Did an appeals court just give the music industry a big break?

« Hollywood Docket: Polanski's last ditch effort; UMG's Veoh appeal; Absolute vs. Absolut | Main | 'Catcher in the Rye' copyright case to be reconsidered »

Did an appeals court just give the music industry a big break?

Fri Apr 30, 2010 @ 09:56AM PST

By Eriq Gardner

1149076947528tzR 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. 

Many in the recording industry have been keenly aware of the looming "termination" time bomb for years and have been nervously getting ready. Already, some songwriters have have been making noise about their plans to terminate. For example, Charlie Daniels is trying to terminate the copyright on "The Devil Went Down to Georgia" and his other hits. 

Insiders are buzzing about what's going to happen in 2013. Eventually, litigation will get bloody.

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.

TrackBack URL for this entry:

Listed below are links to weblogs that reference Did an appeals court just give the music industry a big break?:

The Hollywood Reporter
The Hollywood Reporter, Esq. blog focuses on how the entertainment and media industries are impacted and influenced by the law. It is edited by Matthew Belloni with contributions from veteran legal reporter Eriq Gardner and others. Before joining The Hollywood Reporter, Belloni was a lawyer at an entertainment litigation firm in Los Angeles. He writes a column for THR devoted to entertainment law. Gardner is a New York-based writer and legal journalist. Send tips or comments to Matthew.Belloni@thr.com

The Hollywood Reporter
Contact: Patrice Atiee at 323.525.2014 or patrice.atiee@thr.com

The Hollywood Reporter is Your Complete Film Resource

The columnists and bloggers who write for The Hollywood Reporter have their collective finger on the pulse of the boxoffice. Martin Grove and the other THR columnists deliver their thoughts on the film industry in an uncompromised style. Subscribe to THR today and get the latest views from these film experts and get the latest movie reviews as well.