When New York District Court Judge Denise Cote dismissed Salt N Pepa’s termination rights lawsuit against Universal Music at the start of the year, her decision was “riddled with error”, according to a new filing by the rap duo who have now taken their case to the Second Circuit Court Of Appeal.
And those errors must be addressed on appeal, the new filing insists, because we’ve been here before. When US Congress added the current termination right into the 1976 Copyright Act - allowing creators who transfer copyrights to business partners to get them back after 35 years - lawmakers were trying to fix problems with a similar right in the 1909 Copyright Act that had been screwed up by judges.
Providing a speedy copyright history lesson, Salt N Papa’s legal team explain that Congress was “intentional with the design” of the current termination right in response to “judge-made law that perverted the purpose of the termination provisions under the 1909 Act”.
Allowing Cote’s ruling in the Salt N Pepa case to stand, they then insist, “is tantamount to continuing the cycle of allowing judicial decisions to contravene Congress’s stated intent to provide safeguards to artists to promote the progress of useful arts - as mandated by the Constitution”.
Salt N Pepa - aka Cheryl James and Sandra Denton - have hired veteran entertainment industry lawyer Richard Busch, perhaps best known for his work on the ‘Blurred Lines’ song-theft case, to lead on their appeal. And he and his team are very much positioning this litigation as a battle to ensure that the US termination right is fit for purpose, and is truly delivering the protection for artists that Congress intended.
When it comes to sound recordings, the big dispute between artists and labels in relation to the US termination right often centres on whether or not the artist ever owned the copyrights in their recorded music. If the producer or label was, in fact, the original owner of those copyrights, then there was never a transfer or ‘grant’ of rights from artist to label, which means there is no transfer to be terminated.
Labels often claim to be the original owner of the sound recording copyright by insisting they had a ‘work for hire’ relationship with the artist. Under US law, if the recordings are created on a ‘work for hire’ basis, the label is the first owner of the copyright and the termination right does not apply.
When James and Denton tried to exercise their termination right and reclaim ownership of their 1980s recordings, Universal said they had no such right.
First because there was no transfer of copyright in the duo’s original deals with NITA, the production company that ultimately ended up selling the rights to Universal. And second because they were employed back in the 1980s on a work for hire basis. Which was, basically, two ways of saying the same thing.
After James and Denton sued Universal, the major presented the same arguments in court. Cote then agreed that the duo’s 1980s deals did not include any transfer of copyright that could now be terminated 35 years later. As a result, she dismissed the rappers’ lawsuit.
The judge didn’t actually rule on whether or not the rappers had a work for hire relationship with NITA. Though, as their appeals filing points out, by ruling there was no transfer of copyright, Cote was basically saying James and Denton were employed on a work for hire basis.
But Cote was wrong, the appeal papers argue. The “plain language” of the duo’s 1980s agreements “can lead to no other conclusion”, it insists: “Salt-N-Pepa are the statutory authors of the sound recordings” and “the copyrights therein vested in them by law upon affixation in a tangible medium”.
More worryingly, the appeal goes on, “rather than focusing” on whether the 1980s agreements “effected a transfer of copyright” when considering the case, Cote instead “created a new requirement out of whole cloth”.
The judge asked: had James and Denton “asserted their ownership of the copyrights” in those original deals? They had not, she concluded. But there was “no such requirement under the law” for James and Denton to assert copyright ownership in that way, the appeal filing argues.
“Along with creating an extra element from thin air”, Cote also “misinterpreted” the 1980s agreements, “ignoring relevant grant language and taking an overall myopic view of the transfers at issue. By ignoring the grant of copyrights and exclusive exploitation rights thereof in the NITA agreement, the district court erred by finding that Salt N Pepa made no such grant”.
To that end, the new filing concludes, the appeals court should “reverse the district court’s grant of UMG’s motion to dismiss Salt N Pepa’s claims and remand for further proceedings”.