May 31, 2012 - “Village People” frontman and songwriter Victor Willis recently scored a major legal victory – a victory that paves the way for authors and artists to regain rights in works previously transferred to third parties.

Willis is one of the first artists to reclaim his rights under a provision of the 1976 Copyright Act that created “termination rights,” allowing authors and artists to revoke rights previously granted to third parties (such as labels and publishers) after 35 years. The termination provision applies to all works created before and after 1976, with limited exceptions.

Critically, in most cases authors and artists must terminate the grant within five years of the 35th anniversary of the grant (for those copyrights secured before January 1, 1978, authors and artists must terminate the grant within five years of the 56th anniversary of the date of copyright). The grantor must provide at least two years – and no more than 10 years – written notice to the grantee of the grantor’s intention to terminate the prior grant of rights. The grantee may then challenge the termination in court.

Relying on these provisions, Willis sought to terminate rights he granted to two music publishing companies in 1978 and 1979. The companies filed suit to prevent Willis from reclaiming his interest in the copyrights, claiming that Willis was a joint author of the songs, and thus incapable of unilaterally terminating the rights he had granted. The court dismissed the claims of the two publishing companies, holding that Willis was entitled to exercise his termination rights even though he was not the sole author of the songs. The court explained that Willis’ termination allowed him to reclaim only his interests and did not affect the interests of other co-authors. The court explained that where two or more authors jointly grant copyright interests to a label or publisher, a majority of the authors is required to later terminate that grant. But, where joint authors individually grant their respective interests to a third party, then one author alone (i.e. Willis) may terminate their respective grant.

However, the court did not foreclose future arguments from labels and publishers that songs are “works for hire,” meaning the author was effectively an employee and thus not entitled to exercise his termination rights. Additionally, it found that authors like Willis may not terminate licenses issued to create derivative works based on their originals if the licenses for derivative works were issued prior to the termination of the author’s grant. So, the recording label and publisher may continue to profit from products that incorporate elements of Willis’ famous songs.

This victory means Willis will significantly increase his revenue share of licensing fees from authorized uses of Village People songs. According to court papers, prior to the ruling, Willis’ royalty percentages ranged from 12 to 20 percent. Now, per his contract, on songs where he is listed as one of three authors, he will receive 33 percent of the royalties. And, he now has broader licensing authority. Under copyright law, each co-author may grant non-exclusive licenses to the song, so Willis is free to authorize more uses of his group’s classic hits, which also generates more revenue for him. So, “Y.M.C.A.” may start popping up everywhere.

Willis is not alone in his efforts. Bob Dylan, Tom Petty, and Tom Waits have each notified their respective labels of their intent to terminate their rights. Given the amount of money at stake in these cases, Willis’ and other artists’ cases are likely to generate more heated legal battles. Future recipients of copyright grants should take note: to avoid this issue, it may be preferable to term these creative endeavors “works made for hire.” However, it is important to first consult an employment attorney to avoid any conflicts with state employment law, and an IP or music attorney to ensure that the work qualifies as a "work made for hire."

Also worth noting: although this decision only addressed songwriters’ authority to terminate transferred rights, nothing in the governing statute indicates this power is limited to music rights. Authors, musicians, performers, artists, and other creative entrepreneurs should be aware of this authority and its effect on their power to reclaim transferred rights.

For more information, contact Alexandra Gilliland (gilla@foster.com | 206.447.6223) or any member of Foster Pepper's Arts & Entertainment and Intellectual Property groups.