Hidden inside Title 17 of the United States Code of Laws sits an unassuming but powerful right that Congress gave to artists and creators: the termination right. Unlike many statutory rights, this right is inalienable – it cannot be given away, not even through contract. Many artists enter into deals with companies that help fund, develop, resource, promote, and distribute their creative output. Typically, such deals involve artists granting or licensing the copyright in their work to these business partners for lengthy periods of time; sometimes these transfers are legally binding in perpetuity. The termination right allows authors of creative works to cut short, or terminate, existing grants or licenses of their work after at least 35 years have passed, regardless of their contract terms.
Congress justified the creation of the termination right on both economic and moral grounds. The right – codified at Sections 203 and 304 of the Copyright Act – was enacted to protect authors and their heirs against agreements that were unprofitable or inequitable by giving them an opportunity to share in the later economic success of their works. In crafting the right, Congress also recognized that unequal power dynamics left artists at a disadvantage when negotiating against more established licensees – particularly given that artists typically enter into their first business contracts early in their careers when they lack both bargaining power and negotiating expertise. Artists of color in particular were often subject to exploitative contracts. In short, the termination right offered artists and their heirs a fair shot at ending unfair contracts by reclaiming their rights.
Some artists may choose to exercise their termination right and reclaim ownership of their work. Other artists may use it as leverage to negotiate (or renegotiate) a better deal. Whichever path they choose, the termination right is a part of copyright law that can empower artists and creators to control their financial and artistic futures. Ensuring that creators can effectively exercise this right – and thus fully participate in the social, cultural, and economic life of the country – is a core social justice issue.
The report recommends six policy actions to help restore fairness and functionality to termination of transfer rights:
- Revise the Copyright Act so that the termination right vests automatically;
- Revise the Copyright Act so that the termination right vests sooner than 35 years after a grant of rights under Section 203 or 56 years after the copyright is first obtained under Section 304;
- Eliminate or revise the “work made for hire” exception or statutory definition;
- Mitigate the need for artists to litigate ownership disputes prior to exercising their termination right by revising the statute of limitations or clarifying that the mere act of registering an adverse claim with the Copyright Office is not an effective repudiation of an ownership claim;
- Address derivative works issues through statutory clarification; and
- Conduct a formal study on the exercise and administration of the termination right, including the effects of the termination right on contract negotiation and renegotiation.