Ownership and renewal rights in Bob Marley's albums

Author: Eddy Ventose (University of the West Indies - Faculty of Law, Cave Hill Campus, Barbados)

Citation: Journal of Intellectual Property Law & Practice (2010) doi: 10.1093/jiplp/jpq166, first published online 10 November 2010

Fifty-Six Hope Road Music Ltd v UMG Recordings, Inc. (S.D.N.Y.), 10 September 2010

In the latest litigation saga, the heirs of the late Bob Marley have lost their claim that they were entitled to the authorship in and the renewal rights to copyright of various sound recordings made under three agreements entered into by Bob Marley and Island Records in the 1970s.

Legal context

The issue for determination by the District Court of New York was whether the plaintiff company, owned by the heirs of Bob Marley, was entitled to prevent the renewals by the defendant of certain sound recordings on the basis that they were not owned by the defendant, based on various exclusive recording contracts entered into between Bob Marley and Island Records Inc., the predecessor-in-title to the defendant, but by the heirs of Bob Marley on the basis that authorship of the copyright reverted to them when he died in 1981.

Facts and analysis

In 1972, 1974 and 1975, Bob Marley entered into three exclusive recording agreements with Island, on substantially the same terms: Bob Marley was to perform services exclusively for Island and to produce albums under the agreements. Advances made by Island to Bob Marley would be offset against royalties to be paid to him under all three agreements; so too would be the cost of Bob Marley's use of Island's studios to record his performances. Island had the power to compel Bob Marley's attendance at various locations for the purpose of recording his performances. Although both parties were to agree to the lyrics and music to be recorded, this was subject to the overriding ability of Island to decide at its discretion whether such music was acceptable to it for commercial production and to reject it if it was not. The agreements provided that the sound recordings were to be the ‘absolute property’ of Island, which had the exclusive and perpetual right to exploit the recordings by any means whatsoever throughout the world, excluding the Caribbean. Under the 1974 agreement Island had the right to refuse to accept an album if it determined that such an album did not have sufficient commercial potential. The 1975 agreement contained similar provisions but provided that Media Aides, Bob Marley's company, had the right to determine the times and places for recordings. Two albums, ‘Catch a Fire’ and ‘Burnin’, were released under the 1972 Agreement; only ‘Natty Dread’ was released under the 1974 Agreement; ‘Rastaman Vibrations’ and ‘Exodus’ were released under the 1975 Agreement. These five albums contain some of Bob Marley's best-known songs, including ‘Get Up, Stand Up’, ‘I Shot the Sheriff,’ ‘Three Little Birds,’ ‘No Woman, No Cry’ and ‘One Love’. Subsequent agreements were made with the predecessors of Media Aides in relation to the creation of additional albums and the payment of royalties.

The plaintiffs, Rita Marley, Bob Marley's widow and his nine children, through their wholly-owned company, Fifty-Six Hope Road, brought an action against Universal Music Group Recordings Inc (UMG), the successor-in-interest to Island, to prevent the renewals of copyright registrations in relation to the sound recordings created by Bob Marley and released by Island pursuant to the 1972, 1974 and 1975 Recording Agreements (the Marley Recording Agreements). UMG is a unit of Vivendi SA's Universal Music Group. The plaintiffs claimed that the defendant failed to pay Fifty-Six Hope Road all of the royalties due to them under the Marley Recording Agreements and that the renewal of the copyrights of each of the five sound recordings made pursuant to the Marley Recording Agreements (Sound Recordings) reverted to them under the Copyright Act 1909 upon the death of Bob Marley in 1981 and that they owned them. They also claimed that UMG ignored a 1995 agreement to share royalties with Fifty-Six Hope Road Music Ltd (the Royalties Agreement), and in addition failed to consult them on key licensing decisions such as use of Bob Marley's songs in the ringtone market, namely, on AT&T, Sprint and T-Mobile phones.

The arguments


The plaintiffs argued that because Bob Marley died in 1981, before the copyrights in the Sound Recordings entered the renewal terms, ownership of the renewal term copyrights reverted to them under the then Copyright Act 1909 and, that since they had not conveyed the copyrights to UMG or anyone else, they were the rightful owners of the renewal term copyrights. UMG argued that, through its predecessor-in-interest Island, UMG had at all times been the statutory ‘author’ of the Sound Recordings. UMG argued that the clauses of each of the Marley Recording Agreements demonstrated that the Sound Recordings were ‘works made for hire’ under the 1909 Act and that consequently it owned the copyrights in the initial and renewal terms of the Sound Recordings, regardless of when Bob Marley died.

The decision

District Court Judge Denise Cote began by examining the distinction between the meaning of the term ‘author’ in its common dictionary sense and its meaning as a legal conclusion in copyright law. She claimed that UMG did not deny that Bob Marley was the author of the Sound Recordings in the common dictionary sense, ie in the sense that he was their creator or the source of the Sound Recordings. It disputed that Bob Marley was the author of the Sound Recordings in the legal sense, ie in the sense that Bob Marley was the person in whom the statutory copyright in the Sound Recordings initially vested and to whose heirs the renewal term of the copyright reverted when he died before commencement of that term. UMG claimed that, although Bob Marley was the author of the recordings in the common dictionary sense of the words, the Sound Recordings were ‘works for hire’ and that it was therefore entitled to the financial rewards copyright law traditionally granted to encourage such efforts.

Under section 17 of the 1909 Act, ‘author’ included ‘an employer in the case of works made for hire’, which meant that with respect to works for hire, the employer was legally regarded as the ‘author,’ as distinguished from the creator of the work: Martha Graham, 380 F.3d at 634. The Federal Court of Appeal in Martha Graham accepted that section 17 of the 1909 Act meant that ‘[i]f a work is a work for hire under the 1909 Act, the employer as statutory “author” owns the original term, and the renewal term vests in the employer if the employer makes an application for renewal within the last year of the original term.’ It also pointed out that in determining whether a work was a ‘work made for hire’ under the 1909 Act, the Federal Court applied the ‘instance and expense’ test, stating that the copyright belongs to the person at whose ‘instance and expense’ the work was created. Indeed, the jurisprudence of the Federal Court concerning the status of commissioned works under the 1909 Act created an almost irrebuttable presumption that any person who paid another to create a copyright work was the statutory ‘author’ under the ‘work for hire’ doctrine. Also, once it is established that a work was made for hire, the hiring party was presumed to be the author of the work. That presumption can be overcome, however, by evidence of a contrary agreement, either written or oral. The burden of proof is on the other party to demonstrate by a preponderance of the evidence that such a contrary agreement was reached.

On the facts the judge held that the Sound Recordings were ‘works made for hire’ under the 1909 Act, because the Bob Marley Agreements, inter alia (a) clearly demonstrated that the Sound Recordings were created at the instance of Island and that Island had the right to direct and supervise the manner in which Bob Marley created the Sound Recordings; (b) obligated Bob Marley to produce ‘sufficient acceptable recordings’ to comprise a specific number of albums for Island within the term of each agreement and (c) provided that Island would pay Bob Marley certain advances against royalties for the creation of the Sound Recordings. Having concluded that the Sound Recordings were works for hire, the judge held that Island and its successor-in-interest UMG were presumed to be the statutory author under the 1909 Act: while this presumption can be overcome by evidence of an agreement to the contrary, the plaintiffs presented no evidence of such an agreement and that other clauses in the Bob Marley Agreements reinforced the presumption that UMG was the statutory author of the Sound Recordings, because each of the agreements provided that the Sound Recordings were the ‘absolute property’ of Island, which was entitled to the ‘sole and exclusive right in perpetuity’ to exploit the Sound Recordings by ‘any and every means whatsoever.’ The court stated that its conclusion that the Sound Recordings were ‘works made for hire’ was also consistent with the original copyright registrations and renewal registrations, which listed Island, not Bob Marley, as the ‘author’ of the Sound Recordings.

After considering and rejecting each of the arguments advanced on behalf of the plaintiffs as to why the Sound Recordings were not ‘works for hire’ under the 1909 Act, the judge stated that the terms of the Marley Recording Agreements demonstrated clearly that the Sound Recordings were produced at the instance and expense of Island and were therefore ‘works made for hire’ under the 1909 Act: it was irrelevant that Bob Marley might have maintained artistic control over the recording process. What mattered was that Island had a contractual ‘right’ to accept or reject what he produced. The plaintiffs had failed to introduce any evidence of an agreement to rebut the presumption that Island owned the copyrights in the Sound Recordings from the outset. In particular, whether Bob Marley would have recorded his music even if he had not entered the recording agreements with Island was beside the point: UMG, as Island's successor-in-interest, was the statutory author and owner of the initial and renewal term copyrights in the Sound Recordings. The judge also denied the plaintiff's request for a ruling upholding its claims over digital downloads, pointing to ambiguity in the Royalties Agreement. She directed the plaintiffs and UMG directed to enter into court-supervised settlement talks, the conference for which was scheduled for October 29.

Practical significance

The 1909 Act, repealed and replaced by the Copyright Act 1976, continues to apply in relation to works created before 1 January 1976, the date the 1976 Act came into effect. Under the 1909 Act, the term of copyright was for an initial period of 28 years, which could be renewed for another 28 years. The renewal could only be properly done if it was registered by the author in the last year of the first initial period, failing which the author would lose copyright. The 1976 Act extended the renewal term of works created before 1 January 1976 to 47 years, which was subsequently increased to 67 years by the Copyright Term Extension Act 1998. The author was the person entitled to the renewal of copyright for 67 years, subject to one major exception for ‘works made for hire’. In relation to such works, the right to renew after the first term of 28 years was not vested in the person who created the work, but to the person who was the proprietor at the end of the first term, or who had obtained copyright from them. The 1976 Act ‘work for hire’ falls into two categories, namely: (a) works prepared by an employee within the scope of his or her employment; or (b) works which fits into one of nine categories stipulated in the Act and is in writing signed by the parties acknowledging that the work is a ‘work for hire’.

This decision does not mark a shift of emphasis in the principles to be applied in determining when a work is a ‘work for hire’. It does, however, highlight the potentially harsh effects that may result if the work is so defined to allow the proprietor an additional 67 years of copyright protection to the exclusion of the heirs of the creator of the work.

Ownership of IP derived from publicly funded research: the State steps in

Author: Lee-Ann Tong (Department of Private Law, University of Cape Town)

Intellectual Property Rights from Publicly Financed Research and Development Act No. 51 of 2008, South Africa

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpq021

South Africa has introduced legislation to regulate allocation and commercialization of IP derived from research and development undertaken with public funds.

Legal Context

The Intellectual Property Rights from Publicly Financed Research and Development Act 2008 aims ‘to provide for more effective utilisation of intellectual property emanating from publicly financed research and development’ (Preamble). It seems that government has decided that it can rectify South Africa's low patenting rate by forcing recipients of public finance for research and development, such as universities and research institutions, to protect and commercialize their research results. The legislation has attracted much criticism, raising many questions about the role of research institutions as revenue-generating enterprises, the potentially detrimental effect of the imperative to commercialize research results on the dissemination of information, the negative impact that the Act may have on institutions' ability to work as part of research consortia and to attract foreign funders, the practicality of the bureaucratic processes that have to be followed and the administrative burdens associated with the reporting, disclosure, and commercialization requirements. Although the Act was passed on 22 December 2008, it can only come into effect once Regulations have been passed which will set up the necessary institutional structures. The draft Regulations were first released for public comment in April 2008, but by the start of February 2010, they had yet to be passed.

Facts and analysis

The stated objective of the Act is to ensure that

intellectual property emanating from publicly financed research and development is identified, protected, utilised and commercialised for the benefit of the people of the Republic, whether it be for a social, economic, military or any other benefit (section 2(1))

This broad objective is implemented through provisions on the allocation of rights to the IP, the statutory protection of IP, the rules of IP transactions, the obligation to enter into benefit-sharing arrangements, the rights of the state to the IP, and the creation of new administrative institutions such as a National Intellectual Property Management Office (NIPMO) (sections 8–9) and technology transfer offices at institutions (sections 6–7).

The Act applies whenever public funds (excluding funds allocated for scholarships and bursaries), regardless of amount or proportion, are used for research and development by a recipient and applies to all IP emanating there from. For the purposes of the Act, ‘IP’ is defined quite broadly as

any creation of the mind that is capable of being protected by law from use by any other person, whether in terms of South African law or foreign intellectual property law, and includes any rights in such creation, but excludes copyrighted works such as a thesis, dissertation, article, handbook or any other publication which, in the ordinary course of business, is associate with conventional academic work (section 1).

There is a concern that the definition is overly broad even though it excludes certain copyright works. It would appear that even IP that would not ordinarily have statutory protection within South Africa may have to be protected if it would constitute protectable subject matter in a foreign jurisdiction. An example is that of a computer program which may need protection under a software patent in a foreign country, even though software patents are not the norm in South Africa.

Ownership of IP

The Act provides that a recipient of public funds owns the IP emanating from the research, however, if the recipient, ‘prefers not to retain ownership in its intellectual property or not to obtain statutory protection for the intellectual property’ (section 8), it must inform NIPMO (section 4(2)). This situation may arise, for example, where the recipient wishes to disseminate the research results to the public in terms of a collaboration agreement. If NIPMO does not agree that the IP need not be protected through ‘statutory protection’ then it may acquire ownership of the IP and seek such statutory protection itself (section 4(3)). However, if NIPMO decides not to take ownership, the recipient is still obliged to offer the option of acquire ownership and to obtain statutory protection firstly to any co-funders, and failing that, to the IP creators (section 4(4)).

Where the IP emanated from an institution, for example a university (section 1), the Act makes provision for possible co-ownership of the IP by co-funding private entities or organizations (section 15). Co-ownership is, however, subject to a contribution of resources, joint IP creatorship, a benefit-sharing arrangement for the IP creators at the institution, and the conclusion of an agreement for commercialization between the private entity and the institution (section 15(2)).

IP transactions

The Act imposes various conditions on all IP transactions, whether licensing or assignment. A distinction is made between non-exclusive licences and exclusive licences, and in addition, between normal transactions and offshore transactions. Although the recipient of public funds is left to determine the nature and conditions of IP transactions with third parties, in doing so it must take account of a number of factors, including giving preference to non-exclusive licences (section 11(1)(a)), to South African licensees and specifically to BBBEE (broad-based black economic empowerment (sections 11(1)(b) and 1) licensees, and to parties that will use the IP to benefit the people of the Republic (section 11(1)(c)). Exclusive licensees must undertake where feasible to commercialize within the Republic (section 11(1)(d)). Where the exclusive licence is in relation to IP from an institution, there is the added requirement that the exclusive licensee ‘has the capacity to manage and commercialize the intellectual property in a manner that benefits the Republic’ (section 15 (1)). Offshore transactions have additional requirements, including that that it be shown that there is insufficient capacity in the Republic to develop or commercialize the IP locally, and that the Republic will benefit from the offshore transaction (section 12(1)–(2)).

Furthermore, in all cases, licensees must provide the State with an irrevocable, royalty-free licence to use or have the IP used throughout the world for the health, security, and emergency needs of the Republic (section 11(1)(e)). In each IP transaction, the party must agree that a failure to commercialize the property will lead to the State having the right to acquire the IP or to demand a compulsory licence be issued (section 11(2)).

Benefit-sharing

IP creators at institutions are entitled to share in the benefits that accrue to the institution from such IP for as long as the right subsists. The Act provides that they and their heirs are entitled to share in at least 20 per cent of the revenues accruing to the institution for the first one million rands of revenues or such higher amount as Minister of Science and Technology may prescribe; and thereafter, in at least 30 per cent of the net revenues accruing to the institution from the IP (section 10(1)(a) and (b)). This amount is to be shared by all the IP creators. It would seem that if the creators are to share in any benefits that may accrue once the IP right in question has expired, then they would need to enter into an agreement to that effect.

Government rights

IP that is not commercialized by a recipient of public funds may be subject to review by NIPMO, and in the event that it is found that there could be commercialization, the recipient may be required to grant a compulsory licence to a third party (section 14(4)). Recipients who do not disclosure IP to NIPMO run the risk of having the IP assigned to the State (section 14(5)).

Practical Significance

Before the Act, IP that was developed at institutions such as universities was dealt with under the general IP statutes, such as the Patents Act 1978, the Designs Act 1993, and the Copyright Act 1978. The new legislation is of utmost significance to research institutions, as well as to any entity that is considering embarking on collaborations with such institutions or even with individuals at such institutions. In every case where there is use of public finance, for example in the form of professors' wages, office space, use of facilities, or use of existing IP, the Act will kick in. Potential donors and collaborators need to be alert to the fact that even if they are contributing significant resources to a research project with a local university or institution, anything less than funding on a full cost model, will result in a severe curtailment of the ability of the funder to decide on the status of the resultant IP.

The Act not only alters the general position that the IP creator is entitled to first ownership of the IP, it imposes enormous administrative burdens on recipients of public funds who have to meet the reporting, disclosure, and commercialization conditions.