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A copyright time bomb has been quietly ticking away 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. For works created since 1978, that recapture process allows an author, after 35 to 40 years, to terminate any transfer of interest in his or her copyright to publishers. 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 on authors to advise the current rights holders that they plan to reclaim their rights. In 2003 authors began entering that notice window for rights that can be reclaimed in 2013. “It is not easy to reclaim rights, and that was on purpose,” says William Patry, an 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, says Walter Thompson, a Nashville, Tenn., copyright attorney who represents singer Kris Kristofferson, the widow of singer-songwriter Roger Miller, and the heirs of singer Waylon Jennings. PLENTY OF 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 to be fewer people than are eligible to do it, according to Thompson. “The pitfalls are obvious,” he says. Not only must an author give notice to the publisher no less than two years and no more than 10 years in advance, the author must also file a notice with the U.S. Copyright Office. Fail to do either and the termination right could be lost, says Thompson. 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 under copyright and whether the appropriate owner is the one making the claim, according to Cydney Tune, an attorney with Pillsbury Winthrop Shaw Pittman’s San Francisco office who represents rights owners. Thompson says few authors or their advisers 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 says. “I know of no estate lawyer that realizes the significance of this,” Thompson continues. “Estate planning and drafting a will leaving rights to the widow has no effect, the statute dictates.” Of course, he adds, “No court has ruled on any of this.” RECORD TROUBLES One of the biggest land mines buried out there for the recording industry can be labeled “works for hire,” according to Tune. People commissioned to create works for a specific employer may be considered employees providing works for hire. The employer owns the copyright, and there are no termination rights for the individual creator. This is the only exception to termination of transfer rights, says Tune. She also notes there is a very short list of works that can be commissioned as works for hire. They include collective works, translations, movies, and instructional texts. Record labels tried to avoid termination rights by writing contracts that state that sound recordings are works for hire, 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 that work-for-hire designation, arguing that they merely assigned copyrights to the recording label. “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 says. This is something the industry fears. “If I am a record label, I am not going to let anyone think I don’t have 100 percent control of my sound recordings,” says Staggs. Geoff Hull, a professor who specializes in copyright and entertainment law at Middle Tennessee State University, says 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 a work for hire, he or she is considered an employee, and the employer must pay withholding, unemployment, and Social Security taxes, Hull says. FIRST DISPUTES So far there is little case law on the termination of transfer rights because the notices only began going out two years ago. But a few disputes have made it to the federal appellate courts. Last year, in a case involving royalties for rights to Roger Miller’s works that were renewed after his death, the U.S. Court of Appeals for the 6th Circuit held that a spouse receives 50 percent and all surviving children share equally in the remaining 50 percent. Also last year, a fight to reclaim rights to Winnie the Pooh children’s books by the granddaughter of the original author, A.A. Milne, failed in the 9th Circuit. The appeals court 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 1976 law permitting recapture of rights. An interesting side issue to the question of dividing rights among artists’ heirs, says professor Hull, involves the rights of homosexual partners in the three states that recognize same-sex unions. In the Defense of Marriage Act of 1996, Congress declared that federal rights recognize only heterosexual marriages. And copyrights fall under federal law.
Pamela A. MacLean is a San Francisco-based reporter for the National Law Journal , an ALM publication in New York where this article first appeared.

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