Rоbert Gene Yount and his son, Robert Blue Yount, brought this action to recover both domestic and foreign royalties for the song “Release Me” during the renewal copyright period.
BACKGROUND
Between 1949 and 1954, Yount worked as a guitarist and songwriter with a now-deceased musician, Eddie Miller. In the course of this collaboration, Yount and Miller created the musical composition “Release Me.” In 1949, Yount, Miller, and. Dub Williams, another member of their band, entered into a single-song publishing agreement for “Release Me” with 4 Star Record Company, Inc.
The parties agrеe that a copyright in “Release Me” was registered in the name of the
The initial term of the copyright for “Release Me” ended in 1983, but it was renewed for a second term. Acuff-Rose paid royalties to Yount from 1983 to 1985. At that time, the McCalls wrote to Acuff-Rose, claiming that the 1958 assignment entitled them to the songwriters’ royalties. Shortly thereafter, Acuff-Rose nоtified Yount and the McCalls that it would withhold payment of domestic royalties for “Release Me” until resolution of the dispute. This action eventually followed.
JURISDICTION AND STANDARD OF REVIEW
The district court had jurisdiction pursuant to 28 U.S.C. §§ 1331, 1338(a) and 1367(a). We have jurisdiction pursuant to 28 U.S.C. § 1291.
We review the district court’s grant of summary judgment de novo. See Warren v. City of Carlsbad,
DISCUSSION
As we have already indicated, this ease involves both a claim for domestic renewal term royalties and a claim for foreign royalties. The former involves both issues of domestic copyright law and issues of state contract law. The latter involves only issues of state contract law. We will discuss each in turn.
A. The Right to Domestic Royalties.
Yount correctly points out that the Copyright Act provisions which existed when he assigned his royalty interest to W.S. Stevenson declared that “the author of [a copyrighted work] if still living ... shall be entitled to a .rеnewal and extension of the copyright in such work for a further term of twenty-eight, years.” Copyright Act of 1909, as amended, ch. 391, § 24, 61 Stat. 652, 659 (1947). It is equally true that an author can assign the right to the renewal term copyright long before it is scheduled to commence. See Miller Music Corp. v. Charles N. Daniels, Inc.,
There can be little doubt that in 1949 Yount did assign the wholе of the renewal term copyright and that he did survive to the commencement of that term. Thus, it cannot be gainsaid that he failed to retain any claim to the underlying legal interest in the copyright itself. Nevertheless, Yount asserts
Yount first argues that the copyright laws were designed to protect authors. No doubt they were. However, that assertion does not significantly advance analysis or indicate that contractual royalty interests have a protection separate from the protection afforded to renewal of the term of the copyright itself. Authors are not the only ones protected by the Copyright Act. Moreover, protection of authors may well come from laws that give them the freedom to contract at will rather than from laws which prevent them “from realizing on their assets when they are most in need of funds.” Fred Fisher Music,
Yount, however, asserts that certain other statutory and common law provisions demonstrate that both Congress and the courts hаve sought to throw up special protections around authors’ contractual royalty rights. He points to a provision which allows beneficial owners of a right under a copyright to sue for its infringement and says that the provision indicates that Congress intended to protect authors’ royalty interests. See 17 U.S.C. § 501(b). However, that provision only indicates an intent to allow every beneficial owner to protect his interests, just in case the legal owner is not doing so. In other words, because an infringer may well injure those who have rights to royalties, standing has been conferred upon them. That, however, has no special reference to authors. It protects anyone who may own a right to royalties, but a determination of who thosе individuals may be in a given ease is, again, a question of state law. Moreover, holding a royalty interest does not bespeak an interest in the underlying copyright itself-a royalty is simply an interest in receiving money when' the owner of the copyright exploits it. Cf. Fantasy, Inc. v. Fogerty,
Yount also points to a case which indicated that an egregious breach of the contract transferring а copyright may well give a royalty holder a right of rescission. Fain v. Irving Trust Co. (In re Waterson, Berlin & Snyder Co.),
We recognize that Waterson declared that the obligation to pay royalties Cannot be severed from the ownership of the copyright itself and then destroyed in bankruptcy. Id. at 710. But that merely means that the copyright owner .will always be burdened with the concomitant contractual obligation of paying royalties and cannot shrug it off through bankruptcy proceedings. To that extent ownership and obligation are inexorably intertwined, but that does not increase the royalty holder’s rights or protections beyond those set forth in the contract.
Because the royalty does arise out of the contract itself, it is that contract which governs the rights of a holder of a royalty interest. Thus, the apposite cases are those which indicate that royalty rights reserved in
Similarly, other cases have declared the principle that state law governs construction of royalty obligations. See, e.g., Cortner v. Israel,
When Yount transferred the underlying copyright, he obtained a сontractual right to royalties. He no longer had a copyright; he had a mere contractual right-a promise by 4 Star that it would make royalty payments. At that point federal copyright law essentially ceased to be concerned with how that contractual royalty right or assignments of it would be enforced. Yount’s right to royalties included both the original term and the renewal term. Therefore,. in 1958 when Yount assigned “all of [his] rights, title and interest,” construction of that assignment became a question of state law only, and the district court erred when it granted summary judgment to Yount based upon renewal term jurisprudence.
We express no opinion on the proper construction of the domestic renewal term royalty assignment from Yount tо Stevenson as far as state contract law is concerned. That issue remains for the consideration of the district court.
B. The Right to Foreign Royalties.
It is axiomatic that United States copyright law does not apply extraterritorially. See 3 David Nimmer & Melville B. Nimmer, Nimmer on Copyright, § 17.02 (1996). Whether Yount is entitled to foreign royalties earned during the renewal term is, therefore, purely an issue of contract law. That requires interpretation of his 1958 assignment to Stevenson, as it relates to foreign royalties.
Under California law,
Yount assigned “all” of his “rights, title, and interest” in the song to Stevenson. Those terms, if read in their “ordinary and popular sense,” would encompass all of Yount’s royalty rights from the song, including the right to foreign royalties earned during the whole term of the contract. To prevail at trial, Yount would have to demonstrate that he and Stevenson mutually intended to exclude foreign royalties despite their use of the term “all” in the 1958 assignment; to survive a motion for summary judgment, Yount had to show that the' evidence at least presented a genuine issue of material fact on that question. Yount stаted that he and Stevenson never discussed foreign royalties, prior to execution of the 1958 assignment. Moreover, he did not present evidence of some industry custom or some course of dealing which would show that a transfer of all foreign royalties was excluded. That indicates that as far as foreign royalties are concerned “all” meant just what it said-his whole interest under the 4 Star agreement. Even if Yount harbored a subjective intent to exclude foreign royalties from the assignment, it is clear that he never said so. To overcome the plain meaning of the written contract, however, Yount must introduce evidence that both he and Stevenson affirmatively intended to exclude foreign royalties from the' assignment-that for them “all” meant “less than all.” Yount has introduced no such evidence. Thus, the district court did not err when it granted summary judgment to the McCalls on the question of foreign royalties.
C. The Failure to Award Attorneys Fees.
Yount appeals the district court’s denial of his request for attorney’s fees. A district court’s refusal to grant attorney’s fees pursuant to 17 U.S.C. § 505 is reviewed for an abuse of discretion. Fantasy, Inc. v. Fogerty,
CONCLUSION
There can be little doubt that Yount made an assignment of his royalty rights to Stevenson. He now seeks to cast himself in the mold of a put-upon author, who should have the special protection of the Copyright Act to save him from his own lack of discretion. But authors are not “wards under guardianship of the law.” Fred Fisher Music Co.,
Congress and the courts have provided some protectiоn for authors as far as the twenty-eight-year copyright renewal term is concerned, but that form of protection ends once the term has been explicitly transferred. Authors are free to deal with any ensuing contract rights, such as royalties, as they will, subject only to the provisions of state law. In this case, we express no opinion on how those state law рrovisions may affect the right to royalties during the domestic copyright renewal term, although we agree with the district court that the foreign copyright royalties were validly transferred.
AFFIRMED in part, REVERSED in part, and REMANDED. Costs on appeal are awarded to McCall from appellants. BMI and Aeuff-Rose shall bear their own costs on appeal.
Notes
. Unless otherwise stated, all references to Yount are to Robert Gene Yount.
. W.S. Stevenson was a name used by William A. McCall.
. Also involved in this appeal are defendants Acuff-Rose Music, Inc., and Broadcast Music, Inc. Acuff-Rose .is the legal owner of the copyright in “Release Me.” With regard to the domestic royalties, Acuff-Rose and BMI are acting essentially as stakeholders because they have withheld payment of those royalties pending the outcome of the dispute between Yount and the McCalls. With regard to the foreign royalties, Acuff-Rose and BMI have continued making payments to the McCalls during the pendency of this dispute. On appeal, Acuff-Rose and BMI filed a joint brief arguing for affirmance of the district court’s judgment on both the domestic and foreign royalty issues.
. In 1957, Yount and Miller entered into a second publishing agreement for "Release Me,” with 4 Star Sales Company,'Inc. That agreement substituted Stevenson for Dub Williams. 4 Star Sales Company, Inc., which is also the party named on the copyright registration for "Release Me,” was an affiliated corporation of 4 Star Record Company, Inc. Because the distinction between the two cоmpanies and the two agreements is immaterial in the instant case, both will be referred to as "4 Star” throughout this opinion.
. Yount argues that the McCalls are estopped from denying that their interest in the royalties is an interest in the copyright itself because they obtained recognition of their continuing royalty in the 4 Star bankruptcy. But the continuation of that interest, despite bankruptcy, is not inconsistent with the McCalls' present position. The most they obtained was the protection afforded to all holders of contractual royalty interests against owners of the copyright itself. See Water-son,
. California law applies because a federal court exercising jurisdiction over non-federal claims must usually apply the substantive law of the state in which it sits. See Erie R.R. Co. v. Tompkins,
. Yount also argues that the, McCalls assigned their rights to foreign royalties to 4 Star. There is, however, no occasion for us to decide that question. Even if they had done so, Yount does not explain how that would aid his case, or increase his rights.