News
2 Live Crew’s Lasting Legacy on Copyright Law
Orange County | Salt Lake City • October 22nd, 2024
I. INTRODUCTION
When you think of copyright law, you don’t think of 2 Live Crew – but should you? The hip-hop group, who was active from 1984–1998 then reunited in 2009, has, yet again, made a potentially historic impact on copyright law. On October 16, 2024, a Florida jury in Lil’ Joe Records, Inc., v. Ross et al., determined that 2 Live Crew group members and their heirs could utilize copyright termination rights—allowing them to reclaim ownership to some of their most iconic songs previously owned by Lil’ Joe Records.[1] This case highlights the significant implications of copyright termination in the music industry, particularly as it pertains to long-standing agreements between artists and record labels. Further, this case highlights the importance of clarity in contracts to establish whether the author’s works are intended to be a work made for hire.
II. BACKGROUND
The hip-hop group 2 Live Crew, consisting of Luther Campbell, Mark Ross, David P. Hobbs, and Christopher Wong Won, is one of the few pop culture icons that will leave a legacy as both a cultural touchstone in the music industry and, perhaps more unexpectedly, as a trailblazer in establishing legal precedent. 2 Live Crew pushed social boundaries with its music, and in 1994 the group made its first defining impression on copyright law.
In 1989, 2 Live Crew released a parody of Roy Orbison’s popular rock ballad “Oh, Pretty Woman,” called “Pretty Woman.” Acuff-Rose Music, Inc., the assigned copyright rights holder for the song “Oh, Pretty Woman,” sued 2 Live Crew for copyright infringement via Campbell, the owner of Luke Skyywalker Records, which held the copyright to “Pretty Woman.”[2] The resulting Supreme Court opinion established the Court’s leading opinion on parody works and what constitutes transformative fair use under Section 107 of the Copyright Act in defense to copyright infringement. The Supreme Court ruled in 2 Live Crew’s favor, determining that their song “Pretty Women” as a parody was transformative within the protections of fair use, and thus cementing the group in legal history while also preserving the group’s rights to their song.[3]
In 2024, 2 Live Crew’s works are now the center of a new, potentially precedent-defining lawsuit in another area of copyright law. Instead of defending their works with parody and fair use defenses like in their 1994 Supreme Court case, 2 Live Crew is now seeking to reclaim the copyrights to their music by exercising termination rights under Section 203 of the Copyright Act.[4]
III. THE CURRENT CASE
Under Section 203, authors (or their heirs) of copyrighted works have a five-year window to terminate the licenses to their works 35-years after granting the license. Section 203 states that “a copyright owner can terminate an exclusive license of copyrighted material ‘at any time during a period of five years beginning at the end of thirty-five years from the date of the grant’ of the license.”[5] The United States Supreme Court has noted that the Copyright Act “provides an inalienable termination right” for both authors and his or her statutory heirs.”[6]
Before 1990, the members of 2 Live Crew recorded five albums and entered into an agreement with Campbell’s record label that transferred the copyrights to Campbell’s record label and authorized Campbell’s label to release the albums.[7] In 1990, the group and Campbell’s record label memorialized the agreement in writing (the “1990 Agreement”).[8] The rights to a significant portion of 2 Live Crew’s song recordings were subsequently purchased by Lil’ Joe Records from the company formed by Campbell, Luke Skyywalker Records, during its bankruptcy proceedings in 1996.[9]
On November 4, 2020, Campbell, Ross, and the heirs of Wong Won served a Section 203 copyright termination notice to Lil’ Joe Records.[10] Defendants maintained that the Section 203 notice “terminated the transfer set forth in the 1990 Agreement and formally returned the copyrights in the Subject Albums to 2 Live Crew.”[11] Further, Defendants maintained that the notice met all statutory requirements of Section 203(a) because it was served in writing to all possible rights holders, signed by a majority of the original 2 Live Crew members and/or their heirs, and a copy of the Notice was recorded in the Copyright Office before the effective date of termination.[12] Thus, Defendants stated that 2 Live Crew should own the copyrights to the five albums beginning on November 7, 2022 (the earliest date of effective termination).
In October 2021, Lil’ Joe Records sued Campbell, Ross, and Wong Won’s heirs. Ross passed away in June 2024 and his heir is presently standing in for him in the suit.[13] Plaintiff claimed the termination was prohibited because (1) 2 Live Crew lost their Section 203 rights in bankruptcy; (2) 2 Live Crew created the five albums as works for hire, therefore they never owned copyrights to the works in the first place; and (3) the 1990 Agreement was not properly reduced to writing.[14]
During the summary judgment phase, the trial judge stated there was no evidence that Campbell, Luke Skyywalker Records, or Ross renegotiated copyright grants while leveraging their rights to terminate during the bankruptcy proceeding.[15] Thus, the judge disposed of Plaintiff’s argument that that any termination rights to the copyrighted works would have been subsumed in bankruptcy proceedings in 1996, when Luke Skyywalker Records sold the works to Lil’ Joe Records.[16]
Regarding the other issues presented during the summary judgment phase, the judge found questions of material fact still needed to be decided by the jury; in particular, two questions related to ownership and transfer of 2 Live Crew’s copyrights.[17] First, whether Luther Campbell, Christopher Wong Won, and/or Mark Ross created the sound recordings in question as “works for hire.” Second, which specific agreements were used to transfer the copyrights of 2 Live Crew’s albums to Campbell’s record label, if any.
A. Works for Hire
A work made for hire is a copyrightable work that is prepared by an employee within the scope of their employment.[18] Copyrighted works that are “made for hire” are excluded from Section 203.[19] An employee cannot hold the copyright for a work made for hire within the scope of their employment.[20]
If the jury determined that Campbell, Ross, and Wong Won were Luke Skyywalker Records employees, and thus could not hold the copyrights to the albums, then Lil’ Joe Records could effectively establish exclusive interminable rights of 2 Live Crew’s disputed songs.
Plaintiff’s argument hinged on employment status: if the group members in 2 Live Crew were each employees of Luke Skyywalker Records, they could not terminate the copyrights subsequently purchased by Lil’ Joe Records under the works-for-hire doctrine.[21] In support, Plaintiff argued that 2 Live Crew members were each artists for hire and that Mr. Campbell—as the CEO and owner of Luke Skyywalker Records—was an employee of Lil’ Joe Records.[22] Plaintiff pointed to provisions of the 1991 Agreements indicating that the works in question were “works made for hire.”[23] In addition, Plaintiff pointed to the copyright registrations, each showing Luke Skyywalker Records as the owner. Plaintiff also pointed to Luke Skyywalker Records’ degree of control over the work, the method of payment and employee benefits provided by Luke Records to 2 Live Crew, the tax treatment of 2 Live Crew by Luke Records, and other factors.[24]
Defendants argued that the five albums were not works made for hire because the requirement for an agreement to transfer copyright, in and of itself, is proof that they were not employees and could hold the initial copyright to the works.[25] Defendants also raised purported inconsistencies in Plaintiff’s pleadings surrounding its efforts to obtain copyrights from group members and arguments relating to the “loss” of the copyrights in bankruptcy proceedings.[26] Defendants also argued that the 1991 Agreements were not pertinent and instead the 1990 Agreement controlled.
B. Transfer of the Works
The second issue—controlling contractual rights—is significant because the court would have to establish when Luke Skyywalker Records ownership to 2 Live Crew’s works was first established as an antecedent to calculating the 35 year period. Once the proper date is established, then the 2 Live Crew members and heirs’ 5-year termination right window under Section 203 would begin.[27]
Regarding the agreements used to transfer the copyrights, the jury was presented with two options:
(1) The recording agreement between the Lil’ Joe Records and 2 Live Crew that 2 Live Crew claim was executed in 1990, or
(2) One or more of three agreements between the parties allegedly executed in 1991, as claimed by Lil’ Joe Records.
Defendants argued the 1990 Agreement controls because it was the only agreement that was signed by all 2 Live Crew members and Campbell on behalf of his record label, and that the group members were paid royalties pursuant to the 1990 Agreement.[28] To the extent that Lil’ Joe Records argued that the 1990 Agreement was not properly reduced to writing until a later, Defendants countered that the “writing” requirement for copyright ownership under Section 204 of the Copyright Act was satisfied by the later written ratification of an oral agreement.[29] Interestingly, 2 Live Crew invoked their earlier copyright suit, Acuff-Rose Music v. Campbell, as proof that the world was on notice of Luke Skyywalker Records’ ownership of the copyrights because Campbell was a named party in that suit as the owner of Luke Skyywalker Records.[30]
In rebuttal, Plaintiff argued that Defendants did not provide sufficient evidence that the copyrights to the works at issue were properly transferred pursuant to the 1990 Agreement.[31] Lil’ Joe Records asserted that there was no mention of transferring copyrights in the 1990 Agreement. And, to the extent that Defendants asserted an oral agreement supplemented the 1990 agreement and transferred the copyrights, that argument failed as a matter of law because the terms of the 1990 contract expressly preclude modification by oral agreement.[32] Instead, Plaintiff argued that one or more of the 1991 agreements control, citing testimony from and communications with the in-house attorney at Luke Skyywalker Records who was apparently unaware of any 1990 agreement between the parties.[33] As a result, because the notice of termination cited the 1990 agreement and not the 1991 agreements, the notice of termination under Section 203 was inadequate as a matter of law.[34]
IV. THE VERDICT
On October 16, after just two hours of deliberation, the jury sided with 2 Live Crew on both issues.[35] On the work-for-hire issue, the jury found that the sound recordings were not created as works for hire.[36] In other words, the members of 2 Live Crew could terminate the agreements pursuant to Section 203 of the Copyright Act. And, on the second issue of transferring rights, the jury again agreed with 2 Live Crew that the copyrights were transferred under the 1990 agreement rather than the 1991 agreements as alleged by Lil’ Joe Records.[37]
Consistent with the jury’s answers to the questions presented, the final verdict found that 2 Live Crew made a valid claim for copyright termination under Section 203. As a result, the group can claw back ownership of dozens of its songs after more than 30 years. 2 Live Crew’s counsel, in a statement provided after the verdict stated “[t]he verdict was a total and overwhelming victory for [2 Live Crew] and for artists everywhere.”[38]
For Lil’ Big Records part, its counsel made it clear that “the appeals will start now.”[39] And, in a statement to Billboard, Lil’ Joe Records’ attorney stated that this case—because of the interplay between bankruptcy law and copyright termination—“is a matter of first impression” and even mused that the case “may go to the Supreme Court.”[40]
V. GOING FORWARD
2 Live Crew again stands at the center of timely issues in copyright law. Though different from the fair use dispute of 2 Live Crew’s prior case, the present case stands as an important reminder in its own right. This case highlights the significant implications of copyright termination in the music industry, particularly as it pertains to long-standing agreements between artists and record labels. The verdict reinforced the statutory right for artists to reclaim ownership of their works, provided they follow the procedures outlined in Section 203 of the U.S. Copyright Act.
This verdict comes at a time when termination rights are the center of many other disputes in the music industry. For example, Jay-Z found many of his copyrightable works up for auction and has publicly asserted his right to soon terminate his music licenses under the same statute as 2 Live Crew.[41] The reminder to artists that they may terminate longstanding agreements provides opportunities for re-publication, re-recording, and/or continued monetization of works. All of these provide artists with at least a renewed perspective on how they can control their personal portfolio of copyrightable works in an era where ownership and rights management have become increasingly valuable.
For purchasers of licenses or copyrights, this case stands as a reminder of the limitations imposed by the Copyright Act’s termination provisions—even, potentially, in bankruptcy. Section 203 allows authors to terminate licenses and other transfers of copyright after 35 years, with a five-year window to exercise the termination right. The ruling thus cautions entities acquiring long-term licenses or catalog rights, as they may find those rights extinguished if proper steps are taken by the authors. Licensees must account for the possibility of losing key catalog items and should structure agreements or business models with these statutory termination windows in mind.
For artists and their heirs, this case stands as a reminder that they may be able to reclaim valuable rights over works that were once considered lost to unfavorable contracts. Artists should be mindful of their ability to renegotiate or reclaim ownership of their works, even decades after initially signing a contract. This trend is likely to encourage more artists to closely evaluate their historical contracts, particularly as the 35-year window approaches for works created in the 1980s and 1990s.
For record labels and others entering contracts with artists, this case stands as a reminder of clarity in contract. If the record label is interested in retaining the copyrights such that the artist is unable to exercise the termination clause, then the contract should be clear that the artist is an employee of the record label. In addition, the record label may want to retain proof of employment such as, for example, pay stubs, tax information, evidence of the degree of control over the artist’s decisions, etc. Equally as important, the record label should evaluate existing contracts—and internal information related to those existing contracts—to determine exposure to potential termination of rights particularly with respect to important and valuable works included in its portfolio.
Finally, like many contract cases before it, this case reinforces the necessity for careful contract drafting. Agreements should be clear when the copyrightable work is classified as a “work for hire.” If a copyrightable work is legitimately deemed a work for hire, termination rights would not be an issue because the rights to the work would belong to the employer or commissioner. This point is critical both for artists and labels to consider when negotiating contracts. While the ambiguity in this case appears to have favored 2 Live Crew—at least at present—ambiguous contracts are not the answer. Clear, well-drafted contracts regarding the status of a work’s creation can mitigate costly disputes down the road and offer both parties a better understanding of their long-term rights and obligations.
[1] Lil’ Joe Records, Inc. v. Ross et al., Case Number 1:21-cv-23727 (S.D. Fla. 2024).
[2] Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).
[3] Id. at 572–73.
[4] 17 U.S.C. § 203.
[5] CENAPS Corp. v. Cmty. of Christ, 371 F. Supp. 3d 1024, 1028 (M.D. Fla. 2019); citing 17 U.S.C. § 203(a)(3).
[6] Brown-Thomas v. Hynie, 441 F. Supp. 3d 180, 191 (D.S.C. 2019) (emphasis added), quoting Stewart v. Abend, 495 U.S. 207, 230, 110 S.Ct. 1750, 109 L.Ed.2d 184 (1990), citing 17 U.S.C. §§ 203, 304.
[7] Lil’ Joe Records, Inc. v. Ross et al., Case Number 1:21-cv-23727, Dkt. 202 at *1 (S.D. Fla. 2024) (Defendants’ Pre-Trial Memorandum of Law).
[8] Id. at *2.
[9] David Minsky, Fla. Jury Finds 2 Live Crew Can Take Back Music Rights, Law 360 (Oct. 17, 2024), https://www.law360.com/articles/1890351/fla-jury-finds-2-live-crew-can-take-back-music-rights.
[10] Id.; Lil’ Joe Records, Case Number 1:21-cv-23727, Dkt. 202 at *2.
[11] Id.
[12] Id. at *3.
[13] The group “2 Live Crew” is not a named defendant in this lawsuit. For purposes of this article, the group name “2 Live Crew” is used as a stand in for the Defendants in this case.
[14] Lil’ Joe Records, Case Number 1:21-cv-23727, Dkt. 251 (Plaintiff’s Motion for Judgment as a Matter of Law Pursuant to Rule 50).
[15] Lil’ Joe Records, Case Number 1:21-cv-23727, (Summary Judgment Order) Dkt. 210 at *23.
[16] Id. at *23–27.
[17] Id. at *7, (stating “the parties dispute when the copyrights of the Subject Albums were transferred, how they were transferred, and what rights were specifically transferred.”)
[18] 17 U.S.C. § 101; Horror Inc. v. Miller, 15 F.4th 232, 243 (2d Cir. 2021) (to be a work for hire the work must be “made by an employee within the scope of his employment”), citing 17 U.S.C. § 101; see Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 738 (1989).
[19] 17 U.S.C. § 203(a); Ennio Morricone Music Inc. v Bixio Music Group Ltd., 936 F.3d 69, 73 (2nd Cir. 2019).
[20] 17 U.S.C. § 201(b) (“In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title.”)
[21] Lil’ Joe Records, Case Number 1:21-cv-23727, Dkt. 251 at *9.
[22] Id.
[23] Id. at 9–11.
[24] Id. at 11–15; see also, Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751 (1989) (establishing a non-exclusive list of 13 factors to aid the fact finder in determining whether an artist’s work is for hire.)
[25] Lil’ Joe Records, Case Number 1:21-cv-23727, Dkt. 202 at *6–7.
[26] Id. at *7–8.
[27] 17 U.S.C. § 203(3).
[28] Lil’ Joe Records, Case Number 1:21-cv-23727, Dkt. 202 at *4.
[29] Id. at *4–5; see also Imperial Residential Design, Inc. v. Palms Dev. Grp., Inc., 70 F.3d 96, 99 (11th Cir. 1995), quoting Arthur Rutenberg Homes, Inc. v. Drew Homes, Inc., 29 F.3d 1529, 1532–33 (11th Cir.1994).
[30] Lil’ Joe Records, Case Number 1:21-cv-23727, Dkt. 202 at *6.
[31] See, Lil’ Joe Records, Case Number 1:21-cv-23727, Dkt. 251 at *5–6.
[32] Id.
[33] Id.
[34] Id. at *7.
[35] See, Lil’ Joe Records, Case Number 1:21-cv-23727, Dkt. 255; see also Minski, supra note 9.
[36] Lil’ Joe Records, Case Number 1:21-cv-23727, Dkt. 255.
[37] Id.
[38] Bill Donahue, 2 Live Crew Wins Jury Verdict to Retake Control of Catalog Rights From Label: ‘Justice Served’, Billboard (Oct. 17, 2024), https://www.billboard.com/pro/2-live-crew-jury-verdict-retake-catalog-rights-from-lil-joe-records/.
[39] Minski, supra note 9.
[40] Donahue, supra note 38.
[41] See, Andre Gee, Dame Dash’s Roc-A-Fella Auction Paused in a Rift Over Rights to Jay-Z’s Debut Album, RollingStone (Sept. 27, 2024), https://www.rollingstone.com/music/music-features/roc-a-fella-auction-paused-jay-z-debut-album-1235113381/.
