Copyright Recapture and Terminations of Copyright Transfers

With the passage of the 1976 Copyright Act, Congress created an entirely new property right under U.S. law – the right of authors and their successors to recapture ownership of valuable copyrights by “terminating” past assignments and licenses of those works after a prescribed period of time.

Terminations allow authors, their statutory successors or their estates to recapture ownership of the copyright for the remainder of the copyright term even if the original grant was for the life of the copyright and regardless of the consideration paid.

Copyrights in works initially published before 1978 last for 95 years.  Copyrights in works created in 1978 and later last for the life of the author plus 70 years. Through terminations, therefore, an author or an author’s heirs can recapture ownership and control over valuable copyrights for many decades to come.  Obviously copyright recapture in many cases can easily be the most significant economic event in the life of those works.

Congress could have elected to make terminations occur automatically, but it did not.  Instead, the legislative history shows that Congress, in exchange for having granted authors these extraordinary rights, bowed to pressure from certain industry groups by imposing highly technical requirements on those wishing to terminate a copyright transfer.  An author or his or her successors must exercise the right of termination within a specified period of time and must serve notices of termination that strictly comply with the statute and regulations or the right to terminate is waived forever.

Every year new termination interests spring into existence.  Unfortunately, the vast majority of termination rights are allowed to lapse through inaction.  (See William Patry Copyright Blog, June 9, 2005, estimating that only 4% of termination rights are being effectuated, although stating that the percentage is “much higher for musical works.”) 

As recent cases over rights to Superman, Lassie and The Grapes of Wrath amply illustrate, the exercise of termination rights will have a profound impact upon the marketplace and will spawn considerable litigation, most immediately in the area of what constitutes “works made for hire,” but ultimately over issues of authorship, joint authorship and numerous other areas of the law.  And unfortunately, given the way certain termination provisions were drafted, it has become obvious their interpretation too will face legal challenge. 

Publishers, distributors, recording companies, producers, film studios, software companies and any other parties granted any interest in copyrighted works need to familiarize themselves with the law and plan for the future.  But above all, authors and their heirs need to become informed and exercise their termination rights, or they will forfeit those rights forever.