Copyright Termination: What is it and Why Should I Care?

Gun and Money ImageIf you keep up on copyright news, you most likely have read a great deal about copyright termination. There have been many high-profile cases centered around copyright termination recently including several superhero related disputes, most prominently over Superman and a separate case involving the creations of Jack Kirby, which include the Xmen, Spiderman, Captain America, etc.

The cases have also hit the music industry hard as well. Some have referred to this as a “time bomb” that could blow up in the industry’s face and many are closely watching as the Village People attempt to terminate their label’s rights to the popular song “YMCA”.

Of course, it isn’t just comics and music affected by copyright terminations. Nearly all creative industries, including book publishers, movie studios and even video game developers could all be affected by it.

Clearly, copyright termination is going to be a big issue for the next few years and it could shake up the major creative industries, many of which have come to rely on profits from older, popular works to help fund newer projects.

So what is copyright termination and how might it affect you? The answers depend strongly on your position.

What is Copyright Termination?

The basic principle of copyright termination is that creators may not know the value of their work or be in a position to negotiate favorable terms when they are starting out. As such, they often sign deals to their work that are less-than-favorable, especially if the work takes off and becomes extremely popular.

To prevent having creators live with these bad deals they made earlier in their careers, the law grants them or their heirs the right to revoke any copyright transfers or exclusive licenses that they granted in the work after a certain amount of time has passed.

For assignments made before January 1, 1978, that time is 56 years, letting the creator recapture the last 39 years of the copyright term in the work. For those deals struck on or after that date, the time is reduced to 35 years, unless the grant covers the right of publication, where it is the earliest of 40 years after execution of the grant or 35 years after publication.

That, in turn, is why copyright termination has been in the news so much lately. Works assigned in 1978 are eligible to have their agreements terminated in 2013. The law, gives a ten-year window for filing these terminations. The earliest any could have been filed was in 2003, but with the date approaching, the rate of termination filings has increased.

On that front, the law provides a very strict set of rules for how the notification must take place and those who are at risk of losing their license to a work can dispute the timeliness, completeness or other elements of the notification to invalidate the termination.

However, since copyright termination does not apply to works for hire, the most common argument against a copyright termination is usually that it was not a license or a transfer at all, but was always the property of the current holder. This, in turn, requires painting the the creator as an employee at the time of creation.

But that is a very limited weapon as, iutside of work for hire, there is no way that the rights of termination may be waived, including in a contract. For those who get assigned rights to creative works, copyright termination is a very real and very current problem.

What’s the Big Deal Behind Copyright Terminations?

The truth is that, for the majority of creators, copyright terminations are more of a thought exercise than a practical matter. Not only are very few works assigned this way, but only a fraction of all copyrighted works have any significant value after a few years. Most of the works eligible for copyright termination probably aren’t worth going through the hoops.

However, the handful of works that are worthwhile are, for the most part, well-known and well-loved pieces of culture. Any work that has remained relevant and profitable enough after either 56 or 35 years has, most likely, made a lot of money and has been a reliable cash cow for the current owner. As such, they won’t be quick to let it go.

This is why publishers, labels, etc. have fought against copyright terminations. At one point, the RIAA tried to insert language into the law that would make all master studio recordings a work for hire, but later backed down.

However, the record labels continue to insist that, even without explicit language in the law, that master recordings are a work for hire, owned by the labels. A theory most experts are dubious on.

This, in turn, is setting the stage for a very nasty fight over the next few years as record labels, publishers and other rightholders work to defend their best money-earners from being reclaimed by the people who created them.

What Happens After Termination?

If a creator or their heirs able to successfully terminate a transfer or exclusive license they granted, the full control of the work is restored to them, the same as if that contract had never existed.

However, most creators lack the resources and tools to exploit the work properly on their own and will, most likely, seek out another publisher, label, etc. to help them manage the work. But this time they are in a much stronger negotiation position and, theoretically, can secure a much more favorable deal.

In short, it’s most likely that the majority of “terminated” works will end up back in the hands of large companies and industry leaders, just some of the names might change the original creators will probably have a better deal.

Bottom Line

For most content creators, copyright termination won’t be an issue. If one manages to create a work that is worth going through these motions in 35 years time, it will be an impressive feat and possible one of the greatest accomplishments any creative can make.

That being said, these terminations are shaking up the major industries and greatly changing the dynamic between creator and rightsholder.

Given how much the Internet has already shifted that front, it’s likely that copyright terminations will just be a side battle to a larger shift brought on by technology. Still, with so many of the world’s best-known and best-loved works at stake, it’s a battle that is impossible to ignore.

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