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Symposium Preview: The Haunting Implications of the Termination Provisions of the 1978 Copyright Act

Published onMar 01, 2010
Symposium Preview: The Haunting Implications of the Termination Provisions of the 1978 Copyright Act

What do Stephen King’s The Stand and Hubert Selby Jr.’s Requiem for a Dream have in common? Are they stunningly creative works standing the test of time? Are they melancholic and important pieces of cultural Americana? Are they works of original copyright from 1978, to which numerous derivative works may be attributed? If you answered yes to all three of these, you are both extremely well rounded and entirely correct. Why is this significant to intellectual property law and copyright in particular? In the coming years, many original works will be up for renewal, and the licensed works attached thereto subject to termination and recapture. The tension between the original copyright holder and the licensee will be an increasing source of litigation. These problems will be analyzed by Mr. Robert Monath from The Monath Law Firm at the Wake Forest Intellectual Property Law Journal Spring 2010 Symposium, Copyleft vs. Copyright: Artist and Author Rights in Tomorrow’s Digital Age.

To clarify the issues, an explanation of copyright derivates is a good starting point. The owner of a copyright holds the exclusive right to reproduce and license her work to whomever she chooses. 17 U.S.C. §106. This right is exclusive, and for a work to constitute a “derivative work” it must be substantially similar to the original piece, such that if not licensed by the original author, it would constitute infringement.1-3 MELVILLE B. NIMMER & DAVID NIMMER, NIMMER ON COPYRIGHT, §3.01 n.7 (1st ed. 1978) (which ironically had its first copyright in 1978). The new derivative work, though substantially similar, is also granted its own copyright protection. The Stand provides an example of the logic underlying this system. The new creators of a 1994 miniseries and a 2008 graphic novel, both based on The Stand, each obtained a license from the original copyright holder to use the story, but also obtained a new copyright in the derivative work independent of the original copyright. This is logical, as the new adaptations add creative nuances and visual representations to the original story. If the new derivative work were not independently copyrightable and subject to its own protection, new authors would not be incentivized to create adaptive and derivative works.

However, profound changes to the Copyright Act in 1978 made the security of licensed works much more tenuous. The revisions to the Act provided that all copyrights in their first term in 1978 shall endure for 28 years, and following this expiration, they shall be subject to renewal for a further term of 67 years. 17 U.S.C. §304. In addition, the code provided a special clause for derivative works, allowing the original copyright holder to recapture and therefore terminate the license or grant after 35 years. 17 U.S.C. §203(3).

This affects the above examples in a specific way. Any grant or license the original copyright owner gave to another party in that same term is reaching the time when the original copyright owner may terminate and recapture her exclusive rights. Thus, 35 years after granting a license, the copyright owner of Requiem for a Dream may recapture the license issued for the movie created using the story line and prevent any future use of the license. What are the rights of the license holder and limits on (a) resale of existing uses of the license, and (b) recreation stemming from the licensed and newly copyrighted work? As more and more derivative works executed on or after January 1, 1978 near their 35-year deadline for recapture, these questions impact both the original authors wishing to maximize revenues derived from their original works and those licensees seeking to maintain their licenses.

Mr. Monath will explain the nature of the derivative work exception (DWE) to copyright termination and he will explain generally what rights remain for the original copyright holders and the licensees. He will discuss the entanglement of § 203 and § 304 of the Copyright Act and will address what publishers and copyright holders may do in the future and what the courts should anticipate in future litigation on the topic. Finally, he will explain this issue’s raison d’être: the financial implications of impending license terminations. In the end, who benefits more from a derivative copyright: the licensees or the original copyright holder? Come and see Mr. Monath at the Symposium on March 5th to find out.

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