Copyright reform/photo by Wikimedia Commons

Paul Fakler thought that the fight over musical artists' rights to reclaim their copyrights was settled 20 years ago.

That's when Congress altered the Copyright Act of 1976 to provide that sound recordings are “works made for hire” that can't be reclaimed. The change prompted such an uproar in the music industry that Congress retracted the provision a year later, the Orrick, Herrington & Sutcliffe partner recalls.

Fast-forward to this week, when John Waite, Joe Ely, David Johansen and other musicians backed by Blank Rome filed two putative class actions. They allege that Sony Music Entertainment and Universal Music Group have “routinely and stubbornly refused” to relinquish their copyrights on musical works more than 35 years old. The labels once again argue that the recordings are works made for hire, which carves them out from the termination provisions of Section 203 of the Copyright Act.

“It's a zombie issue that I thought had fizzled,” Fakler says.

Instead, it's alive and marching.

Section 203 provides that “in the case of any work other than a work made for hire,” the grant or transfer of a copyright executed after 1978 is subject to termination after 35 years.” The idea was to give authors a second chance to exploit works they might have bargained away when in a weaker negotiating position.

Musical artists started serving notices of termination several years ago. According to the class complaints, signed by Blank Rome partner David Kistler, they've been met with “stubborn and unfounded disregard of their rights under the law and, in many instances, willful copyright infringement.”

According to letters attached to the complaints, Sony and Universal argue that they or their predecessor labels commissioned the sound recordings as works made for hire. Universal's contracts with the musicians state that they “shall be our employees for hire and all such master recordings shall be works made for hire under the United States Copyright Law.”

Further, the labels point out that Section 101 of the Copyright Act explicitly defines works made for hire as including “a work specially ordered or commissioned for use as a contribution to a collective work” or “a compilation.”

“The sound recordings were specially commissioned for use in compilations, i.e., long-playing record albums,” states UMG's May 31, 2018, letter to Waite signed by Cowan Liebowitz & Latman counsel Thomas Kjellberg. It demands that Waite cease and desist from publishing music from his 1982 album “Ignition” on Spotify and other digital services.

Fakler generally represents digital music services such as Sirius XM Radio and isn't involved in the class actions, though he's upfront about his general disdain for the recording industry.

He describes the industry's 1999 lobbying as an effort to “screw over the artists in advance.” The subsequent withdrawal of the provision ought to dispose of the work-made-for-hire argument, he says.

Nor can the labels rely on contractual provisions to supersede the artists' termination rights. Section 203 expressly says that “termination of the grant may be effected notwithstanding any agreement to the contrary,” he notes.

The “compilation” exception applies only to the selection and arrangement of works, Fakler says. It might apply if a publisher had commissioned individual artists to contribute tracks to, for example, a Jimi Hendrix tribute album. It would not apply to an ordinary collection of songs that make up a music album.

So why is the issue only being litigated now, five years after Section 203 began kicking in for sound recordings?

It's because the major music publishers have negotiated new deals with their superstars, Fakler says. “They're the only ones who can afford to take on the recording industry,” he says, though the class action might change that. “I'm sort of surprised and disappointed that the litigation hadn't started before now,” he said.