Jury Awards Return of Copyrights to Iconic Hip-Hop Group

In a rare occurrence, a jury has rendered a verdict over termination rights under the U.S. Copyright Act. On October 16, 2024, a Florida jury found in favor of renowned hip-hop group 2 Live Crew (2LC), restoring ownership of the copyrights to various of the group’s iconic albums. After losing the copyrights to those works in bankruptcy proceedings, the members of 2LC, individually or via their heirs, successfully asserted their termination rights under the Copyright Act against Lil’ Joe Records, Inc. The trial and jury verdict underscore the importance of work-for-hire determinations and impact of complex histories of copyright transfers and provide some important lessons for those involved in termination disputes going forward.

The Termination Right Under the Copyright Act

The termination right provisions of the Copyright Act provide a powerful mechanism for authors to regain control of copyrights they transferred years ago. In the music industry, this typically involves the grant of copyright from an artist to a record label. Section 203 states that any “grant of a transfer or license of copyright… executed by the author on or after January 1, 1978… is subject to termination under” certain conditions. Expressly excluded from the termination right are works “made for hire.” 17 U.S.C § 203(a).¹ To effect a termination, the author must serve “an advanced notice in writing…upon the grantee or the grantee’s successor in title.” 17 U.S.C § 203 (a)(4). Importantly, “[t]ermination of the grant may be effected notwithstanding any agreement to the contrary.” 17 U.S.C. § 203(a)(5).

Congress described the termination right as “a provision safeguarding authors against unremunerative transfers” that was “needed because of the unequal bargaining positions of authors.” Lil' Joe Recs., Inc. v. Ross, ___F.Supp.3d___, 2024 WL 4576445, at *10 (S.D. Fla. Sept. 30, 2024) (quoting H.R. Rep. No. 94-1476, at 124 (1976)) (Summary Judgment Order). Since then, courts have consistently understood the termination right to be a personal and “inalienable” right of the authors and their heirs. See id. at *9-11 (collecting cases).

2 Live Crew (“2LC”) Invokes the Termination Right and the Related Lawsuit

The lawsuit between Plaintiff Lil’ Joe Records, Inc. (Plaintiff) and Defendants Campbell, a former member of 2LC, and the heirs of former members of 2LC (Defendants) was a copyright ownership dispute over various albums recorded by 2LC, including some of their most popular ones. The albums were released in the 1980s by a record label owned by Campbell (the Original Label). Both the Original Label and Campbell, individually, underwent bankruptcy proceedings, where copyrights were transferred to Plaintiff.

Plaintiff argued it owned the contested copyrights because (1) they were created as works for hire and (2) Defendants’ termination notices were invalid. On the first theory, Plaintiff argued that Defendants created the disputed albums as employees of the Original Label and, therefore, the albums were works for hire and not subject to termination. The Copyright Act provides that a work for hire is “prepared by an employee within the scope of his or her employment.” 17 U.S.C.A. § 101. When analyzing whether the albums were prepared in the scope of Defendants’ employment, the Court listed the thirteen, non-exhaustive factors courts must consider when making this determination.

(1) the hiring party's right to control the manner and means by which the work is accomplished; (2) the skill required to create the work; (3) the source of the instrumentalities and tools; (4) the location of the work; (5) the duration of the relationship between the parties; (6) whether the hiring party has the right to assign additional projects to the hired party; (7) the extent of the hired party's discretion over when and how long to work; (8) the method of payment; (9) the hired party's role in hiring and paying assistants; (10) whether the work is part of the regular business of the hiring party; (11) whether the hiring party is in business; (12) the provision of employee benefits; [and] (13) the tax treatment of the hired party.

Lil' Joe Recs., 2024 WL 4576445, at *8 (quoting  Horror Inc. v. Miller, 15 F.4th 232, 243-44 (2d Cir. 2021)). Second, assuming Defendants did not create the albums as works for hire, Plaintiff argued the termination notice was not valid, on the basis that Defendants had not identified the proper transfer of copyright.

At trial, the jury was asked to decide these issues, with the verdict form asking: 

Regarding the work-for-hire issues, the jury instructions listed the non-exhaustive factors for the jury’s consideration. 

Ultimately, the jury’s verdict found that Defendants did not create the albums within the scope of their employment and that the agreement Defendants identified in the termination notice transferred ownership rights to Plaintiff. As such, the members of 2LC prevailed and could recover ownership of the copyrights.

Why it Matters

Termination rights are complicated and must be handled correctly, lest artists and authors miss their window to invoke them or otherwise fail to properly send valid termination notices. Other procedural issues should be taken into consideration, such as whether the artist’s services had been furnished to the copyright transferee via a loan-out or furnishing company. As illustrated here, the determination of whether a work is an independently created work or a work for hire is highly fact-intensive and typically only decided at late stages in lawsuits, such as summary judgment or trial. 2LC’s win here may give pause to those who may decide to contest termination notices based on a work-for-hire theory, but it also illustrates how long a road it can be for an artist to recover its copyrights.