You’d Better Watch Out: EMI Loses Rights to “Santa Claus is Comin’ to Town”
The Second Circuit Court of Appeals held that the rights to “Santa Claus is Comin’ to Town,” the most performed Christmas song of all time, will revert to the heirs of author John Frederick Coots.[1] The song was written in 1934 by Coots and Haven Gillespie, and the two entered into a publishing deal with a company that was eventually acquired by EMI. Leo Feist, the owner of the publishing company, registered the song’s copyright on September 27, 1934. Under the Copyright Act of 1909, the song’s copyright lasted for an initial 28 years and could then be renewed for another 28 years. In 1951, before the song’s initial 28 years were up, Coots assigned the composition’s copyright to EMI in exchange for royalties. At the end of the first 28 years, EMI renewed the copyright and continued ownership.[2]
The song would have been in the public domain since 1990 if not for the Copyright Act of 1976, which went into effect on January 1, 1978 and extended the duration of copyright to 75 years from the date of the song’s registration. Section 203 of the 1976 Act also allowed authors or their heirs to terminate copyright grants to publishers 35 years after a grant was made.[3] In 1981, the Coots family signed an agreement with EMI allowing the publisher to continue to exploit the song through 2009. The publisher also agreed to pay Coots’s children a bonus of $100,000 and royalties. Coots served EMI a termination notice, naming October 23, 1990 as the termination date for the 1951 agreement. Coots’s attorney sent a copy of the termination notice to the Register of Copyrights in November 1981, but the Copyright Office returned the notice in 1982, explaining that it was never actually recorded.[4]
When the parties entered into the 1981 agreement, Section 203 was not contemplated because the copyright was expected to expire less than 35 years after the deal. However, the 1998 Sonny Bono Copyright Term Extension Act extended the term of copyright to 95 years from the date of registration, protecting the song until 2029. With termination possible under Section 203, Coots’s daughter Gloria Coots Baldwin and granddaughters Patricia Bergdahl and Christine Palmitessa sent a termination notice to EMI in 2007 and another in 2012 to terminate the 1981 agreement in 2016. EMI tried to offer Baldwin and her daughters $2.75 million for the rights to the song, but they rejected it. Instead, they sought a declaration that one of the termination notices was enforceable.[5]
EMI argued that it owned the copyright until 2029 and that the 1981 agreement only related to “future interest that vested in [Coots] upon service of the termination notice.”[6] The district judge held that the 1951 agreement remained valid because the 1981 termination notice was never recorded. However, Circuit Judge Debra Ann Livingston found that Coots granted “all United States revisionary and termination interests” as well as “all rights and interests … under any and all renewals and extensions” in the 1981 agreement.[7] The Court of Appeals held that the failure to record to the 1981 termination notice was “irrelevant” and that the agreement was still enforceable because the parties to the 1981 agreement intended to replace the 1951 agreement. It was “sufficiently clear” from the 1981 agreement that EMI’s rights were to expire in 2016.[8]
In the past few years, many artists have filed for termination with the Copyright Office but have been ignored by their labels and publishers. There is not much case law relating to termination rights, as reversion was not a possibility until the early 2000s. Baldwin’s lawyer called the decision “a milestone in the development of copyright law.”[9]
Image: “Santa Claus is coming to town” by nettsu is licensed under CC BY-NC-ND 2.0.
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