View Print Friendly Version
Termination of Copyright Grants – It’s even better the second time around!
© Cheryl Hodgson 2007 | Posted on September 6, 2007
Cheryl Hodgson
© 2007 Hodgson Law Group
Trusts and estates which own copyrighted assets, or which generate royalty income from copyrighted works may well be entitled to exercise a statutory right of termination of previous transfers, thirty-five years after the date of the original grant by the author or copyright owner.
Original documents of transfer or license should be carefully reviewed to insure termination rights are not overlooked, and that deadlines for issuing the required statutory notice of termination are not missed, and hence lost forever.
Who should and must be concerned?
• Trustees of trusts
• Estate Planning Professionals
• Business Managers
• Financial Advisors
What is the effect of termination of previous assignments or exclusive licenses?
Asset income can and will immediately double, and in the cases of certain assets, quadruple or more, since instead of receiving the previous royalty income stream from the previous transferee, the reclaiming party will receive 100% of all revenues following the date of termination.
Recapture means the estate, trust, or beneficial owners will once again become the owner and licensor of the work for the remainder of the copyright term, or can the event as an opportunity to renegotiate more current rates in a new and more favorable agreement.
How does it work?
Prior to 1978, copyright had two terms, with a “renewal term.” In 1976, Congress created one term of copyright, now measured by Life of the author, plus 100 years, thus bringing the United States into the same duration as other countries. At the same time, Congress recreated for all works (except works made for hire), a one time opportunity for an author or the heirs to terminate grants that would otherwise continue for the full term of copyright.
Post 1978 Copyrights: 17 U.S.C. § 203 allows the author or creator of a work (or his heirs) to terminate a transfer of any exclusive right during a five-year period beginning at the end of thirty-five years from the original grant After the effective date of the termination, a further grant of the exclusive rights may be made by the owner. Notice must be served no sooner than ten years prior to the termination and no later than two years prior to the termination, and statutory filing requirements observed.
Pre 1978 Copyrights: 17 U.S.C. §304(c)(3) provides that an “author” his statutory heirs may terminate a grant during a five-year period at the end of the 56th year of the term of copyright “notwithstanding any agreement to the contrary.” For these copyrights, the terminating party may issue a notice of termination within five years beginning at the end of fifty-six years from the date copyright was originally obtained. As a result of the Sonny Bono Copyright Term Extension Act, there is an additional opportunity to terminate a transfer twenty years later, at the end of the seventy-fifth year of copyright protection.
No Comments »