deemed to have intended the exclusion of music publishers from the ambit of the exception. See also 543 F. Supp. at 862.* In addition to reviewing the specific presentations on the partnership between music publishers and composers, and in an effort to determine how Congress intended the derivative works exception to apply to these groups, the Courts also considered a more general question: who was to be benefited by the derivative works exception and, even more generally, by the Copyright Act? Those who criticize the Mills Music decision say that the Supreme Court missed the basic purpose of the 1976 Act, which they say was to favor authors. However, the legislative history of the as the District Court and majority opinions demonstrate reveals no such singular purpose. On the contrary, the legislative history confirms a Congressional recognition that the process of creating and disseminating works involves a variety of participants and a Congressional intent to create suitable incentives for all participants in this process. See 105 S. Ct. at 650; Brief for Petitioner at 37-39. As Judge Weinfeld succinctly Act - stated: [The songwriter's heirs] press that Congress It may readily be acknowledged that the extension period is intended to benefit the author, "the fundamental beneficiary of copyright under the Constitution." Protection of authors and their dependents is one of several * - In reaching the conclusion that music publishers are not excluded from the scope of the derivative works exception, the Courts did not adjudicate the respective roles of songwriters and music publishers in the music industry. As Justice Stevens noted, "[a]s a matter of fact -- or of judicial notice we are in no position to evaluate the function that each music publisher actually performs in the marketing of each copyrighted song." 105 S. Ct. at 651. This was a case of statutory construction, aided by findings on Congressional intent. The controversy was submitted to the District Court on cross-motions for summary judgment predicated on stipulated facts; the parties agreed not to litigate how the industry actually worked. See Joint Appendix at 83. For this reason, there was no factual basis in the record on which to dismiss music publishers as "mere middlemen," as did the opinion of the Court of Appeals and the dissent in the Supreme Court. reasons specifically identified in the com- The [songwriter's heirs] also ignore express statements in the legislative history indicating that the termination provisions represent an accommodation of the various interests involved. These statements show that while the provisions are intended to benefit authors and their families by giving them an opportunity to share in the benefits of the extended term, other interests were also recognized. The statements form a consistent theme throughout the history. 543 F. Supp. at 857-58 (footnotes omitted). See also id. at 85863. I respectfully suggest that every single argument that has been made in this hearing about legislative intent was addressed by Judge Weinfeld in his exhaustive review of the legislative history.* Two of the witnesses who appeared at the hearing, Barbara Ringer and Irwin Karp, drew on their own involvement in the pre-legislative history of the 1976 Act -- that is, the preliminary drafting efforts that preceded introduction of a bill in Congress to support their positions on Congressional intent. They state that music publishers were not to benefit from the - It has been noted that 7 of the 13 judges who considered the Mills Music case ruled against Mills. Such judicial nosecounting is of little value. The law of the land is as the Supreme Court majority finds it. On the subject of Congressional intent, the District Court opinion is, by far, the most exhaustive analysis. The Court of Appeals opinion, in sharp contrast, makes little reference to what was actually said by or to members of Congress. exception. Since the hearing, however, another participant in that process, Richard Colby, has submitted a statement which reaches the opposite conclusion. It would serve little purpose at this stage to survey those who worked with, or within, the Copyright Office as a proposed bill was prepared for submission to Congress. To the extent the intent of Congress prior to enactment of the 1976 Act is viewed as significant in the consideration of the present bill, the legislative history should control, rather than the varied personal recollections of what occurred two decades ago. See also 543 F. Supp. at 863-67 (finding no meaningful support in the pre-legislative history for the songwriter's heirs' position). This subject of Congressional intent should not be concluded without reference to the language of the derivative works exception. The Supreme Court majority, as well as the District Court, attempted to read and construe the words of the exception as written, without torturing them. 105 S. Ct. at 646-47; 543 F. Supp. 853-55. The Court of Appeals and the Supreme Court dissenting opinions embraced policy arguments, with far less consideration of the actual words enacted. In the end, perhaps the clearest indication of Congressional intent comes not from the legislative history but from the legislative directive statute itself. And the plain words of the statute enacted in 1976 in sharp contrast to the language now offered to amend support the continued sharing of royalties. the law The Reach of Mills Music the Some of the witnesses who testified in favor of the bill argued that, unless Mills Music is overturned, the termination right will have been rendered ineffective. The argument fails to measure the true reach of either Mills Music or of the derivative works exception. The 1976 Act gives an author and his heirs a valuable right upon termination: to regain control over the copyright for all future exploitation. But this reversionary right, by its specific terms, is made subject to an important limitation the derivative works exception. With respect to pre-termination derivative works made by another, an author's compensation is not to be enhanced upon exercise of the termination right; the status quo is preserved, even if it reflects an improvident grant by the author. Thus, it is undisputed that if an author conveyed to a motion picture producer the screen rights in a novel for a onetime lump sum payment, the author and his heirs will receive nothing more upon termination no matter how successful or long-lived the motion picture that was made from the novel. This is how the exception was intended to work. See 543 F. Supp. at 861-62. - It is important to emphasize that Mills Music does not bear on the primary right encompassed by termination: the recapture of a copyright for purposes of future exploitations. The author who long ago conveyed motion picture rights in his novel for a lump sum will still regain the sequel or remake rights, even though he can never renegotiate his deal with respect to a pre-termination motion picture made from his novel. A songwriter who all along has received 50 percent of the royalties generated on sound recordings licensed by a music publisher will, after termination, have complete control over new sound recordings. Additionally, the songwriter gains control over new print uses of the song. Thus, it is inaccurate to suggest that, unless Mills Music is reversed, the termination right is of no value. The legislative history and the language of the exception show that the derivative works exception was a limitation on the right of termination, and that the benefits to an author upon termination come from new uses of his work, not from pre-termination derivative works. Had Mills Music as grantee of the copyright in "Who's Sorry Now" from Ted Snyder itself made sound recordings, under the derivative works exception Snyder or his heirs would not have the right to renegotiate the terms of the deal with Mills Music. By the same token, where the initial grantee has sublicensed the right to make a derivative work, the author has no right to increased income from utilization of the pre-termination 105 derivative work beyond the terms of his grant under which that derivative work was made. There is no basis in the legislative history to suggest that Congress intended any other result. S. Ct. at 645, 649-50. On the contrary, the standard practice of the music industry illustrated by Mills Music does not present the type of "unremunerative" transfer the termination right was intended to remedy. See Brief for Petitioner at 44 - - 45. At all times, both before and after termination, the author (or his heirs) receives 50% of the royalties derived from the utilization of sound recordings licensed by the music publisher.* Perhaps recognizing that the 50-50 arrangement of the music industry does not provide a compelling case for remedial legislation, several of the witnesses who testified in favor of the bill referred to the effect of Mills Music outside of the music industry. It was suggested certain authors would in other situations be severely prejudiced. But these sugges tions reflect overstatements. - Again, to the extent an author makes a grant to the utilizer of a derivative work (such as the motion picture producer), the termination right does not undo the author's grant. Mills Music has no bearing on that situation; the proposed bill would not help the author. Mills Music only applies when an author conveys a copyright or rights thereof to a grantee who in turn sublicenses the right to create and utilize a derivative work. Such licensing occurs routinely in the music industry, where routinely the author's share of the royalties is 50%. No specific examples have been, as yet, offered which reveal an author being disadvantaged by an unremunerative grant in a situa Some suggestion has been made that 50-50 was not the standard practice. The arrangement in Mills Music, portrayed in the stipulated facts as standard, provided for the even division of royalties between the publisher and each of the three songwriters. 543 F. Supp. at 847. This standard practice has also been presented to Congress in the past. See Brief for Petitioner at 30-31. In his statement, George David Weiss states that the gross royalties received by Mills Music from "Who's Sorry Now" for the years 1970-80 were $142,633; in fact, Mills conveyed 50% of these royalties to the songwriters. See Joint Appendix at 35. |