By Thomas Long, J.D.
Rapper Jay-Z has won another round in his defense against claims that he infringed the copyright in a 1957 arrangement of an Egyptian composer’s song, "Khosara, Khosara" when he used a sample from the arrangement in the background music to his hit single "Big Pimpin’." The U.S. Court of Appeals in San Francisco affirmed a district court’s judgment as a matter of law in favor of Jay-Z and other defendants because the plaintiff—the composer’s heir—lacked standing to bring the copyright claims. Pursuant to Egyptian law, when the heir transferred "all" of his economic rights in the song to the owner of an Egyptian music company in 2002, the transfer included the right to create derivative works adapted from "Khosara." Any moral rights retained by operation of Egyptian law were not enforceable in U.S. federal court, and even if they were, the heir failed to comply with a compensation requirement of Egyptian law, which did not provide for his requested money damages and only provided for injunctive relief from an Egyptian court. The fact that the heir retained the right to receive royalties did not give him standing to sue for copyright infringement, the court said (Fahmy v. Jay Z, May 31, 2018, Bea, C.).
Plaintiff Osama Ahmed Fahmy was an heir of Baligh Hamdi, a well-known Egyptian composer, who co-authored the song "Khosara, Khosara" in 1957. In 2007, Fahmy asserted copyright infringement claims against defendants Jay-Z (aka Shawn Carter), producer Timothy Mosley (pka "Timbaland"), and others, including record labels, publishers, and distributors, who were involved in the production, performance, and distribution of the 1999 song "Big Pimpin’." In "Big Pimpin’," Jay-Z sings rap lyrics over a recording of "Khosara."
The defendants asserted that they held a license to use portions of "Khosara" in "Big Pimpin’" and that the license derived from rights originally granted by Hamdi to an Egyptian recording company. Fahmy contended that the rights transferred covered only the right to make sound recordings of "Khosara," and not the right to make derivative works based on the song.
In 2002, Fahmy signed an agreement with the Egyptian recording company’s successor. The defendants argued that the 2002 agreement constituted a full and complete assignment of all of Fahmy’s rights in the copyright for the "Khosara" musical composition. Fahmy testified that the purpose of this agreement was simply to "authorize the same rights that had been authorized originally." Fahmy contended that he retained rights in the song sufficient to give him standing in the current suit.
The district court applied Egyptian law to determine the scope of the conveyance of rights in the 2002 agreement. Fahmy argued that it was not possible under Egyptian law to enter into an agreement conveying the right to modify a musical composition, but the district court disagreed, determining that Egypt recognized a distinct economic right for authors to authorize or prevent "adaptations" of their works, which may be transferred pursuant to statute. The district court concluded that Fahmy had transferred all of his non-moral rights in "Khosara" and therefore did not have standing to sue the defendants for copyright infringement. Because Fahmy disposed of all of the economic rights in the composition, he was not the legal or beneficial owner of an exclusive right under a copyright under Section 504(b) of the Copyright Act, the district court said.
Fahmy appealed, and the Ninth Circuit conducted a de novo review of the district court’s grant of judgment as a matter of law.
Right to create derivative works—moral rights. To have standing to sue for the copyright infringement alleged to have been done by Jay-Z’s adaptation of "Khosara," Fahmy must have retained the exclusive right to prepare derivative works of "Khosara," such as "Big Pimpin’," the court said. Fahmy argued that he could not have transferred the right to prohibit others from making derivative works because, under Egyptian law, that right was subsumed within Egyptian moral rights and was inalienable. Unlike U.S. copyright law, the court noted, Egyptian law gave copyright owners certain moral rights in addition to economic rights, including a moral right of "integrity." This right conferred on authors the right to object to derivative works that they deem to be "distortions" or "mutilations" of the copyrighted work, whether or not the relevant economic rights have been transferred. Because moral rights are personal to the author, they cannot be transferred to another party. However, in the Ninth Circuit’s view, the record did not support Fahmy’s argument that the specific right to prepare derivative works for profit was a non-transferable, non-economic right. Fahmy’s expert witness testified that the term "adaptation" in Egyptian law meant the same thing as "derivative work," and Egyptian law gave authors the right to authorize adaptations of their works. Because Egyptian law also permitted authors to transfer all or some of their economic rights, it followed that the right to prepare derivative works for profit can be transferred under Egyptian law, the court reasoned.
The court added that Fahmy’s moral rights—even if he had retained them—were not enforceable in the United States because U.S. law recognized only limited moral rights with respect to certain works of visual art. In addition, while the Berne Convention guaranteed that holders of foreign copyrights were to be given the same protection as holders of domestic copyrights, it did not require U.S. courts to grant rights to foreign copyright holders that were not granted to domestic copyright holders.
Even if U.S. law recognized or enforced the moral rights of musical composers, the specific right that Fahmy asserted under Egyptian law entitled him only to injunctive relief in Egypt. An author seeking to prevent mutilations or distortions of a copyrighted work can request a court order preventing the distribution of a challenged work, or preventing others from modifying the copyrighted work, but the Egyptian statute also required the author to pay fair compensation to the person authorized to exercise the economic rights of exploitation. There was no evidence that Fahmy had paid Jay-Z the required compensation here.
The Ninth Circuit therefore concluded that (1) Egyptian law recognized a transferable economic right to prepare derivative works; (2) that the moral rights Fahmy retained by operation of Egyptian law were not enforceable in U.S. federal court; and (3) even if they were, Fahmy had not complied with the compensation requirement of Egyptian law, which did not provide for his requested money damages, and which provided for only injunctive relief from an Egyptian court.
Right to create derivative works—assignment. The 2002 agreement unambiguously conveyed to Jaber the economic right to create derivative works, the court said. The agreement met all the requirements of Egyptian law, including the writing requirement and details regarding the rights transferred, the extent and purpose of the transfer, its duration, and the place of exploitation. It was not necessary for the agreement to explicitly state that it transferred the right to make changes to future version of "Khosara" because the agreement provided that all economic rights were being transferred.
Beneficial ownership. Finally, Fahmy argued that because the 2002 agreement reserved his right to receive royalties for exploitation of "Khosara," he was a "beneficial owner" of the song’s copyright, thus conferring upon him standing to sue for infringement. The Ninth Circuit rejected this argument, stating that the right to receive royalties does not confer standing to sue for copyright infringement. Royalty rights reserved in a contract transferring a copyright were a concert of state contract law only, and it also appeared that the right to receive royalties was treated under Egyptian law as separate from the economic rights related to copyright. A transfer of "all" economic interests in a copyright was consisted with the retention of some set percentage of royalties. Therefore, the Ninth Circuit affirmed the district court’s conclusion that Fahmy lacked standing.
This case is No. 16-55213.
Attorneys: Keith J. Wesley (Browne George Ross LLP) for Osama Ahmed Fahmy. Christine Lepera (Mitchell Silberberg & Knupp LLP) for Jay-Z a/k/a Shawn Carter.
Companies: Big Bad Mr. Hahn Music; Chesterchaz Publishing; EMI Blackwood Music Inc.; EMI Publishing Ltd.; Kenji Kobayashi Music; Lil Lulu Publishing, Machine Shop Recordings LLC; Marcy Projects Productions II; MTV Networks Enterprises Inc.; Nondisclosure Agreement Music; Paramount Home Entertainment Inc.; Paramount Pictures Corporation; Radical Media, Rob Bourdon Music; Roc-A-Fella Records LLC; Timbaland Productions Inc.; UMG Recordings Inc.; Universal Music and Video Distribution Inc.; Warner Music Inc.
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