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John Fogerty, Santa Claus, and Publishers’ Exploitation of Artists

· October 20, 2015

Singer/songwriter John Fogerty’s new memoir Fortunate Son reminds us that the fiercest battles in the copyright area often are not between rights holders and users or technology platforms, but between artists and their distributors. As a recent review of the memoir in the Washington Post explains, the brief success of Fogerty’s band Creedence Clearwater Revival “teed up a lifetime of struggle” that “came not for the usual reasons of drug abuse or lack of talent but because of … the signing of a bad contract.”

That bad contract was with record label Fantasy Records. According to reviewer Greg Schneider, the band signed “a disastrous contract with Fantasy Records just as they were about to hit it big.” Fogerty lost all control over his compositions: “All of his hits for Creedence were owned by Fantasy, and he was on the hook to deliver hundreds more songs in the coming years.” Fogerty claims that he received only a small fraction of the revenue earned by his songs, and that Fantasy engineered an offshore tax scheme that enmeshed him in investigations that drained his savings. Additionally, “Creedence songs kept cropping up in commercials, and Fogerty had no authority to prevent them from being used.”

But Fantasy inflicted perhaps its greatest injury when it sued Fogerty for infringing the copyright in a song he wrote. In 1970, while with Creedence, Fogerty wrote a song called “Run Through the Jungle.” Under the contract with Fantasy, the copyright was transferred to the record label. In 1985, long after the Creedence disbanded, Fogerty wrote a new song called “The Old Man Down the Road.” Fogerty published and distributed the song through Warner Bros. Fantasy sued Fogerty and Warner Bros., alleging that Fogerty infringed Fantasy’s copyright in “Run Through the Jungle” because “The Old Man Down the Road” was essentially the same song with different lyrics. After trial, Fogerty prevailed in a jury verdict.

Fogerty’s pursuit of attorneys’ fees from Fantasy led to an important Supreme Court precedent. The district court denied Fogerty’s motion for fees and the Ninth Circuit affirmed, upholding its dual standard whereby the court automatically awarded fees to prevailing plaintiffs, but awarded fees to prevailing defendants only if the defendants established that the original suit was frivolous or brought in bad faith.

The Supreme Court granted certiorari, and in a unanimous decision held that prevailing plaintiffs and prevailing defendants must be treated alike under the Copyright Act’s attorneys’ fee provision, 17 U.S.C. § 505. Fantasy argued that a “dual standard” approach promoted a key objective of Section 505, which was to encourage meritorious copyright infringement claims. The Court thought that a “dual standard” neglected another central objective behind Section 505 and the Copyright Act in general: to promote the progress of the useful arts by enabling authors to build upon ideas and information of others. As the Supreme Court explained:

Because copyright law ultimately serves the purpose of enriching the general public through access to creative works, it is peculiarly important that the boundaries of copyright law be demarcated as clearly as possible. To that end, defendants who seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them to the same extent that plaintiffs are encouraged to litigate meritorious claims of infringement.

Turning to the case before it, the Court said that:

the successful defense of “The Old Man Down the Road” increased public exposure to a musical work that could, as a result, lead to further creative pieces. Thus a successful defense of a copyright infringement action may further the policies of the Copyright Act every bit as much as a successful prosecution of an infringement claim by the holder of a copyright.

The Court concluded that Section 505 required an “even-handed” analysis, in which a court treats prevailing plaintiffs and defendants alike, using its discretion to determine when attorney’s fees are appropriate.

Although record labels rarely sue their artists for copyright infringement, artists often have to litigate against their labels to protect their rights, as demonstrated by a Second Circuit decision earlier this month. The Copyright Act contains a complicated provision that allows an author under certain circumstances to terminate her assignment of her copyright to a third person. In essence, the provision enables an author to reclaim her copyright from her publisher. Fred Coots and Haven Gillespe wrote the Christmas classic “Santa Claus is Coming to Town” in 1934, and sold the rights to a music publisher. 80 years later, Coots’s heirs are interested in terminating the transfer and reasserting control over the song. The Coots heirs argued that the termination should be effective in 2016. The current owner of the copyright, EMI, argued that for complex technical reasons, the Coots heirs no longer had termination rights. The district court agreed with EMI, finding that EMI’s rights in the song would subsist until the song entered the public domain in 2029. The Second Circuit now reversed, ruling that the Coots heirs could terminate the assignment in 2016, and thus collect royalties for the song until 2029.

There is, of course, no sound policy justification for a song written in 1934 to remain in copyright in 2015, particularly since the maximum term at the time of composition was 56 years, meaning it should have gone into the public domain in 1990. Congress extended the term twice, first to 75 years and then to 95 years. Indeed, the second extension occurred thirteen years after Coots had died. Nonetheless, the author of a work should receive the full rights Congress intended him or her to receive, including termination rights. It is unfortunate that authors so often need to go to court to protect themselves from exploitation by their publishers.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.