Friday, December 21, 2012

How You (and Your Heirs) Can Terminate Contracts & Reclaim Copyrights

A Passing Opportunity to Break Bad Book & Songwriter Agreements

The year is 2022, and the copyright termination bomb is ticking loudly for book and music publishers. 
Designed to protect authors of older works, who, in hindsight, signed away their rights for inadequate compensation, Congress devised a "reset" button that allows them to reclaim their  copyrights. This powerful right trumps written agreements, even agreements that state they are in perpetuity.  Typically, when served with a notice of termination, a publisher will attempt to  negotiate a re-grant of rights. However, if  those negotiations fail, the copyright owner regains control of their copyrights.  

The Devil is in the Details  

Notices of termination can be served and recorded up to ten years before the termination date you've selected. The latest a notice can be served is two years before the termination date you've selected. A missed deadline is a lost opportunity.  

For older works (explained below), when to send a notice of termination turns on when the copyright was secured. For post-1977 works, when the work was published, or the agreement or license signed, determines the termination date. 

Important! Because of the complexity surrounding the termination of contracts and licenses, you should seek legal help regaining ownership of your copyrights.  

Pre-1978 Works: the "56-Year Rule"

Under section 304(c) of the Copyright Act, 
pre-1978 grants may be terminated during a five-year window beginning 56-years after the date copyright was secured.
 This allows authors to benefit from laws that extended the copyright term from 56-years to 95-years. To terminate a publishing contract or other grant of rights, the author, or their heirs, must file a notice of termination within the time limits specified by the Copyright Act.  Notices must be sent and recorded with the Copyright Office between two and ten years before the termination date selected. For example, icopyright in a work was secured in 1964, the window for sending a notice of termination closes in 2022. If not served and recorded, the agreement will continue for the term of the original agreement. 

Post-1977 Works: the "35 Year Rule"

A different calculus applies to post-1977 works. Like pre-1978 works, termination notices must be sent between two and ten years before the termination date selected. However, the window for sending a notice of termination opens the earlier of 35-years from the date of the work was published, or 40-years from the date the agreement granting rights was signed. 

The 35-year rule only applies to grants of copyrights signed on or after January 1, 1978 by the author.  It does not apply to grants or licenses signed by the author's heirs. As long as the work being terminated is not a “work made for hire,” the right of termination cannot be waived. 

Make a Date

The date termination takes effect is determined by the author or their heirs.  However, the process is not considered complete until a legally acceptable termination notice is recorded with the Copyright Office, which must be recorded before the termination date.    

Example 1: Suppose a book publishing contract was signed in 1988, then the termination date must fall between 2023 and 2028. The latest notice of termination can be served and recorded is 2026 -- two years before the last available termination date. Before the stated termination date, an author, for example, can negotiate for a better deal with his original publisher, or, make a new deal with a new publisher upon termination.

Example 2 below, illustrates how statutory successors (not those named in an author's will) were able to reclaim a full 67-years of copyright of pre-1978 copyrights, under very specific circumstances.            

Example 2. Prior to 1978, copyright duration was split into two 28-year terms.  Before to the expiration of the initial 28-year term, to prevent a work from falling into the public domain, a renewal application had to be filed.   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 four children according to the Copyright Act -- cutting off  a nephew mentioned in his will. Today, his sons (two of whom were not included in their father's will) and his daughters, jointly control the copyright to Bitches Brew and other songs. Here, the Copyright Act rewrote both Miles Davis' will and his agreements with his music publisher.

Termination Checklist

Don't Delay.  If you do nothing, the termination window will
 close and not reopen.

Review Old Files.  Assemble publishing agreements, and other grant of rights,  including film option agreements in one place. Make a list of titles, contract and publication dates before meeting with an attorney. 

Don't sign anything without consulting an attorney. It's easy to inadvertently exhaust your termination right by regranting rights to your publisher. That is what happened to Christopher Robin who re-granted rights to Winnie-the-Pooh to Disney in 1983.  The re-grant right cut off his heir's right terminate the original 1930 publishing agreement signed by A.A. Milne.  

Negotiate.  If you would like to negotiate improved terms, hire an attorney.  Keep in mind there is no such thing as a standard agreement. Advances, royalty rates, the scope of the rights grant, duration of the agreement, and the right to create new works based on the old, are all on the table. 

Don't Assume Your Estate Planning Attorney Understands Any of This.   Suffice it to say, due to its complexity, and the absence of clear judicial guidance, it's not surprising that agents, as well as many trusts and estates attorneys, are not conversant in the ins and outs of copyright termination. For that reason, we are happy to work cooperatively with your trusts and estates attorney or literary agent.  

Maneuvering the Other Complexities
There is also a whole emotional side to copyright termination. These are not just business and financial decisions, but decisions that may involve family members, and the revisiting of past relationships. Fortunately, the invisible copyright "reset" button found in virtually every copyright grant or license, and certain wills, also has the potential to set right injured relationships -- provided the focus is on the future, not past injustices.  

We Can Help You Reclaim Your Copyright 
Contact us. We work with both authors and heirs to (i) identify if a copyright is eligible for termination; (ii) determine who are the parties who hold the termination right; (iii) calculate termination and notice of termination dates; and (iv) prepare, serve, and record notices of termination.  

NOTICE: This article discusses general legal issues of interest and is not designed to give any specific legal advice about any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.
Contact: or at (212) 354-4442. Law Offices of Lloyd J. Jassin, The Paramount Bldg., 1501 Broadway, Floor 12, New York, NY 10036.

(c) 2022. Lloyd J. Jassin

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