Recently the Estate of Steve Ditko filed notices of termination against Marvel Comics. Steve Ditko was the original designer of the Spiderman and Doctor Strange characters. So, how does the termination of copyright rights work?
WHY DO COPYRIGHT TERMINATION RIGHTS EXIST?
Copyright termination rights were most recently codified in the 1976 Copyright Act. The Copyright Act sought to provide authors stuck in bad licensing deals the ability to regain control over their works so that licensing deals could be renegotiated or, failing that, the author could negotiate a new license with a separate company with better terms.
HOW DOES COPYRIGHT TERMINATION WORK?
For the purposes of clarity, this overview only addresses works created on or after January 1, 1978. There are termination rights for works published prior to January 1, 1978, but these rights are outside the scope of this overview. Also, copyright termination rights only apply to U.S. copyright registrations and do not apply to international registrations.
An author may terminate a license to another during a five-year period beginning 35 years after the date of execution of the license/grant (the “Termination Window”). The Termination Window is slightly different if the author granted the “right of publication” of the work. If the right of publication was granted in the license agreement, the Termination Window starts at the earlier of 35 years after the work was published or 40 years after the original grant of rights.
An author may give notice of termination as many as ten years from, but no less than two years from, the Termination Window. To do this, an author needs to serve a signed, written notice of termination on the licensee specifying the effective date of termination, and then file the “as served” notice with the Copyright Office. There are strict statutory requirements to record this notice with the Copyright Office:
The submitted notice must be a true, correct, complete, and legible copy of the signed notice of termination as served on the grantee or successor in title.
The submitted notice must be accompanied by a statement setting forth the date on which the notice was served and the manner of service, unless such information is contained in the notice itself.
The submitted notice must have been timely served and must have an effective date of termination that is later than the date of recordation.
The submitted notice must be accompanied by the correct filing fee.
WHO CAN TERMINATE?
Single Author: Generally speaking, a living author can terminate rights that they granted. Where the author is deceased, heirs holding a majority interest of the author’s estate may terminate the license.
Joint Authors/Joint Grant: Where a work has joint authors with a grant approved by all authors, termination rights of these grants generally work on a majority rules system, meaning that if a majority of the authors terminates the copyright grant, the non-consenting authors are bound by the majority decision, and the non-consenting party will receive their share of their copyright rights back.
Joint Authors/Unilateral Grant: Not all grants of copyright rights are made with the consent of all authors as a joint author may unilaterally grant rights to a joint work. In this case, the author that originally granted the rights may unilaterally terminate that grant.
Works created for hire and certain commissioned works are not eligible for copyright termination. Additionally, copyrights granted through a will are not eligible for copyright termination.
Copyright termination rights are a complex and nuanced area of copyright law, but in certain circumstances, can provide tremendous leverage for authors or their heirs to recapture the value of a copyrighted work.
For more information on this article and this topic, contact Christopher L. Harbin.