Let’s Talk About Section 203 of the Copyright Act, Baby

By Emily Poler

Most copyright disputes you hear about — and most that I write about — question whether a work has been infringed or whether an infringement constitutes fair use. But that’s not every case! There are pretty interesting and obscure provisions in the Copyright Act that sometimes come into play, like that at the crux of a current lawsuit brought by old-school hip-hop artists Salt-N-Pepa against the record label that owns the music from their golden age as the First Ladies of Rap. 

This provision, section 203 of the Copyright Act, allows artists to reclaim their copyrights and/or sound recordings from an entity to whom they transferred ownership after 35 years. The thinking behind it is that throughout the history of pop music, artists often got screwed when they signed their first contracts because they had less bargaining power than they eventually gained after becoming successful (and having the wherewithal and cash to hire attorneys). Imagine the difference, say, in Dolly Parton’s ability to favorably negotiate her first record deal when she was an unknown teenager from eastern Tennessee versus the imperial powers the Queen of Country wielded at the time of her death (RIP Dolly 😢).

That said, this right of reclamation only exists where there was (a) a grant of a transfer or license of copyright, and (b) that grant was executed by the author. Notably, the statute specifically says this right to terminate a transfer or license does not apply to works for hire. This makes sense because when someone creates something as a work for hire, that person isn’t legally the author of the work; the company they work for is.

And all that is the problem for Salt-N-Pepa. In 1986, the group’s members, which include Cheryl James (Salt) and Sandra Denton (Pepa), entered into a couple of agreements with Noise in the Attic Productions, Inc. (NITA), a company owned by their producer and manager Hurby Azor. (As an aside, shout-out to the third member of the group, Deidra Roper a/k/a Spinderella, their DJ, who is not involved in the case. But we should never forget Spinderella.) That contract names NITA as the “sole and exclusive owner” of the master recordings and all copyrights. Azor subsequently assigned those rights to the Next Plateau Records label in an agreement that James and Denton were not signatories to (the pair only signed an attached “inducement letter”). The years went by, record labels were bought and sold, the industry consolidated and today, the rights to the four albums Salt-n-Pepa recorded between 1986 and 1993 are owned by entertainment behemoth Universal Music Group (UMG). 

James and Denton now say that those agreements are subject to termination under the Copyright Act. In keeping with this, in 2022 they served UMG with notices of termination. UMG responded saying the 1986 agreements did not amount to a transfer of copyright based on how those original agreements were structured, and that Salt-N-Pepa’s recordings for NITA were also works for hire. Either way, says UMG, James and Denton weren’t eligible to get their copyrights back. 

As will surprise no one who reads this blog, James and Denton filed suit. However, the District Court judge agreed with UMG and dismissed the case. In her dismissal, the judge wrote “the 1986 agreements do not indicate that Plaintiffs ever owned the copyrights to the sound recordings or that they granted a transfer of those rights to anyone else.” Basically, the judge determined that the only assignment of ownership was NITA’s transfer to Next Plateau and no contract James and Denton executed indicated otherwise. Crucially, the judge said that James and Denton had failed to expressly assert copyright ownership in their original agreement with NITA. Thus, according to the judge, James and Denton never held any copyrights in the work they created. While the judge didn’t issue a decision on whether the recordings were works for hire, she did note that the original copyright registrations described NITA as “employer for hire.”

Last week, the Second Circuit heard the appeal of this matter. Salt-n-Pepa’s attorneys argued that the 1986 agreements they signed with their producer transferred rights that are subject to the Copyright Act’s termination section. They also argued that the District Court judge erred by insisting that artists expressly assert copyright ownership in their contracts. According to Salt-n-Pepa’s attorneys, by doing so the judge invented a “new requirement out of whole cloth” where the Copyright Act has no such rule. 

UMG, for its part, said that the 1986 agreements were clear that Salt-n-Pepa hadn’t granted or licensed their copyrights to their producer. Therefore, according to Universal, there was no agreement to be terminated under Section 203 of the Copyright Act. 

As with all things litigation, we’ll have to wait and see where the Second Circuit comes out. If I had to guess, I’d say that there’s a chance the Second Circuit reverses the District Court’s opinion, but not because the District Court’s conclusion was necessarily wrong. Rather, I think the Second Circuit may find that the 1986 contracts are a bit of a mess and, therefore, the case shouldn’t have been dismissed at a very preliminary stage.

While this gets sorted, we can all kick back and bop down memory lane to Salt-N-Pepa classics like Push It, Shoop, Whatta Man, or Let’s Talk About Sex, right? NOPE! UMG has removed the old albums from streaming platforms, claiming the question of who could license the music was unresolved; James and Denton allege the action is retaliation against their efforts to reclaim their work. So if you want to hear the original hits, you’ll have to dig out your old CDs. Assuming you still have something to play them on; if not, ask your kid, because apparently CD players are back in vogue among Gens Z and A.