Vetter v. Resnik

Fifth Circuit affirms ruling that statutory termination of copyright grant, as well as contingent copyright renewal rights, apply worldwide and are not limited to rights in United States.

In 1962, Cyril Vetter and Don Smith co-wrote a song titled "Double Shot (Of My Baby's Love)." They then assigned all of their interests in the song—including their interests in the renewal term of copyright under the 1909 Copyright Act—to Windsong Music Publishers. Smith passed away in 1966, and Smith's heirs and Vetter later registered a renewal copyright in the song. Although Vetter's assignment of the renewal term to Windsong was effective because he survived into the renewal term, Smith's assignment of the renewal term was not effective because he died before the beginning of the renewal term. Windsong therefore owned 50% of the renewal copyright and Smith's heirs held the other 50%. Windsong later transferred its assets to Robert Resnik and Resnik Music Group, and the Smith heirs sold their interest to Vetter Communications.

In 2019, Vetter served on Windsong a notice of termination pursuant to Section 304 of the 1976 Copyright Act, seeking to recapture the rights in the song that he had previously assigned to Windsong. However, when ABC sought to use the song in an episode of a TV show to be broadcast worldwide, Resnik argued that the Smith heirs' renewal interest (now owned by Vetter's company) and Vetter's recaptured interest were limited to the United States. Vetter filed a declaratory judgment action in Louisiana federal court asking the court to find that his rights extended worldwide, which he acknowledged was a "novel theory of recovery." Resnik moved to dismiss. The court denied the motion, finding that Vetter stated a plausible claim that his interests encompassed both domestic and foreign rights. (Read our summary of the district court's decision here.) The court later granted Vetter's motion for summary judgment, declaring Vetter to be the sole owner of the copyright rights to "Double Shot (Of My Baby's Love)" throughout the world. On Resnik's appeal, the Fifth Circuit affirmed.

As to termination under the 1976 Copyright Act, the panel focused on the following language in Section 304(c)(6)(E) of the act: "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." Resnik argued that Section 304 limits termination to U.S. rights, that case law confines termination to domestic rights, and that termination of a grant worldwide would violate national treatment and territoriality principles under the Berne and Universal Copyright Conventions. The Fifth Circuit rejected all three arguments.

Based on the plain reading of the statutory language, the court interpreted "arise under this title" to mean rights created or granted in accordance with the U.S. Copyright Act. Because the court interpreted Vetter's grant to Windsong as having been executed under the U.S. Copyright Act, it ruled that the plain language of the termination statute required that all rights conveyed in that transfer—which the court believed included domestic and foreign alike—would be subject to recapture.

The panel drew support from Kirtsaeng v. John Wiley & Sons, Inc., where the U.S. Supreme Court adopted a non-geographical interpretation of the phrase "lawfully made under this title" in applying the first-sale doctrine to textbooks manufactured outside the United States. Noting the structural similarity between that phrase and "arise under this title" in Section 304(c)(6)(E) and "lawfully made under this title" in the first-sale provision, the panel found the Supreme Court's reasoning applied to the termination statute as well.

The panel next discussed the purpose of the termination statute, which was enacted to safeguard authors against "unremunerative transfers" and addresses "the unequal bargaining position of authors." Confining recapture to domestic rights would, in the court's view, undercut Congress' objective by depriving authors of "the full set of rights" originally conveyed.

The panel declined to follow other courts in the Second and Ninth Circuits, which held that termination affects only rights in the United States, characterizing their support for a domestic-only rule as weak, nonbinding and resting heavily on treatises that focus on territorial limits related to copyright infringement rather than copyright ownership, assignment and termination.

The panel also rejected Resnik's treaty-based objections, explaining that national treatment under the Berne Convention means that member states recognize and protect rights granted under another member's law. Thus, a copyright granted under U.S. law can be recognized globally, contrary to Resnik's theory that there are "multiple and separate copyright interests in each country." The panel also found that the district court's reading does not contravene territoriality principles (i.e., copyright protections do not have extraterritorial effect) because the question here is about ownership, assignment and termination, not extraterritorial infringement.

As to copyright renewal, the panel found that the text and purpose of the renewal provision in the 1909 Act supported the district court's holding, noting that the provision "makes no mention of geographical limitations to the scope of renewal rights." The panel noted that such a reading aligns with the purpose of the 1909 Act and that "[o]nly by recapturing the exclusive rights to Double Shot throughout the world rather than recapturing U.S. rights alone would Vetter [] receive fair remuneration consistent with the purpose of [the 1909 Act]."

While Resnik argued that the recapture of renewal rights is limited to rights in the United States—which is the only country with a two-term system of copyright—under the Supreme Court's 1990 decision in Stewart v. Abend, the panel rejected this argument because the Abend ruling drew no distinction between domestic and foreign rights. The panel also rejected Resnik's international treaty arguments, explaining that the arguments relied on the same faulty assumption the court had already dismissed—that each country grants a separate copyright rather than recognizing a single copyright created under U.S. law for works created in the United States.

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