Amanda Carpenter is a JD Candidate at Osgoode Hall Law School.
To help protect authors, the U.S. Copyright Act of 1976 provided for inalienable termination rights, rights unique to the United States. An inalienable termination right means that when an author assigns their copyright rights to a publisher, and even if that assignment agreement stipulates that the assignment of rights will last forty years the author will be able to reclaim his or her rights to their creation after 35 years. That is, copyright law steps outside of the freedom of contract realm and terminates the assignment, thus allowing the author to regain the copyright rights, “notwithstanding any agreement to the contrary”.
The reasoning behind this is to help protect authors who are starting out their careers from receiving a dime for their creation; for example, the author of Superman sold his creation for a pittance to a publisher. After several years, Superman became very lucrative and proved to be a great bargain for the publisher, but not so for the author. The law is there for the author to be able to receive a fair return by terminating the publisher’s rights to Superman and giving these rights back to the author who will then be able to strike a better bargain with the publisher.
Termination rights are nothing new; they were found in the 1710 English Statute of Anne, the very first copyright act, which after a first 14-year term re-vested a second term of copyright in the author. However, termination rights had become abused over the following centuries (particularly the 20th) by publishers pressuring authors into assigning to publishers not only their copyright rights but also their right to terminate the agreement. In order to protect authors, the unique and experimental U.S. Copyright Act of 1976 ensured that termination rights would be inalienable by providing that “notwithstanding any agreement to the contrary” the law would step in and terminate the assignment, giving the rights back to the authors so that they would be able to strike a better bargain and profit off their creations. The IP Colloquium has a new podcast on Copyright Termination in which a couple of well known copyright experts discuss the intricacies of copyright termination, focusing specially on “works for hire”. This issue is of importance right now because the first “termination rights” created under the 1976 copyright law would be taking effect now — that is, 35 years after the author was first able to assign their copyright rights under the Act in 1978.
The copyright experts in this podcast explained how it was decided when the Copyright Act of 1976 was created that an exception would exist to these inalienable termination rights. This exception would apply to works that could be classified as “works for hire”. A work for hire is a work that was created over the course of employment or that can be classified as a “commissioned work”. For a creation to be a commissioned work there has to be a written contract stipulating the work is a work for hire and the work has to fit into one of nine special enumerated categories. Examples of these enumerated categories are encyclopaedias, motion pictures, and atlases, which are all examples of types of creations for which there are many different authors. Since computer software did not exist at the time, it was not given its own special enumerated category. An exception for commissioned works was created because the publishers who had been assigned copyright rights found that when authors were able to terminate their assignment of copyright rights after 35 years it would be too difficult and time-consuming to get re-assignments from all the joint authors if the publisher continued to want to publish that particular encyclopaedia. Hence, the law made it so that termination rights would not exist for these works so the publisher would not have to get re-assignments from all the joint authors in order to continue publishing after 35 years.
The podcast then went through some hypotheticals that provided examples of how copyright law in this area works. Hypothetical one involved a comic book author who assigns his of her copyright right to a comic book publisher in 1970. The comic book author can terminate their right after 56 years since the terms under the Copyright Act of 1909 apply (and not the 1976 Act) – that is, in 2026. There is a five year window for terminating these rights after which the author will not have another chance to terminate the assignment. To effect this termination, the comic book author will have to serve a notice made by first class US Mail at least two years in advance of the date of termination to a maximum of ten. So, 2016 would be the first year that the copyright author would get the chance to serve termination notice in order to reclaim his or her copyright. The “works for hire” exception to termination rights doesn’t apply since the comic book author was not an employee when he or she created his comic book and there was no written contract stipulating that this was a work for hire. Other hypotheticals in the podcast discussed derivative works, and how publishers will try to fit the work that they have acquired rights over into one of the enumerative categories for commissioned works so that the right to terminate will not apply. For another example of termination rights one can also refer to this previous IPilogue post.
In short, this recent podcast sheds some light on copyright termination, an area of copyright law that is very complex and complicated but that will become increasingly subject to litigation over the coming years. Regardless of whether one agrees with Congress that authors should be provided with extra protection in this manner, it deserves a listen.