Salt N Pepa’s legal battle with Universal Music, in which the rap duo are trying to reclaim ownership of their 1980s recordings, is set to become another big test case around the termination right in US copyright law, alongside the recent high profile legal dispute led by songwriter Cyril E Vetter.
In a new development, a number of organisations representing creators and entertainment industry lawyers have told the Second Circuit Appeals Court that it must overturn a January judgement that found in Universal’s favour.
The dispute centres on whether or not Salt N Pepa - real names Cheryl James and Sandra Denton - had a ‘work for hire’ relationship with the producer and label they worked with in the 1980s. If they did it would prevent them from exercising the termination right, because the US Copyright Act specifically excludes works for hire from that right.
However Judge Denise Cote didn’t even rule on that point when dismissing the rappers’ lawsuit and that fact alone is enough to allow the Second Circuit to overturn the January judgement.
That’s according to two so called amicus briefs submitted to the Second Circuit this week. One comes from the National Society Of Entertainment & Arts Lawyers, while the other is a joint submission from creator organisations the Music Artists Coalition and Authors Alliance, along with lobby group Public Knowledge.
When they filed their appeal last month, James and Denton said Cote’s ruling was “riddled with error”. In their amicus brief, the entertainment lawyers hone in on one specific error: the fact Cote said she wasn’t ruling on the work for hire point, but - by concluding that the rappers never owned the copyrights in their recordings - she had in fact done so, inadvertently or not.
And working out whether or not the rappers had a work for hire deal required much more scrutiny, says the NSEAL submission. This means that interpreting the rappers’ 1980s deals as work for hire arrangements, “without any factual development or legal explanation” is a reversible error. Which is a polite way of saying the judge made a significant legal mistake that warrants reversal by the appeals court.
Meanwhile, both the Music Artists Coalition and Authors Alliance insist that, if Cote’s decision is allowed to stand, important protections that were provided for creators by Congress are nothing more than “illusory”, which is why it’s so important that the Second Circuit intervenes.
If the appeals court does intervene by sending the matter back to the district court, that will likely prompt a more rigorous investigation on whether or not James and Denton had a work for hire relationship with producer Hurby Azor and his production company Noise In The Attic Productions. It was that company that did the deal that ultimately resulted in Salt N Pepa’s recordings sitting with Universal.
That investigation will be important, because it could impact on whether or not other artists’ deals with producers and labels are also work for hire arrangements, which deprive artists of the termination right.
Lots of labels claim record deals are for work for hire arrangements, but most artists insist they are not. The two amicus briefs in the Salt N Pepa case set out arguments for why James and Denton definitely did not make music on a work for hire basis.
The termination right allows creators who assign or transfer copyrights to business partners, like record labels and music publishers, to terminate that transfer and reclaim their rights after 35 years.
In music publishing, it has become common and uncontroversial for US songwriters to terminate old publishing deals and reclaim the copyrights in their songs. With writers and publishers the big controversy is whether or not the writer can just reclaim their rights within the US or whether the termination applies globally.
Up until recently it’s been assumed the termination was limited to the US, but this was successfully challenged in a recent legal battle involving the songwriter Cyril E Vetter, the other big test case around the termination right.
That one is such a big deal with such significant consequences for the majors that they, alongside BMG, recently bought a share in the disputed copyright so they can try and get the Vetter ruling overturned by the Supreme Court.
When it comes to recordings, labels often argue that they, rather than artists, are the default first owner of sound recording copyrights. This means that artists do not transfer any copyrights when signing with labels, so there is no transfer of rights to terminate after 35 years. That stance is usually based on the argument artists make recordings on a work for hire basis.
Indeed, according to the entertainment lawyers in their amicus brief - which has been co-written by the lawyer who led on the songwriter side of the Vetter case - that’s the only way under US law that a label could claim to be the default owner of a recording copyright.
So when Cote reviewed Salt N Pepa’s 1980s agreements and concluded that the rappers didn’t own the copyright in their recordings, she must have interpreted those agreements as work for hire arrangements, even though she claimed she hadn’t done so.
For its part, Universal insists that Salt N Pepa’s 1980s deals were work for hire agreements, but the lawyers filing the amicus brief disagree, and point to the criteria that must be met for an artist to be work for hire, according to the US Copyright Act.
Either the work is made by employees within the scope of their employment or it is the result of a specific kind of commission. Commissions only count if they relate to “contributions to a collective work, parts of a motion picture or other audiovisual work, translations, supplementary works, compilations, instructional texts, tests (or answer material for a test) and atlases”.
Legal precedent confirms that artists are rarely employees of producers, studios or labels, so for work for hire to apply, a label would need to show an artist’s recordings were the kind of commission that qualifies.
Universal “acknowledges that sound recordings are not an eligible category” in their own right, the entertainment lawyers’ filing says, so instead the major claims “they fall comfortably within the ‘contribution to a collective work’ category where, as here, the works are for inclusion on albums”.
However, Universal’s position is not supported by “the text and history” of the US Copyright Act’s work for hire provisions, “nor the judicial interpretation of those provisions”, the lawyers say.
That debate only becomes relevant if the Second Circuit overturns January’s decision and sends the matter back to the district court. But if it does, the subsequent debates in court will be closely followed by any other US artist with an old record deal keen to exercise their termination right.