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Through the 1976 Act, effective in 1978, Congress created a "termination right" that allows an author to undo a prior transfer of his copyright and recapture all interests in the copyright for himself. If the work was transferred in 1978 or later, the author could terminate the transfer between thirty-five and forty years after the date the copyright was assigned to a third party, 17 U.S.C.S. § 203(a)(3). If the work was copyrighted and transferred before 1978, however, a different set of provisions kicked in, with a timeline tied to the date the copyright was obtained. The author (or his successors as provided by the Act) could terminate between fifty-six and sixty-one years after the work was copyrighted, or for a period of five years after January 1, 1978, whichever was later, 17 U.S.C.S. § 304(c)(3).
In the late 1920s, Albert Brumley composed the song "I'll Fly Away." Johnny Cash and Alison Krauss have covered the song, as have many others, and it can be heard on many a Sunday morning. Brumley sold his creation to a music publishing company, which copyrighted the song in 1932. In the late 1940s, Brumley purchased the company, bringing the song and its copyright home. Brumley at that point started a music publishing company of his own called "Albert E. Brumley & Sons." In 1975, Brumley and his wife Goldie sold Brumley & Sons to two of his sons, William and Robert, for $100,000. Brumley died in 1977. Robert and William apparently sought to shore up their status as owners of the song's copyright. In May 1979, they obtained from Goldie a "BILL OF SALE AND ASSIGNMENT." Robert bought out William's interest in Brumley & Sons in 1986 for $246,500, becoming the sole owner of the copyright. Goldie died in 1988. Twenty years later, a sibling spat arose, tied to the royalties from a gospel song. In April 2008, Albert, Jr., Betty, Jackson, and Thomas—four of Brumley's children—served a termination notice on their brother, Robert, to share in the lucrative rights in "I'll Fly Away," which appears to generate roughly $300,000 a year in royalties. The idea was to cut off Robert's exclusive rights to the copyright and to permit all of the siblings to profit equally from the song. The termination notice purported to undo the 1975 assignment in which Brumley and his wife sold Brumley & Sons—and with it, the rights to the song—to William and Robert. The four siblings recorded the termination notice with the U.S. Copyright Office shortly after serving it on Robert. In December 2008, the four siblings filed this lawsuit against Robert and Brumley & Sons, seeking a declaration that their termination notice was effective. Robert and the company responded with two key defenses: (1) Albert's song was a "work made for hire," which is not eligible for termination, 17 U.S.C. § 304(c); and (2) Goldie relinquished any termination rights in the 1979 assignment to Robert and William. The district court ruled as a matter of law that Goldie did not extinguish the family's termination rights in 1979 and presided over a jury trial on the work-made-for-hire question. After the jury ruled in favor of the four siblings, Robert and the company appealed, challenging certain evidentiary rulings. The court reversed and required a new trial. The second trial ended the same way—in favor of the four siblings. Robert appealed, challenging the district court's interpretation of the 1979 assignment but not the jury's finding that "I'll Fly Away" was not a work made for hire.
Was the termination of the assignment to Robert proper?
The court held that Goldie’s termination right went to her children when she died in 1988, and the 1979 agreement did not stop the children's termination. In 1979, Goldie held a one-half share of the termination right because the other half passed in equal shares to the children when Brumley died, 17 U.S.C.S. § 304(c)(2)(A), and she thus could not have terminated the 1975 grant in 1979 without at least one of her children joining her. Goldie’s 1979 document by its terms did not replace the 1975 contract and never mentioned the 1975 contract at all. Nothing in the 1979 document, which never mentioned the 1975 agreement, indicated that it extinguished the 1975 agreement. The 1986 agreement only sold the brother's share in the company to the son, and each of the six siblings owned one-sixth of an interest in the copyright of the song.