The Interaction of International Law and U.S. Copyright–Assignment Terminations

That U.S. copyright-assignment termination issues are among the most complex in the copyright field becomes even more apparent when attempts to reclaim copyrights involve aspects of international law. Few courts have ruled, however, on the impact of international law on U.S. copyright-assignment terminations. The most recent to do so is the U.S. Court of Appeals for the Second Circuit in Ennio Morricone Music Inc. v. Bixio Music Group Ltd., 17-3595 (2d Cir. 2019).

Ennio Morricone is an Academy Award-winning Italian composer who garnered international fame in the 1960s for his scoring work on Italian director Sergio Leone's "spaghetti westerns." Toward the end of the 1970s and in the early 1980s, Morricone entered into agreements with Italian publisher Bixio Music for Morricone to create movie scores that Bixo then placed with Italian filmmakers needing music. In the composer agreements, Morricone granted Bixio "exclusively, for the maximum total duration permitted by the laws in force in each country in the world, and at the conditions established here below, all the rights of economic use, in any country in the world, with regard to the works." The agreements also stated the music Morricone created "shall forever continue to be the absolute and exclusive property of" Bixio.

In 2012, Morricone Music sent Bixio termination notices to recapture the musical scores' U.S. copyright interests under 17 U.S.C. §203, which allows authors to do so for post-1977 works starting 35 years after a copyright grant is made — except for "works for hire," which provide no reversion rights. In 2016, Morricone Music filed suit in the U.S. District Court for the Southern District of New York for a declaratory ruling that the termination notices were valid. Bixo responded that Morricone's scores had been composed as works for hire.

In Itar-Tass Russian News Agency v. Russian Kurier Inc., 153 F.3d 82 (2d Cir. 1998), the Second Circuit held "the choice of law in international copyright cases" is "the law of the state with the most significant relationship to the property and parties." Morricone Music and Bixo agreed the law of Italy their contracts were governed. Granting summary judgment for Bixio, the Morricone Music district court ruled that the scores did constitute works for hire under Italian law.

Reversing in favor of Morricone Music, the Second Circuit observed: "Bixio contends that the decisive question is actually whether Italian law recognizes a counterpart to the U.S. doctrine of 'works made for hire.' Specifically, Bixio identifies the Italian statutory doctrine governing 'commissioned' works as an analog sufficiently close to U.S. law that the scores should be considered 'works made for hire' under U.S. law. However, a comparison of the two statutory schemes, in the context of the contracts at issue, reveals meaningful differences."

The appeals court noted that, "under Article 44 of the Italian Copyright Code, the composer of the music is considered a 'joint‐author' of the cinematographic work, along with the writer and artistic director, and the composer retains sole authorship in the score itself. … The designation of the 'author' — as either the commissioner or the creator — is a key distinction because, under §203, it is the assignment of rights 'by the author' that is subject to termination."

Despite the few judicial opinions that have addressed the issue, the Second Circuit isn't the only court recently to find the U.S. copyright-assignment termination right can survive grants made under contracts interpreted under the laws of foreign countries. A California federal court decision from earlier in 2019 expressed a similar view. Stillwater Ltd. v. Basilotta, 16-1895, involved a declaratory action challenging the validity of a §203 copyright termination notice singer Toni Basil sent to reclaim the copyright in her chart-topping early 1980s hit recording "Mickey." Basil had signed a recording agreement with a company in the United Kingdom. In the contract, Basil acknowledged "all master recordings hereunder shall be and remain the property of the Company for perpetuity and the Company is hereby granted for perpetuity throughout the world all rights of copyright and all other rights in and to the master recordings hereunder the performances embodied therein …."

The 1982 agreement also stated "it shall be construed in accordance with and governed by the laws of England." But in the decision dismissing Basil's pre-termination accounting counterclaims, the Stillwater court noted, "The forum selection clause does not extend to [§203] claims since the claims do not require interpretation of the 1982 Agreement and instead arise under the [U.S.] Copyright Act." The district court added, in a footnote regarding Stillwater's initial summary judgment motion, that the court had turned it down because "§203 provides quite clearly that a termination 'may be effected notwithstanding any agreement to the contrary[,]'" and because the choice-of-law provision wasn't "broad enough to cover the §203 claim."

But though the Morricone Music and Stillwater decisions concur on the vitality of U.S. copyright-assignment termination rights when interacting with the laws of other nations, the issue isn't likely to become less litigious — at least for parties willing to ponder the Stillwater court's "broad enough" reference when drafting choice of law clauses.

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Stan Soocher is Editor-in-Chief of Entertainment Law & Finance and Professor of Music & Entertainment Studies at the University of Colorado's Denver Campus. He is also an entertainment attorney, as well as author of the books Baby You're a Rich Man: Suing the Beatles for Fun & Profit and They Fought the Law: Rock Music Goes to Court, the latter which is available in an updated, expanded edition in Amazon's Kindle Store. For more information: www.stansoocher.com.