"The legislative history of the Exception is scanty, and it contains no express consideration of the multiple-grant situation that confronts us in this case....

"The majority places great emphasis on indications that Congress was aware of multi-party arrangements in the movie and music-publishing industries, positing from this awareness an intention to extend the benefits of the Exception to middlemen such as Mills. But the majority cites not one word to indicate that Congress did in fact contemplate such a result when it enacted the Exception. On the contrary, when the Exception was being drafted by the Copyright Office, the hypotheticals offered to illustrate its operation were cast in terms of the motion picture industry and assumed that the creator of the underlying work, a story or novel, would deal directly with the creator of the

derivative work, a film.

"That middlemen such as music publishers were to be excluded from the benefits conferred by the Exception is strongly supported by statements to that effect by music publishers

themselves, made in the discussions that took place before the Copyright Office. When a version of the Exception first appeared in the 1964 preliminary draft bill, representatives of the music publishing industry protested. A representative of the Music Publishers Association of the United States stated that under the proposed exception, 'the royalties resulting from the license presumably rever[t] entirely to the author.' A spokesman for the Music Publishers Protective Association construed

the exception as being 'for the benefit of

everyone acquiring rights under a copyright other than the publisher.'

"As the majority acknowledges, the principal purpose of the extension of the term of copyright and the concomitant termination provisions

which the derivative works clause forms an

exception

to

was to benefit authors. Under the 1909 Copyright Act, copyright subsisted in two twenty-eight-year terms, with renewal available to the author at the end of the first term. This right of renewal was intended to allow an author who had underestimated the value of his creation at the outset to reap some of the rewards of its eventual success. That purpose, however, was substantially thwarted by this Court's decision in Fred Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643 (1943). As a result of that decision, an author might assign, not only the initial term of the copyright in his work, but

also the renewal term. Thus, assignees were able

to demand the assignment of both terms at the

time when the value of the copyrighted work was most uncertain.

"The termination provisions of the 1976 Act

They

were designed to correct this situation. guarantee to an author or his heirs the right to terminate a grant and any right under it 'notwithstanding any agreement to the contrary.'

The House Report accompanying the Act explained that '[a] provision of this sort is needed because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work's value until it has been exploited.' The termination provisions,

therefore, clearly favor authors' interests over

those of grantees such as music publishers.

"By going further than necessary to effect the goal of promoting access to the arts, the majority frustrates the congressional purpose of compensating authors who, when their works were in their infancy, struck unremunerative bargains. That such frustration will result is clearest in the situation, not uncommon in the music industry, where an author has assigned his rights for a one-time, lump-sum payment. Under the majority's interpretation of the exception, the publisher-middleman would be free to continue to collect all royalties accruing during the

extended nineteen-year copyright term, and the author would receive nothing. While my

interpretation of the Exception results in the author's receiving more than he would have

received under the terminated grant, such a result is the very objective of the termination

provisions.

"To allow authors to recover the full amount of derivative-works royalties under the Exception is not to slight the role of middlemen such as music publishers in promoting public access to the arts. Achieving that fundamental objective of the copyright laws requires providing incentives both to the creation of works of art and to their dissemination.

But the need to

provide incentives is inapposite to the

circumstances of this case, because the rights at issue are attached to a term of copyright that

extends beyond what was contemplated by the parties at the time of the initial grant. In 1940, when Ted Snyder and Mills entered into their royalty-division agreement, neither party could have acted in reliance on the royalties to be derived from the additional nineteen-year term created by the 1976 Act. In this situation, the author and the grantee have each already reaped the benefit of their bargain, and the only question is which one should receive the windfall conferred by Congress. The considerations that should govern the allocation of a windfall are not those of providing incentives but those of providing compensation. And the legislative history of the renewal and termination provisions

indicates a congressional purpose to compensate
authors, not their grantees. In attempting to

claim for itself the benefits of the derivative
works exception, Mills bears the burden of
proof. In my view, it has fallen far short of
carrying that burden."

The gravamen of our complaint is that the Supreme

Court majority made the language of the Harry Fox license the focal point of its decision, but it misunderstood that language.

The fact is that the language has never been

construed in the music industry as the Supreme Court construed it. On the contrary, whenever copyright to a musical composition has changed hands, voluntarily or involuntarily, on notification of the change Fox has paid royalties to the new copyright owner or his designee. The language in the Fox license mentioned above has only governed the frequency of payment and the basis of calculating royalties.

The clearest illustration is the common situation where copyright ownership has changed at the end of the first term of copyright. If an author has granted to a publisher rights for only the first 28-year term of copyright, after the first term the renewal copyright reverts to the author or his statutory heirs (as defined by the Copyright Act), and they may grant the renewal copyright to a different publisher. Even though an author may have granted both initial and renewal term rights to a publisher, if the author dies before the end of the first term of copyright, his statutory heirs may renew the copyright and also assign the renewal to a new publisher. In either case, the consistent practice of Fox has been to pay all royalties earned after the renewal to the new publisher. Fox does not issue a new license or

change the existing license; it requires no documentation beyond