Beginning in 2013, musicians and others who create sound recordings (or their heirs in the event of their death) may terminate previously assigned copyrights. Customarily, many recording artists assign or otherwise transfer their rights for their music under one-sided agreements with record companies for a fraction of the commercial value of the music in exchange for having their music published. In fact, most artists make very little money in exchange for the transfer of copyrights in their work.
As an example, America’s first professional songwriter, Stephen Foster wrote “Oh! Susanna”, “Camptown Races”, “Old Folks at Home” (“Swanee River”), “Hard Times Come Again No More”, “My Old Kentucky Home”, “Old Black Joe”, “Jeanie with the Light Brown Hair”, and “Beautiful Dreamer.” These songs are still popular more than 150 years after his death. Despite the success Mr. Foster had with these songs he died at the age of thirty-seven with 38 cents in his pocket.
As Congress stated in passing the 1976 amendments to the Copyright laws, more than any other industry, recording artists are probably the most common artist who is “ripped-off” by record companies with a business model designed to commercially exploit the music while refusing to provide commercially reasonable contract terms for the use of artist’s music.
Copyright termination resulted when Congress enacted changes in the Copyright law, in 1976, which gives musicians, or their heirs, the right to terminate copyright assignments after thirty-five years. Those changes will first be in effect in 2013 and as a result it is anticipated the record companies will fight over the ability of the musicians to reclaim their work through the termination provision.
By way of background, under copyright law, the author or owner of a work of art has many exclusive rights including the right to reproduce the work, prepare derivative works, distribute copies of the work to the public, publicly preform the work, publicly display the work and in the case of sound recordings, publicly preform the work by means of a digital audio transmission. In the music world, these rights are typically transferred by the musician to the record company based upon industry standard language which is very draconian, for the “benefit” of greater marketing and distribution of the musical works. Often, the contract language will indicate that the work is assigned, in other cases, the contract states that the work is a work-made-for-hire. By classifying the transfer as a work-made-for-hire, the record company is usually attempting to avoid the right of the artist and their heir to terminate their copyright transfer and regain their copyright ownership in the musical work.
The purpose of the right of termination is to give artists, and their heirs, who cannot know the future value of their work, the ability to reevaluate the licensing of their work when the value is determined by the market presumably after thirty-five years. If the artists is able to terminate the copyright transfer, the artist can at least partially realize the true commercial value of the work. However, this is obviously contrary to the record companies current profit making business model, which is to pay a minimal amount of money for the ownership of commercially successful musical works and to be able to use the works in almost any manner to commercially exploit.
The 1976 Copyright Act, specifically provides that the unless the work is a work for hire, a transfer of the copyright may be terminated. In addition, the Copyright Act indicates what works may be considered works for hire and sound recordings are not covered within the statutory language. While record companies have attempted to influence Congress and the courts before, they have failed. However, record companies have deep pockets and strong alliances through the RIAA. Musicians and other artists who create the musical works, are generally individuals with limited resources who can’t afford to battle the large record company institutions.
Therefore, it is expected that as musicians attempt to exercise their termination rights in 2013 under the 1976 Copyright Law, the record companies will fight back trying to claim the works are not covered by the termination provision. Ultimately, litigation may be necessary before it is clear that the artist can excercise the right to terminate copyright assignments.
If you have assigned your rights under copyright, feel free to contact us to discuss the implication of these transfers and the right, if any, to terminate such agreements.