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In early January, a federal court dismissed a high-profile lawsuit filed by legendary hip-hop duo Salt-N-Pepa against Universal Music Group (UMG). The artists had sought to reclaim ownership of their early master recordings under federal copyright law. The judge ruled their claims failed at the most basic level: the duo never actually owned the copyrights they were trying to reclaim.
Behind the headlines and celebrity names lies an important lesson for every business owner about how intellectual property (IP) rights are created, transferred, and protected.
What Happened in the Salt-N-Pepa Case?
Salt-N-Pepa recorded a series of albums in the 1980s that later became classics. Over time, these recordings generated significant revenue for UMG and its predecessor entities.
In 2025, the duo filed a lawsuit asserting that they should be able to reclaim the copyrights to those master recordings under Section 203 of the Copyright Act, which is often described as a creator's "termination right." That law allows certain artists and authors to undo prior copyright transfers after a statutory waiting period.
However, the court did not even reach the issue of whether termination should apply here. Instead, the judge ruled after holding the claim up to a single threshold question: Did Salt-N-Pepa ever own the copyrights in the first place?
Based on the contracts presented, the court concluded they did not. Legal title to the recordings was held by entities affiliated with their producer and original record label – not by the artists. Because Section 203 only applies if the claimant previously owned and transferred the copyright, the court dismissed the case.
Ownership Is the Foundation of IP Rights
For non-lawyers, the key takeaway is simple: you cannot enforce rights you never had.
Many business owners assume that creating something automatically means owning it. In reality, ownership depends on what contracts say. This is especially true in industries where multiple parties contribute to a product – music, software, marketing campaigns, manufacturing, and these days even AI-generated content.
If a contract assigns or transfers IP rights to another party, the creator may lose control of those rights forever unless the agreement clearly reserves certain ownership interests.
Lessons for Business Owners and Creators
1. Always Know What You Own and Why You Own It
Before entering into agreements, be clear about whether you are assigning, licensing, or retaining rights. A contract can transfer ownership even when that is not your intention.
Example: hiring a consultant to create branding materials. If the contract says they "own all deliverables," you might not own the photos or artwork you paid for. Also, does that phrase mean you do not own the copyrights to the photos or artwork?
2. Do Not Rely on Statutory Protections as a Substitute for Clear Contracts
Termination rights and similar protections were designed to give creators a second chance, but they only apply if there was a qualifying original transfer. If you never owned the right at the outset, you cannot reclaim it later.
3. Document Early and Review Regularly
Over time, companies evolve, and agreements get lost or forgotten. Regularly auditing your IP portfolio and underlying contracts can prevent disputes and maximize the value of your assets.
Salt-N-Pepa's case involves famous artists, but the legal principles are universal. Intellectual property law is built on ownership. Before you sign any contracts, register the trademarks or copyrights, and make sure you know what you own.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
