‘Happy Birthday' Plaintiffs to Go After Refunds

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By Anandashankar Mazumdar

Sept. 23 — Plaintiffs that have won a ruling that Warner/Chappell does not own the rights to the “Happy Birthday to You” lyrics are now going to concentrate on trying to get Warner to refund the possibly millions of dollars in licensing fees it has collected over the years, a lawyer for the plaintiffs told Bloomberg BNA on Sept. 23.

On Sept. 22, the U.S. District Court for the Central District of California ruled that Warner/Chappell Music Inc. and its predecessor companies, which have asserted copyright interest in the “Happy Birthday” lyrics for the last 80-some years, did not actually own those rights.

“We have to turn our attention to who Warner has to pay money back to,” Mark C. Rifkin of Wolf Haldenstein Adler Freeman & Herz LLP, New York, counsel to Good Morning to You Productions Corp. and lead counsel for the plaintiffs, told Bloomberg BNA on Sept. 23.

‘Missing Chunk' in the Copyright Act 

Rifkin said that his clients will seek repayment under a theory of unjust enrichment under federal law. The Copyright Act of 1976—the federal copyright statute—does not explicitly account for this kind of circumstance.

“There's kind of a missing chunk in the Copyright Act,” he said. “If you're a copyright owner, the statute gives you an absolute statutory right to bring an infringement claim and seek damages, but there's no provision in the Copyright Act” that says you can file a claim to get back royalties or fees you might have paid to a putative copyright owner who it turns out did not hold those rights.

The complaint also seeks payment under California common law for “money had and received,” “recission for failure of consideration,” and for false advertising under California statutory law, Cal. Bus. & Prof. Code §§17500 et seq.

“Obviously, if you collect money unlawfully under a false claim of ownership, you've got to give that money back,” Rifkin said. “They bought nothing. Warner was selling them the Brooklyn Bridge.”

But the plaintiffs are not only seeking repayment for themselves. They have also sought certification of their lawsuit as a class action.

The court has yet to decide whether to grant class certification. This would allow the plaintiffs to seek remedies for any person who has paid Warner/Chappell for use of the song.

Millions a Year for 80 Years?

Should a court eventually decide that Warner has to repay royalties and licensing fees that it has collected over the past 80 years, it will be difficult to determine the amount of those refunds.

Rifkin told Bloomberg BNA that at a March hearing, a representative of Warner/Chappell said in court that for a single major motion picture license, Warner might collect as much as $100,000 in fees.

In October 2010, Robert Brauneis, a law professor at the George Washington University, published a law review article that referred to estimates that at the time Warner was collecting about $2 million a year in royalties and licensing fees for “Happy Birthday to You.” Robert Brauneis, “Copyright and the World's Most Popular Song,” 56 J. of the Copyright Soc'y of the U.S.A. 335 (2009).

Appeal Remains a Possibility 

Naomi Jane Gray of Harvey Siskind LLP, San Francisco, who is author of the IP law blog Shades of Gray, has been following this case, and she said that going forward, the district court ruling left open for now the remote possibility that even if Warner/Chappell does not hold the rights in the song, that somebody else might.

“It is theoretically possible, although perhaps implausible, that there is some copyright owner out there or perhaps an heir who could claim copyright interest in the lyrics,” she told Bloomberg BNA on Sept. 23.

For now, a lot of members of the public who have felt outrage that Warner has been getting royalties for a century-old composition might “feel like justice has been done.”

But “who knows what's going to happen next,” she said.

It is very conceivable that Warner would seek to appeal the district court's ruling to the U.S. Court of Appeals for the Ninth Circuit.

But, she said, “I think it would be an uphill battle to get it reversed on appeal.”

J. Michael Keyes of Dorsey & Whitney, Seattle, also said that “It's going to be interesting to see where the parties go from here and whether this decision withstands scrutiny at the Ninth Circuit or elsewhere, if it goes that far.”

Indeed, plaintiff's lawyer Rifkin was skeptical that Warner could appeal right away—known as an interlocutory appeal, before a trial disposes of all the outstanding legal issues and questions of fact.

“I think they would have to ask Judge [George H.] King for permission to appeal right now, and I don't think judge King would be inclined to grant it,” Rifkin said. “I don't think they could convince Judge King that an immediate interlocutory appeal would be appropriate but who knows?”

Inquiries to Warner Bros. Entertainment Inc. and its lawyers were not returned by publication time.

The court's ruling was issued by Judge George H. King.

Marya was represented by Wolf Haldenstein Adler Freeman & Herz LLP, San Diego. Warner/Chappell was represented by Munger Tolles & Olson LLP, Los Angeles.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Mike Wilczek in Washington at mwilczek@bna.com

Text is available at: http://www.bloomberglaw.com/public/document/Rupa_Marya_v_Warner_Chappell_Music_Inc_Docket_No_213cv04460_CD_Ca/2

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