A Fleeting Opportunity to Terminate Publishing Contracts
The
copyright termination time bomb is ticking away. In 2013 alone,
thousands of the publishing and entertainment industry's cash cows --
backlist books and song catalogs -- will be decimated by copyright
owners clawing back their contract rights. Some call it contract
bumping. This powerful "re-valuation mechanism" found in the Copyright
Act allows authors (and their heirs) to break contracts 35-years after
the contract date. The termination right trumps written agreements --
even agreements which state they are in perpetuity. Also known as
“termination” or “recapture” rights, the time is ripe to send termination notices for contracts signed between 1978 and 1988. Alert! The time is ripe to send termination notices for contracts signed between 1978 1988
The impending economic dislocation will manifest itself in the loss of evergreen or backlist titles, as authors, or their heirs, exercise their right to terminate publishing agreements and recapture their copyrights. What is a threat to mainstream book (and music) publishers, is otherwise an opportunity for a cheaper, more flexible kind of book publishing. With the ability to recapture rights, access to indie distributors and print on demand technology, authors (and their heirs) will have to decide how much faith they should place in their existing publisher relationships. My guess is that "life of copyright" grants will soon become the exception, not the rule. This article explains why.
Termination Rights Trump Life of Copyright Contracts
To protect authors of older works from having to live with a bad deal they entered into when they had little negotiating skill or leverage, the Copyright Act allows authors (and their heirs) to recapture copyrights by sending notices of termination to their publisher partners. This often overlooked, but powerful right, serves as an “insurance policy” for authors who signed away their rights for less than adequate compensation.
Section 203 of the “new” Copyright Act applies to grants of copyrights signed on or after January 1, 1978 by the author -- not grants signed by an author's heirs. As long as the work being terminated is not a “work made for hire,” the right of termination cannot be waived -- even if there are contractual provisions to the contrary. In short, copyright law trumps contract law. One of the idiosyncrasies of the termination right, is that it does not apply to foreign grants. However, under UK law, heirs can recapture rights twenty-five years after the death of an author. Known as British Reversionary Rights (BRR), these rights are analogous to our recapture and termination rights.
Unlike general interest trade book publishers, technical reference and textbook publishers, who generally commission works on a "work for hire" basis, are largely immune from the effect of Section 203, which applies to contracts signed on or after January 1, 1978.
Alert! If you are an author or heir, be very careful of what you are asked to sign by agents, publishers, producers and other copyright licensees and partners. If you sign a new agreement for the same rights, you may have nothing left to terminate. Consult an attorney. The opportunity to break a contract comes around just once every 35 years. If what you sign is a revoke and re-grant of rights agreement, you (or your agent) may be signing away valuable rights for less than market rate.
This lucrative right
of termination does not concern itself with when the work was published
or registered; it only concerns itself with when the copyright grant or
license was signed by the author. Succinctly stated, “Termination may
be exercised at any time during a period of five years beginning at the
end of thirty-five years from the date of publication of the work under
the grant or at the end of forty years from the date of execution of the
grant, whichever is earlier.”
Countdown to Copyright Termination (for books & songwriter agreements)
The Copyright Act and the administrative rules that apply to termination and recapture of copyrights are dense and unforgiving. Some might call them hellish. For example, if you serve your Notice of Termination late, it is considered a fatal mistake under the law. And, the process is not considered complete until the Notice of Termination has been recorded with the Copyright Office, which must be prior to the date of termination. You can serve a Notice of Termination as early as ten years before the effective date of recapture, or as late as two years before the effective date of recapture. The author (or his heirs) selects the date termination will take effect, and must send a Notice of Termination within the termination window outlined in the Copyright Act.
Countdown to Copyright Termination (for books & songwriter agreements)
The Copyright Act and the administrative rules that apply to termination and recapture of copyrights are dense and unforgiving. Some might call them hellish. For example, if you serve your Notice of Termination late, it is considered a fatal mistake under the law. And, the process is not considered complete until the Notice of Termination has been recorded with the Copyright Office, which must be prior to the date of termination. You can serve a Notice of Termination as early as ten years before the effective date of recapture, or as late as two years before the effective date of recapture. The author (or his heirs) selects the date termination will take effect, and must send a Notice of Termination within the termination window outlined in the Copyright Act.
Example 1: If a novel was published
in 1978, rights could be recaptured as early 2013, i.e., 35-years after
the date of initial publication. In this instance, the earliest the
author (or his heirs) could have served a Notice of Termination would
have been 2003, i.e., ten years before the recapture date. And, the
latest a notice of termination can be sent is 2011 -- two years before
the effective termination date.
Example 2: If a songwriter agreement was signed
in 1978, the Notice of Termination could be served as late as two two
years before the recapture date. In this instance, 40-years from date
of execution would be 2018, which means the notice of termination can be
served as late as 2016.
Like
the deed to a house, a Notice of Termination filed with the Copyright
Act becomes – if not challenged -- part of the work's chain of title. If
anyone were to review the Copyright Office’s database, the author or
composer's name will show up in the "notice of termination” document.
Use It or Loose It
Use It or Loose It
Calculating the notice and recapture dates are the author or composer's sole responsibility. The Copyright Office cannot draft Notices of Termination, or calculate the notice and recapture dates for you. Therefore, it is strongly advised that you consult with a knowledgeable copyright attorney -- not a trust & estate attorney, or your agent, or your book or music publisher. Sophisticated trust and estate attorneys and agents are generally, not very well informed. And, book and music publishers hope you never read this article.
Getting Back Rights to Pre-1978 Works
Keep in mind that the Copyright Act also gives families of deceased authors and composers an opportunity to terminate pre-1978 works. For example, if an author of a pre-1978 work died during the initial 28 -year term of copyright, that author’s heirs may have the right to reclaim his entire renewal copyright -- a further term of 67 years of copyright protection. This subset of the Copyright Act also provides for termination at any time during the five year period beginning at the end of 56 and 75 years from the date the copyright was originally secured. These added opportunities to get back ownership of copyrights exists even if the author assigned his or her renewal term (or devised it by will) to someone other than his or her family. What is extraordinary about these rights, is that copyright law also trumps a writer or composer's will or estate plan.Alert! In 2013, termination notices for works copyrighted between 1935 - 1945 and 1954 - 1967 should go out
Example 3. Miles Davis, the jazz icon, died in 1991, before the end of the 28th year of copyright of his revolutionary 1970-album Bitches Brew. Because he died before the 28th year of copyright, his renewal term rights in the song Bitches Brew vested automatically in his heirs -- cutting off a sister and brother mentioned in his will, and severing his ties to his music publisher. Today, his sons (two of whom were not included in their father's will) and his daughter, jointly control the remaining 67-years of copyright in Bitches Brew and other songs. Here, the Copyright Act rewrote both Miles Davis' will and his songwriter agreements.
Similarly,
in 1938 Jerry Siegel and Joe Schuster, two young men from Cleveland,
Ohio, signed over all of their rights to the Superman character to DC
Comics for $130.00 and vague promises of future work. To address this,
and similar economic injustices, Congress gave authors (and their heirs)
a second chance to strike better financial deals. As a result, starting
in 1999, using Section 304 of the Copyright Act, Siegel’s heirs
recaptured his rights to the Superman character. Fortunately, you don’t
have to be related to a man of steel to reclaim copyrights. The heirs of
Hank Williams, William Saroyan, Truman Capote, Lorenz Hart,
and many others have availed themselves of these valuable rights.
Heirs To Do List
If you have inherited either a literary work or catalog of songs, it is not in your book or music publisher's best interests to let you know about copyright termination rights. As such, be wary of what agents, publishers and other licensees or business associates ask you sign. If it is what is known as a revoke and re-grant agreement, you will be left with nothing to terminate. It is easy to inadvertently waive this powerful right conferred upon authors and heirs by Congress. The important message is that when a writer or composer dies, their spouse, children or grandchildren may be entitled to exercise termination rights. Consult a copyright attorney. Surprisingly, most agents, as well as many trusts and estates attorneys, are not conversant in the ins-and-outs of copyright termination. Granted (pun intended) it is easy to see how this area of the law can be confusing. Freedom from old poorly drafted contracts is never granted, it must be won. While Congress gave authors and their heirs an extremely valuable right. While most termination cases we see do not require litigation, skill and perseverance is required.
The clock is ticking. For example, in 2015, provided a properly timed termination notice was recorded as being sent in 2013 (the latest a notice can be sent is two years before the reversion date), works contracted for in 1980 will revert back to their authors. Older works, published in the mid-30s, 40s, 50s and 60s are also eligible for recapture within the next ten years.
If no notice is sent, rights will remain with the publisher. As a copyright owner, or copyright owner's heir, professional adviser or executor, you must remain vigilant throughout the productive life of the copyright. Failure to exercise these rights, or exercise them in a timely manner, can be economically disastrous for all concerned.
Heirs To Do List
Alert! In 2013, termination notices should be sent for works copyrighted between 1935 - 1945 and between 1954 - 1967; and for works contracted for between 1978 - 1988.
If you have inherited either a literary work or catalog of songs, it is not in your book or music publisher's best interests to let you know about copyright termination rights. As such, be wary of what agents, publishers and other licensees or business associates ask you sign. If it is what is known as a revoke and re-grant agreement, you will be left with nothing to terminate. It is easy to inadvertently waive this powerful right conferred upon authors and heirs by Congress. The important message is that when a writer or composer dies, their spouse, children or grandchildren may be entitled to exercise termination rights. Consult a copyright attorney. Surprisingly, most agents, as well as many trusts and estates attorneys, are not conversant in the ins-and-outs of copyright termination. Granted (pun intended) it is easy to see how this area of the law can be confusing. Freedom from old poorly drafted contracts is never granted, it must be won. While Congress gave authors and their heirs an extremely valuable right. While most termination cases we see do not require litigation, skill and perseverance is required.
The clock is ticking. For example, in 2015, provided a properly timed termination notice was recorded as being sent in 2013 (the latest a notice can be sent is two years before the reversion date), works contracted for in 1980 will revert back to their authors. Older works, published in the mid-30s, 40s, 50s and 60s are also eligible for recapture within the next ten years.
If no notice is sent, rights will remain with the publisher. As a copyright owner, or copyright owner's heir, professional adviser or executor, you must remain vigilant throughout the productive life of the copyright. Failure to exercise these rights, or exercise them in a timely manner, can be economically disastrous for all concerned.
Conclusion
If you are thinking about exercising your termination rights, or need assistance renegotiating your soon-to-terminate publishing agreement, call us. We can help you: (i) identify which copyrights are eligible for termination; (ii) determine who is the proper party to exercise those termination rights; (iii) prepare and record your Notices of Termination; (iv) assist you recover rights to copyrighted works you thought were irrevocably assigned or bequeathed to others; (v) help you renegotiate your existing contracts using; or (vi) work cooperatively with your trusts and estates attorney on reopening an estate, or seeking copyright damages that flow from a determination of ownership or co-ownership of a recaptured copyright.
The Best 1978*
Select Backlist Books
1. The Stand
- Stephen King
2. Eye of the Needle
- Ken Follett
- Ken Follett
3. The House of God
- Samuel Shem
- Samuel Shem
4. The Far Pavilions
- M.M. Kaye
- M.M. Kaye
5. Holcroft Covenant
- Robert Ludlum
- Robert Ludlum
6. Chesapeake
- James Michener
- James Michener
7. If Life Is a Bowl of Cherries . . . - E. Bombeck
Select Songs (artist , not composer shown)
- Bob Marley
- Chic
- Billy Joel
4. Life's Been Good
- Joe Walsh
- Joe Walsh
5. Night Fever - The Bee Gees
- The Bee Gees
6. Miss You
- The Rolling Stones
- The Rolling Stones
7. YMCA
- The Village People
*For a work published on January 1, 1978 the latest the termination notice can go out is January 1, 2016
NOTICE: This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.
LLOYD J. JASSIN is a New York-based publishing and entertainment attorney with a special interest in copyright and trademark matters. He is co-author of The Copyright Permission and Libel Handbook: A Step-by-Step Guide for Writers, Editors and Publishers (John Wiley & Sons, Inc.). Mr. Jassin has written extensively on negotiating contracts in the publishing and entertainment industries, and lectures frequently on contract and copyright issues affecting creators. He may reached at Jassin@copylaw.com or at (212) 354-4442. His offices are located at 1560 Broadway, Suite 1100, New York, NY 10036. Visit www.copylaw.com.
(c) 2011 - 2013. Lloyd J. Jassin. All Rights Reserved.
- The Village People*For a work published on January 1, 1978 the latest the termination notice can go out is January 1, 2016
NOTICE: This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.
LLOYD J. JASSIN is a New York-based publishing and entertainment attorney with a special interest in copyright and trademark matters. He is co-author of The Copyright Permission and Libel Handbook: A Step-by-Step Guide for Writers, Editors and Publishers (John Wiley & Sons, Inc.). Mr. Jassin has written extensively on negotiating contracts in the publishing and entertainment industries, and lectures frequently on contract and copyright issues affecting creators. He may reached at Jassin@copylaw.com or at (212) 354-4442. His offices are located at 1560 Broadway, Suite 1100, New York, NY 10036. Visit www.copylaw.com.
(c) 2011 - 2013. Lloyd J. Jassin. All Rights Reserved.
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