This time of the year, we all hear the popular Christmas song “Santa Claus is Comin’ to Town,” but what we don’t hear is the ownership dispute over it.  Recently, the Second Circuit ruled that the current rights to the song will end December of 2016, and it will pass to the descendants of one of the songwriters, John Frederick Coots.

Tracing the history of the song through decades that also included significant changes in copyright law, records showed that the songwriters had sold the song and copyright to EMI Feist Catalog, Inc. (partially owned by Sony) in 1934.  EMI and Coots later entered into an agreement in 1951, where Coots assigned EMI rights to the song, as well as “all renewals and extensions” of the song’s copyright.  Subsequently, Coots and EMI entered into another agreement in 1981, wherein Coots assigned EMI all of his rights and interests “whatsoever now or hereafter known or existing.”

In 2007, the Coots descendants served EMI a termination notice.  That notice stated that their agreement would terminate on December 15, 2016.  Under 17 U.S.C. § 203, it permits authors and their heirs to terminate grants executed on or after January 1, 1978 “beginning at the end of thirty-five years from the date of execution of the grant” or in this case, December 15, 2016.

EMI offered to pay the Coots descendants $2.75 million to “acquire 100% ownership and exclusive administration” in the song, but this offer was rejected, and a litigation was commenced in 2012.

The Coots descendants argued that the notice in 2007 canceled the agreement in 1981.  However, EMI argued its rights are governed by the agreement in 1951, and that its rights extend until when the copyright is set to expire – until 2029.  At that point the song will enter the public domain.

The Second Circuit held that the 1981 agreement superseded the 1951 agreement, and thus, the Coots descendants had the right to terminate the agreement.  The termination notice was valid and the December 2016 termination date is effective.  Therefore, by Christmas of next year, it will be a very merry Christmas for the Coots descendants as “Santa Clause is Comin’ to Town.”