SHERMAN, Texas (CN) - A dispute between two music companies over who owns the rights to the songs "Whoomp! (There It Is)" and "Dazzey Duks" may go to trial after a federal judge said the facts are still unclear.
Alvertis Isbell, owner of Alvertis Music, filed suit 10 years ago in the Eastern District Court of Texas, alleging that DM Records used the 1993 Billboard hits "in a manner inconsistent with Alvertis Music's ownership rights," according to the ruling.
Isbell claimed to have owned two companies in the 1990s that owned sound recordings, music publisher Alvertis Music and Bellmark Records.
Bellmark allegedly gained the rights to Tag Team's "Whoomp! (There It Is)" and Duice's "Dazzey Duks," and DM Records licensed the recordings in 1997, according to the complaint.
When Bellmark filed for bankruptcy two years later, DM bought the songs at the bankruptcy estate and gained rights to them.
Alvertis Music, which did not declare bankruptcy along with Bellmark, contends that DM then began using the songs in ways that violated Alvertis Music's rights.
Transferred from federal court to bankruptcy court over a course of nine years, the case returned once more before the Eastern District in 2011.
Claiming that Isbell and his company could not claim ownership because they had improperly gained the rights to the songs, DM moved for summary judgment. Isbell also moved for summary judgment, claiming that he is the songs' rightful owner.
Though U.S. District Judge Richard Schell refused to dismiss Isbell's complaint on Friday, he said DM can still supplement its motion for summary judgment.
"Because there are genuine issues of material fact surrounding the ownership of the subject composition copyrights, the court denies both DM's and Isbell's motions for summary judgment," Schell wrote.
To show ownership of a copyright, a party must have proof that the material is original and copyrightable. In the case of a transfer, the party must produce a signed statement from the original owner to validate the transfer.
"The writing does not have to contain any particular language or 'magic words,' but it must show an agreement to transfer copyright," Schell wrote.
Though Bellmark obtained the song rights with writers agreements, neither Isbell nor Alvertis Music are mentioned by name. The language in the agreement is unclear as to whether transfer of the rights was intended to apply a company owned by Bellmark or entirely separate from it, the decision states.
"Because this contract is susceptible to more than one reasonable interpretation, it is ambiguous and extrinsic evidence may be used to determine the parties' intent," Schell wrote.
Because of this dispute, the issue is not ripe for summary judgment.
The parties also dispute whether Bellmark was an alter ego of Isbell. Claiming that it was an alter ego, DM argued that its purchase of Bellmark's assets also covered the assets of Alvertis Music. Isbell says, however, one entity's entity does not necessarily involve the other's assets.
Schell decided the alter ego relationship "should be resolved at trial."
The judge also refused to stop Isbell from claiming rights to the songs via equitable estoppel. Isbell's intentions with regard to the song rights are unclear, the court said.
"This court has held that there is a genuine factual dispute regarding when Isbell knew or had reason to know that the Subject Compositions were being exploited," Schell wrote.
DM failed as well to show it had an implied license from Isbell.
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