Intellectual Property Attorney

Termination Rights Under The Copyright Act: Part Four

In Parts One,
Two and
Three of this series of blogs, we introduced termination rights and discussed those rights provided under Sections 304(c) and (d) of the Copyright Act, including the reasoning that gave rise to these provisions. In this blog, we will discuss yet a third opportunity to exercise a termination right; this one provided under Section 203 of the Copyright Act.

In addition to Sections 304(c) and (d), yet another provision in the Copyright Act creates a right to terminate any grant of exclusive or non-exclusive rights made after 1977. This right is commonly referred to as “the right of recapture.”

Pursuant to Section 203, an author or a majority of the author’s statutory beneficiaries may terminate grants executed by the author on or after January 1, 1978 to the extent of the author’s share. In the case of a joint work, both authors (or a majority of each author’s beneficiaries) must agree to terminate in order to effectuate termination.

Such grants may be terminated during a five-year period beginning at the end of thirty-five (35) years from the grant; provided (a) advance written notice is served on the grantee at least 2 years and no more than 10 years prior to the date of termination, and (b) a copy of the notice is recorded in the Copyright Office before the effective date of termination. If the grant covers publication rights, the period begins at the end of thirty-five (35) years from publication or forty (40) years from the grant, whichever is earlier.

Therefore, notices could be served on October 8, 2012, for example, for rights granted between January 1, 1978 and October 8, 1987. If one serves notice for a right granted on January 1, 1978, the effective date of the termination could be as early as October 8, 2014. If one serves notice for a right granted on October 8, 1987, the effective date of the termination could be any time between October 8, 2014 and October 8, 2022.

Termination under Section 203 has the same effect as it does under Sections 304(c) and (d). Following termination, rights revert to the persons owning the termination interest, including those owners who did not sign the notice of termination. Any derivative work already created may continue to be utilized by the prior grantee, but no new derivative works may be created by that prior grantee. Accordingly, in addition to serving notice on the original grantee, it may be necessary to serve notices on an assignee and any exclusive licensees of the grant, as well.

Owners, in the same number and proportion as those who may effect termination, may grant the reverted rights, including the right to create new derivative works, after the date of termination. If the new grant is to the prior grantee, the grant may be made any time after the notice is served.

Accordingly, a copyright grantee will likely be quite anxious as the window for serving a notice of termination draws near. Congress foresaw that a grantee who has enjoyed and exploited exclusive rights in a work for thirty-five years or more may seek ways of avoiding the “unpleasantness” of having to re-negotiate this grant with a newly emboldened son or grandson of its star author—or risk losing the grant entirely. As a result, Section 203, as well as Sections 304(c) and (d), expressly provide that “termination of the grant may be effected notwithstanding any agreement to the contrary, including an make any future grant.” In other words, one cannot contract away one’s termination right. That said, termination rights may be lost forever if one does not timely serve a proper termination notice.

As with many aspects of intellectual property law, understanding your rights and how to exercise them is vital.

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