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FRED AHLERT MUSIC CORP. v. WARNER/CHAPPELL MUSIC

April 14, 1997

FRED AHLERT MUSIC CORP., d/b/a OLDE CLOVER LEAF MUSIC, Plaintiff, against WARNER/CHAPPELL MUSIC, INC., Defendant.


The opinion of the court was delivered by: BAER

 Hon. Harold Baer, Jr., District Judge:

 In this case, the parties agree that there exists no factual dispute and that the case simply involves questions of law as to the scope of an exception under the extended renewal terms added to the Copyright law in 1976 (17 U.S.C. § 304) and thus both move for summary judgment. Plaintiff seeks declaratory and monetary relief, and defendant cross-claims for similar relief. For the reasons stated below, plaintiff's motion for summary judgment is granted, defendant's cross claims are dismissed and defendant's motion for summary judgment is denied.

 I. Background

 The song "Bye, Bye Blackbird" (the "Song") was written by Mort Dixon and Ray Henderson. They registered the Song on May 3, 1926 and the copyright was renewed in the names of the authors on May 6, 1953. The copyright would have expired on December 31, 1982; but a 1976 revision of the copyright law extended the renewal term for an additional nineteen years (the "Extended Renewal Term"). See 17 U.S.C. § 304 (West 1996). After renewing, Mr. Dixon and Mr. Henderson assigned their interests in the copyright to defendant Warner-Chappell's predecessor in interest.

 On or about May 2, 1969, defendant granted A&M Records ("A&M") a mechanical license, which provided for a "non-exclusive license to use, in whole or in part, [defendant's] copyrighted musical composition entitled BYE BYE BLACKBIRD (Dixon-Henderson) in the recording and manufacturing of phonograph records to be manufactured and sold only in the United States . . . ." The license stated that it "covers only the particular recording mentioned herein ... and is personal and non-assignable." On the bottom of the license is typed "RECORD NO. SP 4182, RECORDING ARTIST Joe Cocker." In 1969, A&M produced a version of the song recorded by Joe Cocker (the "Cocker Derivative").

 As noted, the Copyright Act of 1976 extended the term of a copyright given to any work under the Copyright Act of 1909 by nineteen years. It also created a mechanism by which previous copyright grants could be terminated. In 1982, after the authors died and pursuant to this second provision of 17 U.S.C. § 304, the children of Mr. Dixon and Mr. Henderson terminated defendant's United States copyright interest in the Song for the Extended Renewal Term (1982 through 2001) and transferred all of their copyright interest in the Song to plaintiff Fred Ahlert Music Corp. ("Ahlert") for the duration of the Extended Renewal Term. In this lawsuit, Ahlert represents only the Dixon children.

 In mid-1992, TriStar Pictures, Inc. ("TriStar") contacted plaintiff for a quotation to use the Song in the motion picture "Sleepless in Seattle" ("Sleepless"). Plaintiff provided TriStar with a quote for use in the United States of the copyright and alerted TriStar to contact defendant for a quote for foreign uses of the copyright. *fn1" In April 1993, plaintiff issued a synchronization license *fn2" to TriStar that specified 6 separate recordings: five background instrumental uses and one background vocal use.

 However, when TriStar made the soundtrack for the movie (the "Sleepless Soundtrack"), it used an edited version of the 1969 Cocker Derivative for the background vocal use. Sony Music Entertainment Inc. ("Sony"), an affiliate of TriStar, obtained the right to make and distribute the Sleepless Soundtrack Album, which included the full version of the Cocker Derivative. In July 1993, plaintiff (through its mechanical licensing agent, the Harry Fox Agency, Inc. ("Fox")) issued a mechanical license to Sony in exchange for Sony's agreement to pay plaintiff a royalty fee for each phonorecord of the Sleepless Soundtrack Album made and distributed. According to plaintiff, defendant (also represented by Fox) called Fox and caused Fox to cancel plaintiff's mechanical license and instead issue one to Sony on behalf of defendant. Ahlert protested and initiated this cause of action.

 II. Discussion

 As noted, the 1976 amendment to the copyright law extended the term of a copyright by nineteen years and, pursuant to 17 U.S.C. § 304(c), allows authors of copyrighted material and their statutory heirs to terminate grants of copyright interest anytime between the 56th to 61st years after issue, if the copyright in question was a pre-1978 copyright. These changes were intended to protect the owners of copyrighted works and their families. See Woods v. Bourne Co., 60 F.3d 978, 978 (2d Cir. 1995). Once the copyright was terminated, all rights under the terminated grant reverted to the author or his statutory heirs. 17 U.S.C. §§ 203(b), 304(c)(6). Congress, however, carved out an exception to the rights that revert back in the Derivative Works Exception, which provides:

 
A derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination, but this privilege does not extend to the preparation after the termination of other derivative works based upon the copyrighted work covered by the terminated grant.

 17 U.S.C. §§ 304(c)(6)(A) (emphasis added).

 A derivative work is defined by the ...


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