Congress enacted a sweeping revision of the Copyright laws. See Pub.L. No. 94-553, 90 Stat. 2541 (1976) (codified at 17 U.S.C. §§ 101-810); see also Mills Music, 469 U.S. at 159-62, 105 S.Ct. 638. Among these changes, the new 17 U.S.C. § 304(b) automatically extended the renewal term of the copyright for an additional 19 years, through December 31, 2001 (the "extended renewal term"), for a total copyright term of 75 years.2 The 1976 Act also allowed the authors of copyrighted material (or if deceased, their statutory heirs) to terminate any grant of a transfer or license in a copyrighted work for the duration of the extended renewal term where the grant was executed before 1978. 17 U.S.C. § 304(c).3 On January 3, 1978, pursuant to the 1976 Act, Dixon's statutory heirs Yvonne Dixon Cresci and Estelle Barbara Kalish served formal notice terminating Dixon's grant to Remick, effective May 3, 1982.4 Thus, Warner's domestic rights in the Song reverted to Dixon's heirs.

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Bluebook (online)
155 F.3d 17, 47 U.S.P.Q. 2d (BNA) 1356, 1998 U.S. App. LEXIS 16091, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fred-ahlert-music-corp-v-warnerchappell-music-inc-ca2-1998.