TERMINATIONS OF TRANSFERS
IVAN HOFFMAN B.A., J.D.
NOTE: The reader should read the other articles on my site including the articles called “Dying and Copyrights” and “Divorce and Copyrights.”
When Congress passed the 1976 Copyright law and as it has been amended, it enacted a series of very complex provisions allowing authors, song writers, recording artists, cover artists, illustrators and other creators to terminate grants of copyright rights they may have made to publishers, recording companies and others. (For the sake of simplicity in this article, I shall refer to all these parties as a “creator” and to the party to whom the grant was made as the “assignee.”)
The purpose of these rules, which are similar to the earlier copyright provisions regarding who can renew old copyrights (see the article “The Problems With Older Copyrights” and “Who Can Renew Old Copyrights?”), is to protect these creators from having made “bad” deals earlier in their careers by granting away rights that may extend until long after they may have become successful. Thus the rules are designed to allow these creators, under certain circumstances, to recapture the rights they may have granted away. However, neither the termination of transfer rules nor the renewal rules require any showing of having made any such “bad” deals. These rights are exercisable simply by virtue of the passage of the requisite period of time.
An overall note: all of these rights to terminate do not exist if the creator was an independent contractor and executed a valid work made for hire agreement or if the creator was a bona fide employee of the assignee for whom the work was created during the course and scope of that employment and thus acted as an employee for hire. However, not all contracts executed by independent contractors in which there is language referring to the agreement as a work made for hire will be legitimately determined to be a work made for hire agreement. Read the several articles on my site under the link “Articles for Writers and Publishers” dealing with work made for hire agreements. Additionally, relationships that look like employment relationships may turn out to not be such relationships. Or it may be that the work that was created may not have been part of the course and scope of employment. The issues related to who is an employee and who is an independent contractor were discussed at length by the United States Supreme Court in Community for Creative Non-Violence vs. Reid and you should read that case carefully. Therefore, the work thus created may not fall into the work made for hire relationship of employer-employee and should be looked at carefully. Thus, both the creator and the assignee should thus consult with their own experienced attorneys to review the actual status of the initial relationship to see if termination is available.
Agreements Entered Into Before January 1, 1978
The law provides that the grant of rights may be terminated by the creator if living or by the creator’s spouse, children, grandchildren or estate in a particular order if the creator is deceased at the time the notices are sent out. It is much more complicated if there was more than one creator and even more complicated still if one of the creators has died and much more complicated still again if the one who died had children. No “agreements to the contrary,” meaning no prior agreements or promises not to terminate, are valid. What is or is not an “agreement to the contrary” is not totally clear however.
The law provides that a creator or the above parties can terminate a transfer at any time during a window of 5 years commencing 56 years after the original copyright date or within that same 5 year window commencing January 1, 1978, whichever is the later.
In 1998, Congress passed the Sonny Bono Copyright Term Extension Act that extended the terms of copyright protection for an additional 20 years and further provided for the contingencies in this situation. The said Act provides that if a copyright is in its renewal term at the time the Act was effective (which is October 27, 1988) and if the window to terminate has already passed, then the right to terminate is extended to a period of 5 years from 75 years from the date of the original copyright.
Agreements Entered Into After January 1, 1978
The law provides that the creator or the above parties may terminate grants of rights based on contracts entered into after January 1, 1978 during a five year window commencing with the earlier of 35 years from the date of the agreement or if the agreement includes publication rights, then the end of 35 years from the date of publication of the work that was the subject of the agreement or the end of 40 years after the signing of the said agreement, whichever is the earlier.
As to both kinds of termination, in the event that the window is still open, the law requires that the creator or the creator’s estate send a notice to the assignee not less than 2 nor more than 10 years prior to the effective date of termination, which effective date must be within the 5 year window. That notice is, in itself, quite complex and there are a series of regulations in the Code of Federal Regulations detailing the nature of the contents of that notice and how, as a condition of termination, the notice must be recorded at the copyright office.
In addition to the exclusions based on work made for hire, discussed above, the right to terminate does not exist as to works that are “derivative works,” which are works that were based on the original copyrighted work. For instance, if the work that was transferred was a book or a piece of artwork and before the notice of termination, a work such as a television show or a computer game was created using the original copyrighted work, the termination of the original transfer does not operate to terminate the rights as to such derivative work nor may such termination prevent the owner of the rights in the derivative work from exploiting those rights even after the termination. However, once there is a termination of transfer the owner of the rights in the derivative work may not make any subsequent versions of the original work.
Furthermore, rights that exist outside of the United States cannot be terminated even if the grant was made inside the United States.
Additionally, any transfers of rights of copyrights made by will cannot be terminated by the estate of the grantor.
As to termination of transfer rights in and to recordings: since recordings are only subject to copyright if they were initially recorded after February 15, 1972, agreements as to recordings made prior to that date are not subject to termination.
This area of the copyright law is enormously complex and the within article is certainly not intended to be exhaustive of the issues. Precise timing calculations must be made as well as research into the original copyrights, the need for renewal applications for certain copyrights and when those were required, whether they were done properly, whether, in the event of death of the creator or creators, who has rights to the work now and many, many other issues.
Now add into the mix issues related to probate and wills and trusts as well as divorce issues, especially in community property states (read “Divorce and Copyright”), and you've got the makings for a very complicated situation.
This is definitely something that should be done by an experienced attorney and not by a non-lawyer trying to “save” money by doing it itself.
Copyright © 2001, 2012 Ivan Hoffman. All Rights Reserved.
This article is not legal advice and is not intended as legal advice. This article is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic discussed. You should not rely on this article in any manner whatsoever and you should not draw any conclusions of any sort from this article. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article is based on United States laws but the laws of other countries may be different. You should consult with an attorney familiar with the issues and the laws of your country. This article does not create any attorney client relationship and is not a solicitation.
No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.