Page 26 - Delaware Lawyer - Summer 2020

FEATURE
the United States will also expire at some point. The duration of copyright protection in the various countries of the world differ, although in most European countries, the term of pro- tection is the same as in the United States: 70 years after the death of the author].
Notices of Termination may be filed/served as early as 10 years prior to the eventual termination date, ending 35 or 56 years, as the case may be, af- ter the transfer of rights was executed. There is an additional five-year period following the ends of these respective dates during which terminations can occur, with some exceptions.
What happens after the Notices of Termination are sent? Even though the rights have not yet reverted, now, for the first time, the author or the authors’ specific heirs can deal with them as with any other asset (although they are constrained from transferring rights to a third party before the effective date of termination). What often happens in these situations is that the authors/ heirs who recapture the United States rights will sell them back to the origi- nal copyright holder, in return for a fa- vorable change in terms/royalty splits, manner of calculation of such royalties, etc. or in exchange for appropriate sums of money commensurate with the cur-
rent market value of the rights being re- sold to the original copyright owner, or both. After all, these newly recaptured (or soon-to-be recaptured) assets come with a stream of income and a track re- cord, so approximate value of the recap- tured rights can easily be ascertained.
Works Made for Hire
Additional issues arise, for example, relating to whether the work itself is susceptible to termination. For ordi- nary works of a literary nature, such as works for the performing arts, there is no such issue, as long as they are not works made for hire where the author is the “employer” rather than the indi- vidual who actually created the work. In the case of works made for hire, ter- mination is not an entitlement afforded to the actual creator.
Section 101 of the Copyright Act defines a “work made for hire” in two parts:
(1) A work prepared by an employee
within the scope of his or her employment (for example, an editor at a book publishing house or a musical arranger at a sheet music print company); or
(2) A work specially ordered or commissioned for use
a. for use as a contribution to a
collective work
b. as a part of a motion picture or
Soon after the 1976 Act was passed, record labels inserted into virtually all recording agreements a work-for-hire provision anticipating a potential claim decades hence.
other audiovisual work
c. as a translation
d. as a supplementary work
e. as a compilation
f. as an instructional text
g. as a test
h. as answer material for a test, or i. as an atlas
if the parties expressly agree in a written instrument signed by them that the work is considered a work made for hire (emphasis added).
Soon after the 1976 Act was passed, even before it took effect in 1978, re- cord labels inserted into virtually all recording agreements a work-for-hire provision anticipating a potential claim decades hence (starting in 2013, when the first effective dates of termination matured for post-1977 works). The ar- gument has been unresolved for years because sound recordings are not spe- cifically listed among the nine catego- ries referenced above.
Even if a sound recording is not a work made for hire, it is nearly im- possible for the industry to concur on the question of the identity of a class of people who might constitute “au- thors.” Remember, only authors or certain of their heirs can terminate a transfer. The artist presumably passes the test of authorship of a sound re- cording featuring the artist’s perfor-
24 DELAWARE LAWYER SUMMER 2020