Sunday, March 5, 2017

Copyright - Don't forget about termination rights

     In an earlier post, I discussed how work-for-hire language in an employment agreement only functions to change the default ownership of a work if it falls into one of the nine specific categories, and therefore, as a safety precaution, you may want to include copyright assignment language.

     Copyright assignments, however, come with a big caveat.  An author has the right to terminate its copyright grant, 17 U.S.C. § 304(c) (grants before January 1, 1978) and 17 U.S.C. § 203(a) (grants after January 1, 1978), and this right cannot be contracted away.  17 U.S.C. § 203(a)(5); Stewart v. Abend, 495 U.S. 207, 230 (1990) ("The 1976 Copyright Act provides ... an inalienable termination right."). Congress gave authors this right because it was concerned about the imbalance of power between authors and publisher, and that authors might receive too little compensation when they first assigned their works.  The termination right gives authors a second chance at exploiting their works. At the moment, musicians appear to be the primary authors taking advantage of the termination right. For example, Victor Willis of the group Village People filed a termination notice concerning the song Y.M.C.A. and some of the rights reverted to him (see Spin article). But, there is no reason that computer programmers, book authors, photographers, or others will not take advantage of this right.

     There are some limits on the termination right. First and most importantly, while termination stops new derivative works from being created, it does not stop existing derivative works from being used lawfully. Second, the termination rights only affect U.S. copyrights. It doesn't affect foreign rights in the copyrighted work. Thus, an author cannot stop foreign distributors from continuing to distribute the work. Third, the termination right does not apply if the grant was made in a will.  17 U.S.C. § 203(a). Fourth, if you don't use the termination right, then it is lost.

     This post examines how to terminate a copyright grant given after January 1, 1978.

     To terminate an assignment, an author must send a written notice to the assignee. 17 U.S.C. § 203(a)(4). The notice must state the effective date of termination, and the notice must be served at least two years but not more than ten years before that date. There are a host of other requirements, such as the name of each grantee whose rights are being terminated and each address at which the service of the notice is being made. 37 C.F.R. § 201.10.  Additionally, the notice must be recorded before the effective date of termination in the Copyright Office.

     A grant may be terminated at any time during a period of five years beginning at the end of 35 years from the date of execution of the grant.  17 U.S.C. § 203(a)(3).  Or, if the grant covers the right of publication of the work, the period begins at the end of 35 years from the date of publication of the work, or at the end of 40 years from the date of execution of the grant, whichever term ends earlier.

- Henry Park

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