Frankfurt Kurnit Klein & Selz

October 21st, 2011

Can You Recapture Valuable Grants of Rights?

If you are an author, musician, artist, or other creator of intellectual property (or the heir to such a person), it’s a good time to learn whether you are taking full advantage of your ability to "recapture" certain grants of rights made years ago.  While everyone’s business deals are different, we urge you to consider the quick summary below: you may have untapped sources of valuable intellectual property.

The law in brief. To help protect artists and their families from deals that, in hindsight, may not have been optimal, the Copyright Act of 1976 provides that certain persons may terminate grants of copyright interests -- including licenses and assignments -- after the passage of specified time periods. This means that in certain circumstances, grants such as a license to a publisher of the right to publish a book, a screenwriter’s sale of rights to a movie studio, or a musician’s license of music publishing rights can be terminated irrespective of the terms of any contract.

But the Copyright Act language governing termination rights is quite complex. And the right to terminate depends largely on when -- and by whom -- the original grant was made. Here’s a summary:

Grants made before January 1, 1978:

• May be terminated between 56 and 61 years after copyright was secured.
• May be terminated by the author or by certain successors to the author’s rights.
• May be terminated only if proper notice is given to the person or entity to whom the grant was made (two to ten years prior to the effective date of termination) and the notice is filed with the Copyright Office.

Grants made on or after January 1, 1978 (but only grants made by the author of the copyrighted work):

• May be terminated between 35 and 40 years after the grant was made (except for publishing rights, where the time period may be slightly different).
• May be terminated by the author or by successors specified by the Copyright Act.
• May be terminated only if proper notice is given to the person or entity to whom the grant was made (two to ten years prior to the effective date of termination) and the notice is filed with the Copyright Office.

It’s important to note that in some cases, the rights do not completely revert; the Copyright Act has rules concerning the continued right of certain business partners to continue to exploit previously granted rights after termination.   Also, works made for hire cannot be terminated. And the termination rules only apply to grants in the United States; grants with respect to rights in foreign countries remain unaffected.  Finally, don’t let the sweeping language of an earlier agreement dissuade you from exploring these potential rights: the right to terminate exists irrespective of "agreements to the contrary" that may have been entered into by the copyright owner.

There are many other nuances to the termination rights, including specifics as to what work can be terminated, who owns the termination right, what happens after notice of termination is served, and the practical effect of termination.   Not knowing your termination rights means an important asset could slip away.

If you have any questions about any of the issues raised in this alert or other copyright issues, please contact Edward Rosenthal at (212) 826 5524 or [email protected], Richard Heller at (212) 826 5533 or [email protected], Lisa Davis at (212) 826 5530 or [email protected] or any other member of the Frankfurt Kurnit Intellectual Property Group.

Disclaimer. This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.