Avoiding a split with the U.S. Court of Appeals for the Sixth Circuit, the U.S. Court of Appeals for the First Circuit has held that if a copyright holder dies before he or she exercises the renewal right, the right belongs equally to his or her surviving spouse (50 percent) and his or her children (who split the remaining 50 percent) under the compulsory bequest provision. Venegas-Hernández v. Asociación de Compositores y Editores de Música Latinoamericana (ACEMLA) v. Peer, 424 F.3d 50 (1st Cir. Sept, 16 2005) (Boudin, C.J.). The court also held that a publisher who wrongfully "authorizes" a third party to perform a copyrighted work is not liable for infringement absent proof the third party actually did so.
During his lifetime, well-known Puerto Rican composer Guillermo Venegas-Lloveras granted Peer the right to sublicense his songs and collect royalties from the sublicenses. Shortly after Venegas-Lloveras died, his widow, Lucy Chávez-Butler, assigned all of her interest in his works to Latin American Music Company. Latin American Music Company and Peer subsequently authorized the use of Venegas-Lloveras’ songs for broadcast in the United States and Puerto Rico. Venegas-Lloveras’ four children sued Peer and Latin American Music Company for copyright infringement and sued Chávez-Butler to determine who owned the right to renew Venegas-Lloveras’s copyrights.
The district court determined that neither Peer nor Latin American Music Company had the right to authorize the use or copying of Venegas-Lloveras’ copyrighted works because the copyright had entered its renewal period, and the renewal period rights belonged to the widow and children of the author and not to the publishing companies. Because the plaintiffs had offered no direct evidence of any infringing act, however, the district court held there had been no infringement, and "wrongful authorization" was not actionable under the Copyright Act.
As to inheritance of the right to renew, Chávez-Butler argued she should receive 50 percent under the compulsory bequest provision of the Copyright Act, which states the right passes to "the widow, widower, or children of the author." The district court, however, citing dicta in the Supreme Court’s De Sylva case, sided with the children and gave them, and Chávez-Butler, 20 percent each.
The First Circuit affirmed the district court’s decision regarding noninfringement but reversed the ruling on ownership. The court, seeking to avoid a split with the Sixth Circuit, held that the ownership rights should be evenly divided between the surviving spouse and the children to better serve the policy aim behind the compulsory bequest: "A majority of states give the widow a 50 percent or greater interest in her husband’s estate if he dies intestate, even with multiple children; … hardly a surprising allocation, since ordinarily the widow will herself have a duty to support children still in their minority, and children in their majority ordinarily have earning power of their own."
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