Prof. Jane C. Ginsburg, Columbia University School of Law*
December 8, 2009
The last clause of the first copyright act, the 1710 English Statute of Anne, anticipated authors’ weaker bargaining position, and, so long as the author lived through the first 14-year term, re-vested a second term of copyright in the author. Fourteen years of sales history would have enabled the author to ascertain the value of the work, and to strike a better bargain with the publisher. Together with its announced purpose to “encourage learned men to write useful books,” and its initial vesting of copyright in the author of a book, the Statute of Anne shifted the focus of literary property rights from printer-publishers, who were the primary beneficiaries of the prior regime of printing privileges, to the actual creators of the works.
The reversion right sought to ensure that authors in fact benefited from the success of their works. While English copyright law has since 1956 abandoned authors’ reversion rights, the United States not only adopted the two-term scheme in the 1790 first U.S. Copyright Act, but has retained and, in important respects, reinforced the reversion right in contemporary copyright law.
This column reviews the history of authors’ statutory reversion rights in the United States and summarizes the current provisions on termination of grants of copyright. A future column will address some of the complexities of the statutory right, as well as recent caselaw construing the 1976 Act’s attempt to ensure that authors not contract the termination right away. With respect to works published before 1978, termination opportunities arise 56 and 75 years from initial publication. Moreover, for both pre- and post-1978 works, now that grants of rights under copyright made as of 1978 have since 2003 begun to enter the period during which authors (or their heirs) may notify grantees of their intent to terminate the grants at the end of 35 years from conclusion of the contract, an understanding of statutory reversion rights becomes particularly timely.
Before embarking on the history of statutory reversion rights, it is worth pointing out that some authors, particularly in book publishing, have long enjoyed contractual reversion rights, in the form of the “out of print” clause. The typical clause provides that if the book is no longer available for purchase, and the publisher declines within a certain period following the author’s notification to commit in writing to put the book back on sale, the contract will terminate, and the rights revert to the author.
The author thus may negotiate a grant of copyright to another publisher, although, if the book has gone out of print because it failed to win an audience, it is uncertain whether the reversion will in fact enrich the author. “Out of print” clauses in any event may be becoming an endangered species, because digital media make it possible for a publisher to keep a book on sale indefinitely (assuming the publisher has acquired the author’s digital rights), without incurring the costs of printing and distributing a new run of hard copies. A book may remain in the publisher’s catalogue, available for printing on demand or downloading should the publisher receive even a single request for a copy.1 The possibility that the “long tail” will render contractual reversion clauses obsolete may therefore make statutory reversion rights all the more significant.
Statutory reversion rights – Then
While the Statute of Anne provided that the rights would “return to the Authors,” the first U.S. Copyright Act stated: “if, at the expiration of the said term, the author or authors, or any of them be living, and a citizen or citizens of these United States, or resident therein, the same exclusive right shall be continued to him or them, his or their executors, administrators, or assigns, for the further term of fourteen years….” (emphasis supplied). The specification of “assigns” suggests that the author could assign her rights not only for the first term, but also for the second (subject to her surviving through the first term).2
The contrast between the Statute of Anne’s specification that the right would “return to the Author” and the U.S. text’s provision that the “exclusive right shall be continued to him…” may also weaken the claim that the first U.S. copyright statute included a reversion right, although if Congress did not intend the rights to return to the author, it is not apparent why it would have made the author’s survival a condition of the vesting of a second term.
In any event, assuming the renewal term incorporated a reversion, if the author’s prior assignment of the second term bound the surviving author, then she would not have obtained the benefit of the renewal term. Some members of Congress appear both to have understood the statute to provide for a reversion, and to have appreciated the anomaly of its assignability, for several bills proposed in the early 1800s would have retained the reference to “assigns,” but would also have provided “That any contract for the sale of the copyright for the second term of fourteen years, or any part of the same made or entered into before the expiration of the first, shall be utterly void.” Thus, the relevant “assigns” would have been new grantees for the second term of copyright.
Ultimately, however, Congress chose to protect the author’s survivors rather than the author herself. The 1831 amendments removed the condition that the author survive into the renewal term, thus making the second term the norm (upon compliance with relevant formalities). But the amendments also specified who could take the renewal term: “the same exclusive right shall be continued to such author … or, if dead, then to such widow and child, or children, for the further term of fourteen years….”
In the course of the 19th and early 20th centuries, U.S. courts came to recognize the renewal term as a “new interest,” but divided over whether and how explicitly the author could assign away his renewal-term rights, and whether the assignment would bind his statutory heirs. Lower courts acknowledged the moral claims of the author against the assignee: “There are at least sentimental reasons for believing that Congress may have intended that the author, who according to tradition receives but little for his work, and afterwards sees large profits made out of it by publishers, should later in life be brought into his kingdom.”3
But the Supreme Court ultimately ruled that the author’s first-term assignment of the second term bound him to convey the renewal term to the original publisher. Justice Frankfurter, finding no explicit statutory limitation on the author’s advance assignment of the renewal term, showed no solicitude for the plight of the author, declaring most unsentimentally,
We are asked to recognize that authors are congenitally irresponsible, that frequently they are so sorely pressed for funds that they are willing to sell their work for a mere pittance, and therefore assignments made by them should not be upheld. … We cannot draw a principle of law from the familiar stories of garret-poverty of some men of literary genius. … We do not have such assured knowledge about authorship … or the psychology of gifted writers and composers, as to justify us as judges in importing into Congressional legislation a denial to authors of the freedom to dispose of their property possessed by others. While authors may have habits making for intermittent want, they may have no less a spirit of independence which would resent treatment of them as wards under guardianship of the law.4
Because publishing contracts routinely since at least the 1870s systematically and explicitly conveyed both the first and the renewal terms, generally with no separate consideration for the latter, the Court’s ruling validated industry practice but also ensured that authors by and large would not be “brought into [their] kingdom,” nor even into a minor freehold.
By contrast, the Supreme Court also ruled that the author’s statutory heirs took the renewal term free of the decedent’s grant (improvident or otherwise). Unsentimental as ever, the Court did not advert to Congressional policy to protect widows and orphans (though this concern almost certainly animated the 1831 law), but rather dryly characterized the author’s prior grant as a mere “expectancy,” thus making the original grantee’s acquisition of the renewal term contingent on the author’s survival.5 Not surprisingly, it became industry practice in some sectors to condition payment for the author’s grant of copyright on the author’s obtaining assignments to the publisher of her statutory heirs’ contingent interests in the renewal term.
Statutory reversion rights – Now
Against this background, Congress’s provision in the 1976 Act of an inalienable termination right stands out as a signal victory for authors. But, as examination of the text and experience to date will show, our cheers, while voiced, will be somewhat muted. First, we will summarize the operation of the termination right with respect both to works published before 1978 and to grants of rights (whether in works published before 1978 or created after that date) made as of 1978. In the 1976 Act, Congress abandoned the two-term copyright scheme and adopted the by-then international standard of the life of the author plus 50 years. (In 1998, Congress extended the term of copyright to life plus 70.) Although the renewal term which had triggered the reversion right would no longer exist, Congress determined to retain a reversion right, and pegged it to the date of conclusion of a grant of rights under copyright, with the right coming into effect from 35 to 40 years from that date (subject to no fewer than two and no more than ten years’ advance notification). See 17 U.S.C. Sec. 203.
For works published before 1978, Congress extended the term of copyright by 19 years so that their 75-year duration would approximate that of works created under the aegis of the 1976 Act. Congress then confronted the question of the beneficiary of the additional 19 years. Because the Constitution authorizes Congress to secure exclusive rights “to Authors,” one possibility would have been automatically to vest the additional years in the works’ creators, free and clear of their prior grants.
Congress instead split the difference by designing a termination right for the “extended renewal” term of 19 years, thus vesting the additional years in authors’ assignees but entitling authors to terminate their ongoing grants, subject to a variety of rather complex conditions. When Congress in 1998 added another 20 years to the terms of extant copyrights, it gave the authors (or heirs) of works published before 1978 another opportunity to terminate grants during the last 20 years, so long as they had not previously terminated grants at the outset of the prior 19-year extension. See 17 U.S.C. Secs. 304(c), (d).
The 1976 Act termination right is not fully coextensive with the prior renewal term reversion. The principal difference concerns the scope of the rights recaptured. The renewal term (if not contracted away) entitled authors to retrieve their copyrights free and clear of all prior grants; thus the copyright owners of any derivative works created under the authority of the first-term grant would be obliged to negotiate with the owner of the renewal-term rights in the underlying work.6 The termination right carves out an exception for derivative works, allowing the continued exploitation of derivative works previously created under the authority of the terminated grant, but returning to the author or her heirs the exclusive rights to create new derivative works. See 17 U.S.C. Secs. 203(b)(1), 304(c)(6)(A).
Another significant difference concerns the rights’ implementation. To obtain the renewal right reversion, the author (if she retained the right) or her heirs needed only to renew the work’s copyright registration; the rights then reverted automatically. By contrast, the 1976 Act termination right is subject to elaborate provisions regarding notification of grantees; we will consider these obligations in detail in our next column.
With respect to grants of rights in all works, Congress specified that “Termination of the grant may be effected notwithstanding any agreement to the contrary, including agreement to make a will or to make any future grant.” 17 U.S.C. Secs. 203(a)(5); 304(c)(5); 304(d)(1). Thus, even if the author’s contract purported to renounce or forbear from exercising the termination right, neither the author nor her heirs would be bound. Whether the “any agreement to the contrary” provision in fact ensures that authors or their heirs will at last “come into [their] kingdom” has been the subject of several recent decisions, which we will examine in our next column.