The Statutory Right To Terminate A Copyright Grant Under U.S. Copyright Law

Now that Paul McCartney has filed his notice to terminate, everyone seems interested. In the olden days of the last Copyright Act, there were two terms to copyright. The old concepts of reversion and renewal are gone; now, we have termination.

There are two different termination provisions in U.S. Copyright Law. They are set forth in § 203 and § 304 of the Copyright Act, under which one can lose the existing right to exploit a work prior to the end of the copyright term. Which termination provision applies to an existing situation depends on when the transfer was executed.

Under § 203, any grant of rights in a copyrighted work executed by the author on or after January 1, 1978 may be terminated at any time during a five-year window beginning 35 years after the date of publication of the work under the grant, or 40 years after the date of execution of the grant, whichever term ends earlier. This termination right may not be waived, even by agreement, and only applies to grants executed by the author of the work. That means that termination rights are inapplicable to "works made for hire" since those works are deemed owned by the employer as the legal "author" rather than by means of a grant.

Section 203 does not prohibit the continued exploitation of derivative works created under the initial grant before its termination. Therefore, after termination, the original grantee would not be able to continue publishing the licensed work in its original form; but, any third-party that received a license for a derivative work, i.e. an adaptation, may continue to utilize the work under the original terms of the grant. For example, a film with music in it may continue to exploit the music.

Alternatively, § 304 provides for termination with respect to grants executed before January 1, 1978. Under § 304 (c), any pre-1978 grants may be terminated during a five-year window beginning 56 years after the date that the copyright was originally secured. This permits the author or their heirs to recapture all rights under copyright that were covered by the terminated grant for up to the last 39 years of the copyright term.

Furthermore, § 304(d) applies to copyrighted works that were in their renewal term on October 27, 1998 (the effective date of the Sonny Bono Copyright Act) for which the termination right under § 304 (c) had expired and as to which the author or the owner of the termination rights had not previously exercised the right. Section 304(d) provides another opportunity for such an author or their heirs to effect proper termination during the five-year period beginning 75 years from the original copyright date, and to recapture the rights granted for up to the last 20 years of the copyright term. Therefore, the terminating party must serve a notice of termination no less than two and no more than ten years before the date of termination specified in the notice. The terminating party can pick any day within the five-year window to act as the date of termination.

Finally, § 304 also has its limitations. It also does not apply to works made for hire and also permits the continued exploitation of derivative works made prior to termination.

To effect termination under the U.S. Copyright Law, the author or their heirs must serve "an advance notice in writing on the grantee or the grantee's successor in title." The heirs may designate any date within the five year termination window as the effective date of termination; however, the notice must be served "not less than two or more than ten years before" the effective date. Both sections require that a copy of the termination notice be recorded in the Copyright Office before the effective date of termination with payment of the appropriate fee.

In conclusion, if a grant was (a) made prior to 1978 and (b) by the author or a statutorily designated successor, § 304 makes those rights subject to termination, in the United States, as of the 56th year of the copyright term in the work, or beginning in the 75th year, if the work was already past its 61st year in 1998.

If a grant made in 1978 or later and by the author, the granted rights are subjected to termination under § 203 during a five-year window starting in the 35th year after the publication under the grant or the 40th year after the execution of the grant, whichever ends earlier.

This article is not intended as legal advice, as an attorney specializing in the field should be consulted further on this matter.

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