Before we jump into a complex topic like copyright termination…Quick!
Off the top of your head…tell me 5 songs from the 1980s that spark a good memory for you?
(leave a comment at the bottom of this post…I’m curious to see your list).
For me there were a ton of songs and groups in the 1980’s that were inspiring but here are the ones that immediately came to mind (I had an eclectic upbringing).
My list would be:
– Time – Culture Club
– La-Di-Da-Di – Doug E. Fresh and MC Ricky D
– Roxanne, Roxanne – UTFO
– Black Steel in the hour of Chaos – Public Enemy
– Mr. Bachelor – Loose Ends
How does this tie into the Copyright Termination Rights? Well, the artists and/or writers of these songs may have the legal right to regain ownership of there copyrights if they fit certain criteria (I have not analyzed these particular acts listed above).
This week I thought that I’d revisit the popular Copyright Termination Rights topic that seems to weave itself in and out of the news (I suspect this has a lot to do with the media strategies of the opposing sides).
About 6 years ago I wrote a few blogs, and did this video, on this topic.
Since then I have been heavily involved in this area of law. I have sent termination notices to copyright assignees on behalf of copyright assignor clients and I have received copyright termination notices on behalf of assignee clients. So far, they have all ended up settling. I have settled a number of these matters.
But what is the state of this so-called “artist right” that was suppose to level the playing fields by giving artists the power to take back their rights, or at least give artist’s some leverage when re-negotiating lopsided deals that they made about 35 years ago?
Well, let’s start with a recap of what I am talking about so that everyone is on the same page, and then I’ll talk about what’s been going on recently.
What Is The Copyright Termination Right?
The Copyright Termination Right sounds like a bunch of legal jargon, but what if I told you that it was possible for you – artist, songwriter, composer, filmmaker, video game creator – to take back ownership of your music from the record, publishing, or media company that “encouraged” you to take an undesirable deal years ago.
Most artists and writers wonder how this is possible when they signed agreements that transferred all rights to their label or publisher.
The short answer is that the U.S. Copyright Act includes a termination provision, the Copyright Termination Right, that actually trumps a signed contract, and, if certain criteria are met, allows the original author to regain ownership of his or her copyright in the work.
What Is The Basis For This Law?
Particularly, there are two main reasons why a creative person may possess this right:
First, in the early 20th Century, the U.S. Congress initially created law to protect young authors from having to settle for bad deals that were made for the life of the copyright because at the time, struggling authors had no leverage to negotiate his or her original contracts.
More recently, Congress, through the 1976 Copyright Act (which actually didn’t take effect until January 1, 1978) reiterated this concept by ensuring that an author would have a chance to re-evaluate the value of a copyright after 35 years, and either re-negotiate a deal with the original contracting party, who would likely be open to more fair negotiations, or go elsewhere and make a new deal with another party for the remainder of the copyright life.
Second, federal law, such as the Copyright Act, takes precedent over any state laws, such as contract law, so if a direct conflict exists between the two then the federal law wins. This means that an author’s Copyright Termination Right cannot be waived, sold in advance, or otherwise forfeited by contract.
In short, taking advantage of a songwriter or composer is not only unconscionable, but literally unconstitutional.
Even though an author signs a contract that says something like, “all rights are assigned for the life of the copyright”, which is common language in publishing deals, such a provision is void and ineffective when it comes to an author’s right to terminate the contract assignment and regain control of his or her work pursuant to the Copyright Act.
But be aware that state laws can sometimes grant additional rights, or provide standing to parties that would not have it otherwise under federal law. When state law chimes in on areas where the Copyright Act is silent, the Act may end up taking the back seat, (see Latin American Music Co. v. American Society of Composers, Authors & Publishers, 642 F.3d 87 (1st Cir. 2011)).
What Is The Effect of Termination?
Upon the effective date of termination, all of the author’s previously transferred or licensed copyright rights covered by the terminated grant revert to the author or proper person(s) if the author is deceased.
Exercising the termination right does not extend or otherwise modify the original copyright term.
A copyright for an individual author under the 1976 Copyright Act lasts for the life of the author plus 70 additional years. If, on the other hand, the work is a work of corporate authorship, the copyright duration is 95 years from the date of publication or 120 years from creation, whichever expires first.
A proper termination of the rights to one can be transferred again for the remainder of the life of the copyright.
When Can The Right Be Terminate?
Rights granted in works created after January 1, 1978 may be terminated during a five-year period beginning 35 years after the grant was made [date of execution of the grant] (This five-year period changes a bit if the author granted a right of publication of the work, whereby the clock may start on the date of publication), subject to the author giving a proper notice, which can be as early as 10 years before the recapture range begins but no later than 2 years before the recapture range ends (see below).
For example, if the original copyright date is January 1, 1983, a notice of termination can be served as early as January 1, 2008 (effective January 1, 2018), but no later than January 1, 2021 (effective January 1, 2023). If the original copyright date is January 1, 1991, a notice can be served as early as January 1, 2016 (effective January 1, 2026), but no later than January 1, 2029 (effective January 1, 2031). As you can see, this timeframe shifts ongoing.
You’ll probably need a calculator and a few examples to get the hang of this calculation.
Who Can Challenge An Author’s Termination Notice?
One such case already decided on the basis of standing involved a termination claim brought by the children of Ray Charles against the Ray Charles Foundation. Though the foundation had become the legal owner of the rights in Charles’ songs, the grant of rights was originally given to Atlantic Records, and later renegotiated to its’ successor-in-interest.
Since only the original grantee can challenge the termination claim, the court determined the foundation had no standing to challenge the claim because they were merely the “beneficial owner” of the copyright interest, rather than the party who was originally granted the transfer.
How Exactly Does This Right Work?
To qualify for the Copyright Termination Right, the transfer or license must have been executed by the author, not by a recipient of an author’s rights (i.e., heirs by will). However, statutory heirs of the author(s) may still able to affect the termination rights if the author who executed the transfer is since deceased.
I won’t go into the details (that would turn this into a book) but if the original author transferred or licensed the rights, then the discussion of the following issues will give authors some guidance as to whether the rights in their work may be eligible for revision:
When Did The Author Transfer or License The Rights?
The first fact to determine is when the grant of rights in question was executed. A longer analysis applies to works that were created prior to January 1, 1978 because Copyright Law prior to this date was more complex.
Within this sub-topic you have to analyze whether the work is considered a pre-1978 work, a post-1978 work, or a so-called “gap” work where may have been contracted or written before 1978 but actually created or released after 1978.
Was The Copyright Created As A “Work-Made-For-Hire”?
A work-made-for-hire is a work prepared by an employee within the scope of his or her employment for the employer so copyright termination does not apply.
It is also a commissioned work, falling under one of the specially designated categories of such works, where the parties agreed in writing to treat it as a work-made-for-hire (“WFH”).
Certain works are clearly defined in the WFH definition, but there are also several types of work that are excluded entirely, particularly music.
This creates some ambiguity and when the work is not mentioned, a deeper analysis may be required, or possibly a lawsuit to clarify.
Upcoming lawsuits will feature arguments from both sides concerning whether sound recordings can qualify as a WFH. Labels will take the position that albums fall under a qualifying category such as a “collective work” or “compilation.”
Most music agreements contain both WFH language and assignment language as an attempt to hedge bets on what a court will say one day.
Also, many agreements with WFH language also contain clear language that the artist is not an employee of the record label. By the way, did you know that California’s labor code states that any agreement with work-made-for-hire language in it automatically means that the contracting party is a statutory employee?
I’ll save that topic for another blog.
Who Can Terminate The Copyright?
Generally, if the author is still alive then this answer is easy, the author can terminate the copyright. If the author is not alive then it can get complicated, but the short answer is the author’s heirs have the right to terminate assignments, (again, provided the deceased author made the assignment).
Are There Any Exceptions?
It is worth noting that the Copyright Termination Right does not apply to derivative work prepared under authority of the grant before termination of the grant. A derivative work is a creation that is based on an original work, such as an updated version of original music.
The derivative user may continue to use that work, but no new derivative works can be created after termination.
The reality of the Copyright Termination Right has come to fruition. Since 2011, the first termination notices have been written and served on record labels and publishing companies, and a flurry of artists, songwriters, and composers are testing rights, including such well-known names as Tom Petty, Kris Kristofferson, Tom Waits, Blondie, Bob Dylan, Eagles, Journey, and Barbara Streisand. As the recapture period shifts many of our other favorite artists will join in (right now songs from 1984 are eligible to issue notices!…yes, the era of vintage rap!)
The hottest sub-topic right now is whether the term “author” of a sound recording includes artists, producers, side artists, engineers, sound technicians, and even background singers.
What do you think?
Where there are joint authors, how many of them must join in the termination for it to be valid?
If courts follow the lead of a case that focused on musical compositions, the recorded music industry may be in trouble. In a case brought by Victor Willis, a co-founder of the pop group The Village People (you know, the group that was cranking out hits like “YMCA” and “Macho Man” in the 1970’s), each of the band members claimed intellectual property rights in the compositions individually, and they transferred their interests to Scorpio Music S.A.
In 2011, Willis served termination notice to Scorpio to reclaim his individual one-third interest in the he co-wrote. Because works by joint authors generally require a majority of the originally-transferring authors to join in the termination, Scorpio argued that Willis failed to meet this requirement and therefore the termination was invalid.
Willis responded that because each of the authors had individually transferred their interests, only his authorization was needed to reclaim his own interest.
The court agreed and held that an author can unilaterally terminate the transfer of just his or her share in copyrighted work, as long as the original transfer was done separately from the other co-author.
Despite the influx of new claims in this area, though, relatively little has been settled so far. While some of the more complex issues have been raised in recent or ongoing litigation, courts have been reluctant to tackle these issues, in some cases opting to instead decide cases based on whether the party has legal standing to bring or challenge a termination claim.
This topic is robust and I could go on for days, but I’d rather hear from you. Please, leave a comment if you have a unique perspective on the copyright termination right or if you could let us know about your experience in asserting this right against a company.
Until next time!