The major music publishers - Sony Music Publishing, Universal Music Publishing and Warner Chappell - along with BMG, have formally asked the US Supreme Court to overturn the bombshell ruling in the Vetter v Resnik termination rights dispute, which significantly shifts the balance of power when it comes to old music publishing contracts to favour songwriters over publishers.
US copyright law says that a writer who signs a deal with a music publisher that involves transferring the rights in their songs can terminate the transfer and reclaim the rights after 35 years (56 years for pre-1978 works). However, music industry convention says they can only reclaim rights within the US, meaning all non-US rights stay with the publisher.
But Vetter and his legal team, led by attorney Tim Kappel, argued that industry convention is wrong and Vetter can actually reclaim global rights when exercising his termination right. And a district court in Louisiana and the US Fifth Circuit Appeals Court agreed with that argument - with big implications for music publishers.
That ruling, the majors and BMG say in a Supreme Court filing, “departs from bedrock copyright law”, and favours a “fringe” legal theory that “bucks the common industry reading of the statute”.
Not only that, they insist, if the ruling is allowed to stand it will create “chaos”, and that chaos “benefits no one”. Which is true. No one benefits. Except every single American songwriter looking to exercise their termination right. But other than them, nobody benefits.
The “stark departure from settled understanding” in this case “is every bit as disruptive as it sounds”, the publishers continue, adding, “indeed, disruption was the whole point of this lawsuit”.
That’s because Vetter’s legal team, “have forthrightly admitted, their ‘ultimate goal’ was to ‘give terminating songwriters leverage they never had before’ - and to sow confusion about the status and validity of innumerable author-publisher agreements, many decades old and worth millions”.
It’s certainly true that the ruling in Vetter v Resnik will have a massive impact on the US music publishing sector by significantly increasing the rights of writers who signed long-term publishing deals decades ago, resulting in publishers losing their assumed cut of international income on songs subject to termination.
Indeed, that’s why it’s the majors and BMG taking this to the Supreme Court, and not Vetter’s original small indie publisher Resnik Music Group. The bigger publishers bought Resnik’s alleged stake in Vetter’s song ‘Double Shot (Of My Baby’s Love)’ in order to take the lead on the top court appeal of this case, so keen are they to ensure no writer-friendly legal precedent is set.
The publishers really hammer home how Vetter’s interpretation of the termination right is “fringe” in their Supreme Court filing. The district court that originally heard the case, they say, “recognised that every case and commentator to consider the issue had come down ‘contrary’ to Vetter’s position”.
And yet, they add, the court then “dismissed five decades of precedent and awarded summary judgment to Vetter in a seven-page opinion”. Which may be true, but just because Vetter’s interpretation of the law is “fringe” and “contrary” to industry convention, it doesn’t mean it’s wrong.
And the fact that interpretation may cause "chaos" within the music industry doesn't mean it's wrong either. And that's if we accept the publishers' claims that chaos will in fact ensue. Commenting on the Supreme Court filing, Kappel tells CMU that "the claims of 'chaos' continue to be vague and unsubstantiated".
He then adds, "I see no reason why the Supreme Court would view" those claims "any less skeptically than the lower courts did".
The key legal dispute
So what are the actual legal arguments here, rather than just focusing on how disruptive the Vetter v Resnik ruling will be? At the centre of the dispute is how copyright works on a global basis.
Creators automatically get copyright protection for their work under their home country’s copyright system providing they meet certain criteria set out in copyright law. However, creators need protection worldwide, more so today than ever before in an increasingly global market place.
Most of the copyright systems around the world are connected through global treaties - for song copyrights, the relevant treaty is the Berne Convention. At a basic level, the convention works like this: the US and UK both sign it, and now works that have automatic copyright protection under US law can also be protected under UK copyright law, and vice versa.
The key question in Vetter v Resnik is whether the convention creates new copyrights for the same work in every country or if there is a single copyright in the home country that can just be enforced under the treaty in other countries.
This is relevant because of a limitation in the US termination right, which says termination does not apply to “rights arising under any … foreign laws”. If the Berne Convention creates a bundle of standalone copyrights around the world for each song, and those other copyrights are the result of foreign copyright law, then the termination doesn’t apply.
In the original court hearings, Vetter insisted there is a single copyright stemming from US law that is then enforceable globally, so that limitation does not apply. Resnik argued there is a bundle of rights, so it does. The district court and Fifth Circuit accepted Vetter’s argument, but the majors and BMG hope they can now persuade the Supreme Court otherwise.
What about Paul McCartney?
Interestingly, the publishers argue that if there is a single copyright, as Vetter insists, that negatively impacts on non-US writers who transferred rights under publishing deals in other countries and who then seek to reclaim US rights using the termination right in American law. The argument goes that that can only happen if there is a separate US copyright created under the global treaties to be terminated.
That’s an interesting argument because, in the past, publishers haven’t always accepted that non-US writers can exercise the termination right in the US, with Sony Music Publishing ending up in a UK court with Duran Duran over that very issue. But it is true that some non-US writers have managed to reclaim rights in the US or at least have forced a renegotiation of old deals under the threat of seeking termination.
In their Supreme Court filing, the publishers specifically mention Paul McCartney. Although McCartney’s songs were initially protected by UK copyright law, which doesn’t have a termination right, “the uniform understanding has been that McCartney nonetheless has distinct US rights in those musical works that he could recapture under the US Copyright Act, as he did in 2017”.
The publishers argue that that wouldn’t be possible under Vetter’s interpretation of how copyright works around the world. Though, it has to be said, how the US termination right works for non-US writers is a separate issue that likely needs to be dealt with through separate disputes, even if the publishers argue that the precedent set in Vetter v Resnik would have an impact on those disputes.
Commenting on this specific argument in the Supreme Court filing, Kappel says, "given their ostensible concern for foreign authors, I wonder if the major publishers and their foreign affiliates will publicly commit to respecting and honouring termination rights exercised by foreign writers. As we know from the Duran Duran case and others - including the Paul McCartney case the petition cites - that has not been their position in the past".
Meanwhile, he continues, "our position hasn't changed, which is that foreign writers continue to have a path to termination rights in the US even after the Fifth Circuit's opinion".
The intent of Congress
Beyond the legal technicalities of global copyright treaties, many songwriter advocates also stress that the original intent of Congress when introducing the termination right is super relevant here.
Congress members wanted to protect writers who were entering into incredibly long term publishing deals - deals that could run for 100+ years - while still giving the publisher a decent length of time to profit from its initial investment.
Would Congress members have really intentionally restricted the termination right to just US rights given their objective? Songwriter groups argue that such restrictions make no sense given what Congress was trying to achieve when crafting the termination right provisions.
When welcoming the Fifth Circuit ruling in Vetter v Resnik earlier this year, Music Creators North America said it was “judicial recognition of Congressional intent that the US Copyright Act is primarily a statute meant to protect the rights of creators first and foremost”.
The music publishers’ new filing is a ‘petition for a writ of certiorari’, asking the Supreme Court to consider this case. We now await to see if it will.