Artist News Business News Labels & Publishers Legal

Warner Music settles its big termination rights dispute with Dwight Yoakam

By Chris Cooke | Published on Tuesday 15 February 2022

A lawsuit against Warner Music testing the rights of artists in the US to reclaim the copyrights in their recordings after 35 years has been settled. Terms of that settlement are, needless to say, confidential. Which is no fun at all.

Country artist Dwight Yoakam sued the major a year ago claiming that it had refused to recognise the termination notices he had filed as part of his bid to reclaim ownership of the rights in recordings he released with the record company back in the 1980s.

In his lawsuit, Yoakam said that he had filed termination notices with Warner and its Rhino division in 2019. But “instead of acknowledging the validity the termination notices, Rhino instead proposed new deal terms”. Following a bit of back and forth between the major and the musician, “defendants failed to acknowledge Mr Yoakam’s termination rights effected through the termination notices, thus leaving him in a state of perpetual limbo”.

To add some insult to the injury, Warner had removed some of his earliest tracks from the streaming services. This, the lawsuit argued, was because the major recognised that – with Yoakam having filed his termination notices – it could be sued for copyright infringement by still distributing his recordings.

However, because the label hadn’t actually confirmed it no longer controlled the rights in those tracks within the US, Yoakam couldn’t make other arrangements to get that music streaming. Meaning the “perpetual limbo” the musician was stuck in was proving costly.

All of this relates to the termination right in US copyright law which says that a creator who assigns a copyright to a business partner – so transfers ownership of that copyright – can terminate the assignment after 35 years. The current termination right was added to US copyright law in the 1970s and started to properly kick in last decade, ie 35 years later.

On the songs side, American songwriters exercising their termination rights and reclaiming previously assigned song copyrights is now pretty routine. However, on the recordings side there is still a disagreement over when exactly the termination right applies.

Many labels argue that record deals are work for hire agreements, which makes the label the default owner of any recording copyrights created under that deal. If that’s the case, the artist never assigns any rights to the label, so there is no assignment to terminate.

Artist managers and lawyers dispute that argument, claiming that while a record contract may say, in the text of said contract, that it is a work for hire agreement, in reality it is not. Therefore artists own or co-own the copyright in each recording they make at the point it is created, meaning there are definitely assignments to terminate.

We are still to get clarity on this point through a test case in court. Many artists have actually managed to renegotiate the terms of old record contracts by threatening to pursue such a case, because labels are generally keen to avoid any litigation. Nevertheless, both Sony Music and Universal Music are currently fighting lawsuits from various artists seeking to reclaim rights in recordings released 35+ years ago via the termination right in US law.

And Yoakam’s lawsuit meant that all three majors faced such litigation. Addressing the work-for-hire argument in that lawsuit, Yoakam’s lawyers argued that his 1985 record deal with the major “uses ‘work-for-hire’ language only to create an artificial work-for-hire relationship, despite not meeting any statutory requirement of such status”.

However, that argument will not now be tested in court. With both sides due to argue yesterday why they should get a summary judgement in their favour, a filing was made with the court confirming a settlement had been reached.

It said, simply: “Plaintiff Dwight Yoakam and defendants Warner Records Inc and Rhino Entertainment Company hereby give notice that they have reached an agreement in principle to settle this dispute. The parties jointly request that the court vacate the hearing set for 14 Feb 2022, refrain from ruling on the parties’ respective motions for summary judgment, and permit the parties fourteen days to negotiate and finalise formal settlement documentation and submit a stipulation of dismissal”.

I say it again: no fun at all.