We have covered several topics on recapturing copyrights here at Lawyer 4 Musicians (see Recapture Basics and Heir’s Rights), as the clock started for copyright owners to terminate a record label or publisher’s grant of rights in 2013. But what if you granted the rights to your copyright before the Copyright Act came into effect (before 1978)? Are they lost for forever? What if I am an heir who has inherited hundreds of songs that are being controlled by someone else? Never fear, with just a gentle tweak in termination timelines, the Copyright Act addresses recapturing of copyrights pre-1978.
Section 304(c) of the Copyright Act allows the copyright owner or his or her heirs to recapture a grant of their copyrights starting on the 56th year from when the copyright was originally registered. Why is it 56 years instead of 35 like post 1978 copyrights? Glad you asked…A little history for you . . . prior to the enactment of the Copyright Act, a copyright was split in two consecutive 28-year periods (this means you could own a copyright for 28 years and then renew it for an additional 28 years) for a grand total of 56 years. Once the Copyright Act was enacted amendments were passed to extend pre-1978 copyrights for an additional 19 years and then again another 20, totaling a whopping 95 years (28+28+19+20). Section 304(c) allows copyright owners or their heirs to recapture for the remaining 39 years that were added by the amendments, (with a few rare exceptions).
The rest of the recapturing maze is the same as post-1978 copyrights . . . simple right? Sort of. The copyright owners or their heirs have a 5-year termination window after the 56th year during which the grant of rights may be terminated. But in order to exercise the termination, the owner must provide written notice to the grantee with an effective termination date falling in the termination window. The notice must be served between 10 and 2 years prior to the effective termination date. Here is an example:
Copyright Registered: June 15, 1950
Termination Window: June 15, 2006 – June 15, 2011
(1950 + 56 years = 2006 + 5 year window = 2011)
Now the tricky part . . . the notice is dependent on the date you want the termination to occur. If you take the above example and want the termination to be effective on January 1, 2010, the termination notice needs to be given to the grantee after January 1, 2000 (later than 10 years before) and before January 1, 2008 (prior to 2 years before). The notice needs to be signed by the owner or if the owner is deceased, those entitled to more than 50% of the copyright interest (see Heir’s Rights article). Then the notice needs to be recorded in the Copyright Office prior to the effective termination date.
A bit complicated, but if you can do the math and send the letter those copyrights are as good as yours! And, of course, we are here to help. Just ask!
Stay tuned for more posts on Lawyers 4 Musicians, after a long hiatus we are back, keeping you updated on all the ins and outs of the music biz!
For decades the industry has struggled with interpreting the pre 1972 copyright laws on recordings. Due to complicated state copyright laws which directly contradict or confuse federal law, the music industry (artists on one side and labels/publishers on the other, naturally) have been battling over the rights in sound recordings. The issue has been coming to the forefront as many extremely popular works recorded prior to 1972 are up for recapture (See our articles on Recapturing here).
In a remarkable act of sanity by Washington, Congressman Jared Polis (NY) has introduced new legislation that aims to simplify, clarify and end speculation as to the true meaning of the US Copyright laws as they relate to sound recordings. The Sound Recording Simplification Act (HR 2933) is not wordy or complicated (yet). Rather it seeks to completely federalize all copyright laws thereby eliminating the existing confusion and contradiction created by conflicting state copyright laws.
The passage of this Act would help to eliminate a hurdle in songwriters recapturing their rights by eliminating the labels/publishers creative arguments of conflicting copyright statutes. Stay tuned to watch the progress of the Act.
What if your now deceased spouse, parent or grandparent entered into a publishing or record deal and the termination period is coming up? Do you have any rights to the masters or underlying compositions? As we know, copyrights can be left to an estate (think Jimi Hendrix, John Lennon, Bob Marley, etc). So, the answer is “yes.” Let’s take a look at how this works.
First, remember, for post 1978 works the termination for an assignment (not a work made for hire) is 35-40 years after the grant was made. Feel free to take a look back at the first installment of this subject (Click Here for First Installment) to get reacquainted with the time frames. Assuming the time frame is coming up, what can you do?
Let’s look at who can terminate. The original author or creator can obviously exercise the right to terminate. However, a surviving spouse and children can also terminate an assignment. If the children are deceased then the grandchildren of the author or creator can exercise this right.
100% of the termination rights will be divided up between the spouse and children or the spouse and grandchildren, as the case may be. The way this is divided is 50% to the surviving spouse and 50% split equally among the children or grandchildren. Let’s look at a couple of examples, shall we?
1. Surviving spouse with no children.
2. Surviving spouse with four children.
3. Surviving spouse with no surviving children and three surviving grandchildren.
Again, in all of these scenarios, the spouse has 50% of the termination rights. In #1 the surviving spouse has 100% of the termination rights. In #2 the spouse has 50% and each child has 12.5% of the termination rights (50% ÷ 4) . Finally in #3, the spouse again has 50% and each grandchild has 16.67% of the termination rights (50% ÷ 3).
Why do these percentages matter? Well, to serve proper notice and to exercise termination rights, over 50% of the interests in termination rights must agree and serve notice. You see how this can cause some family strife, right? If you thought Thanksgiving dinner was stressful, can you imagine this conversation? “I am happy with the royalties we are getting, let’s just leave this alone.” Your sibling, “I want these copyrights back because I think we can do a lot more with them and preserve Mom’s legacy. Can you pass the dinner rolls?”
This is all assuming the spouse wants to terminate. What if the children or grandchildren want to terminate and the spouse does not? Or what if the spouse wants to and none of the children or grandchildren want to terminate? Pass the wine, please.
If the spouse wants to recapture the copyrights, he/she must convince at least one child to join him/her. More wine please.
Assuming everyone agrees to terminate, this would not be an issue. It is just something everyone should be aware of when dealing with copyrights and recapture.
Next up in the series is dealing with works written or recorded prior to 1978. Stay tuned.
Suppose you are a publisher or a record label and I am a 25 year old writer or artist. You are impressed with my music and we begin talking. After a couple of weeks of proper courting we decide to consummate the relationship. You present me with a contract. The language states you give me money as an advance; in exchange, I give you my music and the copyrights linked to the music for the life of the copyrights. This seems like an awfully long time, no? After all, life of copyright is 70 years after my inevitable death. You, as publisher or label, want me to assign my copyright to you, basically, forever. So, assume I sign the contract in ink (or blood or something). Is that it? Will my work remain with your company for the next 100 years or so? No. Not necessarily.
Despite what many think and despite the language of the contract, you may be able to get your copyrights back. There are strict time lines and certain formalities that must be followed; which, if done timely and correctly, will result in you getting your copyrights back. These guidelines are set forth in a little discussed portion of the 1976 Copyright Act (Section 203 to be precise). Note: This does not apply for works made for hire which we will discuss in a future post.
Section 203 provides a chance for authors to terminate their assignments and recapture their copyrights. For works after January 1, 1978 (the year the 1976 Act went into effect) grants, assignments and licenses can be terminated during a five year window starting 35 years after such grant was made. For the termination to be effective a letter requesting that the copyrights revert must be sent no more than 10 years prior and no less than two years prior to the effective termination date. There are certain other formalities such as recording a termination notice with the Copyright Office.
Here’s how Section 203 works: suppose a song was written and assigned on January 2, 1978; the writer could get his/her copyright back between the years 2013 – 2018 (1978 + 35 years + 5 year window). Termination letters could be sent beginning in 1993 and no later than 2016 (10 years prior to 2013 and less than two years before 2018). If done correctly and timely, publishers cannot deny these termination letters. As an added bonus you cannot waive your rights in advance. Thus, the contract you had me sign granting you my copyrights for life of copyright would not affect my right to recapture my copyrights. In fact, right now, there are writers and artists in this exact position requesting their copyrights revert back to them. However, if you do not send a proper termination letter during the proper time frame, the contract will then go back into effect and the publisher or record label would continue to own your copyrights for life of the copyright.
So what’s the big deal about getting your copyrights back? What do you do if you get your copyrights back? Suppose you don’t have any business experience and have no idea what to do to market and get your material out to the public? Fear not readers. You can use this as a negotiating tool. For example: suppose your contract allowed for a future advance of x dollars and a money split of x%. Well, you could renegotiate all your terms. You could ask for three times x and a money split of x+10%. I will let you fill in the x’s, percentages and numbers until you are happy because that is how you could (and should) handle negotiations of this type. You should see what would make you happy to stay with the same company. Another option would be to take your copyrights and move to another company on more favorable terms. Yet another option would be to recapture your copyrights and start a company to start selling or licensing your copyrights. There are countless options available if you decide to recapture your copyrights.
It is important to remember the value of a label or a publisher is the value of the copyrights it owns and controls. Think of how many albums the Beatles, Stevie Wonder, The Who, Led Zeppelin, Ray Charles, etc. still sell (click here to read about the revenue still generated by Ray Charles). Think of how many times you hear those same artists on the radio or in movies or on television or in video games. (Labels currently do not receive money for terrestrial radio play. Please see the post on the Performance Rights Act). Now, you may not be as well known as the artists just mentioned but think of how much you could do if you had the rights to. A label usually only pushes an album for about 12-18 months; after that the album slowly fades into obscurity. However, they still own the copyrights. If the label does not push it; no one can. Now, if you had your rights back you could go out and try to get your music placed on television shows, movies, video games and commercials and reap 100% of the money. There are several companies out there that pitch and place music in all these areas (for a fee or commission). Another source of income could be repackaging and selling your album yourself. Whether it is on iTunes or at the local indie shop; you could sell your own cds and keep your own money. No one will ever care about your music more than you. If you are back in control of your songs and master recordings, your music may get a new push and find opportunities you never thought possible.
This is an exciting time in the music industry. Every year new writers and artists start entering the termination period for copyrights. New business models, new marketing techniques and new interest in older songs are going to emerge. I, personally, cannot wait to hear a great song that some label or publisher forgot about back in 1978.
This is an extremely interesting and complicated issue. We at L4M will have many more articles about this issue and how it relates to you. Future posts will discuss pre-1978 works, sound recordings, works made for hire, heirs’ rights and the importance of record keeping. Stay tuned…