Composer Retaining Beneficial Interest in Copyright Registered by Music Publisher Has Standing to Sue for Infringement: Eleventh Circuit | Practical Law

Composer Retaining Beneficial Interest in Copyright Registered by Music Publisher Has Standing to Sue for Infringement: Eleventh Circuit | Practical Law

In Smith v. Casey, the US Court of Appeals for the Eleventh Circuit held that where a music publisher had registered a claim to copyright in a work not made for hire, a composer who retained a beneficial interest had statutory standing to sue for infringement under the Copyright Act.

Composer Retaining Beneficial Interest in Copyright Registered by Music Publisher Has Standing to Sue for Infringement: Eleventh Circuit

by Practical Law Intellectual Property & Technology
Published on 24 Jan 2014USA (National/Federal)
In Smith v. Casey, the US Court of Appeals for the Eleventh Circuit held that where a music publisher had registered a claim to copyright in a work not made for hire, a composer who retained a beneficial interest had statutory standing to sue for infringement under the Copyright Act.
On January 22, 2014, in Smith v. Casey, the US Court of Appeals for the Eleventh Circuit affirmed in part, reversed in part and remanded the US District Court for the Southern District of Florida's dismissal of an estate's claims for, among other things, copyright infringement on behalf of a former member of KC and the Sunshine Band (No. 1:12-cv-23795-UU, (11th Cir. Jan. 22, 2014)). Notably, the court's decision aligned the Eleventh Circuit with the US Court of Appeals for the Fifth Circuit in holding that a composer who retains a beneficial interest can rely on a copyright registration filed by the composer’s music publisher.
Ronald Louis Smith, Sr. recorded music in the late 1970s with KC and the Sunshine Band. Smith wrote and produced a recording of the musical composition "Spank" under a recording agreement with Sunshine Sound Enterprises, Inc. The agreement contained a separate songwriter's agreement providing that Smith would assign his rights in a composition in exchange for scheduled royalties for different uses of the work and authorized Sunshine Sound to execute the agreement in Smith's name. Harrick Music, Inc., a publishing company affiliated with Sunshine Sound, registered a copyright for the musical composition "Spank" that both:
  • Identified Smith as composer and itself as claimant.
  • Indicated that "Spank" was not a composition made for hire.
In 1980, Smith signed a release agreement with Sunshine Sound terminating his recording contract and mutually releasing all claims and obligations under it "except as otherwise provided" in the release. The release agreement both:
  • Stated that sound recordings made under the recording agreement remained Sunshine Sound's property and Sunshine Sound remained obligated to Smith under the royalty provisions.
  • Was silent on where ownership rested for the musical composition copyrights.
Harris Music was not a party to the release.
In the following years, Smith acquiesced to Harrick Music's administration of the "Spank" copyright but alleged that Harrick Music never remitted any royalties. In 2011, Smith sent a cease and desist letter revoking Harrick Music's authority to administer "Spank." In 2012, Smith's estate, among other claims, alleged copyright infringement of Smith's copyright in the musical composition "Spank." The district court concluded that Smith lacked statutory standing to pursue the copyright claim and sua sponte dismissed that count with prejudice to all of the defendants, noting that registration was a necessary precondition to filing an infringement suit under 17 U.S.C. § 501(b), and also dismissed the rest of the case. The estate appealed.
On appeal, the Eleventh Circuit held that the district court erroneously concluded that the estate lacked statutory standing for the copyright infringement claim and vacated the dismissal of that claim. The court's analysis noted that:
  • Its sister circuits have agreed that an author who assigns legal rights to a work in exchange for royalties has a beneficial interest sufficient for § 501(b) standing.
  • A beneficial owner of an exclusive right in a copyrighted work must still comply with the Copyright Act's formalities, including preregistration or registration of the copyright under 17 U.S.C. § 411(a).
The court noted that Smith alleged that he never signed any agreement giving Harrick Music the right to exploit the copyright, but that even treating Smith's agreement to permit Sunshine to execute the form songwriter's contract as acquiescence to its terms, Smith still would only have assigned his rights to the musical composition in exchange for royalties.
For § 411(a) compliance, the district court found that Smith had not registered the work because:
  • Harris Music registered the copyright and Smith did not file a separate registration.
  • Smith could not rely on Harris Music's registration to satisfy § 411(a).
The Eleventh Circuit found the district court construed § 411(a) too narrowly because nothing in the statute indicates that a composer who agrees to assign his legal interest in a composition, including the right to register it, in exchange for royalties, may not rely on the registration that the assignee files. The court aligned itself with the Fifth Circuit and held that where a publisher has registered a claim to copyright in a work not made for hire, the beneficial owner has statutory standing to sue for copyright infringement. The court also:
  • Reversed and remanded the district court's denial of the estate's leave to amend and the estate's contract claims.
  • Affirmed the district court's dismissal of the estate's claim brought under the Declaratory Judgment Act.