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Peretti v. Authentic Brands Group, LLC

Second Circuit holds that songwriter’s heirs did not validly terminate their grant of contingent rights in renewal term of copyright for composition “Can’t Help Falling in Love” because their grant was not “executed by the author” under Section 203 of Copyright Act.

Plaintiffs are heirs to the late songwriter and record producer Hugo Peretti, who co-authored the musical composition “Can’t Help Falling in Love,” famously performed by Elvis Presley and later by various other recording artists. The composition was created, published and registered as a copyright in 1961. In 1983, Peretti, his wife and his daughters all signed a contract assigning their contingent rights and interests in the renewal term of the copyright in the composition to Julian J. and Joachim Jean Aberbach, predecessors-in-interest to defendants Authentic Brands Group and ABG EPE IP LLC.

Under the Copyright Act, renewal rights to the composition would not vest until the expiration of the original term of copyright, 28 years after the copyright was initially secured. Peretti died three years before his renewal rights vested. His widow and daughters subsequently registered the renewal of the copyright in 1989. In 2014, they served a notice of termination on defendants purporting to terminate the 1983 assignment. Defendants argued that the termination was not effective, and plaintiffs commenced suit seeking declaratory judgment that they had validly terminated the 1983 assignment.

Defendants moved to dismiss for failure to state a claim, and the district court granted the motion, holding that the 1983 assignment was not a grant “executed by the author” under Section 203 of the Copyright Act and, therefore, plaintiffs had no statutory right to terminate the grant. On appeal, the Second Circuit affirmed.

As the appellate court noted, Section 203(a) of the Copyright Act permits termination only of “the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978.” The court’s analysis focused on the meaning of the words “executed by the author."

Plaintiffs argued that all that is required for a grant to be “executed by the author” is the author’s signature affixed to the grant document, but the court rejected that interpretation. The Copyright Act defines the term “execute” to mean “signed by the owner of the rights conveyed.” Accordingly, the court reasoned, “anyone can affix his signature to a document purporting to transfer a right or piece of property, but only the signature of the owner of the right or property in question (or that of the owner’s authorized agent) can ‘execute’ the transfer, because only the owner’s consent can give ‘validity’ to the transfer.” The court held that, based on the plain reading of the statute, a grant “executed by the author” is a grant that is “documented in writing, that is signed by the author, and”—most importantly—“that conveys rights owned by the author.”

The court found that because of his death, Peretti’s contingent right to renew the copyright never vested and, consequently, the 1983 assignment never conveyed any right to renew on his behalf. Instead, the only renewal rights conveyed in the 1983 assignment were those of his widow and daughters, which vested upon the expiration of the original copyright term. The court found that the assignments made by Peretti’s widow and daughters were not grants “executed by the author” merely because Peretti’s signature appeared on the same document. Accordingly, their grant to defendants’ predecessors-in-interest was not capable of termination under Section 203.

Summary prepared by Frank D’Angelo and Ava Badiee.