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IP/Entertainment Case Law Updates

Waite v. Universal Music Group

In putative class action involving termination of grants of copyrighted sound recordings under U.S. Copyright Act, district court finds recordings were not works made for hire that would be ineligible for termination, plaintiffs’ claims were not barred by statute of limitations for copyright ownership disputes, and grants executed by third-party loan-out companies are not subject to termination, partially denying and partially granting UMG’s motion to dismiss. 

John Waite and other recording artists brought a putative class action against Universal Music Group for copyright infringement and declaratory relief, claiming UMG continued to exploit the artists’ sound recordings despite the artists having served notices of termination of the grants of rights in the recordings to UMG or its predecessors under Section 203 of the Copyright Act. In partially granting and partially denying UMG’s motion to dismiss, the court first declined to hold at the pleading stage that the recordings were works made for hire, which would have rendered them ineligible for termination. Neither party argued that the recordings were specially commissioned, a requirement for work-made-for-hire status under the Copyright Act. Plaintiffs’ claims were not time barred under the three-year statute of limitation for copyright ownership disputes, according to the court, as work-for-hire language is ubiquitous in recording agreements and a contrary holding would eviscerate the termination right. The court also concluded that UMG received sufficient notice of the grants that plaintiffs sought to terminate, as any errors or omissions in the termination notices as to the dates of the copyright grants were harmless, as UMG had enough information to identify the relevant dates. Grants executed by the artists’ third-party loan-out companies were not subject to termination, the court explained, because they were not executed by the authors themselves or their statutory heirs as required for grants to be eligible for termination under Section 203 of the Copyright Act. Finally, the court held that any pre-1978 recordings that were subject to pre-1978 agreements were not terminable under the plain language of Section 203. 

Summary prepared by Tal Dickstein and Michael Segal