intent. The court's emphasis on the word "share" led it to believe that the sharing was for the benefit of the terminated publishers as well as the actual utilizer of the derivative work (as distinct from a sharing only between the copyright proprietor and user). The court decided that such sharing permits the author to receive that portion of the royalties to which his contract originally entitled him before termination and, concluded the Court, there was no valid reason for excluding music publishers from sharing in the benefits of the extended term. B. United States Court of Appeals. (720 F.2d 733, Second Circuit, 1983) The The U.S. Circuit Court, in its unanimous reversal of the Weinfeld decision, focused on Judge Weinfeld's statement: "Congress intended that in specified situations the benefits of the extension [should] be shared" as manifested by the exception itself, which limits the reversionary rights of the authors. Court of Appeals held that in viewing the Congressional purpose, it found no reference to sharing by a middleman music publisher such as Mills. The Court held that in preparing derivative works the licensees (i.e. the record companies) were relying on the authority of the grant from Mills to them even though that authority was originally derived from Mills' contract with the Snyders. This is buttressed by the fact that in the instant case Mills had to rely on two grants, i.e. the original grant from Snyder, which gives it a 50% interest in the mechanical royalties, and the subsequent license to the record companies from which those royalties flow. Since the only grant which defines the circumstances under which the derivative work is to be prepared and utilized is the mechanical license from Mills to the record company, it is the terms of that grant to which the exception applies and preserves the rights of the record companies; not the contract between Snyder and Mills. The Court quickly found that Mills was not a Because utilizer of a derivative work within the meaning of this statute. There was nothing in the statutory language which gave Mills, as a middleman, any connection with the underlying copyright. Mills was neither a utilizer nor a copyright owner, it was not entitled to share in any royalties. The Court found that nothing in the legislative history appeared to indicate that Congress had addressed a tripartite situation of this nature. Since reasonable minds could disagree about the intent of the language, the Court found that in the Congressional scheme underlying the Act, it was the author who was its prime beneficiary and therefore any doubt about the intended beneficiary should be resolved in favor of the author. However one seeks to parse the language of the section, one is forced to conclude that the language contemplates a single grant between creator and the terminated party; and that it does not focus on the tripartite situation under discussion. If the statutory language had been clear, not only would there have been no need for litigation, but there would not have been a majority of judges who ultimately agreed with our understanding of Congress' intent (N. B. Of the 13 judges who heard the case, from the District to the Supreme Court, 7 supported the creators' understanding of the Congressional intent and 6 were opposed). Faced with this lack of clarity in the statute, the U.S. Court of Appeals focused on what I believe is the balancing, or what Judge Weinfeld calls the "sharing", which is reflected in the Act. It is a sharing or balancing of equities between the owner of the copyright and those who would properly exploit it in the market place: "In contrast to the situation where an assignee or licensee has done nothing more than print, publicize and distribute a copyrighted story or novel, a person who with the consent of the author has created an opera or a motion picture film will often have made contributions literary, musical and economic, as great as or greater than the original author." Citing the need to protect those who invest large sums of money in creating derivative works (i.e. a motion picutre producer who has contracted with a book publisher; a record company which has contracted with a music publisher) the Court of Appeals found that both should be permitted to continue utilizing their own derivative creations, and that the 1976 Act reflected that intent. VS. In its conclusion, the Court of Appeals correctly found that Congress in effect reversed Fred Fischer Music Co. M. Witmark & Sons, 310 US 643 (1943) which held that a copyright proprietor could divest him or herself of renewal rights as long as he or she survived into the renewal term. In enacting the reversionary provisions of $304(c), Congress returned the copyright to the author, notwithstanding any prior grant made by the author. By negating any prior grant made by the Author, the Court felt that Congress had evidenced a clear intent to give paramount protection to authors and their heirs, to the exclusion of their prior grantees. At the sme time, it protected those who invested substantial time, effort and money in the preparation of "derivative works" and who are recognized as such by the "Exception" engrafted into the 1976 law. C. We come now the the 5-4 decision of the U.S. Supreme Court (83L. Ed. 2d 556 (1985)) which reversed the holding of the As we have stated, the facts in the case were Court of Appeals. ageed to by the parties. However, while one may search the Supreme Court's decision for broad policy implications or an exhaustive analysis of statutory language, we believe that the crux of its decision rests on the following language: "If ... the Exception limits the relevant The protection given derivative rights holders by the Exception permits them to continue to pay royalties at the rate specified in the original mechanical license. That payment was established by the original music publisher as an incident to its ownership of the copyright. Failing such payment the record company would be an infringer of a copyright. Thus the statement of the United States Supreme Court is on its face incorrect. As stated by the Court of Appeals, the record companies have an obligation to pay royalties to the copyright proprietor after termination, i.e. the author. Admittedly the language of the mechanical license requires payment to Mills (i.e. the original publisher) but that obligation arose because the publisher owned or controlled the copyright during the initial 56 years. Once the author or his statutory successors terminated their original publisher, they succeeded to the rights and benefits under the licenses issued by the now terminated publisher. As cited in the Snyder brief to the U.S. Supreme Court, this is no different than the obligation of a tenant to pay rent to a new landlord where the old landlord sells his building. The tenant cannot argue that he will continue to pay the old landlord. The landlord as a successor in interest to his predecessor. Court, ignoring this, merely stated that since the mechanical licenses conferred no rights or privileges on the Snyders, they gained nothing under those licenses. Since the licenses required payment to Mills Mills must continue to receive those payments notwithstanding the fact that it is no longer a utilizer or a copyright proprietor. The Court stated "The statutory transfer of ownership of the copyrights cannot fairly be regarded as a statutory assignment of contractual rights." In contrast, the dissenters, Justices White, Brennan, Marshall and Blackmun, focused upon the protection accorded the utilizer of the derivative work. They pointed out that the statute, while protecting the royalty rate that prevailed before the author's termination, did not identify the recipient of the royalty that being a matter of total indifference to the record company. That the Mills/Snyder contract provided for a 50/50 payment was entirely irrelevant to protecting the utilizer of the derivative work. The dissent stated that the entire thrust of the derivative rights exception was to overrule the long held opinion that where a renewal copyright reverted to an author, the derivative rights owner had to stop exploiting the original work. In this context the middleman who is neither a copyright plays no role. It is appropriate to quote from Justice White's dissenting opinion: "The right to terminate defined in $304 (c) encompasses not only termination of the grant of |