Copyright Reversions: Issues and Obstacles

New York State Bar Association - Entertainment, Arts and Sports Law Journal

Spring 2017

By Neville L. Johnson and Douglas L. Johnson

Many pieces of art are subject to reversions, meaning that the artists who originally composed/wrote/painted/sung these works now have rights in copyright to terminate their prior transfers of the rights in their works and reclaim their ownership rights. A barrage of legal issues arise for these artists, through which their lawyers must skillfully navigate. 

Background of Reversions for Copyrighted Works

1. The first step to termination is to make sure that the underlying work is not in the public domain, or, put another way, that any renewal terms have been properly registered (if not automatic). To determine whether there is a valid copyright in the underlying work, one should ascertain when the work at issue was registered and published. For works registered with the Copyright Office before 1964, the renewal registration must have been formally registered and filed in the Copyright Office before the end of the initial 28-year term in order for the work to have remained under copyright. Absent formal registra- tion, these works are in the public domain and cannot be recaptured.

”Those works then also benefit from the 1992 Sony Bono Act, giving them total protection of 95 years.”

For works registered between 1964 and 1977, there is an automatic renewal term so long as the work was published during this 14-year period. Therefore, works published between 1964 and 1977 with proper copyright notice have an initial 28-year term of protection, plus another 28-year renewal term. Those works then also benefit from the 1992 Sony Bono Act, giving them total protection of 95 years. Grants involving works published during this time are therefore terminable, and the artists and/or heirs may terminate and reclaim rights in these works. 

For works created after 1978, the term of protection is life of the author plus 70 years. There are no sticky renewal issues. Grants involving works published during this time are therefore terminable, and the artists and/or heirs may terminate and reclaim rights in these works.

2. Once it has been determined that the work at issue is protected by copyright, the second step to termination is to analyze the grant (e.g., the license or assignment) being terminated. Termination of grants executed prior to 1978 may be effected “at any time during a period of five years beginning at the end of 56 years from the date copyright was originally secured, or beginning on January 1, 1978, whichever is later.”1 The rationale behind this scheme is that it constitutes the maximum term of protection for all works under the 1909 Copyright Act (two 28-year terms).

”The termination notice must be served not less than two and not more than 10 years before the specified termination date provided in the notice.”

Termination of grants that were made before 1978 but not terminated during the initial 56-year window (see above) and are within the scope of the Sonny Bono Act may be effected “at any time during a period of 5 years begin- ning at the end of 75 years from the date copyright was originally secured.”2 In effect, this allows a second bite at the apple for grants made during the automatic renewal period. Critically, this second bite applies only to grants involving works “subsisting in [their] renewal term on the effective date of the Sonny Bono [Act] [October 27, 1998].”3 So long as the termination right provided in
§ 304(c) has expired by October 27, 1998, and the author or owner of the termination right has not previously exer- cised that right, the grant executed prior to 1978 is subject to termination.4 

Termination of grants executed on or after January 1, 1978 “may be effected at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant.”5 Therefore, by way of ex- ample, if a grant is executed on June 6, 1985, the first date on which it is subject to termination is June 6, 2020. The last date is June 6, 2025; the corresponding dates to notice termination run from June 6, 2010 through June 6, 2023. Service of notice of termination must be at most 10 years and at least two years in advance of termination.

3. Once it is determined that the work at issue is (a) copyright protected and (b) the grant involving the work is terminable under either §304 or §203, the third step to termination is to give proper notice of termination.6

The termination notice must state the date of termination, which must fall within the five year period during which termination may occur (see supra). The termination notice must be served not less than two and not more than 10 years before the specified termination date pro- vided in the notice.

If the grant at issue does not cover the right of publication and was executed on or after January 1, 1978, the earliest date a termination notice may be served is 25 years after execution of the grant, and the latest date such termination notice may be served is 38 years after execu- tion of the grant.

If the grant at issue was executed prior to January 1, 1978, then the earliest date a termination notice may be served is 46 years after the copyright was originally secured (or, 18 years after the renewal period commenced). The latest date such a termination notice may be served is 59 years after the copyright was originally secured (or, 31 years after the renewal period commenced). Finally, for works that are within the purview of the Sonny Bono Act, the five-year period for termination of those grants begins at the end of 75 years.7

Termination of Joint Works

A “joint work” is a work in which the copyright is owned in undivided shares by two or more persons. The authors of a joint work are co-owners of the copyright in the works.8  A joint work will result in the following  circumstances: (1) if the work is a product of joint authorship; (2) if the author or copyright proprietor transfers such copyright to more than one person; (3) if the author or copyright proprietor transfers an undivided interest in such copyright to one or more persons, reserving to him or herself an undivided interest; (4) if upon the death of the author or copyright proprietor, such copyright passes by will or intestacy to more than one person; (5) if the renewal rights under the Copyright Act or the terminated rights under the termination of transfers provisions, vest in a class consisting of more than one person; or (6) if the work is subject to state community property laws.9

”If the author survives to the vesting on the termination right, he or she has the right to recapture. In the case of a joint author and a post-1978 grant, a majority of the joint authors who executed the grant is necessary for termination.”

If the work is a joint work, certain issues must be considered with respect to termination. For example, if the grant being terminated was executed on or after January 1, 1978, it is subject to termination only if it has been executed by the author.10. A grant by joint authors, though, is subject to termination even if the grant was executed by only one of several joint authors, so long as the joint author acting alone had the power to convey the rights granted.11. A grant executed before January 1, 1978 is subject to termination if it was executed either by the authors or by those statutory successors entitled to a claim of renewal copyright in place of the author.

If the author survives to the vesting on the termination right, he or she has the right to recapture. In the case of a joint author and a post-1978 grant, a majority of the joint authors who executed the grant is necessary for termination.12  If only two joint authors joined in a grant, both must agree to terminate. If three joint authors joined in a grant, any two of them hav the power to terminate.13

”If a grant is executed by two or more joint authors and one of them does not survive until the termination vesting, the termination interest of that deceased author may be exercised by a majority of those who succeed to ownership of the interest.”

In the case of a joint author and a pre-1978 grant, such grants are terminable by each executing joint author, even if a majority of the executing joint authors do not join in such termination. The termination is effective, however, only with respect to the interest of the terminating joint author.14  This illustration from Nimmer is helpful:

Suppose, for example, that a work is jointly written by A, B, and C, who share the copyright equally. If all three joint authors join in executing a grant of renewal rights in the work to D in advance of the vesting of such rights, and if all three authors survive to the time of such vesting, then absent any termination of the grant, D will be entitled to the renewal term of copyright in the work. Suppose, at the time the authors are able to terminate, A wishes to terminate the grant, but neither B nor C is willing to join in the termination. As indicated above, if this were a grant executed on or after January 1, 1978, no termination could occur because the consent of a majority of joint owners is required for this purpose. With regard to grants executed prior to January 1, 1978, A alone may terminate his or her grant to D, but such a termination will not divest D of the rights acquired under the grant from the non-terminating joint authors, B and C. D and A will thus become tenants in common of the rights in the work granted by A, B, and C. If the rights granted to D were exclusive, the termination will make the rights nonexclusive and both A and D will have power to grant licenses. 

If a grant is executed by two or more joint authors and one of them does not survive until the termination vesting, the termination interest of that deceased author may be exercised by a majority of those who succeed to ownership of the interest.15  Whether such a majority may terminate its deceased joint author's grant without the consent of any of the other joint authors who joined in the execution of the grant, or whether termination may occur only if a majority of the joint owners join in the termination, will depend upon when the grant was executed. If execution occurred on or after January 1, 1978, majority approval of joint authors or their heirs is required. If execution occurred prior to January 1, 1978, those who control a given deceased joint author's termination inter- est may terminate without joining the other joint authors or their representatives.16

Endnotes

1. 17 U.S.C. § 304(c)(3).

2. 17 U.S.C. § 304(d)(2).

3. Id.

4. See 17 U.S.C. § 304(d).

5. 17 U.S.C. § 203(a)(3).

6. As for termination notice formalities, the termination notice must be in writing and signed by the persons with the right to terminate and must contain a brief statement reasonably identifying the grant to which the notice of termination applies. See 17 U.S.C. §§ 203(a)(4), 304(c)(4); 37 C.F.R. § 201(b)(1)(iii). The effective date of termination must be stated in the notice. Id. Service of the notice may be effectuated either by personal service or service by first class mail. 17 C.F.R. § 201.10(d)(1). The Copyright Act also requires that the notice be served upon the grantee or the grantee's successor in title. See 17 U.S.C. §§ 203(a)(4), 304(c)(4). Further, the termination notice must be recorded in the Copyright Office, prior to the effective date of termination, as a condition to its taking effect. 17 U.S.C. §§ 203(a)(4)(A), 304(c)(4)(A). For other formalities including form and content, see 17 U.S.C. §§ 203(a)(4)(B), 304(c)(4) (B).

1. See 17 U.S.C. §§ 304(c)(4)(A), 304(d)(2).

2. 17 U.S.C. § 201(a).

3. See Nimmer, § 6.01.

4. 17 U.S.C. § 203(a).

5. See Nimmer, § 11.02[A][4][a].

6. See Nimmer, § 11.03[A][1][a].

7. See 17 U.S.C. § 203(a)(1).

8. See Nimmer, § 11.03[A][1][c].

9. 17 U.S.C. §§ 203(a)(1), 304(c)(1).

10. See Nimmer, § 11.03[A][2]. Note, there is no reversion possible for a work made for hire; however, an analysis should be done if the work is a true work made for hire, a subject outside the purview of this article.

Neville L. Johnson and Douglas L. Johnson are partners at Johnson & Johnson LLP, in Beverly Hills, CA, practicing entertainment, media, business and class action litigation. Alec Govi is an associate there.

Reprinted with permission from: Entertainment, Arts and Sports Law Journal, Spring 2017, Vol. 28, No. 1, published by the New York State Bar Association, One Elk Street, Albany, NY 12207.