IP Law Daily, COPYRIGHT—S.D.N.Y.: Musician’s action to terminate copyright grants was not ripe for judicial review, (Feb 24, 2020)

By Nicholas Kaster, J.D.

Because further factual development may inform the court’s decision at relatively little harm to either party, the court declined to exercise jurisdiction.

A federal district court in New York City has dismissed a claim for declaratory relief brought by a musician against Sony Music Entertainment. The musician sought a declaration that certain sound recordings made pursuant to a 1977 agreement were terminable under Section 203 of the Copyright Act. The court found that the declaratory relief was not ripe for judicial review because the issues in the case might be better resolved at a later time (Mtume v. Sony Music Entertainment, February 20, 2020, Ramos, E.).

The case arose from a dispute between Sony and a musician, Mtume, involving Mtume’s album titled Juicy Fruit. Juicy Fruit is a "gap work" because it was released in the United States in 1983 pursuant to an agreement made between Mtume and Zembu Productions in 1977. According to the 1977 agreement, Mtume agreed to render, on an exclusive basis, his services as a recording artist, and to deliver albums embodying his musical performances. As part of the agreement, Mtume also granted Zembu all rights of copyright to these master recordings. Zembu assigned the 1977 Agreement to CBS Records, Inc. in 1979. Sony subsequently acquired CBS in 1987 and became the successor in interest with respect to copyright interests in all of the sound recordings created under the 1977 Agreement, including Juicy Fruit.

Under the Copyright Act, there are two avenues by which authors, including songwriters, or their successors, can terminate copyright grants. Section 304 of the Act describes a process for terminating grants that were executed prior to 1978 for works that were copyrighted and created as of January 1, 1978. Section 203 sets forth a termination process for grants that were executed in or after 1978, irrespective of when the work was copyrighted. Certain works, however, fit into neither category. These are works that were transferred and/or assigned by an agreement dated before 1978, but were not created until after this date. They are referred to as "gap works." Because § 203 applies only to works with grants that were executed in or after 1978, gap works did not initially fit under § 203’s framework. This changed in December 2010, when the Copyright Office opined that § 203 would be the relevant provision for gap grants and allowed termination notices for gap grants to be recorded under this provision.

In 2015, Mtume sent a termination notice to Sony regarding two albums and one song, all of which were created under the 1977 Agreement. Sony subsequently informed Mtume via three separate letters that it believed the 2015 Notice was ineffective for several reasons, including that the sound recordings were works for hire and therefore not subject to termination under the Copyright Act and that the sound recordings created pursuant to the 1977 Agreement were not subject to termination under § 203 of the Copyright Act, presumably because Sony believed § 203 did not apply to gap works. The 2015 Notice is the subject of a currently pending lawsuit between Mtume and Sony.

On October 1, 2018, Mtume sent Sony another termination notice, this time in reference to the sound recordings on the Juicy Fruit album. The Copyright Office recorded the Termination Notice on December 19, 2018. According to the notice, the effective date of termination is October 9, 2020. Sony has yet to respond to the 2018 Notice.

Mtume initiated an action on December 14, 2018 requesting a declaration that the sound recordings on the Juicy Fruit album are terminable pursuant to § 203 of the Copyright Act and that the 2018 Notice is valid and complies with the provisions of § 203. Sony moved to dismiss, arguing that Mtume’s request for declaratory judgment was unripe because Sony has yet to respond to the 2018 Notice and therefore has taken no position on its validity. In response, Mtume argued that Sony’s position toward the 2015 Notice was sufficient to create a concrete dispute between the parties.

Sony argued that dismissal was warranted because Mtume’s claim for declaratory relief regarding the 2018 Notice was not ripe. A declaratory judgment action is ripe for judicial review only if "there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Ripeness is a twofold inquiry, including both constitutional and prudential questions. The court found that the case was ripe for Article III constitutional purposes. However, the primary dispute concerned "prudential ripeness."

To determine whether a claim is prudentially ripe, courts consider (1) the fitness of the issues for judicial decision and (2) the hardship to the parties of withholding court consideration.

Sony’s position towards works created pursuant to the 1977 Agreement, said the court, is "not so uncertain as to create a purely hypothetical case unfit for review under Article III," but the level of uncertainty in this case "does reduce the adjudicative fitness of the issues." In other words, the court found, the issue may be better resolved at a later time, when Sony has had an opportunity to articulate its position towards the works in the Juicy Fruit album. Indeed, the court noted, Sony may never take a position at all. Business, legal, or other reasons may counsel that the conflict between Mtume and Sony be resolved without court intervention. Alternatively, the court noted, Sony could challenge the validity of the 2018 Notice for completely unrelated reasons, in which case a decision by the court now would have done little to resolve the conflict and would be purely advisory in nature.

Further, the court said, there were no concerns about judicial economy here. Indeed, quite the opposite, as almost identical questions were raised by Mtume’s pending lawsuit, which indisputably concerns a live dispute between the parties.

Finally, the court stated, neither party would be significantly harmed by the adjudication of this matter at a later time, if and when Sony responds to the 2018 Notice. Mtume is currently prohibited from entering into any binding agreements regarding the Juicy Fruit album as per the Copyright Act, the court stated, irrespective of whether the court decides the case prior to termination. Thus Mtume does not face "the choice between abandoning his rights or risking prosecution," the "dilemma that it was the very purpose of the Declaratory Judgment Act to ameliorate."

The court stated that there was therefore no reason to prematurely answer questions that may never be raised with respect to this particular work. Because further factual development may inform the court’s decision at relatively little harm to either party—in other words, because Mtume’s claims may be better heard at a later time—the court declined to exercise jurisdiction.

Accordingly, Sony’s motion to dismiss was granted without prejudice.

This case is No. 1:18-cv-11747-ER.

Attorneys: David B. Rosemberg (Rosemberg Law) for James Mtume. Andrew Harrison Bart (Jenner & Block LLP) for Sony Music Entertainment.

Companies: Sony Music Entertainment

Cases: Copyright NewYorkNews