Smith v. Casey, 13-12351, 2014 WL 223599 (11th Cir. Jan. 22, 2014)
"At issue in this appeal is whether the author of a musical composition who assigned his rights in exchange for royalties may rely for purposes of standing to sue for infringement under the Copyright Act on a registration his publisher filed."
1 composer who had agreed to assign his legal interest in a composition, along with right to register it, in exchange for royalties, could rely on registration his assignee had filed;
2 district court abused its discretion in declining to exercise supplemental jurisdiction over pendent state-law breach-of-contract claim; and
3 claim seeking declaratory judgment regarding effectiveness of copyright termination notices was not ripe for adjudication.
Affirmed in part, reversed in part, and remanded.
From the opinion:
To our knowledge, each of our sister circuits to have confronted the situation has agreed that an author who assigns his legal rights to a work in exchange for royalties from its exploitation has a beneficial interest sufficient for statutory standing under § 501(b). See Batiste v. Island Records Inc., 179 F.3d 217, 219–21 & n. 2 (5th Cir.1999) (stating that composers who had assigned composition to music publisher in exchange for royalties could “properly assert ... copyright infringement claims”); Cortner v. Israel, 732 F.2d 267, 271 (2d Cir.1984) ( “When a composer assigns copyright title to a publisher in exchange for the payment of royalties, an equitable trust relationship is established between the two parties which gives the composer standing to sue for infringement of that copyright.”); see also Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1144 (9th Cir.2003) (“Several other circuits have held that a creator may be a beneficial owner where a creator assigned all rights to a work, but the assignee was obligated to pay royalties to the composer if it exploited the work.”); Moran v. London Records, Ltd., 827 F.2d 180, 183 (7th Cir.1987) (citing “an author who assigned his work in exchange for royalties” as “the classic example of a beneficial owner in the cases deciding standing to sue under the 1909 Act,” and stating “Congress merely intended to codify the existing case law”); 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 12.02[D] (stating that § 501(b)'s definition of beneficial owner “follows the law established by the courts under the 1909 Act”). By contrast, an author who creates a work within the scope of her employment under a “work for hire” agreement lacks statutory standing to maintain an infringement suit.4 See 17 U.S.C. § 201(b) (“In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author....”); Moran, 827 F.3d at 182–83; Silvers v. Sony Pictures Entm't, Inc., 402 F.3d 881, 883, 886–87 (9th Cir.2005) (en banc ) (quoting the legislative history regarding the meaning of beneficial ownership to distinguish creators of works for hire, who have no standing to sue).
The Caveat:
To our knowledge, each of our sister circuits to have confronted the situation has agreed that an author who assigns his legal rights to a work in exchange for royalties from its exploitation has a beneficial interest sufficient for statutory standing under § 501(b). See Batiste v. Island Records Inc., 179 F.3d 217, 219–21 & n. 2 (5th Cir.1999) (stating that composers who had assigned composition to music publisher in exchange for royalties could “properly assert ... copyright infringement claims”); Cortner v. Israel, 732 F.2d 267, 271 (2d Cir.1984) ( “When a composer assigns copyright title to a publisher in exchange for the payment of royalties, an equitable trust relationship is established between the two parties which gives the composer standing to sue for infringement of that copyright.”); see also Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1144 (9th Cir.2003) (“Several other circuits have held that a creator may be a beneficial owner where a creator assigned all rights to a work, but the assignee was obligated to pay royalties to the composer if it exploited the work.”); Moran v. London Records, Ltd., 827 F.2d 180, 183 (7th Cir.1987) (citing “an author who assigned his work in exchange for royalties” as “the classic example of a beneficial owner in the cases deciding standing to sue under the 1909 Act,” and stating “Congress merely intended to codify the existing case law”); 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 12.02[D] (stating that § 501(b)'s definition of beneficial owner “follows the law established by the courts under the 1909 Act”). By contrast, an author who creates a work within the scope of her employment under a “work for hire” agreement lacks statutory standing to maintain an infringement suit.4 See 17 U.S.C. § 201(b) (“In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author....”); Moran, 827 F.3d at 182–83; Silvers v. Sony Pictures Entm't, Inc., 402 F.3d 881, 883, 886–87 (9th Cir.2005) (en banc ) (quoting the legislative history regarding the meaning of beneficial ownership to distinguish creators of works for hire, who have no standing to sue).
The Caveat:
Section 501(b), however, contains a caveat. Even the beneficial owner of an exclusive right in a copyrighted work must still demonstrate compliance with the Act's formalities, which require “preregistration or registration of the copyright claim ... in accordance with this title.”17 U.S.C. § 411(a). Harrick Music registered the copyright in the “Spank” composition, but Smith did not file a separate registration. Because Smith had not registered the work, the district court concluded, he lacked statutory standing. In reaching that conclusion, the district court rejected the Smith estate's contention that it could rely on the registration Harrick Music had filed to satisfy § 411(a).
The district court's construction of § 411(a) was too narrow. Harrick Music registered a claim to copyright in the “Spank” composition, specifically identifying Smith as the composer and informing the Copyright Office the work was not made for hire. Nothing in§ 411(a) indicates that a composer who has agreed to assign his legal interest in a composition, along with the right to register it, in exchange for royalties, may not rely on the registration his assignee files. Where a publisher has registered a claim to copyright in a work not made for hire, we conclude the beneficial owner has statutory standing to sue for infringement.
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