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Intellectual Property – Copyright Act – Termination Provisions – Trusts & Estates – Artist’s Widow – Special Administrator

By: S.C. Lawyers Weekly staff//April 5, 2020

Intellectual Property – Copyright Act – Termination Provisions – Trusts & Estates – Artist’s Widow – Special Administrator

By: S.C. Lawyers Weekly staff//April 5, 2020

Plaintiffs, James Brown’s adult children, allege that defendants—Brown’s widow, his youngest child, his estate’s personal representative, and the limited special administrator and limited special trustee of Brown’s estate and trust—have entered into agreements which violate the termination provisions of the Copyright Act. On defendants’ motion to revise the court’s denials of their motions to dismiss, the court finds no clear error in its rulings (1) that it has subject matter jurisdiction to construe the Copyright Act to determine whether defendants’ alleged agreements are contrary to the act’s termination provisions and (2) that the defendant-limited special administrator has the inherent authority to enter into settlement agreements binding the estate and trust.

Motion denied.

A court may revise an interlocutory order if (1) a subsequent trial produces substantially different evidence, (2) there has been a change in applicable law, or (3) the court finds clear error causing manifest injustice. Here, defendants argue clear error.

The Copyright Act’s termination provisions, 17 U.S.C. §§ 203(a)(5) and 304(c)(5), allow an author, if he is living, or his widow and children, if he is not, to recapture rights that had previously been transferred to third parties. This termination right is inalienable.

If an author is survived by a spouse and children, the surviving spouse is deemed to own 50 percent of the termination interest, and the author’s surviving children, and the grandchildren of any deceased child, own collectively the other 50 percent of the termination interest on a per stirpes basis. The termination right can only be exercised by those persons who collectively own more than half of the termination interest.

The Fourth Circuit has adopted the standard set forth in T.B. Harms Co. v. Eliscu, 339 F.2d 823 (2d Cir. 1964), to determine when a federal court has subject matter jurisdiction, i.e. if any one of three conditions exists: the complaint (1) “is for a remedy expressly granted by the Act,” (2) “asserts a claim requiring construction of the Act,” or (3) “presents a case where a distinctive policy of the Act requires that federal principles control disposition of the claim.”

The court rejects defendants’ assertion that the securities case of Touche Ross v. Reddington, 442 U.S. 560 (1979), is somehow the new and improved standard of the second prong of the T.B. Harms test.

In its prior orders, this court, like others courts, correctly applied the T.B. Harms test and found that “Plaintiffs’ claims necessarily require a federal court to determine how and why Defendants’ alleged agreements are unlawful agreements “to the contrary” and which, if any, should be declared as “void under the express provisions under the Copyright Act.” Federal courts have determined whether an agreement was “to the contrary” such that it violated the Copyright Act’s termination provisions and that investigation has conferred subject matter jurisdiction upon those courts.

Although the order appointing the limited special administrator does not expressly list a power to settle claims, such power is inherent in both the appointment order and the applicable legal authority. Plaintiffs have sufficiently alleged that the limited special administrator, along with the other defendants, entered into classic “agreement[s] to the contrary” that purport to pre-assign or otherwise pre-encumber the statutory termination interests in Brown’s compositions in violation of the Copyright Act.

Motion denied.

Brown-Thomas v. Hynie (Lawyers Weekly No. 002-005-20, 21 pp.) (J. Michelle Childs, J.) 1:18-cv-02191. Alyson Smith Podris, Robert C Byrd, Douglas A Fretty and Marc Toberoff for plaintiffs; Arnold Samuel Goodstein, Gerald Malloy, Robert Neil Rosen, S Alan Medlin, Susan Corner Rosen, Howard Bryant Stravitz, Thomas Andrew Haffey, Albert Peter Shahid, Stephen M Slotchiver, J David Black, John Fisher Beach and Lyndey Ritz Zwing Bryant for defendants. D.S.C.


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