Copyright Termination Rights Come of Age

25 August 2011 Second City Bench Memo Publication

Section 203 of the 1976 Copyright Act affords authors the ability to terminate copyright assignments and reclaim for themselves copyrights in the works they created 35 years after first publication. This right cannot be waived by the author and exists regardless of what the author was originally paid for the work. The provision reflects the principle that some authors may strike bad deals, particularly at the beginning of their careers, and they should be afforded an opportunity to undo those agreements after a period of years has passed.

For works created in 1978 or later (the earliest works as to which the 1976 Act applies), the right to terminate runs for a period between 35 and 40 years from the copyright grant or the first publication of the work, whichever is earlier. Works assigned in 1978 are eligible for termination if a filing is made by 2013. In recent months and years, as the termination window narrows for the initial group of eligible works under the 1976 Act, songwriters and authors of literary works have begun to file termination claims seeking to cover the copyrights in famous songs and books that have been under the control of publishers for decades. Songs made famous by The Village People (“Y.M.C.A.”), Bob Dylan, Tom Petty, and Loretta Lynn have all been reportedly been subject to termination notices filed in recent months.

Not all stake holders are going along with the authors’ efforts to recover their copyrights. The publisher of “Y.M.C.A.” has sought relief in court, arguing that the work was a “work for hire.” A “work for hire” is a work created by a company employee within that person’s scope of employment. In such circumstances, the employer is deemed to be the author of the work for copyright purposes and the termination provision of Section 203 is inapplicable. Similarly, record labels have taken the position that all master recordings of musical works are “works made for hire” and exempt from termination rights.

Whatever the merits of these positions and however individual cases are resolved, the entertainment and publishing industries face a cascade of potential termination claims and the likelihood of hundreds, if not thousands, of contract renegotiations. In fact, copyright termination could provide a significant disruption to creative industries, which have often relied on constant streams of income from older works to finance the development of new ones.

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