Santa Claus Is Comin’ To Town!!!! YES HE IS! Oftentimes, creative people don’t spend much time thinking about protecting their creations.  And, when they do, the legal budget is kept quite small because, unfortunately, many believe they can just“get some boiler plate off the Internet.”  A recent New York City lawsuit provides a cautionary tale regarding why such reasoning is quite flawed.

The lawsuit relates to the copyright in the song “Santa Claus Is Comin’ to Town.”  It is worth noting here that this song is one of the top earning tracks of all time. Well, the heirs brought suit against the music publisher due to a dispute that arose while renegotiating licensing terms.

By way of background, in 1976, Congress modified the Copyright Laws to, in part, give authors (and their heirs) the right to terminate agreements that assigned away their rights in their creative works.  This allowed the authors and their families to recapture some of the value associated with their creations. That is what the heirs were attempting to do in this case.  However, the statutory scheme is quite complicated.  While we would not recommend anyone attempt to seek recapture on their own, that is not the main focus of this article.  The centerpiece of this blog post is actually contract law.

The Court of Appeals for the Second Circuit, in reviewing the summary judgment granted by the district court below in favor of the publisher, focused on the language of the contracts at issue between the author and the publisher.  The specific language sounds like what most would consider “standard boiler plate:”
“Grantor hereby sells, assigns, grants, transfers and sets over to Grantee . . . all rights and interests . . .heretofore . . . acquired or possessed by Grantor . . . under any and all renewals and extensions.”

While the publisher argued the earlier agreement was operable, the family argued it was the later agreement that governed.  The Second Circuit interpreted this critical language to mean the heirs position was right – the second agreement was operable – thereby validating their termination notice. Translation? The rights reverted back to the family.  Cha Ching! The family gets the copyright revenue stream after the effective termination date without having to rely on the publisher for royalties.  See how important the language used in a contract can be!? Moral of the story…find the budget and get learned counsel to draft your agreements.  IJS.