US Copyrights: The Termination Right

Authors of copyright works created after 1 January 1978 have the right to regain the ownership of these in the US after 35 years. Transfers of copyright in a work (including a song) signed on or after 1 January 1978 can be terminated, provided certain conditions are met and procedures followed.

If a songwriter, for example, signed a deal which transferred rights in a song to a music publisher for the full term of copyright (life of the author plus 70 years in the US, for post-1978 copyrights), he or she gets a chance to have the rights in the song for the US back. Many songwriting deals in the music industry are signed when the songwriter is at the beginning of his or her career and does not have much bargaining power. So the intention was, at the very least, to provide the songwriter with a renegotiation opportunity.

The termination right does not apply to “works for hire”. This expression has a wide meaning in US law, going beyond works created by employees in the course of their employment. Works for hire can also include music commissioned for films, among other things. Record companies are currently arguing that recordings are works for hire. This is being disputed by many US recording artists. We will keep an eye on these arguments as they unfold in the coming months.

Since it is now 2013 (35 years after 1978), this termination right (set out at section 203 of the US Copyright Act) is now significant. For example, Victor Willis, formerly of Village People, has won the right to recapture his interest in the copyright in the Village People’s songs he co-wrote (including “YMCA”, “Go West” and “In The Navy”).

The right can be exercised by notice from the writer at any time during a period of 5 years after 35 years from when the contract was signed, or if the agreement concerns the right to publish the work in question, at the end of 35 years from publication of the work or 40 years from the date of the contract, whichever is the earlier.

The notice can be served by the writer or, subject to certain qualifications, his or her estate.

The notice has to state the intended termination date (which has to be during the 5 year period mentioned above) and be served not less than 2, nor more than 10 years before that termination date.

So, by way of example, if a songwriter signed a publishing deal on 1 January 1978 and the 35 year period applies, the termination date would be between 1 January 2013 and 31 December 2017. The earliest a writer could have served the notice would have been 1 January 2003 (10 years before the first possible termination date) and the latest would be 31 December 2015 (2 years before the last possible termination date).

The US Copyright Act states that this termination right is “inalienable”. This basically means that an author and publisher cannot contract out of it. We should however expect some creative arguments from music publishers trying to resist the termination notices. Expect the works for hire argument to be raised and scrutiny of the technical aspects of the notices and their service.

The right only affects US copyright. If successful under these provisions, a songwriter gets the return of the US copyright. But this doesn’t have any effect on the rest of the world copyrights. The songwriter, or his or her estate, should then have the benefit of the remaining US copyright term.

You do not have to be a US songwriter with a US contract for the right to apply. Copyright law is territorial. It is US copyright law which applies in the US, including this termination right, even if you are a UK writer who signed a UK contract with a UK publisher.

There are significant qualifications. It looks like some rights already granted before the termination, for example to include music in a film or a play, remain in place after termination and the royalties will continue to be paid to the original publisher. But the songwriter, after termination, should be entitled to grant licences to include the music in new films and plays.

The outcome of the forthcoming attempts to terminate copyright transfers will be significant, not only for the music business but also for the film and book publishing industries and any others which rely on exploiting copyright in the US. This could therefore affect songwriters and any other authors or creatives who transferred the US (or worldwide) copyright in any works after 1978 and, correspondingly, any business which acquired these copyrights.

What about pre-1978 copyrights?  More about that to follow soon.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.