In an important decision issued on January 12, 2026, the Fifth Circuit affirmed a lower court ruling and held that the statutory termination of a grant of copyright causes the reversion of all rights to the original author or their heirs, including rights in foreign countries. The decision in Vetter v. Resnik can be viewed here.

By way of background, the termination provisions set forth in the 1976 Copyright Act permit grantors of copyright interests (including assignments and licenses), in certain circumstances, to terminate those grants and recover their copyright interest after the passage of a proscribed period. (17 U.S.C. § 203, § 304.) The legislation was intended to give creators “a second bite at the apple” to financially benefit from their work when its true value becomes clear. The underlying concept is that because creators often sign deals at a time when they have little bargaining power, they deserve an opportunity to try again to gain financial remuneration from their works.

Vetter involves the song “Double Shot (Of My Baby's Love”), which was a hit for the Swinging Medallions. In 1963, the two composers (Don Smith and Cyril Vetter) assigned to a music publisher, in exchange for one dollar, their respective 50% copyright interests in the song “throughout the world for the full term of copyright protection, including a contingent assignment of all renewal period rights under the [Copyright Act of 1909].” Because Smith died (in a plane crash) before expiration of the original 28-year copyright term under the Copyright Act of 1909, his heirs (and not the publisher) were entitled to his 50% interest in the song during the renewal term, notwithstanding the prior assignment. (See Miller Music Corp. v. Charles N. Daniels, Inc., 362 U.S. 373 (1960).) Ultimately, a company owned by Vetter purchased Smith’s interest in “Double Shot,” and in 2019, Vetter recaptured his 50% copyright interest by sending a termination notice pursuant to 17 U.S.C. § 304(c). 

The plaintiffs (Vetter and his company) brought an action seeking a declaratory judgment that as a result of the termination of the underlying 1963 grant of Vetter’s publishing rights to this song, they recaptured all copyright interests in “Double Shot” throughout the world, not just in the United States. The successors to the original publisher argued that they continue to control rights outside of the United States. The District Court for the Middle District of Louisiana granted the plaintiff's motion for summary judgment declaring them to be the owners of the copyright in “Double Shot” throughout the world. Not surprisingly, the defendants appealed.

Vetter turns on the scope of this provision:

“Termination of a grant under this subsection affects only those rights covered by the grant that arise under this title, and in no way affects rights arising under any Federal, State, or foreign law." 17 U.S.C. § 304(c)(6(E) (applying to grants made before January 1, 1978.  See also 17 U.S.C. § 203(b)(5) (applying to grants made on or after January 1, 1978).

This provision has been widely discussed and debated. Most grantees (e.g., movie and television studios and music labels) have vociferously argued that the language means that even after a grant is terminated, the grantee retains the right to exploit the work outside of the US. There are enormous implications to this question. The value of the reverted interest in a work is dramatically reduced if the distributor retains rights outside of the US. Indeed, for certain types of works such as motion pictures, it may be extremely difficult for the owner of the reverted rights to make a new deal if it can only offer US rights. 

On appeal, the defendants argued that the district court decision is: (i) contrary to the plain language of the statutory provision; (ii) contrary to case law on this subject (iii) in conflict with US treaty obligations that deal with copyright law. The Fifth Circuit rejected each of these arguments.

On the question of statutory interpretation, the defendants argued that because Section 304(c)(6)(E) expressly provides that termination only affects rights that “arise under this title” and not “arising under any Federal, State, or foreign law,” Congress limited termination to domestic rights. The Fifth Circuit disagreed, holding that the phrase “arise under this title” refers to the source of the rights – i.e., U.S. copyright law – not the territory in which they may later be exploited. In other words, because Vetter’s copyright interest in the song “arose under the U.S. Copyright Act, the plain language of section 304(c)(6)(E) dictates that his termination would be effective as to all of his rights – including his copyright to the extent that it extends internationally.” The court also noted that “there is no explicit geographical limitation in section 304(c)(6)(E) that restricts the exploitation of Vetter’s rights to uses within the United States.” The court further held that even if the term “arises under” were ambiguous, the district court correctly interpreted the statute. The Fifth Circuit cited Kirtsaeng v. Wiley, where the Supreme Court concluded that the phrase “lawfully made under this title” in section of the Copyright Act governing the first sale doctrine did not limit application of the doctrine to activities within the United States. The Fifth Circuit went on to note that the district court's holding is consistent with the purposes of the termination provisions included in the 1976 Copyright Act to provide a remedy for creators who may have made unremunerative transfers.

As for the argument about prior case law, the Fifth Circuit declined to follow precedents from other jurisdictions that had reached a contrary conclusion, including the “Superman” case from the Ninth Circuit which in turn relied heavily on secondary treatises written by copyright experts. See Siegel v. Warner Bros. Entertainment, Inc., 542 F. Supp. 2d 1098 (C.D. Cal. 2008), rev’d in part on other grounds, 504 F. App’x 586 (9^th Cir. 2013), 

The Fifth Circuit also rejected defendants' argument that the district court holding conflicts with U.S. obligations under the Berne Convention and Universal Copyright Convention, because it would grant US authors greater rights than authors from other signatory countries. The court found that the presumption against extraterritoriality may apply to questions of infringement, but not to questions of ownership, assignment or termination.

The Fifth Circuit decision is certain to receive an enormous amount of attention and criticism, particularly from those that are likely to be deprived of valuable leverage if they can no longer claim the continued right to exploit a grant in foreign jurisdictions after termination. Expect to see a motion for reargument, rehearing, petitions for certiorari and aggressive amicus briefing on both sides of the issue.

I can’t wait.