Q: If a non copyright song is used for the creation of a new song does that make the new song a derivative?

A: There are a few issues raised by your question.

I'll ignore "non copyright version of the song" and address who owns the copyright in a song created by two or more people:

First, you should have a written agreement between you and the producer that expressly assigns the copyright interest to one or both of you. Ownership will be determined by that written agreement. Do not work with a producer or any co-creator without a written agreement. Determining ownership rights after the project has completed is like putting a helmet on while you’re on the way to the hospital after crashing your bike. You have already lost the preventative benefits.

If (a) you do not have a written agreement; (b) neither of you is the employee of the other; and (c) you both contribute creative content to the new song, you would be considered joint authors of the work. As joint authors, you would also be joint owners, both having co-equal 100% interests in the copyright. You could both independently do whatever you'd like to exploit the work, except granting exclusive licenses without the permission of your coauthor. Profits generated from one author's exploitation of the music would need to be shared with their coauthor. In short, both you and your coauthor would own a 100% copyright interest in the song.

It's not clear what you mean by the producer "has a non copyright version of the song." Your producer has found a song in the public domain? They found a song by a foreign national not entitled to copyright protection under U.S. law? They have obtained a license to remix and redistribute the song?

Second, I'll assume when you say "non copyright version of a song," you mean a song that is in the public domain.

If that's the case, you must be careful that every element of this "non copyright song" has entered the public domain before attempting to build a derivative work based upon it. With songs, there are separate copyright interests that receive legal protection: (1) the musical composition (including any associated lyrics) and (2) the copyright over the sound recording.

A copyright interest in derivative work is separate from the copyright interest in the underlying work. This is of concern to you because, while a song may have entered the public domain, derivative works based upon that song may enter the public domain at a later date. For example, if a copyrighted poem enters the public domain in 1920, but seventy years later that poem is turned into a song by the addition of original music, you're free to copy the poem, but not the song. So, when you say you have a "non copyright version," ensure it is in fact the poem in the example above, and not the song.

Third, do you have a copyright interest in derivative work, based on a song in the public domain?

Yes. However, copyright in derivative works extends only to the original material contributed by the person who created the derivative work. Some courts take the position that the standard of originality should be higher for derivative works than for other works of authorship. If an artist copies a public domain work and makes only minor changes to produce a derivative work, there is a risk that the artist might file an infringement claim against another party that copies the same public domain work.

I hope my description of these general legal principles helps you. You will have to consult with an attorney to receive specific legal advice pertaining to your situation.