Summary
The Eleventh Circuit held that Mark Ross’s copyright termination interests under 17 U.S.C. § 203 became part of his Chapter 7 bankruptcy estate under 11 U.S.C. § 541, notwithstanding the Copyright Act’s restrictions on alienation. Because those interests were not scheduled, administered, or abandoned, Ross could not personally exercise them when he signed the termination notice. The court reversed the district court’s contrary judgment and remanded for further proceedings.
Topics
Practice areas
Questions Presented
- Whether Mark Ross's statutory copyright termination interests under 17 U.S.C. § 203 were interests in property that entered his Chapter 7 bankruptcy estate under 11 U.S.C. § 541(a)(1), notwithstanding the Copyright Act's restrictions on alienation.
- Whether Ross could personally exercise those termination interests after they remained unscheduled, unadministered, and unabandoned property of his bankruptcy estate.
- Whether the termination notice was effective when, without Ross's valid exercise of his interests, it represented at most two of four authors' interests.
Holdings
- Ross's statutory copyright termination interests were contingent interests in property existing when his bankruptcy case commenced and therefore became property of his bankruptcy estate under 11 U.S.C. § 541(a)(1), notwithstanding 17 U.S.C. § 203's restrictions on alienation.
- Ross could not personally exercise the termination interests when he signed the notice because the interests remained property of his bankruptcy estate; they were never scheduled, administered, formally abandoned, or otherwise removed from the estate.
- The termination notice was ineffective because, without Ross's valid exercise of his interests, it exercised at most two of the four authors' termination interests, while § 203 requires a majority of the authors or their successors to terminate a grant made by multiple authors.
Key quotations
“We believe Ross’s bankruptcy estate gained control of his termination interests because they are interests in property.” (8)
“A termination interest is an “interest[] . . . in property” under section 541(a)(1) because it is a contingent right to regain intellectual property.” (9)
“Because no one scheduled, administered, formally abandoned, or mentioned those interests, they remained part of Ross’s bankruptcy estate when he signed the notice.” (13)
Factual background
2 Live Crew had four members and entered an agreement granting Luke Records sound-recording copyrights in the group's master recordings. Mark Ross filed Chapter 7 bankruptcy in 2000, and the parties conceded that his copyright termination interests were never scheduled, administered, formally abandoned, or otherwise mentioned during the bankruptcy. In 2020, Campbell, Ross, and the heirs of Christopher Wong Won served and recorded a notice purporting to terminate grants covering five albums. Because Ross's termination interests remained in his bankruptcy estate, the notice was signed by too few interest holders to terminate the grants.
Procedural history
Lil’ Joe Records sued members of 2 Live Crew and successors in interest for a declaration that they could not effectively terminate copyright grants covering five albums. The parties cross-moved for summary judgment on whether Mark Ross's bankruptcy affected his termination interests. The district court held that the interests were outside Ross's bankruptcy estate, denied the parties' motions on other grounds, and after trial entered judgment based on the jury's findings that the termination notice was valid. The Eleventh Circuit reversed and remanded.
Remand instructions
Remand for further proceedings consistent with the opinion.