MBW Views is a series of op-eds from eminent music industry people… with something to say. The following MBW op/ed comes from Nick Breen (Partner) and Joshua Love (Partner) at Reed Smith LLP.
Here, Breen and Love (pictured, L-R, inset) argue that Vetter — the Fifth Circuit ruling that a songwriter’s US termination can recapture worldwide, not just American, rights — is a landmark win for writers and their heirs, but one that may prove far harder to enforce than to win.
As major publishers petition the US Supreme Court to overturn it, they explain why a US declaration of worldwide ownership could stall for years against foreign courts and collecting societies that still treat copyright as fundamentally territorial.
The U.S. Court of Appeals for the Fifth Circuit’s January decision in Vetter v. Resnik made headlines for holding that a songwriter’s statutory termination recaptured not only U.S. rights, but worldwide rights. For songwriters and their heirs, the ruling could be transformative.
For publishers and catalog investors, the Supreme Court petition now challenging the decision calls it “every bit as disruptive as it sounds.”
As the parties ask the Supreme Court to review the case, now captioned BMG Rights Management (US) LLC v. Vetter, two practical questions deserve attention.
Can artists and songwriters implement the worldwide ownership the Fifth Circuit says they recovered? And could the court’s reasoning create new problems for foreign songwriters seeking to terminate grants of U.S. rights?
Winning in court and winning on the ground are different things
The Fifth Circuit treated the worldwide rights covered by Vetter’s 1963 assignment as arising under U.S. copyright law. It therefore concluded that termination recaptured the full interest granted, including rights outside the United States.
The decision says much less about what happens next
Copyright remains territorial in important respects. Foreign courts, collecting societies, subpublishers, and licensees may look to local law and local procedures when deciding who owns a copyright, who should be registered, and who is entitled to receive royalties.
A collecting society faced with competing claims may suspend distributions, reserve royalties or continue to follow the ownership information already in its system. An author asserting worldwide recapture may need to approach subpublishers and societies territory by territory.
The RIAA, NMPA and A2IM contend these issues are no longer theoretical. Their amicus brief states that authors and their representatives are already invoking Vetter to assert worldwide termination of agreements historically understood to be terminable only as to U.S. rights. According to the brief, some parties who previously served termination notices and renegotiated their arrangements are now sending supplemental notices seeking foreign rights and additional compensation.
An artist who obtains a declaration of worldwide ownership in Louisiana may therefore spend years trying to make that result appear consistently on royalty statements around the world.
Why recognition abroad may not be automatic
International copyright law is built in large part on territoriality. Protection, ownership and remedies in each country generally depend on that country’s law.
That principle sits uneasily with a rule under which U.S. statutory termination reallocates copyright interests recognized under numerous foreign legal systems.
The petitioners argue that the Fifth Circuit treated Vetter’s assignment as a single U.S. law grant with worldwide effect, rather than as a bundle of national copyrights whose ownership may be determined separately. Foreign courts will have to decide what weight to give that distinction.
The United Kingdom has no direct equivalent of the U.S. statutory termination regime. Ownership and transfers are governed by the Copyright, Designs and Patents Act 1988.
In Peer International Corp. v. Termidor Music Publishers Ltd., the English courts declined to give Cuban nationalization legislation the effect of reallocating ownership of U.K. copyrights. The factual and legal context was different, but the petitioners cite Peer International as evidence that an English court may resist treating a foreign statute as dispositive of U.K. copyright title. In 2007, the Oberlandesgericht Düsseldorf reached a similar conclusion in a dispute over German copyright in the Three Investigators book series, holding that U.S. termination provisions had no bearing on German copyright ownership.
A U.S. declaration of worldwide ownership may not therefore settle either the applicable law or the available forum when exploitation or infringement later occurs abroad.
A potential complication for foreign authors
Foreign songwriters have generally been understood to own distinct U.S. copyrights capable of termination under Sections 203 and 304, even where the authors, works and publishing agreements originated abroad.
Certain language in Vetter could invite a contrary argument. At points, the Fifth Circuit described the rights as having been granted “in accordance with” the U.S. Copyright Act. That framing helped Vetter because the court treated the worldwide rights as arising under U.S. law.
A foreign publisher may try to use the same reasoning in reverse, arguing that a worldwide agreement between foreign parties governed by foreign law, is not a grant made under Title 17, even as to the U.S. rights it conveyed.
There are strong textual reasons to reject that argument. The legislation refers to the rights covered by the grant, not the governing law of the contract. A U.S. copyright should remain a right arising under Title 17 even when transferred through an agreement governed by Italian, French or English law.
Still, the decision exposes a tension in how worldwide publishing agreements are characterized. Is the agreement a single grant whose legal identity depends on the law governing the transaction? Or is it a bundle of territorial rights, including a distinct U.S. copyright subject to U.S. termination?
The petitioners and several amici describe the issue as a potential “two-way street.” If a U.S. law grant can bring foreign rights within a termination, a publisher may argue that a foreign law grant places U.S. rights outside it.
Acceptance of that argument could leave foreign authors with fewer termination rights than U.S. authors. It could also raise questions under the national treatment principles underlying international copyright law.
A valid U.S. termination may still carry foreign contractual consequences
Foreign authors may face another problem even when their U.S. termination notices are valid.
In Gloucester Place Music Ltd. v. Le Bon, the English High Court considered Section 203 termination notices served by members of Duran Duran under English law publishing agreements. The case showed that exercising a U.S. statutory termination right may still have consequences under the law governing the original contract.
Section 203 permits termination “notwithstanding any agreement to the contrary.” Contracting parties cannot eliminate the statutory right under U.S. law. But a foreign court applying its own contract law may nevertheless ask whether the author breached continuing contractual obligations and what remedies follow.
A foreign author could therefore terminate the U.S. copyright successfully and still face a contractual claim abroad. The economic value of termination may turn not only on the notice itself, but also on the governing law and dispute resolution provisions of the original agreement.
What the Supreme Court may examine
Five amicus briefs supporting review have been filed by organizations representing the film, recorded music, music publishing, and broader copyright industries. No amicus brief supporting Vetter appears on the docket at the certiorari stage as of this writing.
If the Supreme Court grants review, the statutory phrase “arise under this title” will likely be central. The Fifth Circuit relied in part on Kirtsaeng v. John Wiley & Sons in which the Court read similar language to carry no geographic limitation.
The petitioners argue the analogy fails because Sections 203 and 304 expressly preserve rights arising under foreign law. Vetter is represented by Joshua Rosenkranz of Orrick, who successfully argued Kirtsaeng, making that decision a central point of disagreement.
For practitioners and dealmakers
For catalog buyers, sellers and lenders, Vetter calls for a closer review of termination exposure.
A catalog materially exposed to U.S. termination claims may require additional analysis where its valuation assumes continued ownership of substantial ex-U.S. revenue.
In current transactions, parties may need to consider whether termination exposure warrants specific representations, tailored indemnity protection, valuation adjustments or holdbacks. Lenders may need to assess whether a worldwide termination claim could impair catalog assets in the borrowing base.
Governing law and dispute resolution provisions also take on added significance. They may not eliminate U.S. termination rights, but (as Gloucester Place illustrates) they can affect the contractual consequences of exercising them and determine where resulting disputes are heard.
For artists and songwriters, Vetter is an important victory, but not a self-executing one. The distance between a U.S. declaration of ownership and recognition by a foreign court, society or licensee may be substantial.
The case began with a song written in Baton Rouge in 1962 assigned for $1. It now presents one of the most consequential questions in modern copyright ownership.
If the Supreme Court grants review, BMG Rights Management v. Vetter will determine whether the Fifth Circuit’s worldwide approach survives. Whatever happens, the decision has already forced artists, songwriters, publishers, lenders and catalog investors to revisit assumptions about the territorial limits of U.S. copyright termination.
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