## Facts

- Composer Harry Woods authored “When the Red, Red, Robin Comes Bob, Bob, Bobbin’ Along” and granted publishing rights to Bourne Co., which licensed uses and collected royalties, including through ASCAP for broadcasts.
- During the extended renewal term, Woods’s heirs (Callicoon Music) terminated Bourne’s grant under 17 U.S.C. § 304(c) and claimed all post-termination royalties.
- Bourne asserted the § 304(c)(6)(A) derivative-works exception, contending it could continue exploiting pre-termination derivative works and receive resulting royalties.
- Disputed post-termination royalties arose from: (1) television performances of films and TV programs incorporating the song (audiovisual works), (2) radio performances of sound recordings of the song, and (3) sales of reprints of published sheet-music arrangements.
- After a bench trial, the Southern District of New York awarded all disputed royalties to the heirs, largely based on whether the relevant arrangements were sufficiently original to qualify as derivative works.
- Bourne appealed.

## Issues

1. Whether television performances of pre-termination films and TV programs incorporating the song generate royalties that remain payable to the publisher under the § 304(c)(6)(A) derivative-works exception after termination.
2. Whether the specific sound recordings and reprinted sheet-music arrangements at issue qualify as derivative works under § 304(c)(6)(A) such that the publisher may retain post-termination royalties.

## Decision

- The Second Circuit affirmed in part and reversed in part.
- Audiovisual works incorporating the song, prepared under authority of the grant before termination, are derivative works for § 304(c)(6)(A) purposes; Bourne retained the right to receive royalties from television performances of those works.
- The sound recordings and sheet-music reprints at issue were not sufficiently original, and thus did not qualify as derivative works; the heirs were entitled to post-termination royalties from those uses.
- The case was remanded for entry of a judgment allocating royalties consistent with these rulings.

## Legal Principles

- A valid termination under 17 U.S.C. § 304(c) returns the terminated rights to the author or statutory heirs, subject to § 304(c)(6)(A)’s preservation of the right to continue utilizing derivative works prepared under authority of the grant before termination.
- For audiovisual works, the work as a whole constitutes the relevant derivative work; continued exhibition or broadcast of a pre-termination film or TV program may lawfully continue after termination, and royalties attributable to that continued performance remain with the party entitled under the pre-termination authorization.
- The derivative-works exception does not extend to post-termination exploitation of the underlying composition through uses that do not add sufficient original expression; ordinary sound recordings or sheet-music arrangements that are not substantially different from the composition are not derivative works for purposes of § 304(c)(6)(A).
- Originality is required for a work to qualify as a derivative work; trivial or insubstantial variations from the underlying musical composition do not meet that requirement.

## Conclusion

The Second Circuit held that termination under § 304(c) transferred post-termination royalties to the heirs for non-original recordings and sheet-music reprints, but the publisher retained royalties from post-termination television performances of pre-termination films and TV programs incorporating the song because those audiovisual works fall within the derivative-works exception.


Woods v. Bourne Co., 60 F.3d 978 (2d Cir. 1995)