Music Law 101: Transfer Of Copyright And Termination

As we have previously discussed, a copyright is first owned by its author (whether individually or on a “work made for hire” basis). Like with any other property, the author can transfer ownership of a copyright (in whole or in part as a fractional portion) to another person or party. However, copyright law has specific rules governing such transfers.

Physical possession of master recordings (or “stem” files) does not mean that the person in possession actually owns the underlying copyrights. That is, even if the author does not possess the master recordings, that alone does not mean that she has transferred the sound recording copyrights to the person in possession of the masters.

Rather, in general, copyright law requires that a transfer of copyright be in writing, and must be signed by the person transferring the copyright. Copyright law does not require any “magic words” in the transfer document—in fact the word “copyright” is not absolutely required. Instead, the writing must just demonstrate that the parties intended to transfer the copyright. Nonetheless, the more express and specific the written transfer language is, the better.

Even though a writing is generally required, there are circumstances when a transfer of copyright can occur without a writing “by operation of law,” including laws relating to:

  • Probate Law
  • Family Law
  • Bankruptcy
  • Corporate Mergers and Dissolutions

Copyright transfer may also occur without a writing in certain circumstances under general partnership law, which is why it is very important for bands and others that “carry on as a business” and “share in profits and expenses” to address copyright ownership in writing (i.e., a band agreement). A default transfer “by operation of law” may not be consistent with each band member’s expectations.

Except in the case of a “work made for hire,” if an author has transferred his or her copyright to another person or entity, in certain circumstances the assignment can be terminated under copyright law. In that case, the copyright will revert back to the author of the work, if living, or if the author is not living, to the author’s statutory heirs.

The termination concept under copyright law provides the author with a “second bite at the apple.” That is, the value of the copyright may have increased significantly since it was first transferred and the termination provisions afford the author with fresh opportunity to capitalize on the increased value. The termination provisions apply even if the underlying transfer document has language that prohibits termination or specifies that the transfer is for or in “perpetuity.” In recent years, there have been several high-profile copyright termination cases involving well-known songwriters and artists, including Duran Duran, Paul McCartney, and the Village People. Wouldn’t you like to have a “second bite” at “Y.M.C.A.”?!

The termination provisions under copyright law are incredibly complicated. You should not attempt to terminate a copyright transfer without the assistance of a lawyer. In general, copyright law provides that a transfer can be terminated during a limited period after 35 years from the date of transfer. To effect termination, a written termination notification with specific information must be served on the current copyright owner not less than 2 years nor more than 10 years before the desired termination date. Failure to comply with all required provisions and deadlines can result in the loss of termination rights.

It is also important to understand that the termination provisions are limited to termination of transfers of United States copyrights. Foreign rights are unaffected by terminations under United States law. This can result in complicated fractional right management issues where the author can get back her United States copyright interests but not her foreign rights. This is an important consideration when exercising termination rights.

In some cases, copyright transfers can also be terminated pursuant to the terms of the specific agreement governing the original transfer. For example, the original transfer agreement may provide that upon satisfaction of certain conditions, the copyright will revert back to the author. Such reversion rights are not uncommon in publishing agreements.

We will continue on the topic of copyright law in our next Music Law 101 post, in which we will explain what constitutes copyright infringement and the elusive defense of fair use.

The Music Law 101 series is provided by Coe W. Ramsey and Amanda M. Whorton of the law firm Brooks, Pierce, McLendon, Humphrey & Leonard LLP. Brooks Pierce provides sophisticated and strategic counsel to a wide variety of clients in the entertainment industry, including artists, musicians, songwriters, record producers, DJs, artist managers, radio stations, television stations, new media companies, record and publishing companies, film and television producers, advertisers, actors and reality TV talent, radio talent, and literary authors and publishers. The Music Law 101 series provides a survey introduction to the laws in the United States relevant to the music industry, is not intended as and shall in no way be construed as legal advice or a legal opinion on any specific set of facts or circumstances, and shall not be construed as creating an attorney-client relationship.

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