In Baldwin, et al. v. EMI Feist Catalog, Inc., the Second Circuit Court of Appeals was tasked with determining when and how the rights to the song “Santa Claus is Comin’ to Town” (the “Song”) would properly terminate.  The heirs to one of the Song’s co-authors challenged the assertions of the copyright holder, EMI Feist Catalog, Inc. (“EMI”).  Relying on bedrock principles of contract law, the Second Circuit ruled in Plaintiffs’ favor, concluding that EMI’s current rights to the Song were the result of an agreement executed in 1981 (the “1981 Agreement”), and that a 2007 Termination Notice would terminate that agreement in 2016. 

In 1934, the Song’s original authors, J. Fred Coots and Haven Gillespie, transferred the copyright to the Song to EMI’s predecessor (“Feist”) by agreement (the “1934 Agreement”). The 1934 Agreement provided that Feist would publish the Song within one year.  Additional agreements were signed over the years, including agreements in 1951 (the “1951 Agreement”) and 1981 (the “1981 Agreement”).  Under these additional agreements and various acts of Congress, the rights to the Song were ultimately extended such that they would not expire until December 31, 2029.

In 2004, Coots’ heirs began attempting to terminate EMI’s rights to the Song. In 2006, Coots’ heirs and EMI agreed that in light of the 1981 Agreement, EMI’s rights in the Song would be terminated under 17 U.S.C. §203.  Under 17 U.S.C. §203, an author or his statutory heirs may terminate grants executed by the author on or after January 1, 1978.  As a result, in 2007, Coots’ heirs served and recorded a Termination Notice, which provided that the 1981 Agreement would terminate on December 15, 2016.  EMI disputed the termination Notice and Coots’ heirs sued in the Southern District of New York.  The district court found that EMI held its rights to the Song under the 1951 Agreement, which was not terminable under 17 U.S.C. §203, and that EMI’s rights would therefore extend until 2029.

Reversing the district court, the Second Circuit held that EMI owned its rights to the Song under the 1981 Agreement, not the 1951 Agreement. The Court determined that the 1981 Agreement replaced the 1951 Agreement.  The Court relied on the language in the 1981 Agreement itself, which granted “all rights and interests…heretofore…acquired or possessed by [him]…under any and all renewals and extensions.”  To give effect to this language, the Court read it as replacing the 1951 Agreement.  To find otherwise would have ignored the basic principle of contract law requiring that contracts should be read to give effect to all provisions.  Because EMI’s rights to the song were under the 1981 Agreement, a post-1978 grant, 17 U.S.C. §203 was the proper mechanism to terminate EMI’s rights.

The next issue the Court addressed was whether the 1981 Agreement was properly terminated under the 2007 Termination Notice, or under a subsequent 2012 Termination Notice. The Court found EMI’s arguments that the 2007 Termination Notice was ineffective because the 1981 Agreement was not “executed by the author” to be meritless because it was in fact executed by Coots, who was still alive then.  The Court also disagreed with EMI’s assertion that the 1981 Agreement “covers the right to publication” of the Song.  If that were true, EMI claimed the earliest the 1981 Agreement could be terminated was 2021.  Publication is a one-time event in the context of §203, occurring when the work is first sold or distributed.  Returning to the original 1934 Agreement, which required publication of the Song within one year, the Court determined that it was the 1934 Agreement that covered the right to publication of the Song, not the 1981 Agreement.  As a result, the 2007 Termination Notice was effective to terminate the 1981 Agreement on December 15, 2016.

The decision is a clear and important application of 17 U.S.C. § 203, itself an important remedy to authors and their heirs.