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IP/Entertainment Case Law Updates

Fahmy v. Jay Z

District court grants defendants’ motion for judgment as matter of law, finding that songwriter’s heir did not have standing to sue for copyright infringement because he had conveyed all his economic rights (copyright) to the song and could not sue under the Egyptian concept of moral rights in U.S. court.

Osama Ahmed Fahmy, the heir of Egyptian composer Baligh Hamdi, sued singer and songwriter Jay Z and others, alleging the hit song “Big Pimpin’” infringed on his copyright to a song co-written by Hamdi called “Khosara, Khosara.” Following the first phase of a bifurcated jury trial, the defendants moved for judgment as a matter of law, arguing that Fahmy lacked standing to bring the suit because he had conveyed all of his rights to the song to Mohsen Mohammed Jaber in a 2002 agreement. The district court agreed, rejecting Fahmy’s argument that the Egyptian “moral rights” law (which, inter alia, grants the author or his successor the right to prevent any modification considered by the author or his successor as distortion or mutilation of the work) prevented Fahmy from granting the right to “alter” the work under Egyptian copyright law and required the defendants to get the Hamdi family’s permission to sample the song.

Since the 2002 agreement transferred rights to the song under Egyptian copyright law, the district court found that Egyptian law governed the dispute. The district court pointed out that Egyptian copyright law recognizes two types of rights belonging to an author: (1) moral rights and (2) economic rights. Because moral rights are considered separate from economic rights, an author could transfer all his economic rights while still maintaining his moral rights. Moral rights include the right to prevent modification of the work considered by the author to be a mutilation or distortion of his work and are deemed “perpetual,” “imprescriptible” and “inalienable,” said the district court. Economic rights, however, are fully transferable.

Under the U.S. Copyright Act, only the legal or beneficial owner of an exclusive right under a copyright is entitled to institute an action for infringement. Since U.S. copyright law does not recognize moral rights, Fahmy could have standing to sue only if the 2002 agreement did not divest him of all of his economic rights to the song, the district court said. Further, any claims he might have under his moral rights had to be brought in an Egyptian court.

The district court concluded that language in the 2002 agreement providing that “Jaber or his successors are solely the owners of the financial usage rights … for the pieces of music [including ‘Khosara, Khosara’]” effectuated a transfer of all of Fahmy’s economic rights. The district court rejected Fahmy’s contention that, under Egyptian law, it is not possible to enter into an agreement to convey the right to modify a musical composition.

Fahmy improperly conflated moral and economic rights, according to the district court. Under Egyptian law, an author is vested with both a moral right to prevent modification of his work and an economic right to authorize or prevent adaptation of his work, the district court noted. Whereas the moral right to prevent modification is inalienable, the economic right to authorize or prevent adaptation may be readily transferred. “Moreover, and crucially to the issue of plaintiff’s standing, because the right to prevent modification of a work is a moral right, it is not enforceable in a suit before this Court.”

Next, the district court determined that the term “financial usage rights” in the 2002 agreement referred to economic rights. It based this conclusion on expert testimony asserting that the terms “economic rights” and “financial rights” are used interchangeably in Egyptian law. In addition, the district court rejected Fahmy’s argument that the 2002 agreement was merely a renewal of the 1968 and 1995 agreements, noting that the plain language of the 2002 agreement contradicted such a finding.

It also rejected Fahmy’s contention that the 2002 agreement did not comply with Egyptian law requiring that a transfer or assignment of rights must provide a detailed list and description of each right being transferred. “Given that a comprehensive list of all of the economic rights in a copyright does not exist under Egyptian law, the most effective means, if not the only effective means, for a copyright owner to transfer ‘all’ of his economic rights is to state simply that he is transferring ‘all’ economic rights,” pointed out the district court.

Finally, the district court interpreted language in the agreement that stated, “I received the amount of 115,000 [Egyptian pounds] for this waiver and declaration while maintaining our rights in respect of the public performance and mechanical printing.” It held that the language was a reservation of Fahmy’s right to receive royalties but did not limit the complete assignment of economic rights provided for in the agreement.

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