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Specifics revealed about Happy Birthday settlement, it will cost Warner over $30 million

By | Published on Wednesday 10 February 2016

Warner/Chappell

The specifics have been revealed about Warner/Chappell’s settlement in the long-running ‘Happy Birthday’ legal battle. The deal will cost the major publisher $14 million upfront, plus legal costs, and confirms that the song is now public domain in the US, meaning lost future income too.

As much previously reported, Warner/Chappell bought the company which it believed owned the copyright in the famous song back in the 1980s. That company was Summy & Co, which had bought the rights in ‘Happy Birthday’ from its creators, the Hill sisters, in the early part of the 20th century. But which copyrights had it bought, exactly? That was the question at the heart of this case.

There were various strands to the legal battle that ensued after a film company sued the Warner publisher claiming that ‘Happy Birthday’ was ‘public domain’ in the US – ie the copyright had expired, and therefore the music rights firm shouldn’t have been insisting on royalties from those who used the song.

Confusion around the copyright status of ‘Happy Birthday’ arose because, in the US, the song was subject to copyright term rules from a hundred years ago, before the life-plus-70-years system was in place. It was agreed that this meant the music was out of copyright in America, but the ‘Happy Birthday’ lyrics came later (they not being the original words), and Warner/Chappell insisted that they remained in copyright.

In their lawsuit, the plaintiffs argued three things: that the Hill sisters, who had written the original words, which went “good morning to you”, didn’t pen the more famous lyrics; or if they did they at some point abandoned the copyright in them; or if they didn’t, they never transferred ownership of those specific words to Summy & Co.

It was on that last point that a judge ruled in favour of the plaintiffs last September, meaning that while the copyright status of the song remained uncertain, Warner/Chappell did not own the lyrics. The publisher initially said it would appeal the ruling, but then in December it was announced that a deal had been reached.

Details of that settlement have now been confirmed, with Warner/Chappell set to pay out $14 million to those who have paid to licence the song in the US in the past. An additional $4.6 million will be paid to cover legal costs, and beyond all that, by accepting that the song is now public domain, Warner/Chappell is probably giving up another $14 million+ in future royalties, because by its maths the song would have remained in copyright Stateside until 2030.

For the publisher, the settlement – which still needs to be approved by the judge – means that the matter won’t now go to trial, where plaintiffs would likely have argued that the company should be punished for collecting royalties on a public domain song for decades.

In Europe, where the life-plus-70-years system does apply, the song will go public domain on 1 Jan next year. In the meantime, it’s not clear who owns the lyrics, given that the ruling that they were never assigned to Summy, though Warner/Chappell may well claim that it still owns the music, which is still in copyright over here.


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