In its May 16, 2016 decision in , the Sixth Circuit expressed skepticism of the Second Circuit’s and Ninth Circuit’s interpretation of the 304(c) termination provisions of the Copyright Act, despite ultimately deciding the case on an issue of contractual interpretation. The Court handed down a decision respecting the termination rights of songwriter Albert Brumley’s heirs in the famous gospel song “I’ll Fly Away,” concluding that those termination rights had not been bargained away via a contract that did not specifically address termination. Although the outcome of the case hinged on contract interpretation, rather than the specifics of the 1976 Copyright Act’s termination provisions under 304(c), opinion author Judge Sutton took the time to express skepticism of previous circuit court interpretations of the 304(c) termination provisions of the Copyright Act.
The 1976 Copyright Act replaced the copyright renewal provisions of the 1909 Copyright Act with termination provisions. Under the “renewal” regime of the 1909 Act, after an initial 28 year copyright period, an author had the exclusive right to a second 28 year renewal term. After finding that authors frequently bargained away their renewal term, Congress sought, through the 1976 Copyright Act, to rectify this situation with termination rights. Termination rights permit an author to undo a prior transfer of his copyright and reclaim all interests in the copyright. For copyrights transferred after 1978, termination can occur between thirty-five and forty years after transfer. For copyrights transferred before 1978, termination can occur between fifty-six and sixty-one years after the copyright was obtained. Of further note, according to the language of the statute, post 1978 grants by someone other than the author of the work cannot be terminated. The 1998 Copyright Term Extension Act provided an additional termination window for any copyright whose window had expired at the time of enactment.
Both the ’76 Act, and the later 1998 Copyright Act that extended copyright terms provide that “Termination of the [copyright] grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.” Furthermore, Termination Rights accrue to the heirs of the original authors according to the provisions of §304(c)(2). If a deceased author has surviving children and/or grandchildren, they receive half of the termination interest while a surviving widow receives the other half. If neither the author or the widow survive, then the entire termination interest is held by the children and grandchildren on a per stirpes bases. A majority termination interest is required for exercise of the right.
Albert Brumley wrote the gospel song “I’ll Fly Away” in the 1920s and sold it to a music publishing company, which obtained a copyright in 1932. Brumley subsequently regained the copyright by purchasing the publishing company. He later started a publishing company of his own called “Albert E. Brumley & Sons,” which he and his wife, Goldie, sold to two of his six children, William and Robert, in 1975. Through this sale, all of Albert and Goldie’s “right title and interest” in “I’ll Fly Away” was transferred to Robert and William. After Albert’s death in 1977, Robert and William executed a new contract with Albert’s widow Goldie that “assigned and transferred . . . all rights to obtain renewals or copyrights in the future upon Works written or composed by . . . Albert E. Brumley” to the Brumley & Sons publishing company. Robert later became the sole owner of the copyright to “I’ll Fly Away” after buying out William’s interest in the publishing company.
In 2008, at which point the song was generating hundreds of thousands of dollars a year in royalties, the four other Brumley children – Albert Jr., Betty, Jackson, and Thomas – attempted to exercise their termination rights to end Robert’s exclusive copyright and allow all of the siblings to share the copyright equally. This attempt resulted in a lawsuit seeking a declaration that the termination notice was effective. The case came to the Sixth Circuit on appeal by Robert challenging the district court’s decision that the termination notice was indeed effective.
The key issue on appeal was the meaning of the 1979 assignment by Goldie (who passed away in 1988) to the Brumley & Sons Publishing Company. The Court agreed with the district court’s ruling that the ’79 agreement did not transfer Goldie’s termination rights to the publishing company. First, the Court stated, the ’79 assignment could not have been an implicit exercise of Goldie’s termination right because she held only half (i.e., less than a majority) of the termination interest at the time and because the assignment did not follow the statutorily required provisions of notice and registration with the copyright office. The Court further found that the ’79 assignment, which mentioned only renewal rights, could not have bargained away termination rights without explicit terms to that effect.
Robert also tried to rely on cases in which a pre-1978 transfer of right by the author was superseded by a post-1978 transfer of right by the author’s successor in interest, thereby extinguishing any termination interests. The Court distinguished the instant case from the decisions by the Ninth Circuit in Milne ex rel. Coyne v. Stephen Slesinger, Inc. and the Second Circuit in Penguin Group (USA) Inc. v. Steinbeck because, in those cases, the post-1978 transfers explicitly superseded or revoked the prior contracts. 430 F.3d 1036 (9th Cir. 2005) and 537 F.3d 193 (2d Cir. 2008). In contrast, the ’79 agreement in the present case makes no reference to the ’75 assignment, and, the Court concluded, cannot therefore be interpreted to revoke or supersede that assignment.
Accordingly, the Court ruled that the Brumley sibling’s termination notice was effective, and that the copyright interests to “I’ll Fly Away” should revert to all of the Brumley siblings in equal shares.
Although this decision was founded in an interpretation of the ’79 transfer from Goldie to Brumley & Sons, Judge Sutton seized the opportunity to express mild skepticism of the Milne and Steinbeck decisions. In these two cases, a post-1978 agreement between the author’s successor in interest and the original grantee was used to revoke a pre-1978 agreement. Because the pre-1978 agreements had been revoked, the courts said, they could not give rise to termination rights. Furthermore, because the post-1978 agreements were not with the author, these also could not give rise to termination rights. Thus, the post-1978 agreements had the effect of extinguishing all termination rights. In both of these cases, the entity that effected the post-1978 copyright grant did not hold a majority termination interest. In the Milne case, the relevant entity was a trust benefitting Christoper Milne, the sole termination interest holder at the time. But in the Steinbeck decision, the author’s wife, Elaine Steinbeck, who held the copyright interests and entered into the post-1978 agreement, was able to unilaterally extinguish the termination interests of John Steinbeck’s children. The issue was not raised in the case, but Judge Sutton appears to express regret at not being able to opine on whether agreements such as those in the Milne and Steinbeck cases would amount to impermissible “agreements to the contrary” unable to affect termination rights. Sutton notes that “[w]hile the caselaw on this issue appears to be one-sided, it deserves mention that Nimmer on Copyright, now a father-son treatise that seems to have cornered the market on copyrights for works about copyright law, takes a contrary view” (citing to M. Nimmer & D. Nimmer, 3 Nimmer on Copyright § 11.07[A] (2015); see also Peter S. Menell & David Nimmer, Pooh-Poohing Copyright Law’s ‘Inalienable’ Termination Rights, 57 J. Copyright Soc’y U.S.A. 799, 824–25 (2010)). Future decisions by the Sixth Circuit that address this issue directly may therefore be of interest.