Property, intangible

Copyright ownership claims are not unusual. But what about authorship? Often the distinction doesn’t matter because, in infringement claims, the owner stands in the shoes of author. But it does matter to termination – the author (or the author’s heirs) is the only one with termination rights; a mere owner cannot exercise a termination (and is most likely whose rights are being terminated). How to decide when an authorship claim, as opposed to an ownership claim, accrues was before the Court of Appeals for the Sixth Circuit.

In Everly v. Everly, the parties are the famous Everly Brothers, in particular a dispute over the authorship of Cathy’s Clown:

later also performed by Reba McIntyre:

The Everly Brothers were Don and Phil; Phil is now deceased and his claim brought by his heirs. The Everly Brothers assigned the copyright in the song to Acuff-Rose Publications in 1960.

The brothers had a falling out and stopped talking in 1973. Until then, both had described themselves as co-authors of the song. After the falling out Don approached Phil about the song, although there are different versions about how the conversation happened. The dispute ended in June 1980 with Phil signing a Release and Assignment:

WHEREAS, [the Acuff-Rose assignment] listed both Phil Everly and Don Everly as composers of said compositions; and

WHEREAS, the said Phil Everly desires to release, and transfer, to the said Don Everly all of his rights, interests and claim in and to said compositions, including right to royalties and his claim as co-composer, effective June 1, 1980;

NOW, THEREFORE, … Phil Everly does hereby transfer, release, assign and set over unto Don Everly all of his rights, titles, interests and claim to the musical compositions “CATHY’S CLOWN,” “SIGH, CRY, ALMOST DIE,” and “THAT’S JUST TOO MUCH,” the copyrights of which were obtained in 1960 by Acuff-Rose Publications, and which are still owned by them. This transfer and release, which is effective June 1, 1980, includes not only the said Phil Everly’s right to royalties and other income arising out of said compositions from and after the effective date, but also every claim of every nature by him as to the compositions of said songs.

Thereafter Don received all royalties and public credit as author. Acuff-Rose changed its records to list only Don as author. However, Don also made at least one public statement indicating that both co-wrote the song.

After Phil died in 2014, his children filed notices of termination of both the 1960 grant to Acuff-Rose and of Phil’s 1980 Release and Assignment. Don filed a declaratory judgment action asking for an order stating that Phil was not an author of Cathy’s Clown and that the 1980 agreement was not terminable. Phil’s heirs counterclaimed for an order that Phil was an author, the termination was effective, and Don owed Phil half of the income earned from Cathy’s Clown. Don moved for summary judgment on the basis that Phil’s claim of ownership was time barred.

The Copyright Act has a statute of limitations of three years. A claim of ownership is therefore barred three years after there has been an “express repudiation” of the aggrieved party’s claim. The court broke repudiation down into three types: private repudiation, such as a statement from one party to the other denying ownership; public repudiation, a publication of the work without credit; and implicit repudiation,¹ non-receipt of royalties.²

That’s how the standard is described in the ownership realm, but the court (with the parties’ agreement) applied it here to the authorship claim. When applied to authorship,

an authorship claim will not accrue until the putative author’s status as an author is expressly repudiated; actions repudiating ownership are irrelevant to begin the statute of limitations for an authorship claim because repudiation of ownership is not adverse to the author’s claim as such. The party claiming sole authorship can repudiate the plaintiff’s authorship (1) privately in direct communication with the plaintiff, (2) publicly by asserting sole authorship to the world and the plaintiff, including the listed credit on the published work, or (3) implicitly by receiving remuneration for the work to which the plaintiff is entitled. Of course, to repudiate the plaintiff’s claims under the latter two theories, the receipt of money and credit must actually be adverse to the plaintiff’s authorship status.

(Emphasis in original.)

The district court had granted summary judgment in favor of Don but the court of appeals reversed, finding there was a question of fact about whether Don expressly repudiated Phil’s authorship. There was evidence that before the falling out, the brothers both described creation as joint owners. There were different versions of the interaction that led to the 1980 agreement, one version a phone call and the other version a letter not in evidence. As to the agreement itself, the court found the language ambiguous:

To be sure, some language supports Don’s version of events. For example, Phil disclaimed “all of his rights, interests and claim in and to said compositions, including rights to royalties and his claim as co-composer,” and “every claim of every nature by him as to the compositions of said songs.” But because the assignment itself cannot transfer authorship status, this language is simply additional evidence a jury could consider in resolving a factual dispute about the interaction between Don and Phil. ¶ Specifically, a reasonable juror could find, as Don argues, that the 1980 Release is evidence that Don challenged Phil’s status as author. But, a reasonable juror could also find that this document was simply the transfer of the right to receive the benefits of authorship, such as royalties and license payments. And, finally, a reasonable juror could find that the release was also a transfer of the right to publicly receive credit for the song.³

The Reba McInytre album cover credited only Don, but that could be because Phil gave up only the right to be named as author, not because Phil was not an author. Non-receipt of royalties was consistent with the Release and Assignment, not a repudiation of authorship. There was therefore a question of fact about when and whether Don had expressly repudiated Phil’s authorship of Cathy’s Clown.

The bonus read is a very thoughtful concurring opinion. While agreeing with the result, Judge Murphy took the opportunity to disagree with the evolution of a stand alone cause of action for ownership of copyright and the application of the discovery rule, rather than the occurence rule, for a copyright claim. Instead, Judge Murphy advocated for an occurrence rule for copyright claims, but a claim would accrue only when a claimant had a complete and present cause of action.

These principles show the right questions to ask in this copyright context: Is a party’s status as a copyright co-author or co-owner a “complete and present” claim that the party may immediately pursue in court (like a negligence claim)? Or is a party’s status as a co-author or co-owner an element of a claim that must fully develop before the party may sue (like the breach element of a negligence claim)? Current caselaw treats this authorship or ownership status as an “element” in the context of an owner’s suit against an infringing party, but as a “claim” in the context of a co-owner’s suit against another owner. I tend to think that courts should treat a party’s authorship or ownership status as an element across the board. That view would mean that this status is not a “claim” and does not, by itself, trigger the statute of limitations in either of these two contexts.…

May an infringing party nonetheless cut off all future liability by sending a copyright owner a “plain-and-express repudiation” of the owner’s ownership status, hoping that the owner does not get around to suing within three years of that repudiation? No, the statute of limitations would not begin to run from the date of the repudiation (no matter how “plain and express”); it would begin to run from the date of the completed claim—the act of copying in violation of § 501.…

What is the act that one owner could take against a co-owner that would be analogous to this “infringing act”? Most often, it would be an owner’s refusal to turn over a share of the “royalty payments” to which the co-owner claims an entitlement. Here, for example, Phil’s successors have a “claim” to half the income earned from Cathy’s Clown after they exercised his termination rights. Just as each infringing act of “copying” creates a new claim, each time an owner fails to turn over income earned might lead to a distinct “claim” subject to a distinct three-year window. After all, the separate-accrual rule means that “[e]ach wrong gives rise to a discrete ‘claim’ that ‘accrue[s]’ at the time the wrong occurs.” And as long as that claim is timely, a request for declaratory relief should be too.…

I simply predict that the Supreme Court may one day hold that the plain text of the Copyright Act’s statute of limitations contains an occurrence rule, not a discovery rule. And that change will likely require courts to reassess their plain-and-express-repudiation tests, which have long followed a discovery-rule model.

“When some law-making bodies ‘get into grooves,’ Judge Learned Hand used to say, ‘God save’ the poor soul tasked with ‘get[ting] them out.’ ” United States v. Jeffries, 692 F.3d 473, 486 (6th Cir. 2012) (Sutton, J., dubitante) (quoting Learned Hand, The Spirit of Liberty 241–42 (2d ed. 1954)). I fear the courts may have gotten into such a “groove” in this copyright context.

A very thought-provoking, thoughtful and well-supported argument that I suspect we will be seeing again.

Everly v. Everly, No. 19-5150 (6th Cir. May 4, 2020)

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