Get Your Copyrights Back

For more than 20 years, McGarry of Chicago- based McGarry & McGarry, has concentrated in intellectual property litigation including copyright, trademark and patent matters. 

Dunnegan of New York-based Dunnegan & Scileppi concentrates in copyright litigation as well. 

There’s Gold (or Platinum) In Them There Copyrights

Age can lead to regret, even for song writers and recording artists. On the way to fame, writers and artists may have signed away — in boilerplate contracts with record labels — their valuable copyrights in their songs and sound recordings. In exchange, they may have received amounts of money that at the time seemed substantial, but were really unfair, if not unconscionable. But the story need not end with disappointment. The law recognizes the unfairness in this situation and may provide a solution.

Specifically, Section 203 of the Copyright Act allows authors, including song writers and recording artists, a window of opportunity to reclaim the ownership of post-1978 copyrights that they previously sold, and to realize the profit from the true value of their work. This is known as copyright reversion.

The Benefit Of Reclaiming The Copyrights

Artists, like Prince, have recently announced deals with record labels based upon their efforts to reclaim their copyrights, as Section 203 now allows. It is easy to see why the artists have chosen this route. The biggest benefit of reclaiming the copyrights is that the writers and performers can license the songs, whether to iTunes or for movies or TV, and keep 100 percent of the license fee. Currently, with the record label owning the copyright in the master recording, the fee that a customer pays iTunes is split between the record company and the artist, with the record company keeping the lion’s share. With the artist reclaiming the copyright, the artist takes 100 percent and the record company takes nothing, as it would own nothing.

For writers, if a publisher owns part of the writing, the license fee is divided based upon the terms of the contract. If the publishing copyright reverts back to the writer, the writer would receive the entire license fee. To obtain the full benefit of reversion of a copyright, the artist must take over the task of exploiting it. As a result, managers and performing rights societies will still be necessary to continue to license the copyright to maximize its value.

The Mechanics Of Reclaiming The Copyrights

Generally, an assignment or perpetual license can be terminated 35 to 40 years after the date of the contract that transferred the copyrights to the record company or publisher. The timing and notice requirements can be tricky. You would be well advised to consult a lawyer. A majority of the musicians signing the original record contract transferring copyright rights must sign the notice of termination. The copyright will revert to all the authors so long as the majority opts to reclaim the copyright in the master recording. If a member of the group has died, his heirs can act in his place, although there are additional requirements and paperwork.

Often, co-writers of a song have signed separate agreements transferring their copyrights. In that instance, any one writer can sign the notice of termination to reclaim his or her percentage of the copyright in the song. There are some limitations to the artist’s rights upon reversion of the copyright. Reclaiming the copyright in the song does not terminate or affect others’ rights in derivative works (for example, a remix or arrangement of the song) that were created before the reversion.

And the artist regains only U.S. rights: If the contract gave the record company worldwide rights, the company will retain its rights in other countries. The “Work For Hire” Issue A record company may not immediately agree that the songwriter or artist can reclaim the copyright. Record companies will have a financial interest in retaining ownership of the copyright. The record company may claim that the song or sound recording is a “work for hire,” which is not subject to the Section 203’s termination right. A “work for hire” is defined in the Copyright Act as a work created by an employee in the course of his job, or one that is specially commissioned and falls within one of nine specific categories of works. Many of the recording contracts that transferred the copyrights to the record companies provided that the songs or recordings were “works for hire.” Frequently the record companies described the songs as “works for hire” when registering them with the U.S. Copyright Office The record label may be right. But calling a song a “work for hire” doesn’t make it a “work for hire.”

A recording artist or songwriter in the post-1978 era typically does not fall within the definition of “employee,” as it is used in the Copyright Act. Furthermore, sound recordings are not listed among the categories of “work for hire” that can be specially commissioned. A record company may claim the sound recording is “a contribution to a collective work.” Generally, however, if the work was created before any contract with the record company, or if the artist delivered an entire album, the song or the recording will not be a “work for hire.”

The label the record company puts on it would not control. The record company may decide to fight reversion of the copyright in court. Litigation can be burdensome and expensive for both artist and record company, and the company will typically have more resources available for a court battle. On the other hand, the record company will likely pay its lawyers on an hourly or fixed-fee basis, while songwriters and artists may be able hire lawyers on a success or contingency fee basis.

While litigation at some point may or may not make sense, there is little to be lost by sending the company a notice of termination at the appropriate time and reclaiming the copyrights and the gold (or platinum) they represent. Miss the window of opportunity, however, and the precious metal is gone, forever.