By Eriq Gardner
Major record labels might have received a gift this week that could prevent them from losing their grip on valuable property.
On Tuesday, Judge Kimba Wood of the Second Circuit Court of Appeals issued an interesting opinion in Bryant v. Media Right Prods
, a case that involved producers of two albums suing for copyright infringement. The defendant had allegedly made an unauthorized licensing deal to distribute albums online. The producers argued they should be entitled to infringement damages for each
of the 20 songs, but in the decision
, Wood ruled that each album constitutes a single "work" and damages should be calculated by a factor of two.
The songwriters are virtual unknowns, and the damages only added up to $2,400, so there's good reason why this decision has gone unnoticed. But the opinion also addressed an issue that's potentially worth untold millions to the recording industry.
In 2013, many holders of sound-recording copyrights can exercise a provision under the 1976 Copyright Act to terminate their assigned rights. This means that some of the biggest artists in the business, from the Eagles to Madonna, may soon have the power to pretty much destroy the recording business as we know it.
When that happens, according to our sources, record labels will argue that these works aren't eligible for termination because they are "works made for hire." Specifically, they'll point out that among the things classified as "works made for hire" by Section 101
of copyright law is "a work specially ordered or commissioned for use as a contribution to a collective work ... a compilation."
It's a dicey argument, say lawyers familiar with what's going on, so that's what makes Judge Wood's decision noteworthy.
For what appears to be the first time the Second Circuit has treated the topic
, Wood says that an album constitutes a single work even if the songs are individually registered with the U.S. Copyright Office. It's true that Wood was addressing the calculation of statutory damages in an infringement case, but the decision includes a highly sensitive discussion on the Copyright Act's "expansive definition of compilation."
Those words will be music to the ears of many record executives.