Intellectual Property Attorney

Termination Rights Under The Copyright Act: Part Three

In Part One of this series of blogs, we introduced termination rights and discussed the right provided under Section 304(c) of the Copyright Act.
Part Two of the series discussed the termination right provided under Section 304(d). This blog deals with the reasoning that gave rise to these termination rights, including the origins of the October 27, 1998 cut-off date.

We previously discussed the fact that Sections 304(c) and (d) only govern grants executed by the author or his/her statutory heirs before January 1, 1978. In other words, if on January 1, 1978 an author granted a publisher the right to publish and distribute his/her book, neither the author nor his/her statutory heirs would ever be able to avail themselves of the provisions under Section 304(c) or (d). Similarly, if the author had assigned his/her copyright in a book, and the assignee then granted a publisher the right to publish and distribute the book, neither the author nor his/her heirs would ever be able to terminate the grant to the publisher under Section 304(c) or (d).

The reasoning behind these limitations goes to the very heart of why these termination rights were put in place. Section 304(c) is part of a larger provision that extended the copyright term from a maximum of 56 years (actually, two consecutive 28-year terms) from publication to 50 years after the author’s death. Section 304(d) was added as part of the Sony Bono Copyright Term Extension Act to extend the copyright term yet another 20 years. It went into effect as of October 27, 1998 (hence, the eligibility cut-off date).

Congress understood that authors may have had very little bargaining power at the time they made these grants more than half a century ago. In the majority of cases, these were brand new works, the value of which had yet to be proven. Most authors and artists were not represented by agents with the experience and clout to negotiate favorable terms. Rather than merely giving the powerful grantees a windfall of several extra decades of copyright protection each time Congress extended the term, Congress wanted to provide the individual authors (or their statutory heirs) with another “bite at the apple” to recover and capitalize on their copyrights during the extended term.

With their focus squarely on benefitting only authors and their statutory heirs, Congress even excluded those copyright owners, who are not defined as statutory heirs yet took title pursuant to an author’s Will, from effectuating termination under Sections 304(c) or (d). In other words, these termination provisions can (and do) frustrate the author’s testamentary intent. A designated statutory heir may effectuate termination of a grant of rights, even though the author’s Will may have actually devised copyright to someone else entirely.

Congress also expressly excluded works that were created as “works for hire.” A work for hire is one that is created by an employee within the scope of his/her employment or one that is specially commissioned for use as part of, or supplementary to, another work. In these cases, the employer or the one who commissioned the work—not the work’s actual creator—is considered the “author” of the work. Congress decided not to extend the termination right to these employers or patrons.

It should be noted that, with respect to works published between 1923 and 1963, if no renewal was sought to extend the original 28-year term of copyright, the work is now in the public domain, as are all works published before 1923. There is no termination right in these works, because there is no copyright to recover.

Part Four in this series of blogs will discuss a third opportunity to terminate certain grants.

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