More On Artists’ Termination Rights

My previous post concerning the rights of creators to exercise termination rights in copyrighted works has generated a lot of interest. It’s  an issue which is likely to get greater attention in the months ahead, as creators begin to understand the opportunity in 17 U.S.C. sec. 203.

But, as noted before, there are traps for the unwary, and those who have been uninformed or underinformed up until now may fall into the “unwary” category.

Take for example musical recordings. There are separate copyright interests protecting compositions, as opposed to master recordings of musical performances. And, the role of the artist overlaps in these, but is not identical.

Generally, any type of transfer or license that authors make with their copyright(s) can be terminated. This includes assignments (even such grants that purport to give someone else power over your copyright forever!) The grants that you can terminate apply only to transfers of copyrights; trademarks and other “related” non-copyright rights are not affected or terminable (e.g., if you transferred the trademark in your band name to your label, it will retain ownership of the trademark).

However, there are a couple of exceptions:

•  Works for hire. You, as an employee, make a musical work within the scope of your employment, or by an independent contractor, as a specially ordered or commissioned work for use as a contribution to a collective work or as a compilation or as part of an audiovisual work.
•  Grants by a decedent’s will. (It’s a 35-year tail on these rights, so that is likely a concern for many)
•  Grants made by persons other than the author(s).
•  Derivative works. Derivative works (think adaptations, synchronization uses, or officially-sanctioned remixes) made under a grant can still be used after termination; however, no further derivative works may be created by the original licensee based upon the work that was originally licensed or assigned.

Let’s take songwriters as an example, While songwriters may be able to fend off a work-made-for-hire claim, a court may consider give credence to the use of such a defense by a record company in relation to a recording artist’s or producer’s attempt to terminate post-1977 grants in sound recordings? A record company could argue that it:

  • advanced all recording costs associated with the creation of the sound recordings;
  • had the right to accept or reject the master recordings submitted by the recording artist;
  • had the right to select the recording studios and the producers for the projects; and
  • engaged writers to create musical compositions when the recording artist is not a songwriter.

Moreover, recording agreements typically purport to “acknowledge” that artists work for hire. Similarly, copyright registrations filed by record companies specify that the sound recordings/masters created by recordings artists are “works for hire”.

On the other hand, recording artists could argue that:

  • unique skill and creativity are required to record songs;
  • standard recording agreements may state that if the recording artist is not a worker for hire, their copyright interests are assigned to the record company;
  • artists are not treated as an employee with respect to taxes or employee benefits [you can count on that];; and
  • although the record company initially covers the costs of production, these are fully recoupable by the record company from the artist’s royalties [you can also count on that!].

Still with me? If you have, or think you have copyright termination rights, proceed thoughtfully, carefully, and with solid advice.

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