Harris v. Emus Records Corp.

• Decision Date: 29 May 1984
• Docket Number: Nos. 81-5753,82-5613,s. 81-5753
• Citation: 734 F.2d 1329
• Parties: , 1984 Copr.L.Dec. P 25,665 Emmylou HARRIS, dba Hannah Brown Music and Emmylou Harris, Plaintiffs-Appellees, v. EMUS RECORDS CORPORATION; Roulette Records, Inc.; Suellen Productions, Inc.; Admo Music Corporation; and Promo Records Distributing Company, Defendants-Appellants. Emmylou HARRIS, dba Hannah Brown Music Ltd., and Emmylou Harris, Plaintiffs-Appellees, v. EMUS RECORDS CORPORATION, a New York corporation; Roulette Records, Inc., a New York corporation; Suellen Productions, Inc., a New York corporation; Admo Music Corporation, a New York corporation; and Promo Records Distributing Company, a New Jersey corporation, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1329

734 F.2d 1329

222 U.S.P.Q. 466, 1984 Copr.L.Dec. P 25,665

Emmylou HARRIS, dba Hannah Brown Music and Emmylou Harris, Plaintiffs-Appellees, v. EMUS RECORDS CORPORATION; Roulette Records, Inc.; Suellen

Productions, Inc.; Admo Music Corporation; and

Promo Records Distributing Company,

Defendants-Appellants.

Emmylou HARRIS, dba Hannah Brown Music Ltd., and Emmylou

Harris, Plaintiffs-Appellees, v. EMUS RECORDS CORPORATION, a New York corporation; Roulette

Records, Inc., a New York corporation; Suellen Productions,

Inc., a New York corporation; Admo Music Corporation, a New

York corporation; and Promo Records Distributing Company, a

New Jersey corporation, Defendants-Appellants.

Nos. 81-5753, 82-5613.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Aug. 4, 1983.

Decided May 29, 1984.

Robert W. Woods, Cooper, Epstein & Hurewitz, Beverly Hills, Cal., for defendants-appellants.

Gerald B. Weiner, Fischbach & Fischbach, Los Angeles, Cal., for plaintiffs-appellees.

Isaac M. Pachulski, Stutman, Treister & Glatt, Los Angeles, Cal., for amicus curiae.

Appeal from the United States District Court for the Central District of California.

Before GOODWIN and ANDERSON, Circuit Judges, and CROCKER ^*, District Judge.

GOODWIN, Circuit Judge.

Emmylou Harris, a singer, recovered a money judgment and injunctive relief against the defendants for infringing her copyrights in certain songs. Defendants appeal.

In 1968, Harris entered into a written agreement with Jay-Gee Record Company in which she agreed to record songs in exchange for royalties equalling 3% of the net retail list price of each record sold. Pursuant to the agreement, she recorded six songs which were released by Jay-Gee on an album entitled Gliding Bird.

Five of the songs were written and composed by Harris. The copyrights to each of these compositions were held in the names of Hannah Brown Music (a company wholly owned by Harris), Nanshel Music and Jubilant Music. In 1969, all three companies issued mechanical licenses to Jay-Gee. Under the 1909 Copyright Act then in force, ¹ such licenses are necessary to enable one to duplicate a musical composition copyrighted by another.

The sixth song, entitled "Gliding Bird," was composed by Tommy Slocum. The copyright originally was incorrectly registered in the name of Hannah Brown Music. On September 19, 1969, Hannah Brown assigned it to Nanshel Music and the assignment was recorded in the Copyright Office. On the same day, Slocum wrote to Nanshel setting forth an understanding which provided in part "I have written and composed the musical composition 'GLIDING BIRD' which your company has copyrighted, and which will be registered with BMI with you as publisher." In 1980, Nanshel assigned its copyright interest to Hannah Brown.

In 1971, Jay-Gee filed a petition for bankruptcy. A year later, Jay-Gee's trustee in bankruptcy sold parts of Jay-Gee's assets--including the master tape of the six songs comprising the Gliding Bird Album--to defendant Suellen Productions, Inc. Suellen then transferred whatever rights it had acquired to manufacture and distribute the recordings on the Gliding Bird album to defendant Emus Recordings. Emus re-released a duplicate of the Gliding Bird album in 1979 with a new serial number and a different cover.

Defendant Roulette Records, Inc. was licensed by Suellen and Emus to license foreign sales of the Gliding Bird album. Roulette provided a master to foreign manufacturers who were to manufacture and distribute the album.

Harris has never received any royalties for the Gliding Bird album from the defendants. In November 1979, she demanded that defendants cease the manufacture and distribution of the songs. She then sued defendants for copyright infringement. With respect to the song "Gliding Bird", the district court granted summary judgment in favor of Harris and subsequently enjoined defendants from further infringing the song "Gliding Bird." After a bench trial, the court found that the defendants had infringed the copyrights of the remaining five songs. Appeals from the two judgments are consolidated.

1. Did Defendants Acquire A Valid Mechanical License from Jay-Gee?

The threshold question in this case, and one which defendants claim requires a trial, is whether Suellen acquired a valid mechanical license to duplicate the song when it purchased Jay-Gee's assets in bankruptcy. Defendants argue that when Suellen purchased the master tape of Gliding Bird from Jay-Gee's trustee, Suellen also acquired Jay-Gee's license to manufacture and distribute the recording. It is defendants' position that Jay-Gee had two negotiated licenses to use the musical composition "Gliding Bird", the one contained in the Harris/Jay-Gee Recording Agreement and the one contained in the Nanshel Agreement, and that both were assignable by the licensee Jay-Gee. Which license was valid depends on which party properly held the copyright to the composition. At most, defendants contend they may have breached a contract but they did not infringe a copyright.

A. The Song "Gliding Bird"

The defendants contend that the court erred in granting summary judgment with respect to copyright infringement of the song "Gliding Bird" because of the existence of genuine issues of material fact.

Paragraph 10 of the Harris/Jay-Gee Recording Agreement reads as follows:

In the event you [Harris] record a musical selection in which you have an interest, direct or indirect, in such musical selection or any copyright thereof, the copyright royalty payable by us [Jay-Gee] on such musical selection shall be 1 1/2cents per selection per record side. We [Jay-Gee] shall not pay any copyright royalty on a Public Domain selection recorded by you [Harris] in which you have any interest, direct or indirect, or in any copyrighted arrangement thereof.

Defendants argue that the Agreement created rights between the parties which were freely assignable. Plaintiff, on the other hand, argues that the contract did not contain a license, but merely an agreement as to a royalty rate if Jay-Gee received a license. No references to the song "Gliding Bird", to accounting terms or to other provisions which one would expect to find in a license are contained in paragraph 10.

The district court expressly avoided deciding whether the contract was a license, holding that in any event the rights transferred under the agreement were unassignable as a matter of law because the agreement was for plaintiff's personal services. The agreement is only relevant if it contained a mechanical license. If it did, then Jay-Gee acquired the rights accorded a licensee.

In addition, Jay-Gee obtained a mechanical license from Nanshel, which read in part:

[Y]ou shall have all the rights which are granted to, and all the obligations which are imposed upon, users of said copyrighted work ["Gliding Bird"] under the compulsory license provision of the Copyright Act.... This license covers and is limited to one particular recording, or phonograph records only, of the musical composition set forth above as performed by the artist on the record number set forth above....

The district court found that this license was unassignable as a matter of law, presumably because it was a compulsory license. ²

Defendants contend that the license could not in fact have been a compulsory license because it authorized first use of the composition while compulsory licenses apply "only to the second and subsequent recordings of a musical work, after the copyright owner has authorized a first recording to be made." Recording Industry Association of America v. Copyright Royalty Tribunal, 662 F.2d 1, 4 (D.C.Cir.1981). They argue that both this license and the one contained in the Harris/Jay-Gee Recording Agreement were negotiated licenses, properly controlled by contract law and freely assignable. Because we decide the issue on other grounds, we need not determine whether or not the license was compulsory. Whether or not the contracts were negotiated or compulsory, and did or did not involve personal services, the ultimate question is whether copyright licenses can be transferred by a mere licensee.

The transferability of a copyright license appears to be a question of first impression in this circuit. There is, however, authority to support the proposition that such licenses are not transferable as a matter of law. Under the 1909 Act,

Absent any contractual limitations, an assignee [of the whole contract] had the right to re-assign the work. A licensee, however, had no right to re-sell or sublicense the rights acquired unless he has been expressly authorized to do so.

M. Nimmer, Nimmer on Copyright Sec. 10.01[c] (1983) (footnotes omitted).

It has been held that a copyright licensee is a "bare licensee ... without any right to assign its privilege." Ilyin v. Avon Publications, Inc., 144 F.Supp. 368, 372 (S.D.N.Y.1956) (citations omitted); Mills Music, Inc. v. Cromwell Music, Inc., 126 F.Supp. 54 (S.D.N.Y.1954).

Where precedent in copyright cases is lacking, it is appropriate to look for guidance to patent law "because of the historic kinship between patent law and copyright law." Sony Corp. of America v. Universal City Studios, --- U.S. ----, 104 S.Ct. 774, 787, 78 L.Ed.2d 574 (1984) (footnote omitted). A patent license has been characterized as "a naked license to make and sell the patented improvement as a part of its business, which right, if it existed, was a mere personal one, and not transferable, and was extinguished with the dissolution of the corporation." Hapgood v. Hewitt, 119 U.S. 226, 233, 7 S.Ct. 193, 197, 30 L.Ed. 369 (1886); See also Unarco Industries, Inc. v. Kelley, Co., 465 F.2d 1303 (7th Cir.1972), cert. denied, 410 U.S. 929, 93 S.Ct. 1365, 35 L.Ed.2d 590 (1973), and citations therein.

Such an interpretation of a license accords with the policies underlying enactment of the Copyright Act. The legislative history reveals an acute awareness of...