Case 3:23-cv-01369-SDD-EWD Document 28 07/12/24 Page 1 of 40
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`UNITED STATES DISTRICT COURT
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`MIDDLE DISTRICT OF LOUISIANA
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`CYRIL E. VETTER AND
`VETTER COMMUNICATIONS
`CORPORATION
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`VERSUS
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`ROBERT RESNIK individually and
`d/b/a RESNIK MUSIC GROUP
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`RULING
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`CIVIL ACTION
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`23-1369-SDD-EWD
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`This matter is before the Court on the Motion to Dismiss1 filed by Defendant,
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`Robert Resnik, individually and d/b/a Resnik Music Group (“Defendant”). Plaintiffs, Cyril
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`E. Vetter and Vetter Communications Corporation (collectively, “Plaintiffs”), filed an
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`Opposition,2 to which Defendant filed a Reply.3 Plaintiffs then filed a Sur-Reply.4 For the
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`following reasons, the motion will be denied.
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`I. BACKGROUND
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`A. Facts
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`This case arises from a disagreement regarding the rights to the foreign
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`exploitation of a musical work co-written by Plaintiff, Cyril E. Vetter (“Vetter”). Plaintiffs’
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`lawsuit alleges the following facts. In 1962, Vetter and his friend Don Smith (“Smith”) co-
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`authored a song entitled “Double Shot (Of My Baby’s Love)” (the “Song”).5 In 1963, Vetter
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`and Smith assigned all of their interests in the Song to Windsong Music Publishers, Inc.
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`1 Rec. Doc. 12.
`2 Rec. Doc. 17.
`3 Rec. Doc. 23.
`4 Rec. Doc. 27.
`5 Rec. Doc. 1, ¶¶ 51–53.
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`(“Windsong”).6 In exchange for the agreed-upon price of one dollar, Windsong purchased
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`exclusive rights to the Song throughout the world for the full term of copyright protection,
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`as well as a “contingent assignment of all renewal period rights” under the Copyright Act
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`of 1909.7 This transfer of rights to Windsong will be referred to throughout this ruling as
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`the “Initial Assignment.”
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`In 1966, after the Song gained some popularity, Windsong obtained a U.S.
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`copyright registration for the Song (the “Original Copyright”).8 The registration, secured
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`under the Copyright Act of 1909, was to subsist for twenty-eight years with a possible
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`renewal term for an additional period of the same length.9
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`Smith died in 1972.10 In 1994 (after the twenty-eight-year term of Windsong’s
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`Original Copyright ended), Smith’s heirs and Vetter obtained a renewal copyright in the
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`Song (the “Renewal Copyright”).11 However, as mentioned above, Smith and Vetter both
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`transferred their renewal interests to Windsong in the Initial Assignment in 1963.12 Under
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`Supreme Court precedent, the parties agree that such a renewal interest assignment is
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`only enforceable against an author if he is living when those rights vest; in other words,
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`an author’s grant of the renewal interest is “contingent” upon the author being alive at the
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`commencement of the renewal period.13 Accordingly, Plaintiffs concede that Vetter’s
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`promise of his Renewal Copyright interest to Windsong in the Initial Assignment was
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`6 Id. at ¶ 57. The signed agreement effecting this transfer is attached to the Complaint (see Rec. Doc. 6-1).
`7 Id. at ¶¶ 58, 59. For context, a “renewal copyright” under the Copyright Act of 1909 is essentially a new
`term of copyright protection that can be obtained after the term of the original copyright expires. Renewal
`copyrights will be explained in more detail below.
`8 Id. at ¶ 63.
`9 Id. at ¶ 64.
`10 Id. at ¶ 65.
`11 Id. at ¶ 73. The renewal certificate is attached to the Complaint (see Rec. Doc. 6-2).
`12 Rec. Doc. 17, pp. 2–3.
`13 See Stewart v. Abend, 495 U.S. 207, 220 (1990) (“if the author dies before the commencement of the
`renewal period, the assignee holds nothing.”). See also Rec Doc. 1, ¶ 108; Rec. Doc. 12-1, p. 14.
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`enforceable because Vetter was alive at the time the renewal rights vested.14 Conversely,
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`because Smith was not alive at the time the renewal rights vested, the parties agree that
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`the transfer of Smith’s renewal rights to Windsong in the Initial Assignment was
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`unenforceable; as a result, those rights “vested in Mr. Smith’s heirs clear of all rights,
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`interests, or licenses granted under the Original Copyright.”15 Therefore, although Vetter’s
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`interest in the Renewal Copyright had been validly transferred to Windsong,16 Smith’s
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`renewal interest vested in Smith’s heirs clear of all rights granted to Windsong through
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`the Initial Assignment.
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`Accordingly, as of 1994, Windsong held a fifty percent interest in the Renewal
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`Copyright (by way of the Initial Assignment of Vetter’s renewal interest), and Smith’s heirs
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`held the other fifty percent (because of Smith’s death before the renewal interest vested).
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`In 1996, Plaintiff Vetter Communications Corporation (“Vetter Communications”)
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`purchased Smith’s heirs’ renewal copyright interest.17 Later that year, Windsong
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`transferred fifty percent of its renewal interest in the Song to another company, Lyresong
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`Music, Inc. (“Lyresong”).18 Thus, as of 1996, interest in the Renewal Copyright was held
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`by Vetter Communications (50%), Windsong (25%), and Lyresong (25%). Throughout this
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`ruling, these interests will be referred to as a given party’s “Renewal Copyright Interest.”
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`14 Rec. Doc. 1, ¶ 74.
`15 Id. at ¶¶ 108, 109. See also Rec. Doc. 12-1, pp. 12–13, where Defendant acknowledges the correctness
`of this part of the Complaint.
`16 Evidently, in 1996, Windsong executed a document (attached to the Complaint at Rec. Doc. 6-3)
`purporting to “reduce to writing” the transfer of Vetter’s renewal interest to Windsong. See Rec. Doc. 1, ¶¶
`77–79; Rec. Doc. 12-1, p. 3. Plaintiffs contend there was “no legitimate basis” for this 1996 assignment
`because the transfer of Vetter’s renewal interest had already been accomplished by the Initial Assignment
`and Vetter’s survival of the term of the Original Copyright. The Court finds it unnecessary to address
`Plaintiff’s contention because, whether or not the 1996 document is valid, the parties appear to agree upon
`the ultimate fact that Vetter’s renewal interest went to Windsong.
`17 Rec. Doc. 1, ¶ 76.
`18 Id. at ¶ 80. This document is attached to the Complaint (see Rec. Doc. 6-4).
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`In 2019, Vetter transmitted a termination notice to Windsong and Lyresong
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`pursuant to Section 304 of the Copyright Act of 1976 (the “Notice of Termination”).19 As
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`will be discussed, this is a statutory mechanism that allows the termination and recapture
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`of rights in a copyrighted work that were previously alienated. According to the Notice of
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`Termination, Vetter sought to terminate all rights in the Song that he had granted
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`Windsong through the Initial Assignment, and those rights would be “recaptured” by Vetter
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`(hereinafter referred to as “Vetter’s Recaptured Interest”).20 The effective date of the
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`Notice of Termination was to be May 3, 2022.21
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`Later in 2019, Windsong informed Plaintiffs that Windsong had sold its assets to
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`Defendant herein, Robert Resnik and/or Resnik Music Group.22 Accordingly, Renewal
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`Copyright Interests were held at that point by Vetter Communications (50%), Defendant
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`(25%), and Lyresong (25%).
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`Plaintiffs allege that on the effective date of the Notice of Termination (May 3,
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`2022), Vetter “retook ownership of his authorship share” of the Song (i.e., Vetter’s
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`Recaptured Interest).23 Later in 2022, Plaintiffs were approached by American
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`Broadcasting Companies, Inc. (“ABC”) regarding possible use of the Song on an episode
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`of a television show to be broadcast worldwide.24 After Plaintiffs provided ABC with a
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`quote, ABC informed Plaintiffs that Defendant, notwithstanding the Notice of Termination,
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`was claiming a twenty-five percent ownership interest in the Song.25
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`19 Id. at ¶ 84. Documents indicating Windsong and Lyresong’s receipt of the Notice of Termination are
`attached to the Complaint (see Rec. Docs. 6-5, 6-6), as well as the certificate of recordation of the Notice
`of Termination (see Rec. Doc. 6-7).
`20 Id. at ¶ 85.
`21 Id.
`22 Id. at ¶ 89.
`23 Id. at ¶ 92.
`24 Id. at ¶¶ 93–94.
`25 Id. at ¶¶ 95–96.
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`B. The Parties’ Dispute
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`The parties disagree on the geographical scope of both Vetter Communications’
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`Renewal Copyright Interest (which it purchased from Smith’s heirs) and Vetter’s
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`Recaptured Interest (through the Notice of Termination). Count One of Plaintiffs’
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`Complaint seeks a declaration from this Court that Vetter Communications is the sole
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`owner throughout the world of its Renewal Copyright Interest that it acquired from Smith’s
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`heirs.26 In short, Plaintiffs contend that all of Windsong’s rights, both domestic and foreign,
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`in the Original Copyright derived from Smith through the Initial Assignment were cut off
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`when Smith’s Renewal Copyright Interest vested in Smith’s heirs.27 Plaintiffs argue this
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`gave Smith’s heirs a completely new property interest, which was later purchased by
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`Vetter Communications.28 As a result, Plaintiffs assert that Vetter Communications is the
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`sole owner of this Renewal Copyright Interest, and that this right extends worldwide.29
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`Count Two of the Complaint seeks a declaration that Vetter is the sole owner
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`throughout the world of Vetter’s Recaptured Interest resulting from his Notice of
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`Termination.30 Plaintiffs allege that the Notice of Termination cut off all of Defendant’s
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`rights, both domestic and foreign, in the Renewal Copyright Interest derived from Vetter’s
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`transfer of same through the Initial Assignment to Windsong.31 As a result, Plaintiffs
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`contend Vetter’s Recaptured Interest includes both domestic and foreign rights to exploit
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`the Song.32
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`26 Id. at ¶ 113.
`27 Id. at ¶¶ 108–113.
`28 Id.
`29 Id.
`30 Id. at ¶ 122.
`31 Id. at ¶ 116–119.
`32 Id. at ¶ 119–122.
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`In sum, Plaintiffs’ Complaint for declaratory judgment asks this Court to find the
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`following:
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`(cid:120) That Vetter Communications is the sole owner of all rights and interests
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`throughout the world in its Renewal Copyright Interest that it acquired from
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`Smith’s heirs;33
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`(cid:120) That Vetter is the sole owner of all rights and interests throughout the world in
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`Vetter’s Recaptured Interest which he acquired through the Notice of
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`Termination;34 and
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`(cid:120) That Defendant has no right to exploit the Song anywhere in the world.35
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`Defendant filed this Motion to Dismiss36 pursuant to Rule 12(b)(6) of the Federal
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`Rules of Civil Procedure. Defendant argues that under the applicable statutes and
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`interpreting jurisprudence, neither Vetter Communications’ Renewal Interest nor Vetter’s
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`Recaptured Copyright Interest have any effect outside of the United States.37 In other
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`words, Defendant contends that the Notice of Termination only resulted in Vetter’s
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`recapture of domestic rights in the Song, and that Vetter Communications’ Renewal
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`Interest that it purchased from Smith’s heirs is also limited to domestic rights.
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`In opposing Defendant’s motion, Plaintiffs rely on the history, development, and
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`purposes of United States copyright law to assert an admittedly “novel theory of
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`recovery.”38 Defendant argues that a straightforward reading of the applicable statutory
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`provisions and case law requires dismissal of Plaintiffs’ claims.
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`33 Id. at ¶ 124(i).
`34 Id. at ¶ 124(ii).
`35 Id. at ¶ 124(iii). Plaintiffs also seek to enjoin Defendant from such exploitation.
`36 Rec. Doc. 12.
`37 Rec. Doc. 12-1, pp. 1–2.
`38 Rec. Doc. 17, p. 6.
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`II.
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`LAW AND ANALYSIS
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`A. Motion to Dismiss Under Rule 12(b)(6)
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`When deciding a Rule 12(b)(6) motion to dismiss, “[t]he ‘court accepts all well-
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`pleaded facts as true, viewing them in the light most favorable to the plaintiff.’”39 The Court
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`may consider “the complaint, its proper attachments, documents incorporated into the
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`complaint by reference, and matters of which a court may take judicial notice.”40 “To
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`survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead ‘enough facts to state
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`a claim to relief that is plausible on its face.’”41
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`In Bell Atlantic Corp. v. Twombly, the United States Supreme Court set forth the
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`basic criteria necessary for a complaint to survive a Rule 12(b)(6) motion to dismiss:
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`“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed
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`factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief
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`requires more than labels and conclusions, and a formulaic recitation of the elements of
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`a cause of action will not do.”42 A complaint is also insufficient if it merely “tenders ‘naked
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`assertion[s]’ devoid of ‘further factual enhancement.’”43 However, “[a] claim has facial
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`plausibility when the plaintiff pleads the factual content that allows the court to draw the
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`reasonable inference” that the Plaintiff is entitled to relief.44 In order to satisfy the
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`plausibility standard, the plaintiff must show “more than a sheer possibility” of entitlement
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`to relief.45 “Furthermore, while the court must accept well-pleaded facts as true, it will not
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`39 In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin v. Eby Constr.
`Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)).
`40 Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (internal citations omitted).
`41 In re Katrina Canal Breaches Litigation, 495 F.3d at 205 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544
`(2007)).
`42 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and brackets omitted).
`43 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted).
`44 Id.
`45 Id.
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`‘strain to find inferences favorable to the plaintiff.’”46 On a motion to dismiss, courts “are
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`not bound to accept as true a legal conclusion couched as a factual allegation.”47
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`On a Rule 12(b)(6) motion, a court is authorized “to dismiss a claim on the basis
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`of a dispositive issue of law.”48 As the Supreme Court explains, dismissal is warranted
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`whenever a claim is based on an invalid legal theory:
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`Nothing in Rule 12(b)(6) confines its sweep to claims of law
`which are obviously insupportable. On the contrary, if as a
`matter of law ‘it is clear that no relief could be granted under
`any set of facts that could be proved consistent with the
`allegations,’ ... a claim must be dismissed, without regard to
`whether it is based on an outlandish legal theory, or on a close
`but ultimately unavailing one.49
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`When a complaint fails to satisfy these principles, “this basic deficiency should be
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`exposed at the point of minimum expenditure of time and money by the parties and the
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`court.”50
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`B. Copyright Law in General
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`The dispute in this case results in large part from the parties’ differing
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`understandings of the broader concept of how a United States copyright operates with
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`respect to foreign countries. This section is intended to summarize the parties’ positions
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`on this overarching issue, which provides needed context to the arguments under Count
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`One and Count Two.
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`46 Taha v. William Marsh Rice Univ., 2012 WL 1576099, at *2 (S.D. Tex. 2012) (quoting Southland Sec.
`Corp. v. Inspire Ins. Solutions, Inc., 365 F.3d 353, 361 (5th Cir. 2004)).
`47 Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).
`48 Neitzke v. Williams, 490 U.S. 319, 326 (1989) (citations omitted).
`49 Id. at 327 (internal citation omitted).
`50 Cuvillier v. Sullivan, 503 F.3d 397, 401 (5th Cir.2007) (quoting Twombly, 550 U.S. at 558).
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`i. United States Copyright Law
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`Two mechanisms under different versions of the United States Copyright Act are
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`at issue: renewals under the 1909 Act and terminations under the 1976 Act. The 1909
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`Copyright Act provides for two distinct ownership terms: the initial term and the “renewal
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`term.”51 After the initial term ends, a renewal term can be effected and claimed by the
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`author, if living, or by the author’s heirs.52 The renewal provision of the 1909 Act states:
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`[T]he author of [a copyrighted] work, if still living, or the widow,
`widower, or children of the author, if the author be not living,
`or if such author, widow, widower, or children be not living,
`then the author's executors, or in the absence of a will, his
`next of kin shall be entitled to a renewal and extension of the
`copyright in such work for a further term of twenty-eight years
`when application for such renewal and extension shall have
`been made to the copyright office and duly registered therein
`within one year prior to the expiration of the original term of
`copyright.53
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`By establishing this right of renewal, “Congress attempted to give the author a second
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`chance to control and benefit from his work. Congress also intended to secure to the
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`author's family the opportunity to exploit the work if the author died before he could
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`register for the renewal term.”54 Put another way, “[t]he renewal term permits the author,
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`originally in a poor bargaining position, to renegotiate the terms of the grant once the
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`value of the work has been tested.”55
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`The 1976 Act became effective on January 1, 1978. For works (like the Song in
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`this case) that were still in their original copyright term as of the effective date, the 1976
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`Act preserved the renewal right. For such works, the original copyright would “endure for
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`51 Stewart v. Abend, 495 U.S. 207, 217 (1990).
`52 Id.
`53 Id. (quoting 17 U.S.C. § 24 (1976 ed.)). This provision was originally found at § 23 of the 1909 Act.
`54 Id. at 218.
`55 Id. at 218–219.
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`28 years from the date it was originally secured.”56 With respect to the renewal copyright,
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`the 1976 Act provides that “the widow, widower, or children of the author, if the author is
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`not living … shall be entitled to a renewal and extension of the copyright in such work for
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`a further term of 67 years.”57
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`However, for works created after the effective date of the 1976 Act, the “dual term”
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`system (i.e., the division between the original term and renewal term) of the 1909 Act was
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`abolished in favor of a unitary term based on the life of the author plus fifty (later increased
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`to seventy) years. Unlike the 1909 Act, the 1976 Act provides authors the ability to
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`terminate grants of rights to third parties in a copyright fifty-six years after the original
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`copyright was secured.58 This termination right was created to replace the renewal right
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`as the author’s “second chance” at benefitting from his work.59 According to the legislative
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`history of the 1976 Act, “[rights of termination] are based on the premise that the
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`reversionary provisions of the present section on copyright renewal [in the 1909 Act]
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`should be eliminated, and that the proposed law should substitute for them a provision
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`safeguarding authors against unremunerative transfers.”60 Pertinent to this case, Section
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`304(c) of the 1976 Act provides that, “[i]n the case of any copyright subsisting in either its
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`first or renewal term on January 1, 1978, … the exclusive or nonexclusive grant of a
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`transfer or license of the renewal copyright or any right under it, executed before January
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`1, 1978, … is subject to termination.”61 The reversion of rights that results from the
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`termination is subject to several limitations in the statute, one of which is as follows:
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`56 17 U.S.C. § 304(a)(1)(A).
`57 17 U.S.C. § 304(a)(1)(C).
`58 17 U.S.C. § 304(c)(3).
`59 Peretti v. Authentic Brands Grp. LLC, 33 F.4th 131, 134 (2d Cir. 2022).
`60 H.R. Rep. No. 94-1476, 124, 1976 U.S.C.C.A.N. 5659, 5740.
`61 17 U.S.C. § 304(c).
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`Termination of a grant under this subsection affects only those
`rights covered by the grant that arise under this title, and in no
`way affects rights arising under any other Federal, State, or
`foreign laws.62
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`The dispute in this case calls for a consideration of whether renewals under the
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`1909 Act and terminations under the 1976 Act have effect outside of the United States.
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`ii.
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`The “Principle of Territoriality”
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`Both parties discuss a concept of general copyright law known as the “principle of
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`territoriality.” This principle recognizes that, “with limited exception, the ‘copyright laws
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`generally do not have extraterritorial application.’”63 Defendant takes this principle to
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`mean that “copyright protection in one country does not extend to or affect protection in
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`any other country,”64 and that “U.S. copyright law [has] no reach outside U.S. borders.”65
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`This, Defendant argues, supports dismissal of Plaintiffs’ claims to foreign rights to the
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`Song because the mechanisms by which Plaintiffs’ interests were purportedly obtained
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`(i.e., Notice of Termination and renewal) are functions of United States copyright law and
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`cannot affect foreign rights that Plaintiffs previously granted away.66
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`Plaintiffs caution against “leaning too heavily” on the principle of territoriality.67
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`Plaintiffs acknowledge that “[i]n copyright jurisprudence, this principle has been used to
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`refuse application of the Copyright Act to acts of purely extraterritorial infringement.”68
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`Thus, Plaintiffs concede that United States copyright law cannot provide a remedy for an
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`62 17 U.S.C. § 304(c)(6)(E).
`63 Jaso v. Coca Cola Co., 537 F. App'x 557, 560 (5th Cir. 2013) (quoting Update Art, Inc. v. Modiin Publ'g,
`Ltd., 843 F.2d 67, 73 (2d Cir.1988)).
`64 Rec. Doc. 12-1, pp. 6–7.
`65 Id. at p. 15.
`66 Id. at pp. 1–2, 6–7, 14–16.
`67 Rec. Doc. 17, p. 8.
`68 Id. (citing Geophysical Serv., Inc. v. TGS-NOPEC Geophysical Co., 850 F.3d 785, 791 (5th Cir.
`2017)(emphasis added).
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`infringement occurring in a different country.69 However, Plaintiffs explain that this case is
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`not about conduct (i.e., infringement); rather, this case concerns rights (i.e., ownership)
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`in the Song.70 Plaintiffs argue that questions of ownership are treated differently than
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`questions of infringement, with ownership questions being answered by the law of the
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`country where the work was created (here, the United States).71 Thus, Plaintiffs state that,
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`“to the extent the defendant argues that the principle of territoriality prevents ownership
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`events occurring in one country (e.g., renewal or reversion) from having any effect or
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`consequence in another country, that argument relies on a vast overstatement of the
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`principle [of territoriality].”72
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`iii. Copyright Interests Across Multiple Countries
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`Based on their differing interpretations of the principle of territoriality, the parties
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`diverge on a related issue heavily influences the outcome of this dispute. Defendant
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`believes “the U.S. Copyright Act, together with the implementing legislation of each other
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`member country, creates multiple and separate copyright interests in each country, rather
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`than a single overarching international master copyright that each country is required to
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`honor.”73 Under Defendant’s reasoning, this means that Vetter Communications’ Renewal
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`Copyright Interest and Vetter’s Recaptured Interest only encompass domestic rights in
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`the Song; in other countries, the copyright interests are “separate” and thus unaffected
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`by the termination and the renewal.74
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`69 Id. at 9.
`70 Id.
`71 Id. (citing Edmark Indus. SDN. BHD. v. S. Asia Int’l (H.K.) Ltd., 89 F. Supp. 2d 840, 843 (E.D. Tex. 2000)).
`72 Id. at 10.
`73 Rec. Doc. 12-1, p. 8.
`74 Id. at pp. 1–2, 6–7, 14–16.
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`Plaintiffs acknowledge that there is no “international copyright.”75 Instead,
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`according to Plaintiffs, domestic protections are extended to works of foreign origin by
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`way of obligations from membership in treaties or conventions such as the Berne
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`Convention for the Protection of Literary and Artistic Works (the “Berne Convention”). The
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`Supreme Court has stated that the Berne Convention “is the principal accord governing
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`international copyright relations.”76 Highlighting some of the main features of the Berne
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`Convention, the Court further stated:
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`Members of the Berne Union agree to treat authors from other
`member countries as well as they treat their own. Nationals of
`a member country, as well as any author who publishes in one
`of Berne's 164 member states, thus enjoy copyright protection
`in nations across the globe. Each country, moreover, must
`afford at least the minimum level of protection specified by
`Berne.77
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`Continuing, Plaintiffs argue that there is only a single copyright interest in a given
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`work, granted by the issuing country (here, the United States) and then conventionally
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`“recognized” and protected by other countries pursuant to the Berne Convention.78
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`Accordingly, under Plaintiffs’ reasoning, “the plaintiffs’ recapture of that one copyright
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`[through renewal or termination] leaves the defendant with nothing. In that instance, the
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`plaintiffs’ domestic rights yield to them the right to exploit [the Song] everywhere without
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`interference from its former owner.”79
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`With these overarching principles in mind, the Court turns to the arguments on the
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`specific claims in the Complaint.
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`75 Rec. Doc. 17, p. 6.
`76 Golan v. Holder, 565 U.S. 302, 306–07 (2012).
`77 Id. at 308 (citing Berne Convention, Sept. 9, 1886, as revised at Stockholm on July 14, 1967, Arts. 1,
`5(1), 2(6), 3, 5(2) (hereinafter “Berne Convention”)).
`78 Rec. Doc. 17, pp. 10–13, 18.
`79 Id. at 13.
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`C. Analysis of Count One: Vetter Communications’ Renewal Copyright
`Interest
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`Count One of the Complaint calls for a determination of whether Vetter
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`Communications’ Renewal Copyright Interest, which it purchased from Smith’s heirs,
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`includes rights to exploit the Song in foreign countries. Plaintiffs say that it does, and
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`Defendant says that it does not.
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`Under the 1976 Act (for works created prior to its enactment) and the 1909 Act, if
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`the author died before the end of the initial copyright term, the author’s heirs could obtain
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`the renewal copyright. The renewal copyright was understood to “provide the author's
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`family a ‘new estate’ if the author died before the renewal period arrived.”80 Plaintiffs
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`assert that the renewal right is not geographically limited to the United States and,
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`therefore, the right encompasses the exploitation of the Song in foreign countries.
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`
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`Two Supreme Court cases provide further background context to the issue in
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`Count One. In Fred Fisher Music Co. v. M. Whitmark & Sons, the Supreme Court held
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`that authors could assign away their renewal interests under the 1909 Act.81 Later, in
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`Stewart v. Abend, the Court expressed that “if the author dies before the commencement
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`of the renewal period, the assignee holds nothing.”82 Put another way, an author’s
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`assignment of his renewal interest is “contingent” on the author’s survival at the start of
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`the renewal period.
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`Based on Fred Fisher and Stewart, it is not disputed in this case that Smith’s Initial
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`Assignment to Windsong of his Renewal Copyright Interest was a facially valid transfer.
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`It is also undisputed that this transfer to Windsong was dependent upon Smith’s survival
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`
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`80 Stewart, 495 U.S. at 220.
`81 318 U.S. 643, 657 (1943).
`82 495 U.S. at 220 (citing Miller Music Corp. v. Charles N. Daniels, Inc., 362 U.S. 373 (1960)).
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`of the commencement of the renewal period; that Smith died before this time; and that,
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`as a result, Smith’s promise of his renewal interest was unenforceable by Windsong.
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`Smith’s Renewal Copyright Interest instead vested in Smith’s heirs and was later
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`purchased by Vetter Communications. The disagreement arises where Plaintiffs assert
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`that Vetter Communications’ Renewal Interest includes both domestic and foreign rights
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`to the Song. Defendant argues he retained the foreign rights notwithstanding Vetter
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`Communications’ Renewal Copyright Interest.
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`
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`The primary case Defendant relies on in moving to dismiss Count One is Stewart
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`v. Abend.83 Defendant claims that in Stewart, “the Supreme Court held that the heirs of a
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`deceased author recapture only the unvested, contingent renewal-term rights that such
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`author may have granted before dying prior to the vesting of those rights.”84 Defendant
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`further argues that, unlike the domestic renewal rights, foreign rights assigned by the
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`author are vested and noncontingent.85
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`The issue in Stewart involved the rights of the owner of a derivative work against
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`the rights of the successor owner (following the death of the author) of the pre-existing
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`work during the renewal period of the pre-existing work.86 The Court, citing its prior
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`decision in Miller Music Corporation v. Charles N. Daniels, Inc.,87 held that the successor
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`to the pre-existing work (i.e., the author’s heir or executor) had superior rights in the
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`
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`83 495 U.S. 207 (1990).
`84 Rec. Doc. 12-1, p. 2 (emphasis in original).
`85 Defendant argues that: “As to the U.S. renewal term, however – and only as to the U.S. renewal term --
`Stewart holds that it is only a grant of an unfulfilled expectancy. As to all other rights conveyed by the author,
`i.e., foreign rights, the effect of the grant should remain unchanged, because the foreign rights granted are
`not mere expectancies but valid full-term rights under the copyright laws of other countries, fully vested in
`the author for their entire duration ab initio.” Id. at 15.
`86 Stewart, 495 U.S. at 211.
`87 362 U.S. 373 (1960).
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`renewal period; in other words, the successor’s renewal copyright trumped the rights of
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`the assignee:
`
`the
`the author dies before
`if
`After Miller Music,
`commencement of the renewal period, the assignee holds
`nothing. If the assignee of all of the renewal rights holds
`nothing upon the death of the assignor before arrival of the
`renewal period, then, a fortiori, the assignee of a portion of the
`renewal rights, e.g., the right to produce a derivative work,
`must also hold nothing.88
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`The Court pauses to note here that a literal reading of the quoted is contrary to
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`
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`Defendant’s position. Nonetheless, Defendant says the case favors his position.
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`Defendant points out that in Stewart, the Supreme Court explained that “the heirs’
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`ownership after the author’s death is not the result of the author’s grant being voided, set
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`aside, or superseded in any way, but simply the result of the contingent nature of the
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`rights held by the author during the first term.”89 The Stewart Court, quoting legislative
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`history of the 1909 Act, did make clear that “[t]he right of renewal is contingent.”90 But the
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`decision did not indicate, as Defendant argues, that “only” the grant of U.S. rights are
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`contingent upon the author’s survival, or that “only” the U.S. rights revert to the successor
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`unencumbered in the event of the author’s death. Defendant’s focus on the contingent
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`nature of the renewal right does not confront the more central question: whether foreign
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`exploitation rights are encompassed within that contingent renewal right. Indeed, as
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`Plaintiffs point out, the Stewart decision says nothing at all about the geographical scope
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`of a renewal copyright interest, which is the issue faced in Count One.91 In the Court’s
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`88 Stewart, 495 U.S. at 220–221.
`89 Rec. Doc. 12-1, p. 13 (citing Stewart, 495 U.S. at 219).
`90 Stewart, 495 U.S. at 219 (quoting 5 Legislative History of the 1909 Copyright Act, Part K, p. 77 (E.
`Brylawski & A. Goldman eds. 1976) (statement of Mr. Hale)).
`91 Rec. Doc. 17, p. 17.
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