[This post is by FMC Legal Intern Margo Varona]
The world may not actually be ending in 2012, but you could forgive record labels and music publishers if they feel that way. Come 2013, many holders of music copyrights may start seeing their song catalogues shrink, or they could have to pay a premium to keep ‘em intact. Of course, apocalypse is in the eye of the beholder. Musicians and songwriters have much to gain from the so-called “termination of transfer” provision of the Copyright Act of 1976. This complex but crucial part of the law allows authors to potentially regain copyrighted works that they may have sold or “transferred” after the Act went into effect in 1978. Under these rules, artists — or their heirs — can enjoy the benefits of re-owning their expression 35 years after having assigned their work to an outside entity.
But wait, why is termination necessary? Why sell away your rights to begin with? Because music, like any creative art, isn’t immediately lucrative: it needs to be released and promoted in order to start selling, and that costs money and takes a certain degree of skill — things that cash-and-time-strapped artists don’t always have. (Or at least that’s the way it used to be — we know plently of brilliant artists who do it all themselves and keep their copyrights, thanks to the power of direct-to-fan technologies like the internet.) Still, the basic idea is that artists sign their over works (or certain rights to their works) to labels and publishers who have the resources to take on the risk of the venture failing, in exchange for some upfront cash in their pockets and usually some sort of profit sharing deal. (We could go on and on about whether those profits are ever actually shared, but let’s let Kenny Rogers do the talking.) Simply put: because a song’s worth is not entirely known at the time of its creation, such deals are not always favorable to an artist.
Congress rightly recognized that the value of a copyrighted work is not entirely predictable over its lifetime (or term), and that artists, particularly inexperienced newcomers, may not be in the best position to negotiate with big hairy executives over how much they should be getting for their untested works. Thus, termination gives artists a “second bite at the apple” by either renegotiating a fairer deal or taking their work elsewhere (even back to mom’s basement).
Okay, termination is great! Next year I can just take back that copyright to that song I sold to a vabel in 1978 for $300? Not so fast. This is copyright, so things are never as simple as they may seem. First of all, are you even sure you have the authority to take back those rights? If you signed a contract that said you were creating that song for the label as a “work made for hire,” you’re fresh out of luck. If you were not the sole owner of that copyright you sold, you’re going to need the majority of your fellow co-owners to agree with your decision. If you inherited that copyright, not only do you need the majority of your fellow inheritors to agree, but if the sale of that copyright was made by one of your inheritors and not by the work’s author, then you’re also fresh out of luck. Additionally, even if you have the power to terminate, you cannot just do that at will when you realize 35 years have past since you sold away your copy; there are — sigh —formalities to adhere to.
The Act merely opens a window, during which you can take back your work, but that window doesn’t stay open forever. Actually it only stays open for five years, and those five years start or stop ticking at the end of those 35 years, depending on whether or not you transferred publication rights and when your work was published. Also, like it or not, those labels and publishers have been relying on your work for quite sometime, and they’re going to need some notice that you intend to take your copyright back, at least two years but no more than 10 years before you actually take it back.
Confused? We don’t blame you. That’s why we created this super-duper helpful Musicians’ Guide to Copyright Termination, which makes plain(er) sense of the ins-and-outs of copyright reversion.
Keep in mind that this is by no means a complete picture of termination of transfers. As we previously mentioned, things can be more complicated than they seem, and they’re sure to get far more complicated as labels and publishers start trying to fight back against the termination apocalypse. So, if you’re planning on taking advantage of termination, you should definitely contact an attorney specializing in copyright. We do, however, stand with Congress’ basic conceit: creators are entitled to have their rights return to them provided they follow some very specific steps. Although it must not be construed as legal advice, our Guide is meant to shed light on those requirements.
Keep it legal out there, people.