which your company has copyrighted, and which will be registered with BMI with you as publisher.” In 1980, Nanshel assigned its copyright interest to Hannah Brown.
In 1971, Jay-Gee filed a petition for bankruptcy. A year later, Jay-Gee’s trustee in bankruptcy sold parts of Jay-Gee’s assets—including the master tape of the six songs comprising the Gliding Bird Album—to defendant Suellen Productions, Inc. Suellen then transferred whatever rights it had acquired to manufacture and distribute the recordings on the Gliding Bird album to defendant Emus Recordings. Emus re-released a duplicate of the Gliding Bird album in 1979 with a new serial number and a different cover.
Defendant Roulette Records, Inc. was lieenged by Suellen and Emus to license foreign sales of the Gliding Bird album. Roulette provided a master to foreign manufacturers who were to manufacture and distribute the album.
Harris has never received any royalties for the Gliding Bird album from the defendants. In November 1979, she demanded that defendants cease the manufacture and distribution of the songs. She then sued defendants for copyright infringement. With respect to the song “Gliding Bird”, the district court granted summary judgment in favor of Harris and subsequently enjoined defendants from further infringing the song “Gliding Bird.” After a bench trial, the court found that the defendants had infringed the copyrights of the remaining five songs. Appeals from the two judgments are consolidated.
1. Did Defendants Acquire A Valid Mechanical License from Jay-Gee?
The threshold question in this case, and one which defendants claim requires a trial, is whether Suellen acquired a valid mechanical license to duplicate the song when it purchased Jay-Gee’s assets in bankruptcy. Defendants argue that when Suellen purchased the master tape of Gliding Bird from Jay-Gee’s trustee, Suellen also acquired Jay-Gee’s license to manufacture and distribute the recording. It is defendants’ position that Jay-Gee had two negotiated licenses to use the musical composition “Gliding Bird”, the one contained in the Harris/Jay-Gee Recording Agreement and the one contained in the Nanshel Agreement, and that both were assignable by the licensee Jay-Gee. Which license was valid depends on which party properly held the copyright to the composition. At most, defendants contend they may have breached a contract but they did not infringe a copyright.
A. The Song “Gliding Bird”
The defendants contend that the court erred in granting summary judgment with respect to copyright infringement of the song “Gliding Bird” because of the existence of genuine issues of material fact.
Paragraph 10 of the Harris/Jay-Gee Recording Agreement reads as follows:
In the event you [Harris] record a musical selection in which you have an interest, direct or indirect, in such musical selection or any copyright thereof, the copyright royalty payable by us [Jay-Gee] on such musical selection shall be 1½¢ per selection per record side. We [Jay-Gee] shall not pay any copyright royalty on a Public Domain selection recorded by you [Harris] in which you have any interest, direct or indirect, or in any copyrighted arrangement thereof.
Defendants argue that the Agreement created rights between the parties which were freely assignable. Plaintiff, on the other hand, argues that the contract did not contain a license, but merely an agreement as to a royalty rate if Jay-Gee received a license. No references to the song “Gliding Bird”, to accounting terms or to other provisions which one would expect to find in a license are contained in paragraph 10.
The district court expressly avoided deciding whether the contract was a license, holding that in any event the rights transferred under the agreement were unassignable as a matter of law because the agreement was for plaintiff’s personal services.
