While it’s commonly known that authors frequently transfer or assign their rights, usually to large corporate rightholders such as publishing houses, recording studios or film studios, the fact that an author can later terminate this transfer is less understood. In fact, I’d been practicing for a couple years before realizing that Section 203 of the Copyright Act provides explicit termination provisions. (Somewhere, my copyright law professor is cringing at my admission.)
The agreements that authors sign sometimes on their face suggest that the assignee will own the copyright forever. The duration of the agreement might say that the terms last “for the period of copyright” or something to that effect. And yet, Section 203 effectively overrides this contract provision under certain circumstances. What are the requirements to effect a termination of transfer?
First, the provision applies to transfers made on or after January 1, 1978. It applies to authors, their descendants or estate. In order to effectuate a transfer, the author must serve notice of termination on the rightholder.
Notices of termination can be served no sooner than 25 years after execution of the grant (or 30 years if the grant covers the right of publication or 25 years after publication under the grant, whichever comes sooner). Notice does not immediately trigger termination, however, which is effective 35 years after execution of the grant (or 40 years/35 years, respectively in the circumstances above). Notice must comply with Copyright Office regulations. While the law regarding termination of transfer isn’t the most straightforward, it still provides significant benefits for authors. The Authors Alliance provides some excellent resources for authors trying to navigate their termination rights.
But why would Congress create a copyright provision that allows an author to unilaterally terminate a contract transferring his rights to copyright?
Section 203 is designed to level the playing field between authors, particularly struggling artists looking to publish their first work, and corporate rightholders that could potentially take advantage of unequal bargaining power. Because a minimum of 35 years must pass before the author can reclaim his rights, the publisher still gets the benefit of exploiting the work for the first several decades. Significantly, an author cannot waive termination rights in advance, ensuring that large corporate rightholders do not simply draft boilerplate language that would eviscerate Section 203.
The most obvious reason an author would want to terminate transfer of copyright is because the work has been successful and still has commercial value decades later. An unproven artist looking to publish his first work could be taken advantage of by a large publisher or recording studio. Even if the artist is granted a fair contract, no one knows just how successful the work may be. An author may therefore want to terminate transfer and cash in on the success of the work after 35 years.
Perhaps a less obvious, but equally important reason to terminate transfer, might occur when the work isn’t being commercialized. Many works have a commercial life only in the first several years after publication; after that, publishers stop printing the book, recording studios stop releasing the albums, etc. An author may want to reclaim copyright in order to find other potential ways to exploit its value, including through social media or other channels. Some older works have never been digitized, often because the rightholder has determined that it is not worth the cost of doing so if it is not an in-commerce work, and an author may want to ensure that his work is made available digitally to potentially give it new life.
Even if a work is still in print and being circulated, the author may not approve of the way it is being commercially exploited. For example, the author may want to permit the creation of a derivative work, such as a graphic novel version of his story, but the rightholder may be preventing such a creation. The author may not approve of the high price the publisher is charging for the monograph she wrote, and want to switch to an on-demand publisher that allows printing at cost so that the work can be used at a cheaper price for schools.
Ultimately, termination of transfer is a useful tool that strikes a balance between allowing a publisher or studio to exploit the work for 35+ years, while ensuring that authors have the ability to reclaim copyright down the road. It is an author-friendly provision that authors should be aware of, particularly those with older works.
Krista L. Cox is a policy attorney who has spent her career working for non-profit organizations and associations. She has expertise in copyright, patent, and intellectual property enforcement law, as well as international trade. She currently works for a non-profit member association advocating for balanced copyright. You can reach her at firstname.lastname@example.org.
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