The dispute was more than 35 years in the making, after Congress lengthened the copyright term but decided that artists who had created works at the early stage of their careers but handed their rights over without much bargaining power should be the beneficiaries of the latter portions of the newly extended term.
When the Copyright Act amendments went into effect in 1978, it meant that songwriters could terminate copyright grants to publishers and record labels 35 years later. If they were to do so, however, they need to send their termination notices not fewer than two or more than 10 years from the intended termination date. The result is that 2013 is the first year in which musicians can effectuate a termination notice, and a number of them who created works in the late 1970s are now under the clock to do so or forfeit the right for the foreseeable future.
It's a ticking time bomb for the music industry as artists such as Bob Dylan, Tom Waits and Tom Petty have sent their own notices. Thus, the lawsuit by Scorpio and Can't Stop to prevent Willis from making his own termination became one of the industry's first and most important legal battles on this front.
In the case, the publishers made the argument that Willis' copyright pullback should be deemed improper because the songs were created by several authors -- not just Willis. They argued he couldn't terminate a share, that he needed all of the co-authors on board.
On Monday, Moskowitz rejected that assessment. "The Court concludes that a joint author who separately transfers his copyright interest may unilaterally terminate the grant," writes the judge in the opinion.
The judge adds that the law doesn't require a joint author to enter into a joint grant with one of his co-authors, nor does the statute provide that "where two or more joint authors enter into separate grants, a majority of those authors is needed to terminate any one of those grants."
The decision has the potential of being quite impactful, even beyond the facts in this particular case. One of the arguments that record companies were expected to pursue in battling termination claims was to say that record producers and sound engineers should also be deemed as co-authors, which could have made it difficult for any one contributor to a song to seek termination. But as the judge in the Willis case writes:
"It would be contrary to the purpose of the [Copyright] Act to require a majority of all joint authors who had, at various times, transferred their copyright interests in a joint work to terminate the legally permissible separate grant by one joint author of his undivided copyright interest in the work. The purpose of the Act was to 'safeguard authors against unremunerative transfers' and address 'the unequal bargaining position of authors, resulting in part from the impossibility of determining a work's value until it has been exploited. Under Plaintiffs' interpretation, it would be more difficult to terminate an individual grant than it would be to make it in the first place."
Publishers in other cases can still argue that songs were works made for hire, which under copyright law would mean they are "authored" by the publisher and aren't eligible for termination. In this case, Scorpio and Can't Stop withdrew their claims that Village People songs were works made for hire.
Instead, Willis seems to be on the verge of successfully effectuating a termination notice.
In the case, the publishers asked the court that if Willis was successful in terminating rights, the songwriter "be limited to the same percentage ownership as he receives as compensation relating to the Compositions and as set forth in the Agreements."
But the judge rejects that request.
According to the court papers, Willis got royalty percentages that ranged from 12 percent to 20 percent on his work, but on a song like "Y.M.C.A.," he's listed on the copyright notice as one of three authors. That would mean that he would be able to grab back a 33 percent share of the song. And perhaps more too, since Willis is contending that that one of the three authors was not actually a joint author. "If Willis is correct," says the judge, "Willis would have a one-half undivided interest in 'Y.M.C.A.' instead of a 1/3 undivided interest."
In other words, the termination could represent a much bigger jump in Willis' revenue participation from the hit song.
"To say this decision will send shock waves through the record industry [as] artists [are] seeking to take back their copyrights is an understatement," says Willis' publicist, Linda Smythe.