Banco Popular de Puerto Rico v. Latin American Music, 2009 WL 3294789 (D. P.R. 2009)

What happens if a party purchases a copyright from a copyright owner, and then the now former copyright owner turns around and sells the copyright again to a third-party? 17 U.S.C. 205 governs these situations and all of their messiness:

As between two conflicting transfers, the one executed first prevails if it is recorded, in the manner required to give constructive notice under subsection (c), within one month after its execution in the United States or within two months after its execution outside the United States, or at any time before recordation in such manner of the later transfer. Otherwise the later transfer prevails if recorded first in such manner, and if taken in good faith, for valuable consideration or on the basis of a binding promise to pay royalties, and without notice of the earlier transfer.

This provision essentially makes the Copyright Act a modified race-notice statute. If there are conflicting transfers, the person who first recorded their acquisition with the Copyright Office prevails provided that they were a bona fide purchaser for value, and they had no notice of the previous transfer.

There was a case in the federal district court in Puerto Rico on October 8 that addressed what happens when a person’s notice of transfer to the Copyright Office is defective. UMG acquired a copyright, that was later also assigned to Latin American Music. LAM provided notice of the transfer to the Copyright Office before UMG did, but, perhaps trying to save money on the Copyright Office fees, its notice covered a group of songs, not just one song. UMG cried foul, arguing that the notice was invalid. The Court rejected the argument finding that the Latin American Music’s filing gave it priority, even if it didn’t meet the specificity requirements set forth in 205(c):

Universal also points out that the recorded document in this case lists too many songs for it to conform with the specificity requirements of 17 U.S.C. § 205(c). However, that disposition merely deals with whether or not a recordation document in the Copyright Office may give constructive notice of the facts stated therein. Such disposition is inapposite as to whether or not LAMCO’s transfer takes priority over EMLASA’s, an issue that is governed by 17 U.S.C. § 205(d).

It may be difficult to reconcile the Court’s finding with a plain language reading of Section 205, but the Court’s finding is hardly surprising. The federal courts don’t take kindly to the Copyright Act’s paperwork requirements. This is but one instance forming a broader trend of federal courts looking past paperwork provisions so as to achieve what they see as just decisions.