## Facts

- In 1993, Cecil Glenn and Steven James (Tag Team) wrote and produced the song “Whoomp! (There It Is)” (“Whoomp!”).
- Tag Team entered an exclusive producer’s agreement with Bellmark Records (Bellmark).
- Under the agreement, Tag Team assigned to “Bellmark’s affiliated designee publisher” 50% of Tag Team’s interest in the copyright to the “Whoomp!” composition.
- Bellmark’s affiliated designee publisher was Alvert Music, a music-publishing company founded by Alvertis Isbell (Bell), doing business as Alvert Music.
- The agreement also granted Bell/Alvert Music the right to administer 100% of the royalties from the composition (i.e., the right to collect and administer royalties for the whole work, not just its 50% ownership interest).
- In 1997, Bellmark filed for bankruptcy. DM Records, Inc. (DM) later purchased Bellmark’s assets through the bankruptcy proceeding under broad “all property” language, without a specific list identifying the “Whoomp!” composition copyright.
- After the bankruptcy case closed, DM took the position that it had acquired the “Whoomp!” composition copyright and exploited the work by collecting royalties and licensing it.
- Isbell, d/b/a Alvert Music, sued DM for copyright infringement, seeking a declaratory judgment of ownership and damages.
- After an 11-day trial, the district court ruled as a matter of law that (1) Alvert Music was Bellmark’s “affiliated designee publisher,” (2) Alvert Music was a separate entity from Bellmark, and (3) Alvert Music’s copyright interest was not part of Bellmark’s bankruptcy estate and thus was not sold to DM.
- The jury awarded $2,131,482 in actual damages and $132,500 in statutory damages. DM appealed, arguing among other things that Alvert Music owned only 50% and therefore could not recover more than 50% of the damages.

## Issues

1. Whether DM acquired the “Whoomp!” composition copyright interest through Bellmark’s bankruptcy asset purchase, or whether Alvert Music’s assigned 50% interest remained with Alvert Music as Bellmark’s “affiliated designee publisher.”
2. Whether a 50% copyright co-owner with contractual authority to administer and collect 100% of the royalties may recover 100% of the infringer’s actual damages, subject to accounting to the other co-owner.

## Decision

- The Fifth Circuit affirmed the district court in all respects.
- The court agreed that Alvert Music was Bellmark’s “affiliated designee publisher,” and that Alvert Music’s copyright interest was separate from Bellmark’s property; therefore, DM did not obtain Alvert Music’s 50% composition interest through the bankruptcy sale.
- Because DM exploited the composition without rights from Alvert Music, the court upheld the finding of infringement.
- On damages, the court upheld the jury’s award that effectively reflected the full royalty stream, holding that under the contract and trial evidence Alvert Music could recover 100% of actual damages from the infringer and then account to Tag Team for any share due.

## Legal Principles

- Contract language assigning a copyright interest to an “affiliated designee publisher” can transfer ownership to an entity other than the record label, depending on the agreement’s text and the parties’ relationship.
- A bankruptcy asset sale transfers only the debtor’s interests; rights owned by a non-debtor entity are not conveyed by broad “all assets” language when those rights are not property of the estate.
- A copyright co-owner is not always limited to recovering only its proportional share of actual damages when the co-owner has contractual authority to administer and collect all royalties for the work and has a duty to account to the other co-owner.
- An infringer may be held liable for a single, full actual-damages award to the collecting/administrating co-owner, with any allocation between co-owners handled through accounting rather than by reducing the infringer’s liability.

## Conclusion

In *In re Isbell Records, Inc.*, the Fifth Circuit affirmed a judgment that Alvert Music’s 50% “Whoomp!” composition interest was not transferred in Bellmark’s bankruptcy sale to DM and that DM infringed by exploiting the work; the court also affirmed a full actual-damages award because Alvert Music had contractual rights to administer and collect 100% of royalties and could recover the full amount from the infringer subject to accounting to Tag Team.


In re Isbell Records, Inc., 774 F.3d 859 (2014)