John Wilson, Charles Still and Terrance Stubbs, members of 1970s rhythm-and-blues band Sly, Slick & Wicked, sued defendants Dynatone Publishing Co., UMG Recordings Inc., and Unichappell Music Inc., asserting claims for declaratory judgment that they owned the copyrights in the composition and sound recording to their 1973 song “Sho’ Nuff (You Really Love Him),” which was sampled in Justin Timberlake’s 2013 hit song “Suit & Tie” and J. Cole’s “Chaining Day” from the same year. With respect to the recording, plaintiffs claimed ownership on the basis that it was not a work made for hire, among other things, because it had been created before the band had met with the original record label, and further because there had been no work-for-hire agreement. With respect to the composition, plaintiffs, who were the authors of the song, contended that they never transferred their renewal rights to the publishers. In addition to their declaratory judgment claims, plaintiffs also sought an accounting of the defendants’ profits from their use of the song within the three years preceding the commencement of the lawsuit.
The defendants moved to dismiss all claims on the grounds that plaintiffs’ underlying claim of ownership was barred by the Copyright Act’s three-year statute of limitations. The court granted the motion, relying on the principle that a claim of copyright ownership accrues “only once” — when “there has been an express repudiation of that claim” or, stated another way, “when a plaintiff knows or has reason to know of the injury.” The court explained that plaintiffs knew or should have known of defendants’ claim of sole ownership to the song well before the three-year period prior to the commencement of the action, because defendants’ predecessors-in-interest had filed copyright registrations in the composition and recording in 1973 and 1974, identifying themselves as claimants; had renewed those registrations in 2001, also identifying themselves as claimants; were identified as the copyright owners on the labels of the records; and never provided plaintiffs with any accountings of royalties, including after the renewal registrations filed in 2001.
The court thus concluded that “plaintiffs’ copyright ownership claims for the ‘Sho’ Nuff’ recording and composition accrued in 1973 or 1974, and, as to the renewal term, accrued in 2001,” more than three years before the commencement of the suit. The district court rejected the plaintiffs’ argument that they could nonetheless sue for infringements within the past three years, citing a recent Second Circuit ruling in Simmons v. Stanberry holding that a plaintiff cannot “revive the time-barred claim of ownership of a copyright interest by relying on defendants’ continued exploitation of the copyright within three years of [the] suit,” because ownership claims “accrue only once.” The court dismissed plaintiffs’ claims for declaratory judgment of copyright ownership, as well as the accounting claims that were also premised on copyright ownership.
The court also dismissed plaintiffs’ accounting claims for the additional reason that a right to an accounting requires a fiduciary relationship under New York law, and “there is no fiduciary relationship between a music publisher and a composer as a matter of law and the fact that a party is responsible for collecting and passing on royalties does not create a fiduciary relationship.” Finally, the court dismissed a cross-claim for an accounting asserted against UMG by Edward Perrell, an alleged co-publisher of the song, because Perrell acknowledged that he had no fiduciary relationship with UMG.
Summaries prepared by Wook Hwang and Joel Ernst