When and how can a copyright assignment or license be terminated?
Imagine you granted or obtained an exclusive license to publish a copyrighted work, such as a book. The license provides, as per the usual boilerplate, that the licensee can exploit the licensed work "for the full term of copyright in the work, including all renewals and extensions thereof." The copyright in the work, first published in 1966, will not expire December 31, 2061 -- 95 years later. Does this mean that the licensed rights are safely locked in until that date?
No. There are two different statutory termination provisions, set forth in §203 and §304 of the Copyright Act, under which the grantee could lose the right to exploit the work prior to the end of the copyright term. Which termination-of-transfers provision applies depends on when the transfer was executed.
These provisions are complicated, and the following is a simplified summary.
Under §203, any grant of rights in a copyrighted work "executed by the author on or after January 1, 1978" may be terminated at any time during a five-year window beginning 35 years after the date of publication under the grant, or 40 years after the date of execution of the grant, whichever term ends earlier. Significantly, this termination right may not be waived.
§ 203 does have its limitations:
- It does not apply to works made for hire, since those works are deemed owned by the employer as the legal "author," rather than by means of a grant from the individual creator.
- It does not divest the grantee of rights in the work other than rights arising under the U.S. Copyright Act (for example, federal or state trademark rights or rights under foreign laws).
- Only grants executed by the author may be terminated under this section.
- §203 does not prohibit the continued exploitation of derivative works prepared "under authority of the grant before its termination." Accordingly, after termination, the grantee would not be able to continue publishing the licensed book in its original form, but could continue to exploit lawfully prepared derivative works, such as a sequel or a stage or film adaptation permitted "under the terms of the grant."
§304 provides for termination with respect to grants executed before 1978. Under subsection (c), such pre-1978 grants may be terminated during a five-year window beginning 56 years after the date copyright was originally secured. This allows the author or heirs to recapture all rights under copyright that were covered by the terminated grant for up to the last 39 years of the copyright term.
Subsection (d) applies to copyrights that were in their renewal term on October 27, 1998 (the effective date of the Sonny Bono Copyright Term Extension Act) for which the termination right under subsection (c) had expired by that date, and as to which the author or the owner of the termination right had not previously exercised the right. Subsection (d) provides another opportunity for such an author or heirs to effect termination during the five-year period beginning 75 years from the original copyright date, and to recapture the rights granted for up to the last 20 years of the copyright term.
§304 also has its limitations:
- It does not apply to works made for hire.
- It does not divest the grantee of foreign rights in the work.
- It permits the continued exploitation of derivative works made prior to termination.
Under both §203 and §304, only certain statutorily specified persons can exercise the termination right: the author, if still living; or in the case of a deceased author, a majority-in-interest of the statutorily designated heirs (the author's surviving spouse, surviving children, and the surviving children of any deceased child of the author).
To effect termination, the author or heirs must serve "an advance notice in writing on the grantee or the grantee's successor in title." The heirs may designate any date within the five-year termination window as the effective date of termination; however, the notice must be served "not less than two or more than ten years before" the effective date. Both §203 and §304 require that a copy of the termination notice be recorded in the Copyright Office before the effective date of termination, as a condition to its taking effect.
In sum, if a grant was (a) made prior to 1978 and (b) by the author or a statutorily designated successor, §304 makes those rights subject to termination, in the U.S., as of the 56th year of the copyright term in the work, or beginning in the 75th year, if the work was already past its 61st year in 1998.
If a grant was (a) made in 1978 or later and (b) by the author, the granted rights are subject to termination under §203 during a five-year window starting in the 35th year after the publication under the grant or the 40th year after the execution of the grant, whichever ends earlier.