Showing posts with label Termination of Transfers and Recapture of Copyrights. Show all posts
Showing posts with label Termination of Transfers and Recapture of Copyrights. Show all posts
Friday, June 17, 2022

Copyright Recapture: How to (Legally) Terminate Your Book Contract

Copyright Termination, Reclaim Your Copyright
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One of the most important rights that authors and their heirs hold is the ability to terminate book publishing contracts. To start this process, it's crucial to examine the details of your publishing agreement.  

First, look for contractual provisions that might allow you to end the contract, such as the publisher not properly reporting sales or failing to keep your book available for sale. If you don't find a clear reason in your contract for ending it, don't worry. Even when the contract doesn't provide a straightforward path to termination, authors have a lesser-known but powerful option under the U.S. Copyright Act. Regardless of any agreements to the contrary, it's crucial to recognize that the right to terminate holds greater authority than the terms outlined in the agreement.

Copyright Termination Rights Explained
To protect authors of older works from having to live with bad "life of copyright" grants, Section 203 of the Copyright Act allows authors and other creators to terminate a grant of rights, notwithstanding any agreement to the contrary.  What this means is the termination right trumps what's written in the agreement.

The principles outlined here also work for film and television options, as well as other copyright assignments, grants and licenses. 

Provided the notice complies with the Copyright Office's rigid requirements and is timely filed, the termination will take effect "no earlier than 40 years after the execution of the grant or 35 years after publication under the grant (whichever comes first)." When a work is eligible for termination is best determined by a copyright attorney.
"Don't forget that the termination right trumps what's written in the agreement."
  🔺Heirs should be aware that Section 203 only applies to grants made by authors and does not encompass grants or re-grants made by the heirs themselves. If you are an heir, be cautious, as publishers may try to convince you to surrender your rights for little money through re-grant requests, effectively negating termination rights.

Works for hire are immune to statutory termination, which is why you should be wary of signing a work for hire agreement. The 
concept of work for hire is complicated. Therefore, just because a contract says it is work for hire or created in the course of employment does not make it so. For clarification, contract a copyright attorney. 
While the termination right does not apply to foreign grants of rights, many countries have their own termination statutes. For example, in Canada, 25 years after the death of an author, rights automatically revert to the author's estate. Here is a link to an excellent article by Professor Rebecca Giblin concerning reversion rights outside the U.S.

Termination Notices Are Challenging to Draft

If you wish to terminate a rights agreement careful implementation is required. You must (a) 
carefully calculate the termination date; (b) draft the notice of termination; (c) sign it; (d) serve it; and (e) submit the documents for recordation (with the recordation fee) electronically through the Copyright Office’s online system. The documents will then be scrutinized by the Copyright Office and rejected if they do not comply in both content and form. 

In other words, the process of reclaiming copyright is not automatic. In the context of joint works, a termination notice requires the signatures of the a majority of the co-authors. The Copyright Act gives the termination rights holder the option, but not the obligation, to reclaim their copyrights. Consequently, the majority of

termination rights expire without being exercised.

It is the author's responsibility to calculate the termination date. It can be anytime during a five-year window beginning the earlier of (a) thirty-five years from the date of first publication or (b) forty years from the date of execution. A notice of termination may be served ten years before the effective termination date or as late as two years before. A missed deadline or improperly drafted notice is a fatal mistake.

Example: Andrea signed a contract for her first novel on September 26, 1989. The book was published on September 26, 1992. The termination window is from September 26, 2024, to September 26, 2029. The earliest Andrea (or her surviving family members) may serve the notice of termination is September 26, 2014, ten years before the earliest possible termination date. The latest Andrea (or her surviving family members) may serve notice is September 2027, two years before the latest possible termination date.

Andrea must serve the notice on her publisher or publisher's successor, fill out the appropriate paperwork, and record the notice of termination with the Copyright Office. This public record becomes part of the work's chain of title, establishing legal ownership. Andrea's name and termination notice would appear in the title chain if anyone were to review the Copyright Office's database.

Derivative Works Exception

Within the framework of copyright law's "derivative works exception," a derivative work created before termination retains the right to be utilized according to the terms of the license agreement. To illustrate, a film adaptation of Andrea's novel can still be streamed after termination, with the stipulation that the studio is obligated to report to Andrea. However, it is important to note that the studio is restricted from generating new derivative works falling under the terminated grant of rights.

Terminating Pre-1978 Works

For works published before January 1, 1978, the maximum term of protection for certain works was 56 years. Over time, Congress increased the term of copyright protection from 56 to 75 years. In 1998 Congress increased the term again by 20 years for a total of 95 years. Congress also created a new right of termination for pre-1978 grants, licenses, and assignments. 
For these older works, the Act provides a five-year termination window beginning 56 years after a work was first published or registered for copyright. To terminate, the author, or their surviving spouse and children, must serve and record the termination notice within the time limits specified by the Copyright Act. If not terminated, the agreement will continue for the duration of the agreement. Unlike post-1977 grants, licenses, and assignments, pre-1978 grants, licenses, and assignments made by an author's widow, children, and other statutory beneficiaries, are terminable.

Case & Comment. 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 a second chance to strike better financial deals. As a result, in 1999, using Section 302 of the Copyright Act, Siegel's heirs recaptured his rights to the Superman character. Unlike authors of joint works created after January 1, 1978, each author of a pre-1978 joint work may serve a notice of termination on their own behalf and recapture their share of the copyright.

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, Joe Young, Lorenz Hart, and many others have availed themselves of these valuable rights.

Estate Planning Considerations
As part of your estate planning, advise your statutory successors of your right to terminate. If you do not survive to exercise termination, that right is distributed to your family members as a statutory class. They may exercise this powerful right despite any agreement to the contrary. While copyright termination rights are kryptonite to copyright contracts, read on how this right can unintentionally be waived (given up).

Hoping they will catch family members off guard, publishers and motion picture studios may make offers to sweeten existing contract terms after an author dies.

Before signing an agreement that revokes and re-grants rights, family members should carefully review the document and consult with a termination rights attorney. If asked to sign during the period termination could be effected, they may be waiving their right to terminate.

If that later agreement revokes a publishing agreement, or film option, in exchange for a new contract, the new contract should be a significantly better deal than the previous grant. If not, they've lost the opportunity to renegotiate the terms of the agreement.

Bottom Line

Call us if you are thinking about exercising your termination rights or need assistance renegotiating your entertainment or publishing agreement. Fees will depend upon the complexity of the matter and the number of works being terminated. 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 the notice of termination; (iv) help you renegotiate your existing contract; or (v) work 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.

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 book publishing attorney and former publishing executive with a special interest in defamation, 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). He has written extensively on negotiating contracts in the publishing and entertainment industries and has been quoted extensively in publications such as the New York Times, Time Magazine, Forbes, Fortune, Publishers Weekly, and the Columbia Journalism Review. You may reach him at or at (212) 354-4442. His offices are located at 1501 Broadway, Floor 12, New York, NY 10036, and in Madison, NJ.

(c) 2011 - 2024. Lloyd J. Jassin 

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