Copyright Law has changed in both scope and length of copyright provisions. It originally was 14 years with a possibilities of a renewal of 14 years. It changed to be 28 years for initial term and then another 28 year renewal term. Congress then added 19 years and then another 20, eventually creating a system of dual term copyrights. Today we have a unitary term system based for most works on the life of the author plus 70 years. That dual term system is actually related to one of the types of termination rights that are currently in the Copyright Act. Damien Allen and Lydia Loren discuss the challenges and the provisions of Copyright Transfer Terminations on today's program.
- The Copyright Act gives authors and their families certain rights to terminate agreements
- Section 203 Termination Rights of the Copyright Act, in Title 17 of the United States Code are for agreements entered into after the 1976 Copyright Act, effective January 1, 1978. For 203 terminations, you can terminate an agreement entered into by an author 35 years after the date of the agreement.
- Section 304 terminations relate to the lengthening of copyright terms of agreements that were entered into before the effective date of the 1976 Act.
Announcer: Welcome to Copyright Law Radio, sponsored by Traverse Copyright Law, internet lawyers specializing in copyright infringement, copyright licensing, and copyright registration. Now here’s your host, Damien Allen.
Damien Allen: Good afternoon, and welcome to Copyright Law Radio. My name is Damien Allen, and joining me today on the phone is Lydia Palace Loren of Lewis & Clark Law School in Portland, Oregon. Good afternoon, Lydia. Welcome to the program.
Lydia Loren: Good to be with you, Damien.
Damien Allen: Today the subject is termination of transfer provisions for copyright law. What is a termination of transfer provision, and what do we need to know about it, Lydia?
Lydia Loren: Well, that’s a great question, Damien. There are actually two different kinds of termination of transfer provisions in the Copyright Act. What these provisions allow for is an author, or even the author’s family if the author is deceased, to go in and serve notice on somebody to whom the copyright may have been transferred or licensed, and the notice says, “I hereby am terminating that transfer.” You have to give at least two years or a maximum of ten years of notice, and after that notice period runs out, that agreement is no longer valid, so that agreement or license then will no longer exist. This is true even if the assignment or license says that it is perpetual or for the life of the copyright or it can’t be terminated, nonetheless, the Copyright Act does give authors and their families certain rights to terminate agreements.
Damien Allen: The primary provision of the Copyright Law is the life of the author plus 70 years, is that correct?
Lydia Loren: That is the current duration of copyright, correct.
Damien Allen: Has this changed over the period of time?
Lydia Loren: It has indeed changed over the period of time of Copyright Law. It originally was 14 years with a possibilities of a renewal of 14 years. It subsequently was moved up to be 28 years of an initial term and then another 28 year renewal term, to which Congress then added 19 years and then another 20, so eventually we got to a pretty long system of dual term copyrights. Today we do have a system that’s based, instead of a renewal term system, a dual term system, we have what’s referred to as a unitary term system based for most works on the life of the author plus 70 years. That dual term system is actually related to one of the types of termination rights that are currently in the Copyright Act. As I mentioned before, there are two different termination rights, so let me just a little bit explain about those two different types. The one type of termination right, I’m going to refer to it as the 203 Termination Rights, because that’s the section of the Act in which it is housed, it’s Section 203 of the Copyright Act, which is in Title 17 of the United States Code. The 203 terminations are for agreements entered into after the effective date of the 1976 Copyright Act, and that effective date is January 1, 1978. For two or three terminations, you can terminate an agreement entered into by an author 35 years after the date of the agreement. Now if you think about that for a second, January 1, 1978, plus 35 years, brings you to 2013. None of these terminations have happened yet, but we’re beginning to see notices because, remember I said you have to serve notice at least two years ahead of time, but as much as ten years ahead of time. So we’re starting to see notices of these kind of 203 terminations. That’s one type of termination. There’s another type of termination that applies to agreements that were entered into before the effective date of the ’76 Act, that being January 1, 1978. Those terminations are housed in a different division of the Copyright Act. They’re in Section 304, so they’re sometimes referred to as 304 terminations. Those termination rights relate to the lengthening of the copyright term. Each time Congress has decided to add extra years to the renewal term of existing copyrights, Congress has said to itself, “Well, who should get the benefit of those extra years? Should it be transferees, licensees, people who have taken assignments of copyrights or should it be the authors and their families?” What Congress decided is, “Well as a default rule, we’ll grant these extra years of protection to the transferees unless the author or the author’s family desires to recapture those rights by sending a termination notice.” Because Congress added new years to the duration term two different times, once in the ’76 Act and once again in the 1998 Copyright Term Extension Act, there are actually two different kinds of 304 terminations. 304C and 304D are the two provisions of the Copyright Act. In a nutshell, those are the kinds of terminations that we’re talking about. There are rules for pre-78 agreements and there are rules for agreements that are after January 1, 1978.
Damien Allen: What are some of the most common reasons someone would seek a termination of transfer?
Lydia Loren: Well, usually it’s because the work has continued commercial viability and the author or the author’s family desires more money. They desire a different deal. Sometimes it can be because they feel that the transferee is not appropriately exploiting the work. The work isn’t making enough, and they think it’s capable of making more. They want to recapture those copyrights to then enter into new agreements with someone else and let someone else take a crack at the exploitation of the work. Fundamentally, it’s typically about money.
Damien Allen: Is there any way to get around the termination of transfer provisions?
Lydia Loren: The termination of transfer provisions are pretty interesting, because in the statute, both in 304 and in 203, Congress was concerned that transferees would attempt to get around the termination rights by having the authors assign not only their copyrights but any right they might have in the termination. Congress was concerned about this because that’s actually what had happened to the renewal terms. The renewal terms, when they were originally designed, were meant as a way for authors and their families to recapture works that had continuing commercial viability, but publishers realized that they could get not only an assignment of the initial term, but an assignment of the renewal term at the same time. They insisted upon that. When Congress was thinking about the termination rights, they wanted to avoid that possibility, and so both Section 203 and 304 say that terminations of the grant may be effective notwithstanding any agreement to the contrary. You can’t agree ahead of time that you’re not going to exercise your termination rights. If you do, you can ignore that agreement and you can go ahead and exercise those termination rights. The statute’s pretty clear, but there language in the legislative history that Congress contemplated voluntary renegotiations at least by authors outside of the context of termination. Imagine the situation. I’m an author. I’ve written a novel. Let’s say I wrote it in 1978. I’ve assigned that agreement to a publisher, let’s I’ve assigned that agreement in 1978. Now a movie studio wants to make a movie based on the book. In 2010, the movie studio is rightly concerned about the possibility of me terminating that agreement to the publisher. So the publisher and the movie studio might come to me and say, “You know, we’d like to make this movie, but we’re worried about your termination rights. Why don’t we enter into a new agreement today rather than waiting until you actually terminate and going through the rigamarole of termination.” There’s, as I said, language in the legislative history that seems to indicated Congress thought those kinds of voluntary renegotiations would be valid and they would not be subject to the termination in the underlying agreement. In fact, what would happen as the author, that new agreement that I entered into now with the publisher and the movie studio would be starting a new 35 year clock. The trick comes in when the author is deceased. What if I died? At that point, the termination rights, pursuant to the statute, passed to my widower and my children. They own termination rights. The question is is there any way to renegotiation that deal with my widower and my children. That’s a much harder question to answer under the statue and under the legislative history. There is another way for agreements to be not subject to these termination rights, and that is if the work is a work made for hire. That’s a very important exception to the termination rights that are contained in the Copyright Act. If the work is a work made for hire, there are no termination rights, even if the author of that work made for hire subsequently transfers the copyright because under our Copyright Act, work made for hire, the employer or the commissioning party is defined to be the author. Thus, there is no transfer from the creative individual to the author. The author is by statute the hiring party or the employer.
Damien Allen: Is there case law relative to this right now?
Lydia Loren: Well, there’ve been a few cases. All of the cases have involved the 304 termination, the terminations that relate to the lengthening of the renewal term that Congress has done. They’ve involved some very interesting works, from “Lassie Come Home” to “Winnie the Pooh” to novels by John Steinbeck. In each one of these cases, there has been an attempt at renegotiation with some parties trying to figure out exactly who to renegotiate with is somewhat tricky. And then a subsequent attempt by others, usually by others, to terminate the underlying agreement, and of course, the question then becomes is that renegotiated agreement somehow insulated from the terminations rights or is that renegotiated agreement what we call an agreement to the contrary, and thus the termination rights still exist and can be exercised. There’s two recent cases in the Ninth Circuit and then another case in the Second Circuit.
Damien Allen: I’d like to thank you for joining us today, Lydia.
Lydia Loren: My pleasure.
Damien Allen: We’ve been discussing the termination of transfer provisions of the United States Copyright Law. You’ve been listening to Copyright Law Radio. My name’s Damien Allen. Everybody have a great afternoon.
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