Sixties music icon Paul McCartney recently filed a declaratory judgement action in the federal court New York City, claiming that he is allowed to terminate certain grants of copyright interests that he made in the 1960s regarding The Beatles’ catalog.
McCartney argues that the Sony defendants have taken the position that the notices are not valid, and that Sony has refused to agree not to take legal action against him or to agree that McCartney will not be breaching his contractual right to termination. He wants a judgment declaring that the fact of his sending termination notices is not a breach of the publishing agreements.
Inside Counsel recently sat down with Edward H. Rosenthal, chair of the Intellectual Property and Litigation Groups at Frankfurt Kurnit Klein & Selz, one of the top entertainment, advertising, and media law firms in the United States, to discuss the case in detail.
“Despite the fact that the termination provisions have existed for nearly 40 years, there are many unresolved questions. The McCartney case raises significant issues, most importantly with respect to termination in the US of grants that originated abroad,” he said. “The termination provisions in US Copyright law are designed to give copyright owners a second bite at the apple in terms of licensing or selling rights, and it could make sense to apply those provisions to grants in the United States that are derived from a grant under foreign law.”
There has been surprisingly little litigation as to the meaning of various statutory provisions. According to Rosenthal, this is especially true with respect to grants of copyright interests that derive from grants outside of the U.S., like the original grants at issue here, which were made by Lennon & McCartney to UK entities. One provision of the U.S. termination law states that the provisions in no way affects rights arising under any other Federal, State or foreign law.
According to Rosenthal, some commentators have read this as meaning that grants that originate abroad and/or U.S. grants that deal with publication or dissemination in other countries are not subject to the termination provisions at all. Others have taken the position that any grant that impacts rights either derived from U.S. grants or involving the exploitation of rights in the US should be subject to these provisions.
So, how does this case affect IP laws internationally?
“While certain other countries have provisions allowing grants to be terminated or to revert under certain circumstances, the U.S. termination provisions are particularly robust,” he explained. “And because of the time frames set forth in the statute, many significant works are in the period where they can be terminated.”
There are different time frames for pre-1978 and post-1978 grants, he said. As a result, works from the early to mid-1960s and also from the 1980’s may be subject to termination. This includes vast numbers of significant works, in music as well as in the motion picture, publishing and other industries.
“The termination provisions were designed to give creators who may have entered into less favorable deals at the time of the original grants to have another bite at the apple some years later,” explained Rosenthal. “While here the grants at issue began in the UK and were made by UK citizens, obviously the USA represents a huge market. And there is reason to argue that foreign creators should be able to have that same second bite at the apple, at least when it applies to things happening in the U.S.”