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The Copyright Act of 1976 decrees that the author shall have a right exercisable only once for each separate literary work under exclusive license and for a brief window of time after 35 years from the date of a work’s publication to terminate a license. (There are some qualifications to this, but not necessary to explain the concept). There are two provisions concerning statutory termination, one [Section 304(c)] relates to literary works published prior to January 1, 1978; the other [Section 203] relates to literary works published after January 1, 1978. Both sections can be thought of as gifts from Congress to authors, or their estates, or spouses and children to renegotiate with the licensee of an economically valuable work or terminate licenses entered into at the beginning of an author’s career when he or she was in an unequal bargaining position with the licensee. We are going to confine our comments to Section 203, for post-1978 publications. The procedures for exercising the right are complicated.
If your literary work was published in 1978, 2013 is an important (in fact, the opening) year because if you acted properly in accordance with the time requirements for notice you are either in the process of renegotiating the license or taking steps to terminate an exclusive license for further exploitation with another licensee. If you started publishing in 1988, to take a random subsequent year, your important year is 2023, which means that this year, 2013 is the opening year for giving notice. Notice can be served at anytime between 2013 and 2021.
What was the purpose of the Act and how does it work? In its Report on the passage of the Copyright Act of 1976 the House of Representatives stated that “The purpose of the Act was to “safeguard[ ] authors against unremunerative transfers” [that is, transfers at the beginning of their careers] and address “the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited.” H.R. Rep. No. 94-1476, at 124 (1976). Section 203 reads in pertinent part:
In the case of any work other than a work made for hire, the exclusive or nonexclusive grant
of a transfer or license of copyright or of any right under a copyright, executed by the author
on or after January 1, 1978 … is subject to termination.
In other words, you have to own the copyright to be eligible to terminate the license. This issue has come up in some cases involving the superman character. There are no termination rights because the cartoonists created the superman stories and character as works made for hire.
You are familiar I know with the standard grant of rights provision in a publishing contract. It states that the grant is exclusive to the Publisher for “the term of copyright and all renewals thereof.” Well, this is not exactly accurate because 35 years from publication of a literary work is likely to be less than halfway through the current term of copyright which is life of the author plus 70 years. Nothing in the grant of rights language takes away the author’s statutory termination right which is non-waivable. In order to receive the benefit of the Act the author has to give notice to the licensee at least 2 years before the date of termination. The notice can be served anytime within a 10 year window preceding the anniversary date of the publication year. In other words, for a termination to be effective in 2013, notice had to have been given between 2003 and 2011. If notice was given in 2012, the earliest date for termination would be 2014.
The problem is that there is another window, a 5 year window. In other words, if the critical year is 2013 the window closes in 2018 so that if the notice is not served between 2008 and 2016 the right is irretrievably lost. Who benefits? The author if he or she is still living, the author’s estate if there is no living spouse and children, or living spouse and children if there are any. If there are only children and grandchildren, the termination interest can only be exercised by the action of a majority of them. Very, very complicated particularly if the family is at odds with each other.
Literary agents are the filters to the publishing industry; the first readers; and mainly indispensable. Acquisition editors rely on their tastes and take their calls. In relation to authors they are like as adventurers to booty: they seek and sell. Their fee, a commission for placing an author’s work, is spread over the economic life of the publishing contracts their efforts bring into being. What exactly is promised and performed and the commission the literary agent is entitled to is set out in the parties’ agreement. A literary agent typically receives a commission of 15% of the publisher’s gross revenues from book sales or licenses of subsidiary and ancillary rights. Author/agent agreements are terminable, but an agent’s right to commissions for services performed survives.
Authors are not captive to their agents. We stress “not captive” and “services performed” because these issues arose in Lampack Agency v. Grimes, an unreported New York case decided in October 2010, and further reviewed in an appellate decision announced on March 1, 2012 (1st Dept.) The appellate division affirmed the trial court’s judgment dismissing the literary agent’s complaint that it was entitled to commissions from contracts negotiated after the author terminated the agency. The questions raised and the answers given in this case are significant markers as to an agent’s right to share in proceeds from subsequently created production after his connection with the author has ended.
Whether or not there is a written agent/author agreement, commissions are protected through a clause incorporated into the publishing agreement, an “Agency Clause.” The agent’s theory in Lampack rested on the inclusion in the publishing agreement negotiated by the Lampack agency of an option provision for the author’s next work of fiction. The publishing agreement for the “option” work was negotiated by the author’s new agent.
The Lampack Agency included the following “agency clause” in the publishing agreement:
The Author hereby appoints [PLA] irrevocably as the Agent in all matters pertaining to or arising from this Agreement. . . . Such Agent is hereby fully empowered to act on behalf of the Author in all matters in any way arising out of this Agreement. . . . All sums of money due the Author under this Agreement shall be paid to and in the name of said Agent. . . . The Author does also irrevocably assign and transfer to [PLA], as an agency coupled with an interest, and [PLA] shall retain a sum equal to fifteen percent (15%) of all gross monies due and payable to the account of the Author under this Agreement.
If a discharged agent has negotiated a publishing agreement that includes an option on the author’s next work, is he entitled to receive a commission on the publishing agreement for the option book? Both courts in the Lampack case made it clear that if such a right exists it would have to be expressly stated in the agreement between the author and the agent.
What does it mean for the author to have “irrevocably assign[ed] and transfer[ed] to [an agent] … an agency coupled with an interest”? What an author “irrevocably assign[s] and transfer[s]” is limited to commissions paid as a percentage of the author’s earnings. “An agency coupled with an interest” (the trial judge citing a case from 1896) “[means that] as a part of the arrangement with the principal, the agent received title to all or part of the subject matter of the agency.” The trial court stated:
In this case, the commission provision grants PLA a 15% commission in the proceeds from its sale of rights in Grimes’ literary works and not an interest in those literary works themselves…. (Emphasis added).
The appellate court went a step further:
It is not reasonable to interpret the phrase “this Agreement” to include either extensions of the 1999-2003 agreements or an agreement for the future work mentioned in the 2005 agreement …. If Grimes and Penguin had meant to give plaintiff commissions on such extensions and future agreement, they would have said so, especially since the 2005 agreement had a specific Option on Next Work clause.
Indeed, to interpret otherwise (in the Court’s words) would produce an “absurd result.” Rather,
Interpreting “this Agreement” to mean only the actual contract signed by the parties, not future agreements or extensions, is consistent with the doctrine that “[a]n at-will sales representative is entitled to post-discharge commissions only if the parties’ agreement expressly provided for such compensation.” (Emphasis added).
An agent engaged for an unfixed period is entitled to commissions on future contracts only for services performed during his agency. The appellate court in Lampack reached back to a 1900 case to explain why an agent is not entitled to commissions received for contracts entered into after discharge with customers he originally secured. In that earlier case the Court held:
He was to have his commission upon all such business, not merely because he had secured these original contracts, but because he was there to aid, if necessary, in securing renewals or additional contracts, and in keeping his customers in touch with the defendant …. contracts. He was consequently entitled to commissions upon renewals or additional contracts which came in during his period of employment…. The customers were … not his when they chose to contract directly with the defendant after his connection with the latter had ceased.
The legal principle is clear. An agent’s right to commissions is for services that result in one or more contracts. The “interest” agents have which survives termination of their agency accrues from their having completed services. The expectancy, if there is any, comes from fulfilling the purpose for which the agent is engaged. The phrase “an agency coupled with an interest”, which refers to ownership of a literary property, does not belong in an Agency Clause because that is not what the agent has. In Lampack the phrase served only to invigorate a dispute. And, who wants that?
In consideration for publishing and distributing an author’s work and for the risk that revenues from publication will fall short of expenses publishers take an exclusive license for the term of copyright subject to two forms of termination and reversion: by statute and by contract. I have discussed statutory termination in an earlier Note. Under that right authors have an opportunity within a window of time to give notice of termination and, failing the original publisher bidding anew for the copyright, can license the work (or arrange for its publication) to another publisher. Contractual reversion of literary property by notice of termination is typically built into the publishing agreement in an “out of print” clause that gives the author the right to terminate the exclusive license under stipulated circumstances.
The “out of print” clause in words or substance opens with the following words:
If, at any time after the expiration of [stipulated time] from the publication date, the Publisher allows the Work to go out of print [or no print or electronic version is available for sale] and such status continues in effect for [a stipulated time] after the Author shall have given Publisher [a first] written notice to put the Work back into print, then the Author by a [a second] notice in writing may terminate this Agreement ….
The term “out of print” means both availability for sale and actual sales. Inventory is not determinative although it may be important if the agreement provides for post-termination sales to the author. Thus,
The Work will be considered available for sale only if the total number of copies of any edition of the Work sold in the [licensed territory] on which the Author is paid royalties exceeds a total of [number of copies] in the aggregate in the two most recent royalty periods and the Work is included in the Publisher’s then recent print and/or electronic catalog.
Implicit in “available” is “unavailable.” A work is unavailable if unit sales fail to reach a stipulated level. For digital or print on demand books “out of print” is typically measured by the amount of earnings over an agreed number of royalty periods: if the author receives less for a stipulated number of royalty periods than a stipulated number of dollars the work is considered “out of print.” Being dropped from the catalog is a powerful indicator that the publisher has no further interest in the work.
If the publisher responds to author’s notice by reissuing the work timely as provided in the “out of print” clause, there can be no termination since the condition for its exercise has been preempted. The stipulated periods for exercising a right, number of units sold and dollar amounts should be carefully considered before executing the publishing agreement. This is so because most trade books fall into the mid-list category and (apologies for uttering an unpleasant truth) tend to have a short shelve life. If works go out of print, and the publisher has no interest in reissuing them, authors should be able to regain control over their copyrights. There is no rule that says that works out of print are incapable of revival.
Particular care should be given to text books or books published by textbook publishers for which publishers are more than mere licensees: they register and own the copyright in their own names. In these agreements, authors assign and transfer their copyright rights in exchange for a small advance and “royalties.” An “out of print” clause in this kind of agreement is the only way to re-capture copyright via a reassignment (reversion) to the author.
Copyright law protects authors who have registered their works. They are generally well attuned to copyright for their separately standing works, but less so when it comes to shorter works accepted for publication in compilations such as collections and anthologies. Section 103 (a) of the Copyright Act states that “[t]he subject matter of copyright … includes compilations.” A “compilation” is a collection of items in which a number of separate and independent contributions are collected into an organic whole. However, § 103(b) provides that the
copyright in a compilation … extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material.
The statutory language makes clear that there are distinctions between the compilation “author” and “authors” of works collected in the compilation. Section 103 tells us that a compilation can be copyrighted, but it “does not imply any exclusive right in the preexisting material.” In fact, “[t]he copyright in such work is independent of” the copyrights in the included works. The provision continues:
The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material.
What rights a compiler may have depends on the nature of the relationship with the author and of the material collected in the compilation. The copyright in the compilation or collection is one form of protection; a separate copyright in the component works is another. Depending upon whether the grant of rights to poetry or short story is exclusive or nonexclusive to the compiler, to be fully copyright protected requires the compiler to register his copyright and the author to register hers. Poetry and short stories included in the compilation that are copyrightable are separately entitled to copyright protection.
The published compiled volume should include two different notices to effectively comply with the Copyright Act. There should be a compilation notice (which protects the author/compiler) and separate authorial notices for the included works (which protect the contributors). (As a separate note, materials included in a compilation that have fallen into the public domain, poetry and short stories for example, do not spring back to copyright life or in any way benefit a deceased author’s estate. The works remain available for use by the public, except to the extent that the compiler has added copyrightable additions:
The copyright in a compilation … extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work.
Infringement that violates the rights of the compiler may also violate the rights of a contributing author, but without a registered copyright of her own the author has no recourse. Why attention to statutory requirements is important is illustrated in cases adjudicating copyright claims of infringement of photographs. What is true of photographs also applies to poetry and short stories. In Bean v. John Wiley & Sons, Inc., CV 11-08028 (D. AZ August 3, 2011) the defendant claimed the photographs had no copyright protection because the registration did not comply with the registration requirements of the Copyright Act. The Court in a separate prior action in which Bean had sued Houghton Mifflin Harcourt Publishing Co., (unpublished decision) concluded that “Corbis’s registration of six compilations containing thousands of photographs by different authors was not effective in registering the individual works in the compilations to the individual authors.”
The Copyright Office does not specifically address registrations works included in a compilation and it is unclear precisely what the law requires the compiler to do. The most recent announcement on this issue is Pacific Stock v. Pearson Education, Inc., 11000423 (D. Hawaii January 11, 2012). The defendant argued that plaintiff did not have valid copyrights for individual works registered only as parts of compilations of various artists. The message from Pacific Stock and other cases, including a 2010 case from the Southern District of New York, Muench Photography, Inc. v. Houghton Mifflin Harcourt Publishing Company and R.R. Donnelley & Sons Company, 712 F.Supp.2d 84, 95 (S.D.N.Y. 2010) is that while group registrations are valid as to the compilations they do not protect the individual works. Therefore, the prudent course is for the compiler to include copyright notices for all contributions including the compiler’s and an author to separately register her own copyright.
Once in the public domain content (which includes characters) is free; to copy or create derivative works. P.D. James’ Death Comes to Pemberley and a continuing stream of novels featuring Sherlock Holmes are recent examples. Until works fall into the public domain content and characters are not free. They are copyright protected. Authors (defined in the broadest sense under the Copyright Act) are entitled to payment.
There are two cases from the U.S. Supreme Court of particular importance concerning the public domain: Eldred v. Ashcroft, 537 U.S. 186 (2003) and Golan v. Holder, 10-545 (January 18, 2012). Both involved Constitutional challenges to laws passed respectively in 1998 and 1994. The challenge in Eldred was suspension of works falling into the public domain and in Golan restoring a class of works to the public domain. The Court in Golan explained that “Congress recurrently adjusts copyright law to protect categories of works once outside the law’s compass” and gives as an example “extend[ing] copyright protection to foreign works in 1891.” The Eldred challenge involved another kind of copyright “adjustment.”
First, some context. During the term of copyright an author or her exclusive licensees controls exploitation of a work. After expiration, works fall into the public domain for use by individuals and businesses whose products and services build on copyrighted works. “On occasion, however, Congress has seen fit to protect works once freely available,” although even they have their term. “[N]o one … acquires ownership rights in the once-protected works.”[Golan]. Works deriving from once-protected works, of course, are entitled to their own copyright. Presently, the term of copyright is life plus 70 years. The first U.S. Copyright Act of 1790 granted authors a limited monopoly of 28 years, 14 on registration and 14 on renewal. Prior to the present Copyright Act of 1976 (effective January 1, 1978) the term had been 56 years, 28 and 28.
The current term of life plus 70 years was driven by United States’ adoption in 1988 of the Berne Convention (1886), but not fully implemented until the passage of the Copyright Term Extension Act of 1998 (CTEA), generally referred to as the Sonny Bono Act or (humorously) the Mickey Mouse Act. This Act did two things: extended copyright term by 20 years (conforming in some but not all respects to the Berne Convention) and suspended by like years works falling into the public domain. It effected only authors who had registered for copyright in the United States. It did not effect foreign authors with no registration in the U.S. As a result, and only for domestic copyrights, no currently protected works will fall into the public domain until January 1, 2019.
The 20-year suspension triggered an unsuccessful Constitutional challenge in Eldred. In rejecting the Petitioners’ argument, individuals and businesses whose works and services build on copyrighted works will have to wait for another 7 years. Wait, that is for domestic copyrights to expire. However, works by foreign authors began falling into the public domain with the result that “orchestra conducts, musicians, publishers, and others … [began] enjoy[ing] free access.”
This anomaly (lower protection for foreign authors inconsistent with the Berne Convention) was rectified by the Uruguay Round Agreements Act in 1994 (URAA). The URAA granted foreign authors the protection they did not previously have under U.S. copyright law and triggered another Constitutional challenge that was finally resolved in the Golan case. The ultimate purpose of the adjustments to the Copyright Act were to protect U.S. authors, which could only be accomplished by protecting foreign ones.
As in Eldred, Petitioners were individuals and businesses who rely for their livelihoods on exploiting public domain works. They complained that restoring works that had already fallen into the public domain “violates the ‘limited [t]imes restriction by turning a fixed and predictable period into one that can be reset or resurrected at any time, even after it expires.” The Court rejected this analysis. “The terms afforded works restored … are no less ‘limited’ than those the CTEA lengthened.” In other words, all works in due course will fall into the public domain — the “limited [t]imes of the U.S. Constitution. It just may not be in one’s lifetime.
As also in Eldred, the Supreme Court in Golan concluded (in the words of the Tenth Circuit Court of Appeals whose judgment it affirmed) that “the law was narrowly tailored to fit the important government aim of protection U.S. copyright holders’ interest abroad.” Congress recognized the disruption in removing works from the public domain by building into the URAA a mechanism for relieving “reliance parties” of some of the impact by deferring the date from which enforcement runs. The Court concluded that the law “does not transgress constitutional limitations on Congress’ authority.”
Not surprisingly, laws that affect intellectual property rights are bound to be unevenly received by winners and losers. As the Supreme Court explained in another case, Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984) “[T]he text of the Constitution makes plain, it is Congress that has been assigned the task of defining the scope of the limited monopoly that should be granted to authors or to inventors in order to give the appropriate public access to their work product…. [T]hat task involves a difficult balance between ‘competing interests’ as reflected in the frequent modifications of the relevant statutes.”
In agreeing to publish a work publishers typically demand author “grant and assign” it an exclusive license to “print, publish and sell” the work for the “term of copyright and all continuations, extensions, and renewals thereof” in stipulated languages and territories. In modern publishing agreements the language is clear that the grant extends to digital rights. However, the grant of right in 1970′s contracts typically used the phrase “in book form.” Ebooks were not imagined at that time (or, if they were) their form was not realized until the late 1990′s. There are two questions. First, did the author intend (could it have intended) to grant publisher more than print rights? If she did not then she can separately grant ebook rights to an ebook publisher. Second – an interrogative conundrum – is an ebook a book “in book form”?
It appeared that the questions were answered in Random House, Inc. V. Rosetta Books, 150 F. Supp.2d 613 (S.D.N.Y. 2001), aff’d 283 F.3d 490 (2nd Cir. 2002). In that case, the district court denied a preliminary injunction against Rosetta Books which the Second Circuit Court of Appeals affirmed. Because the parties thereafter settled the dispute the ultimate questions were never answered. But, the district court held (citing New York contract cases) that the phrase “in book form” did not “include the right to publish the works in the format that has come to be known as the ‘ebook’.” The court held that it did not because “in the publishing industry” the phrase “is understood … to be a ‘limited’ grant.” The phrase “limited grant” is anathema to publishers who believe they acquired an exclusive license to “print, publish and sell” the work in every conceivable format “now known or hereafter invented” for the term of copyright.
The unresolved issue of “in book form” has now returned to court in HarperCollins Publishers LLC. v. Open Road Integrant Media, LLP., 11 Civ 9499 (S.D.N.Y complaint filed December 23 2011). The complaint alleges that “[n]otwithstanding the … grant of rights … Open Road, a digital publisher … seeks illicitly to capitalize on HarperCollins’ four decades of publication and promotion of Julie of the Wolves [by] … publishing an electronic version of that book.” The complaint continues:
The rights that HarperCollins acquired from George plainly encompass such electronic means of distribution, which is but a technology-enabled variant for how consumers can read the Work. Open Road’s unlawful exploitation of those rights is directly competitive with sales of the Work in paper format and HarperCollins’ own plans to publish Julie of the Wolves as an e-book.
The Random House case was decided under New York contract law. In affirming the district court, the Second Circuit Court of Appeals added that “New York … has arguably adopted a restrictive view of the kinds of ‘new uses’ to which an exclusive license may apply when the contracting parties do not expressly provide for coverage of such future forms.” New York being the capital of book publishing in the United States it is not surprising that the issue are not been litigated in any of the other Circuits.
Given how the Random House case ended HarperCollins is in a position to test “whether the license extends to ebooks” by exploring the “‘evolving’ technical processes and uses of an ebook … and the reasonable expectations of the contracting parties,” Random House, 150 F.Supp.2d at 615 n. 5. Random House had argued that “the phrase ‘in book form’ means to faithfully reproduce the author’s text in its complete form as a reading experience and that, since ebooks concededly contain the complete text of the work, Rosetta cannot also possess those rights.” The court did not see it that way:
While Random House’s definition distinguishes “book form” from other formats that require separate contractual language — such as audio books and serialization rights — it does not distinguish other formats specifically mentioned in paragraph # 1 of the contracts, such as book club editions and reprint editions….
The Court continued:
Not only does the language of the contract itself lead almost ineluctably to the conclusion that Random House does not own the right to publish the works as ebooks, but also a reasonable person “cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business” … would conclude that the grant language does not include ebooks.
The Court concluded:
Employing the most important tool in the armamentarium of contract interpretation — the language of the contract itself — this Court has concluded that Random House is not the beneficial owner of the right to publish the eight works at issue as ebooks.
HarperCollins’ arguments are not different. It alleges that Open Road is seeking “to reap where … it has now sown by seeking to divert sales of the Work from HarperCollins in the rapidly expanding e-books market.” It complains that “[t]his fundamental impairment of rights ensured to HarperCollins by contract and copyright law should be enjoined and Open Road’s unlawfully gotten gains therefrom disgorged.”
The next substantive step in the HarperCollins litigation will be an application for a preliminary injunction. The same route as in Random House and the same legal questions. If the contract term “in book form” does not extend to ebooks, then Open Road’s publication is not copyright infringement. If the author only agreed to a “limited grant” (harking back to Random House) she may legally assign her right to a digital publisher to publish her work in ebook format.
One can hardly wait — breathlessly is more apt! — for the next installment on this issue. Until the grant formula “in book form” was abandoned for a more inclusive grant of rights (which is now “standard”) digital rights for works contracted for in the 1970s and on may very well be under authors’ control. Although George has not been named in the lawsuit she undoubtedly executed a publishing agreement with Open Road. That too could be an issue because the ebook will be in competition with the print book, which may violate the non-compete term in the publishing agreement.
Authors control the rights to their works until they agree to license all or some of them. A typical provision in publishing contracts provides that “[t]he Author agrees to grant and assign to the Publisher during the term of copyright and all continuations, extensions, and renewals thereof the exclusive right to publish” the work in stipulated languages and territories. The word “assign” in the phrase “grant and assign” is synonymous with “transfer of copyright ownership” (Act, §101). The exclusive license typically granted in a publishing agreement is such a transfer. However, the phrase “all continuations, extensions, and renewals thereof ” does not override an author’s or her heirs’ statutory rights provided in §§203 (grant of right or publication after January 1, 1978) and 304 (grant of right or publication prior to January 1, 1978). The statutory provisions that permit an author or her heirs to terminate an exclusive license and recapture the copyright is not well understood.
Authors beginning their writing careers are not likely to have any bargaining power in negotiating the disposition of their copyrights. The Copyright Act compensates for this inequality between author and publisher (or any other licensee) by granting authors (or their statutory heirs) the right to terminate exclusive licenses; in effect, to pressure publishers to relicense works that continue to have significant market value.
How does this gift work? The statutory rules are complicated and the benefit conferred can be lost by failure to follow the rules. For both pre- and post-1978 copyrights and depending upon the grant and publication date of the work authors and their heirs should be alert to the notice requirements for exercising the termination right. 2013 is a magic year; 1978 plus 35 years. (It is either 35 or 40 years depending on the grant of rights and publication date. I’ll work only with 35 years here). Sections 203 and 304(c) do not apply to authors who produced their works as “works made for hire.”
Section 203 of the statute provides
In the case of any work … the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions:
(1) In the case of a grant executed by one author, termination of the grant may be effected by that author or, if the author is dead, by the person or persons who, under clause (2) of this subsection, own and are entitled to exercise a total of more than one-half of that author’s termination interest….
(2) Where an author is dead, his or her termination interest is owned, and may be exercised … as follows:
(A) The widow or widower owns the author’s entire termination interest unless there are any surviving children or grandchildren of the author, in which case the widow or widower owns one-half of the author’s interest….
The Act goes on to delineate the interests of the surviving children. The notice has to be signed by a majority of those entitled to receive the benefit under the Copyright Act.
This termination right provides authors or their statutory heirs the opportunity to capture some of the added value produced by the lengthened copyright term of life plus 70 years. The typical contract provision such as quoted above would have the author believe that having granted an exclusive license when she had no idea of the economic value of her work she (or her husband and children) are stuck with it for the full term of copyright. The quoted language in the grant of rights (“grant and assign”) does not constitute a waiver; the termination right is inalienable and overrides any contract provision to the contrary. The right cannot be taken away, although it can be exchanged for an improved financial arrangement negotiated at any time within the window for exercising the termination.
The termination provision is not appropriate for every author or every work. It is directed to authors whose works have such value that the publisher with exclusive rights will bargain with the author for a new contract for the remaining years of copyright.
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