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Termination Rights - Explained

February 13, 2011


This article is written from two perspectives – The songwriter or their heirs who want to reclaim the copyright and the publisher who wants to continue ownership of the song or acquire rights to a copyright whose right have terminated.

 WHAT IS A TERMINATION RIGHT?

This provision of copyright law originates from a basic principal or fundamental of the music publishing business: When a song is first written, it’s impossible to know whether it will become commercially successful over time. This provision is called The Termination Right and is designed to give songwriters, or their heirs, a second chance by allowing them to reclaim their copyright ownership, but only after many years, and only if the law’s requirements are followed to the letter

WHEN IS A SONG ELIGIBLE FOR TERMINATION RIGHTS?

The math of termination rights is complicated but we’ll break it down for you:

The math for “counting” copyright duration, and for knowing when termination rights arise, is different depending if a song was published before 1978 or after 1978 (the effective year of the current Copyright Act). 

One other important item to note is that termination rights don’t have to be exercised the first year they arise; there is a five year “window “to work with.

For Songs Published Pre 1978

It takes at least 56 years from the initial copyright assignment for the termination right to arise.  So this year, 2011, is the year that songs assigned in 1954 are eligible for termination, because their 56 year waiting period expired at the end of 2010.  Pre-1978 copyrights have a total duration of 95 years, so if an estate reclaims a work after 56 years, the estate will have the copyright for the remaining 39 years. 

There’s another category of termination right for works published 75 years ago. For example, if a song was published in 1936 and never terminated before, it would be ready for termination so that the estate could reclaim the last 20 years of copyright before it went into the public domain.

For pre-1978 works where there are multiple authors or heirs, any one of the rights holders can terminate their share independently.

For works Post-1978

Starting in 1978, the math is different:  For works assigned to a publisher in 1978 and later, it takes 35 years for the termination right to arise. For example a song assigned in 1978, the termination right will be available after the end of 2013. 

Major issue with Post-1978 copyrights: for songs created Post-1978, where there are multiple authors or heirs, a majority of the authors or heirs must agree to terminate. 

HOW TO RECLAIM YOUR PUBLISHING RIGHTS

For Writers – here’s what you must do.

Carefully calculate the termination date, and we recommend that you have a proper notice of termination drafted by a copyright lawyer.  You would then send the termination notice to the publisher. Note: you can do this up to ten years in advance, but it must be no less than  two years in advance of the effective date of the termination.  If there are multiple authors or heirs, for songs created Post-1978 the majority must agree to terminate. 

For Publishers – here are your options

a. Keeping a copyright: An upcoming termination may be an opportunity to reach a new deal with the songwriter’s estate, and secure the future rights that might have otherwise been lost.  Once an estate gives notice of termination, there is a waiting period before it comes in to effect, and during the waiting period, only the current publisher can enter into a new deal with the estate.  It is an important negotiating advantage.

b. Acquiring termination rights from an estate:  A publisher might acquire a classic song from an author’s estate that was formerly owned by a competitor.  Estates that reclaim copyrights may be looking for a better agreement, and many publishers are on the lookout to grow their catalogs with good copyrights that were terminated and have come onto the market for the first time in 56 years.

TWISTS AND TURNS

A few examples of how this can get complicated.

1.     Derivative Rights       Even though a writer (or estate) was successful in regaining the rights, the music publisher who had the rights will still be able to receive continuing revenue from derivative works (based on the song), such as mechanical licenses for sound recordings.  Notwithstanding this ruling there have been cases where courts have settled disputes over these continuing post-termination royalties in different ways.  Notable examples included a dispute over mechanical royalties for the song Bye Bye Blackbird on the Sleepless in Seattle movie soundtrack.

2.     Only In The USA        The termination right is effective only under U.S. copyright law.  Where a publisher was assigned worldwide copyright, even after termination, the publisher will retain all rights outside the United States.

3.     Works For Hire          Songs that are classified as “works made for hire” can’t ever be terminated, for example a song written especially for a motion picture where the songwriter was a studio employee and/or signed a valid work made for hire agreement can’t be terminated.  Sometimes, there are legal disputes over whether or not a work was a work made for hire.

4.     Termination Rights Cannot be Excluded       Under the law, a songwriter can’t contract away the termination right.  Even a contract that says “I will never terminate” is void under the law.  But, as is often the case with valuable works, there have been disputes over this provision.

5.     Is It Worth It?                         Sometimes a 56 year old song truly has no more commercial appeal, but authors or heirs may demand promotional time and investment.  Even where a business decision is made by a publisher not to try and negotiate to keep the copyright, the publisher retains some of the rights post-termination as discussed below.

Despite The Complexity, You Must Pay Attention To Termination Copyrights. 

If you are a music publisher, there may be works in your catalog ripe and at risk of termination.  You can wait it out and see if the estate will terminate (they may not), or you can use a pending termination as a good time to renegotiate, and take advantage of the way the law give the current publisher a “first look” at re-acquiring the work.

If you are a songwriter or the heir of a songwriter, you may have termination rights now, or in the future.  Neither side can escape this “second bite at the apple” under copyright law.  Understanding termination rights is the key.

This article is meant to give an overview of termination rights but is not to be considered legal advice. You should retain legal counsel or seek advice from a knowledgeable expert before making decisions involving termination rights.

Corey Field, Esq.

with Richard Feldman, AIMP President       

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