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duration, renewal & termination of transfers

Notes:
    Note that a transfer of copyright ownership must be in writing and signed by owner of rights conveyed, s204. At common law, copyright ownership could transfer without writing.

    Exclusive or non-exclusive transfers of copyright may be recorded in the U.S. Copyright Office, s205. The benefit of recording a transfer of copyright ownership is that it serves as constructive notice (other persons can no longer claim innocent infringement).

    Under the 1909 Act, failure to comport with formal transfer requirements could cost copyright. Formality now relaxed, but first recorder has presumptive advantage in ownership dispute.

    The copyrights transfered vary depending on nature of payment from grantee to grantor. If grantor compenstated by a royalty agreement, the grantor is a beneficial owner and has right of beneficial ownership. If grantor compenstated by fixed sum, the grantor transfers his economic interests to grantee. An example is FANTASY v. FOGERTY.

    Keep in mind Breyer (1970) that publishers capture bulk of return from book publication within 3 to 5 years. This tends to disprove the economic value of future terms of copyright.

    Statutory terminations of transfers. s203 applies to grants made after 1978 to terminate transfer generally 35 years after grant executed. s304(c) applies to grants made before 1978 to terminate transfer of 19 years added to renewal term of works published between 1964 and 1977 (28 year term extended to 47 years by 1976 Act).

    The right to terminate a transfer does not apply to works made for hire.

    A work created by joint authorship may be terminated by a majority action of the interest holders. If interests are not equal (e.g. one of the joint authors is dead and his interest has passed to beneficiaries) joint owners on the principle of per stirpes representation.

    Effect of date of publication.

    Termination relates to constitutional prohibition against perpetual copyrights.

    Berne Convention. Movement to relax formal requirements of renewal.

    Author's successors may have opportunity to create new license agreements with producers of subsequent derivative works. This may create second term bargaining problems. This is the STEWART v. ABEND case. But consider ROHAUER v. KILLIAM SHOWS, INC. (2d Cir., 1977) (Friendly opinion; owners of Valentino movie based on book do not need fresh license to make derivative work in renewal term because derivative work has more economic value). But note that automatic renewal does not affect license for derivative worked granted by the author in the initial term.
    BE: I think this only applies to works covered by the 1909 Act.

    The legislative intent of s304 is to protect creative talents.

    Renewal rights create a hierarchy of interests. Fours tiers are set out in s304(c): living author: surviving widow or children: author's executors: author's next of kin.

    Posthumous works: BARTOK v. BOOSEY & HAWKES, INC.

    High level of formality required to renew copyright protection before Berne Convention amendments. Errors could be fatal.

    The right to terminate. Compares to voidable contracts. In general, a grant may be terminated during a five-year period following the expiration of a period of 35 years from the execution of the grant (window of opportunity may differ if grant covers the right of publication). The right to terminate cannot be waived or contracted away in advance. There is a formal notice requirements for termination: notice must be served "not less than two or more than ten years before the effective date" of termination stated in the notice.

    Effect of termination. Rights conveyed by terminated grant revert to everyone who owns terminations interests. Termination does not invalidate derivative works prepared under original grant, but author of derivative work cannot prepare further derivatives.

    One reason for posthumous protection is to prevent mutilation of dead author's work.

    The Copyright Office maintains a death registry of authors. Any person having interest in copyright may submit information that author dead or living on a particular date, s302(d).

    Although works published between 1964 and 1977 are automatically renewed, s304 creates an incentive to voluntarily renew in that registration will "constitute prima facie evidence as the validity of the copyright during its renewal term and extended term and of the facts stated in the certificate.


Comparison of s304 and s203 Termination Provisions

s304(c) s203
I. Grants Covered
(a) transfers or licenses of renewal rights -- exclusive or nonexclusive
(b) executed before January 1, 1978
(c) by a person designated by section 304(a)(1)(C)
(d) where statutory copyright -- first or renewal term -- is subsisting on January 1, 1978 (i.e. common law copyrights are not covered)
(e) except as to (i) works made for hire, (ii) dispositions by will
(a) transfers or licenses of any rights under copyright -- exclusive or non-exclusive
(b) executed on or after January 1, 1978
(c) by an author
(d) as to any work -- i.e. irrespective of date of creation and source of copyright protection
(e) except as to: (i) works made for hire, (ii) dispositions by will
II. Persons Who May Exercise
(a) as to grants by author(s): (i) the author(s) to the extent of such author(s)' interest, (ii) if an author is dead, by owners of more than one-half of author's termination interest, such interest being owned as follows: (A) by surviving spouse (if no children or grandchildren), (B) by children and surviving children of dead child (if no surviving spouse) or (C) chared, one-half by widow and one-half by children and deceased's child's children (per stirpes and by majority action)
(b) as to grants by others -- all surviving grantors
(a) the author or a majority of the authors who made grant
(b) is author is dead, his or her right may be exercised by (or is he or she was one of joint authors, his or her interest may be "voted" by) majority action of the owners of more than one-half of author's termination interest, such interest being owned as follows: (i) by surviving spouse (if no children or grandchildren) or (ii) by children and surviving chidlren of deceased child (is no surviving spouse) or (iii) shared, one-half by widow and one-half by children and deceased child's children (per stirpes and by majority action)
III. Effective Date of Termination
(a) Designated time during five-year period beginning on later of the following dates: (i) end of 56th year of copyright, or (ii) January 1, 1978
(b) Upon 2-10 years notice
(a) Designated time during 36th through 40th year after grant or
(b) if grant covers right of publication, designated time during five-year period beginning on the earlier of the following dated: (i) 35 years after publication, (ii) 40 years after grant
(c) Upon 2-10 years notice
IV. Manner of Terminating
(a) written and signed notice by required persons to "grantee or grantee's sucessor in title"
(b) specification of effective date, within above limits
(c) form. content and manner of service in accordance with Copyright Office regulation
(d) recordation in the Copyright Office before effective date
(e) termination right may not be waived or contracted away in advance
(f) interests under termination vest on service of notice
(a) written and signed notice by required persons to "grantee or grantee's successor in title"
(b) specification of effective date, within above limits
(c) form, content and manner of service in accordance with Copyright Office regulation
(d) recordation in Copyright Office before effective date
(e) termination right may not be waived or contracted away in advance
(f) interests under termination vest on service of notice
V. Effect of Termination
reversion to author, authors or others owning author's termination interest (including those who did not join in signing termination notice) in proportionate shares reversion to author, authors or other owning author's termination interest (including those who did not join in signing termination notice) in proportionate shares
VI. Exceptions to Termination
(a) utilization of derivative work made under grant prior to termination (but no right to make a new derivative work)
(b) rights outside federal copyright statute
(a) utilization of derivative work made under grant prior to termination (but no right to make a new derivative work)
(b) rights outside federal copyright statute
VII. Further Grants of Terminated Rights
(a) must be made by same number and proportion of owners required for termination, then binds all
(b) must be made after termination, except, as to original grantee or successor in title, agreement may be made after service of notice of termination
(a) must be made by same number and proportion of owners required for termination, then binds all
(b) must be made after termination, except, as to original grantee or successor in title, agreement may be made after service of notice of termination


Issues:
    A question of ownership arises when technology advances to enable new forms of entertainment. Does prior grant to produce movie convey right to broadcast movie on television? on video?

    How long should copyright protection last? Length of protection has been gradually extended over the years and Congress has considered further extension to life plus seventy years. Setting the proper incentive raises a number of considerations. Some works are discovered as new modes of entertainment emerge (e.g. Masterpiece Theater). Artists might be demoralized if they are unable to provide for their family's future security. Science and better living preserve both artists and their works longer.

    Is copyright properly concerned with the welfare of the artist's family? Is a royalty contract superior to a fixed-sum agreement in that it produces a stream of revenue for the author's familty? Renewal rights are like a forced-share provision.

    It is difficult to predict with certainty the market value of a novel. One party receives a windfall of a successful book. How do the risks of the book publishing market compare to the risks of other markets? Who is most likely to know a book's true value? Do book publishers, by virtue of their size and experience, have an upper-hand in bargaining with an author (or his family)?

    Presumptive publication date when unclear.

    Some value to renewal in sweeping many low-value works into the public domain. According to House Report (1976) about 85 percent of works are not renewed.

    FRED FISHER MUSIC CO. (US 1943)
    The Supreme Court holds that an author could validly assign in the initial term his interest in the renewal term. But the assignment is only effective if the author survives until the renewal term vests (during the 28th year of the initial term). DZ: This is a weird decision with strange results.

    Does compliance with the Berne Convention mean that some public domain works are capable of renewal? The restoration of foreign works is accomplished by s104A. Does these mean that M. C. Escher will have the opportunity to establish new license agreements with companies that incorporate his designs in products? Does this law take property from artists who have used the public domain to create derivative works?


Statutory References:
    s104A: Copyright in restored works
    s201(d): Ownership of copyright: Transfer of Ownership
    s203: Terminations of transfers and licenses granted by the author
    s204: Execution of transfers of copyright ownership
    s302: Duration of copyright: Works created on or after Jan. 1, 1978
    s304: Duration of copyright: Subsisting copyrights

Illustrative Cases:
    Stewart v. Abend (U.S. 1990) (Read Opinion - FindLaw) (Listen to Oral Arguments - Oyez)
    Defendant makes movie "Rear Window" based on story "It Had to Be Murder" by Cornell Woolrich. Author assigns defendant the right to prepare derivative works in the renewal term but dies before commencement of renewal term. The court rules that author's successors are not encumbered by prior dealings and movie producers must negotiate a new agreement to prepare derivative work.
    NOTE: It would now be important to know whether renewal was automatic or voluntary.

    Mills Music, Inc. v. Snyder (U.S. 1985) (Listen to Oral Arguments - Oyez) (Read Opinion - Justia)
    This case involves disputed royalties for the popular song "Who's Sorry Now." Descendents of songwriter terminated grant of copyright interest to stop sharing royalties. Court holds that termination of transfer does not affect licensed derivative works based on original song.

    Russell v. Price (9th Cir. 1979)
    Movie "Pygmalion" based on play by George Bernard Shaw falls into public domain and defendant distributes copies of film. The court rules that distribution of the film infringes copyright of the play because protection lapses only to the original elements of the derivative work and does not diminish the protection of the underlying work.

    Filmvideo Releasing Corp. v. Hastings (2d Cir. 1981)
    Accord with RUSSELL. The expiration of the copyright in a film that incorporates portions of an underlying copyrighted work does not cast that incorporated portions of the underlying work into the public domain along with the film.