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A copyright time bomb has been quietly ticking away for the music and publishing industry for nearly 30 years-and may soon explode into a plethora of legal disputes over ownership rights, intellectual property litigators say. The Copyright Act of 1976 gave artists, songwriters and authors a new right: the power to recapture control of works sold early in their careers before the value became known. That recapture process allows an author, after 35 to 40 years, to terminate any transfer of interest in his or her copyright assigned to publishers for works created since 1978. Congress wanted authors to be able to reclaim control of their creations and negotiate better royalty deals for popular works. But the law also imposes complex notice requirements for authors to advise the current rights holder that they plan to reclaim their rights. In 2003, authors began entering that notice window for rights that would be reclaimed in 2013. “It is not easy to reclaim rights and that was on purpose,” said William Patry, a copyright and intellectual property specialist with the New York office of Thelen Reid & Priest. “The industry didn’t want [termination rights] at all.” “I think you will see a flood of litigation with prominent works” in the next few years, said Walter R. Thompson, a Nashville, Tenn., copyright attorney who represents the widow of singer-songwriter Roger Miller, singer Kris Kristofferson and the heirs of singer Waylon Jennings. ‘Obvious pitfalls’ There are no statistics on how many people have filed notices that they plan to terminate rights transferred to publishers or recording labels, but it appears not as many people are doing it as are eligible, according to Thompson. “The pitfalls are obvious,” he said. Not only must authors give notice to the publisher no less than two years in advance or as much as 10 years in advance, they must also file a notice with the copyright office. Fail to do either and the termination right could be lost, Thompson said. Publishers on the receiving end of a termination notice, who don’t want to lose their rights, will start looking at whether the work is still protected and whether it is the appropriate owner with the legal right to make the claim, according to Cydney Tune, an attorney with Pillsbury Winthrop Shaw Pittman’s San Francisco office who represents rights owners. Thompson said few authors or their advisors realize that the termination rights vest with the author and his or her heirs when notice is given. “The most important thing is to get the notice served on publishers and copyright holders as soon as possible within the 10-year window,” he said. “I know of no estate lawyer that realizes the significance of this,” he said. “Estate planning and drafting a will leaving rights to the widow has no effect, the statute dictates,” he said. Of course, he added, “No court has ruled on any of this.” One of the biggest land mines buried out there for the recording industry is what is known as “works for hire,” according to Tune. Employees commissioned to create works such as music, software or art for a specific employer may be employees providing works for hire. The employer then owns the copyright and there are no termination rights for the individual creator. The only exception to termination of transfer rights is in work for hire, said Tune. If it is a work for hire, the musician would never have owned the copyright to it, she said. But there is a twist. There is a very short list of works that can be commissioned as works for hire, she said. That includes such things as collective works, translations, movies and instructional texts. Record labels tried to avoid giving termination rights by creating contracts that say that sound recordings are works for hire, but if they are not, then the artist is assigning rights to the record label, according to Kyle Staggs, director of legal affairs for Bug Music in Los Angeles, which helps artists protect their rights. Staggs expects some musicians to challenge the work-for-hire label and seek control of copyrights. “At some point someone is going to make a claim that the artist is an author and will seek termination of the record label’s rights,” he said. If the work was an assignment, not work for hire, it qualifies for termination rights, something the industry fears. “If I am a record label, I am not going to let anyone think I don’t have 100% control of my sound recordings,” Staggs said. Industry on ‘thin ice’ Geoff Hull, a professor who specializes in copyright and entertainment law at Middle Tennessee State University, said most of the legal literature suggests that “the recording industry is on thin ice.” Further complicating matters are taxes. Under California law, if the songwriter creates “work for hire,” he or she is considered an employee and companies are subject to payment of withholding, unemployment and Social Security taxes, he said. There is little case law on the termination of transfer rights so far because the notices only began going out two years ago. But a few disputes have made it to the federal appellate courts. Circuits weigh in Last year, the 6th U.S. Circuit Court of Appeals, in a case involving royalties for rights to Roger Miller’s works renewed after his death, held that a spouse gets a 50% share and all of the surviving children share equally in the remaining 50%. Broadcast Music Inc. v. Roger Miller Music Inc., 396 F.3d 762 (2005). And a fight to reclaim rights to Winnie the Pooh children’s books by the granddaughter of the original author failed in a 9th Circuit decision in December. The 9th Circuit held that the 1983 renegotiation of the 1930 transfer of rights by Christopher Robin Milne, son of the author, was in line with the purpose of the 1978 law. Milne v. Stephen Slesinger, Inc., 430 F.3d 1036 (2005). Hull said that an interesting side issue of the division among heirs involves the rights of homosexual partners in the three states that recognize same-sex unions, and the 1996 Congressional response with the Defense of Marriage Act. In that law, Congress said that federal rights, including copyright law, recognize only heterosexual marriages. Federal law trumps state law in the three states-Vermont, Massachusetts and Connecticut-that recognize homosexual unions, an important issue in the entertainment industry, Hull said.

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