Plaintiffs Scorpio Music S.A., a French music publisher, and Can’t Stop Productions, Inc., the exclusive U.S. sub-publisher and administrator of Scorpio’s musical compositions, brought a declaratory judgment action against defendant Victor Willis, the original lead singer of Village People, challenging Willis’s attempt to terminate his post-1977 grants of his copyright interest in musical compositions, including the hit songs “YMCA,” “In the Navy,” and “Go West.” In May 2012, the district court dismissed the music publishers’ declaratory judgment action, holding that as a joint author who separately transferred his copyright interest, Willis could unilaterally terminate that grant. (Read our summary of the court’s decision here). Plaintiffs filed a First Amended Complaint, seeking a judicial determination that Willis could recover a maximum of only 33.3 percent of the copyright interest, representing an equal share split between three authors. Willis filed a counterclaim asserting that the third alleged author did not contribute to the authorship of the lyrics or the music of 24 of the compositions and that he is entitled to recapture 50 percent of the copyright interests in those works. Plaintiffs moved to dismiss the counterclaim as barred by the Copyright Act’s three-year statute of limitations and the doctrine of laches. The court denied plaintiff’s motion to dismiss, finding an issue of fact as to when Willis’s claim accrued.
According to the court, Willis’s claim is in the nature of a co-ownership claim and, under the Ninth Circuit’s decision in Zuill v. Shanahan, accrued when plain and express repudiation of his claim to ownership of 50 percent of the copyright interests was communicated to him. Willis argued that his claim accrued in 2011, when he terminated his grant of rights pursuant to Sec. 203 of the Copyright Act. The court disagreed. Noting that Section 203(b) does state that upon termination, “all rights” that were covered by the terminated grants revert back to the author, the court reasoned that these rights are privileges or claims that depend on the interpretation of laws and the rights of others, often by a court. Further, Section 203 does not address when the rights covered by terminated grants must be determined nor provide a different statute of limitations for ownership claims raised in connection with terminated grants. With respect to ownership claims raised in the context of the termination of grants, the statute of limitations in the Copyright Act acts as it normally does, barring claims brought more than three years after plain and express repudiation of the ownership claim. The fact that Willis’s future rights to the disputed works vested upon service of the notice of termination does not mean that he could not have brought his co-ownership claim earlier. In fact, the court noted, at the time Willis granted his copyright interests to Can’t Stop, the Copyright Act of 1976 had been enacted. Willis therefore knew he would have the opportunity to terminate his grants and could have litigated any ownership disputes of which he was aware in order to preserve his rights.
Citing Zuill, the court also rejected the argument, made by Willis and the Songwriters Guild of America, that the statute of limitations prevented Willis from recovering monetary damages for claims that accrued more than three years before filing suit (in this case, credit for the disputed works for the past 35 years), but does not preclude Willis from asserting his substantive right to reclaim one-half of the copyright ownership interests on a prospective basis. Under Zuill, while § 507(b) applies in infringement actions to limit a plaintiff’s remedy to the prior three years without extinguishing the rights of the copyright owner, it would operate as a complete bar to Willis’s co-ownership claim if he brought his claim more than three years after it accrued.
The court concluded that factual issues existed as to when plain and express repudiation of his 50 percent ownership interest was first communicated to Willis. Plaintiffs asserted that the copyright registration certificates, filed between 1978 and 1980, identifying the third author, as well as printed labels on the original vinyl albums released in 1978, 1979, and 1981, constituted plain and express repudiation and started the running of the clock. The court disagreed, finding that the mere filing of copyrights and the release of records with labels identifying the third author did not rise to the level of “plain and express repudiation” communicated to Willis and that, at the very least, plaintiffs should have to show that Willis had actual notice of the content of the registrations and the record labels. The court denied plaintiffs’ motion to dismiss, concluding that factual issues as to what Willis knew and when precluded the determination of whether the three-year statute of limitations barred Willis’s claim. The court likewise denied the motion based on plaintiffs’ laches argument, finding that if Willis’s counterclaim proved timely under § 507(b), an unreasonable delay that would support the application of the equitable doctrine would be unlikely to exist.