How to Terminate Your Publishing Contract (or, Strike a Better Deal)

 By Lloyd Jassn
 
The Registrar of Copyrights Wants You to Terminate Your Publishing Contract   

Hidden in every book and songwriter agreement is a powerful reset button. When activated 35 years after an agreement is signed, it returns the author's ownership and control of the copyright. The right of termination exists because authors, composers, and artists often have little or no negotiation leverage early in their careers. To address this economic injustice, Congress gave authors (and their heirs) a second chance to strike better financial terms or find another home for their copyrights. However, as long as the work is not a "work made for hire," the right of termination cannot be waived -- even if there are contractual provisions to the contrary.

 The 35 Year Rule

 Most publishing agreements are life of copyright grants, the duration of which is the author's lifetime plus 70 years. In reality, most life of copyright grants (e.g., publishing agreements, film options) are terminable during a five-year window that begins to run 35 years from the date the grant was signed. 

"Termination may be exercised at any time during a period of five years beginning at the end of 35 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."

The 35-year rule applies to grant rights entered into after December 31, 1977. To exercise the right of termination, you must serve the grantee, or their successor-in-interest, with formal written notice.  The latest notice can be sent is two years before the intended termination date. The earliest a notice of termination can be served is ten years before the termination.  Put another way, for post-January 1, 1978 works, the earliest date a notice can be sent is 25 years after the grant was signed.    

 Caution! There are two very different termination roadmaps -- one for works registered or published on or before December 31, 1977, and another for contracts signed on or after January 1, 1978. Each has different time windows when notices must go out and different rules for when termination occurs. When the contract was signed, who signed it, when the work was registered or published must also be given consideration.

 Mechanics, Exceptions, and Limitations

If the notice is properly drafted and served in the manner prescribed by the Copyright Office, the termination will occur sometime during a 5-year period starting 35-years after the grant was signed. The terminating party determines the exact date. If a termination notice is sent too early (or too late) or does not comply with tedious statutory requirements of the U.S. Copyright Act, the termination right is waived. Please note that termination applies to grants signed on or after January 1, 1978, by the author -- not grants signed by an author's heirs. 

 The Copyright Act and the administrative rules for the 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.  The process is not considered complete until the notice is recorded with the Copyright Office before the termination date.  You can serve notice as early as ten years before the termination date or as late as two years before the termination date you've selected.  In addition to serving the notice, the notice must be recorded with the U.S. Copyright Office.  If properly filed, the Notice of Termination becomes part of the work's chain-of-title. If anyone reviews the Copyright Office's database, it would explain who controls rights. 

 Calculating the notice and recapture dates are solely the author's (or author's heirs) responsibility. 

Termination only applies to U.S. territorial rights.  Another exception involves derivative works such as motion picture adaptations of novels. Derivative works created before termination may still be exploited post-termination. However, no new derivative work can be made. 

Alert!  If you sign a new agreement in exchange for a royalty uplift, or other consideration, unbeknownst to you, you may be signing away your termination rights. The opportunity to break a contract comes around just once every 35 years.  Before you unwittingly exchange your old contract for a shiny new one, consult with an attorney to ensure you are not leaving money on the negotiation table. 

Reclaiming Rights to Pre-1978 Works (the 56 Year Rule)

Example:  Novel registered with U.S. Copyright Office January 1, 1965.  The last possible reversion date is January 1, 2026, provided notice is sent before January 20,2024, which is two years before the effective date of termination.

Keep in mind that the Copyright Act also provides an inalienable right to terminate pre-1978 works.  Over time, Congress increased copyright protection from 56 years to 75 years.  In 1978 Congress amended the Copyright Acts again, extending the renewal term to a full 95 years.  This subset of the Copyright Act 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.  In 2019, works that were copyrights between 1960 and 1977 can be noticed for termination. 

If you are considering exercising your termination rights, w can help you: (i) identify if your license or agreement is eligible for termination; (ii) determine who is the proper party to exercise those termination rights; (iii) establish the termination date; (iv) prepare and record the Notices of Termination; (v) renegotiate your existing contract; and (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. 

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 Not Legal Advice. The information contained in this blog is intended as general advice. Because the law is not static, and one situation may differ from the next, we cannot assume responsibility for any actions taken based on information published here. Be aware that the law may vary from state to state. Therefore, this blog cannot replace the advice of an experienced attorney. No attorney-client relationship is created by your access to or use of this website. Contacting us by email does not create an attorney-client relationship. If you wish to establish a professional relationship, it must be done through a mutual agreement in writing. Please do not send us any confidential information until an attorney-client relationship has been established.

LLOYD J. JASSIN is a New York-based publishing and entertainment attorney interested 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.)  In addition, he has taught publishing courses at the New York University School of Professional Studies.  For a consultation, contact:  Jassin@copylaw.com or call (212) 354-4442. Office located at 1501 Broadway, Floor 12, New York, NY 10036. 


 
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