Copyright lawyers have long known the value of characterizing a creator-acquirer relationship as one “for hire.” Even under the predecessor 1909 Copyright Act, it was possible to defeat the expectancy of the author’s heirs by treating the acquisition of rights from an author as a “work made for hire,” rather than acquiring the rights by assignment. This avoided the possibility that an author could die prior to vesting of the renewal, in which case rights previously granted via “assignment” by the author could become a nullity. [FOOTNOTE 1]If the rights were originally vested in the proprietor as a work for hire, the renewal went to the hiring party, not the creator. Indeed, in the case of a “work made for hire,” it is the employer or commissioning party who is deemed to be the “author” of the work in the first instance.
Similarly, under the 1976 Copyright Act, there are certain inviolate rights of an author and heirs to terminate grants, exclusive or nonexclusive, in a copyright in circumstances designated by the statute. [FOOTNOTE 2]These provisions were enacted to deal with the practical elimination of the renewal right by acquiring parties who insisted that the authors assign both their initial and renewal rights at the outset. Unlike the renewal right, however, the right of statutory termination is expressly inalienable and cannot be waived by agreement (although the parties entitled to that termination right can elect not to exercise it). As the 1976 Copyright Act makes clear, any agreement purporting to limit exercise of the right of termination (“an agreement to the contrary”) is ineffective. However, one significant exception exists: “works made for hire” are not subject to the right of statutory termination.
