Acuti v. Authentic Brands Group LLC

Background

Valentina M. Peretti Acuti and Paul J. Reitnauer, III sought a declaratory judgment concerning the renewal-term rights to “Can’t Help Falling in Love,” a composition co-authored by Hugo Peretti. In a January 31, 1983 assignment, Hugo, his wife June Peretti, and their daughters transferred their rights in the composition’s United States renewal copyrights and renewal extensions to Julian J. Aberbach and Joachim Jean Aberbach, predecessors of Authentic Brands Group LLC and ABG EPE IP, LLC.

Hugo died in 1986, before the composition’s renewal term began in 1989. In 2014, June Peretti and Acuti served Authentic with a notice seeking to terminate the 1983 assignment, with termination stated to become effective in 2018. Authentic later asserted that the notice was defective and invalid. The plaintiffs filed this action seeking a declaration that the termination had succeeded.

Parties’ Positions

Authentic moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. Authentic argued that Hugo had transferred only a contingent interest because the renewal term had not yet begun. Since Hugo died before that term began, his interest never vested and the assignment of his interest became void. Authentic further argued that the renewal interests of Hugo’s wife and daughters vested when the renewal term began and transferred through the 1983 assignment, but those transfers could not be terminated under 17 U.S.C. § 203 because that provision applies only to grants executed by the author.

The plaintiffs argued that § 203 applied to the 1983 assignment as a single instrument because Hugo signed it. They contended that, after Hugo’s death, his termination interest passed to his widow and daughters and was validly exercised through the 2014 notice.

Court’s Analysis

The court adopted Authentic’s reading of § 203. It explained that, before the renewal term begins, an author has only a contingent expectation of acquiring the renewal term. Because Hugo died before the 1989 renewal period, his contingent interest failed to vest, and the Aberbachs and their successors received nothing from Hugo’s interest.

The court concluded that Hugo’s wife’s and daughters’ contingent interests instead vested by operation of 17 U.S.C. § 304(a)(1)(C) when the renewal term began. Those interests were transferred to the Aberbachs through the 1983 assignment and ultimately to Authentic. But § 203’s termination right applies only to grants “executed by the author.” The court held that the family members’ grants were not executed by Hugo merely because he signed the same instrument: Hugo had authority to transfer only his own interest, not the family members’ independently held statutory interests.

The court also rejected the plaintiffs’ argument that treating the assignment as one instrument changed the result. It reasoned that the Copyright Act distinguishes between grants made by the author and grants made by the author’s successors. The court concluded that the 2014 notice was a nullity and did not terminate Authentic’s rights.

Disposition

The court held that the plaintiffs were not entitled to the requested declaratory judgment and granted Authentic’s motion to dismiss. The clerk was directed to terminate the motion at ECF No. 20 and close the case. The opinion does not state that the motion was granted with or without prejudice.