[Federal Register Volume 75, Number 59 (Monday, March 29, 2010)]
[Proposed Rules]
[Pages 15390-15391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6936]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201


Gap in Termination Provisions; Inquiry

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice of public inquiry; request for comments.

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SUMMARY: The Copyright Office is seeking comments regarding the 
application of Title 17 to the termination of certain grants of 
transfers or licenses of copyright, specifically those for which 
execution of the grant occurred prior to January 1, 1978 and creation 
of the work occurred on or after January 1, 1978. The Copyright Office 
is seeking comments at this time because the deadlines for serving 
notices of termination for 1978 grants will begin to expire in 2011 and 
some stakeholders have raised questions with the Office and some 
Congressional Offices.

DATES: Initial comments on the Notice of Inquiry and Requests for 
Comments are due on or before April 30, 2010. Reply comments are due on 
or before May 14, 2010.

ADDRESSES: The Copyright Office strongly prefers that comments be 
submitted electronically. A comment page containing a comment form is 
posted on the Copyright Office Web site at http://www.copyright.gov/docs/termination. The Web site interface requires submitters to 
complete a form specifying name and organization, as applicable, and to 
upload comments as an attachment via a browse button. To meet 
accessibility standards, all comments must be uploaded in a single file 
in either the Adobe Portable Document File (PDF) format that contains 
searchable, accessible text (not an image); Microsoft Word; 
WordPerfect; Rich Text Format (RTF); or ASCII text file format (not a 
scanned document). The maximum file size is 6 megabytes (MB). The name 
of the submitter and organization should appear on both the form and 
the face of the comments. All comments will be posted publicly on the 
Copyright Office Web site exactly as they are received, along with 
names and organizations. If electronic submission of comments is not 
feasible, please contact the Copyright Office at 202-707-1027 for 
special instructions.

FOR FURTHER INFORMATION CONTACT: Maria Pallante, Associate Register, 
Policy and International Affairs, by telephone at 202-707-1027 or by 
electronic mail at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Copyright Act gives authors (and some heirs, beneficiaries and 
representatives who are specified by statute) the right to terminate 
certain grants of transfers or licenses, subject to the passage of time 
set forth in the statute and the execution of certain conditions 
precedent.
    Termination rights (also referred to as ``recapture rights'') are 
equitable accommodations under the law. They allow authors or their 
heirs a second opportunity to share in the economic success of their 
works. Codified in sections 304(c), 304(d) and 203 of Title 17, 
respectively, they encompass grants made before as well as after 
January 1, 1978 (the effective date of the 1976 Copyright Act). (The 
provisions do not apply to copyrights in works made for hire or grants 
made by will.)
    This inquiry concerns a narrow set of facts that some authors and 
their representatives have brought to the attention of the Copyright 
Office and some Congressional Offices. Specifically, the Office is 
interested in whether or how the termination provisions apply in 
circumstances where the grant was executed prior to January 1, 1978, 
but the work was created on or after January 1, 1978. For such works, 
there appears to be some confusion and possible disagreement among some 
stakeholders as to whether termination rights are exercisable in the 
first place and, if they are, which statutory provision applies. In 
seeking comments, the Office is aware that termination rights may only 
be exercised during the window of time specified by statute and the 
deadlines

[[Page 15391]]

for grants made in 1978 will begin to expire next year.
    Termination provisions provide authors with a long-term insurance 
policy on the value of their copyrights. The House Report accompanying 
the 1976 Copyright Act states that the provisions are ``needed because 
of the unequal bargaining position of authors, resulting in part from 
the impossibility of determining a work's value until it has been 
exploited.'' H.R. Rep. No. 94-1476, at 124 (1976). Termination rights 
are put in motion by serving notice on the grantee. The notice must 
state the effective date of the termination and must be served on the 
grantee not less than two or more than ten years before that date. 17 
U.S.C. 304(c)(4)(A); 304(d)(1); 203(a)(4)(A). The Register of 
Copyrights, through regulations, has set forth additional core elements 
that must be included in the notice, among them a statement as to 
whether termination is being made under section 304(c), 304(d) or 203. 
37 CFR 201.10(b)(1)(i) and (b)(2)(ii).
    Section 304 (c) governs older works, specifically works in which a 
copyright was subsisting in its first or renewal term as of January 1, 
1978. It provides for termination of the exclusive or nonexclusive 
grant of a transfer or license of the renewal copyright (or any right 
under it) executed before January 1, 1978. Termination may be exercised 
at any time during a five-year period beginning at the end of fifty-six 
years from the date copyright was originally secured. Section 304(d) 
governs a smaller subset of pre-78 works for which the termination 
right under section 304(c) expired (and was not exercised) on or before 
the effective date (October 27, 1998) of the ``Sonny Bono Copyright 
Term Extension Act,'' which extended copyright terms by 20 years. It 
provides for termination of the exclusive or nonexclusive grant of a 
transfer or license of the renewal copyright (or any right under it) at 
any time during a five-year period beginning at the end of 75 years 
from the date copyright was originally secured.
    Section 203 governs grants made under the ``new law.'' It provides 
for termination of the exclusive or nonexclusive grant of copyright (or 
any right under copyright) executed on or after January 1, 1978 
(regardless of whether the copyright was secured prior to or after 
1978). Termination may be exercised at any time during a period of five 
years beginning at the end of thirty-five years from the date of 
publication of the work under the grant or at the end of forty years 
from the date of execution of the grant, whichever is earlier. Unlike 
section 304, the termination right in section 203 applies only to 
grants executed by authors. Section 203 terminations may be exercised 
as of January 1, 2013, provided notice has been served no less than two 
years prior.
    Once the notice is served, a copy of the notice must be recorded 
with the Copyright Office prior to the effective date of termination. 
17 U.S.C. 304(c)(4)(A); 304(d)(1); 203(a)(4)(A). Upon receipt of the 
notice, the Copyright Office undertakes a review of certain facts, 
including whether the notice has been executed in a timely manner. 
Because lateness is a fatal mistake \1\ under the law, the Office 
reserves the right to refuse recordation of a notice of termination if, 
in the judgment of the Office, such notice of termination is 
untimely.\2\ 37 CFR 201.10(f)(4).
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    \1\ By contrast, the regulations provide accommodations for 
certain harmless errors. 37 CFR 201.10(e)(1)-(2).
    \2\ If a document is submitted as a notice of termination after 
the statutory deadline has expired, the Office will offer to record 
the document as a ``document pertaining to copyright'' pursuant to 
Sec.  201.4(c)(3), but the Office will not index the document as a 
notice of termination. Whether a document so recorded is sufficient 
in any instance to effect termination as a matter of law shall be 
determined by a court of competent jurisdiction.
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Subject of Inquiry

    The Copyright Office seeks comment on the question of whether and 
how Title 17 provides a termination right to authors (and other persons 
specified by statute) when the grant was made prior to 1978 and the 
work was created on or after January 1, 1978. For purposes of 
illustration, please note the following examples:

    Example 1: A composer signed an agreement with a music publisher 
in 1977 transferring the copyrights to future musical compositions 
pursuant to a negotiated fee schedule. She created numerous 
compositions under the agreement between 1978 and 1983, some of 
which were subsequently published by the publisher-transferee. 
Several of these achieved immediate popular success and have been 
economically viable ever since. The original contract has not been 
amended or superseded.
    Example 2:  A writer signed an agreement with a book publisher 
in 1977 to deliver a work of nonfiction. The work was completed and 
delivered on time in 1979 and was published in 1980. The book's 
initial print run sold out slowly, but because the author's 
subsequent works were critically acclaimed, it was released with an 
updated cover last year and is now a best seller. The rights 
remained with the publisher all along and the original royalty 
structure continues to apply.

Questions

    In order to better understand the application of sections 304(c), 
304(d) and 203 to the grants of transfers and licenses discussed above, 
the Copyright Office seeks comments as follows:
    A. Experience. Please describe any experience you have in 
exercising or negotiating termination rights for pre-1978 grants of 
transfers or licenses for works that were created on or after January 
1, 1978.
    B. Interpretation. Are the grants of transfers or licenses 
discussed above terminable under Title 17 as currently codified? If so, 
under which provision? What is the basis for your determination? Are 
there state or federal laws other than copyright that are relevant? Is 
delivery of the work by the grantor to the grantee relevant to the 
question of termination? Is publication relevant?
    C. Recommendations. Do you have any recommendations with respect to 
the grants of transfers or licenses illustrated above?
    D. Other Issues. Are there other issues with respect to the 
application or exercise of termination provisions that you would like 
to bring to our attention for future consideration?

    Dated: March 24, 2010.
Marybeth Peters,
Register of Copyrights, U.S. Copyright Office.
[FR Doc. 2010-6936 Filed 3-26-10; 8:45 am]
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