The tune was used (with amended words) in JibJab's satirical cartoon of President Bush and Senator John Kerry, which has been entertaining web users since July.
Ludlow Music, which claims to own the copyright in the song, threatened to sue; but JibJab's lawyers, from the Electronic Frontier Foundation (EFF), filed a pre-emptive lawsuit, asking a court to declare that it was making fair use of the tune, as permitted by copyright law.
The EFF then claimed that the song had actually been in the public domain since the early 1970s. The rights group explained that Woody Guthrie had written his classic American song in 1940, when the copyright laws granted a copyright term of 28 years, renewable once for an additional 28.
According to the EFF, the initial copyright term was triggered when Guthrie sold his first versions of the song as sheet music in 1945. The copyright expired when Ludlow failed to renew its registration in 1973.
Ludlow, however, believes its copyright - initially filed in 1956 and renewed in 1984 - remains valid and disputes EFF's claims. Unlike the UK, the US has a system of copyright registration. Speaking to CNET News.com, Paul LiCalsi, lawyer for Ludlow, explained that, as the song had been last copyrighted at a time when it was technically regarded as unpublished, the copyright had not lapsed.
"Since there was no official publication after the last copyright, the song is still protected under the law," he said.
But the case has settled. Under the terms of the agreement JibJab has dismissed its suit against Ludlow and is free to continue distributing its "This Land" animation without further interference from Ludlow.