Oh Bother: Milne, Steinbeck, and an Emerging Circuit Split Over the Alienability of Copyright Termination Rights

Journal of Intellectual Property Law Volume 14 | Issue 2 Article 6 April 2007 Oh Bother: Milne, Steinbeck, and an Emerging Circuit Split Over the Alienability of Copyright Termination Rights Allison M. Scott University of Georgia School of Law Follow this and additional works at: https://digitalcommons.law.uga.edu/jipl Part of the Intellectual Property Law Commons, and the Modern Literature Commons Recommended Citation Allison M. Scott, Oh Bother: Milne, Steinbeck, and an Emerging Circuit Split Over the Alienability of Copyright Termination Rights, 14 J. Intell. Prop. L. 357 (2007). Available at: https://digitalcommons.law.uga.edu/jipl/vol14/iss2/6 This Notes is brought to you for free and open access by Digital Commons @ Georgia Law. It has been accepted for inclusion in Journal of Intellectual Property Law by an authorized editor of Digital Commons @ Georgia Law. Please share how you have benefited from this access For more information, please contact . Scott: Oh Bother: Milne, Steinbeck, and an Emerging Circuit Split Over t OH BOTHER: MILNE, STEINBECK AND AN EMERGING CIRCUIT SPLIT OVER THE ALIENABILITY OF COPYRIGHT TERMINATION RIGHTS TABLE OF CONTENTS I. II. INTRODUCTION ........................................... 358 BACKGROUND ............................................ 361 A. STATUTORY AND POLICY BACKGROUND FOR THE RECAPTURE OF PREVIOUSLY TRANSFERRED COPYRIGHTS ....... B. THE COPYRIGHT ACT TERMINATION PROVISIONS ............. 1. Which Tranfers May be Terminated ......................... 2. When TranfersMay be Terminated ......................... 3. Who May Terminate Transfers ............................. 362 364 365 366 367 C. AN EMERGING SPLIT BETWEEN THE SECOND AND NINTH CIRCUITS: THE ALIENABILITY OF COPYRIGHT TERMINATION RIGHTS ................................... 1. Second Circuit ......................................... a. Marvel Characters (2002) ............................ b. Steinbeck (S.D.N.Y 2006) ........................... 2. Ninth Circuit: Milne (2005) ............................. III. AN ALYSIS ................................................. 368 369 369 372 375 380 A. STEINBECK AND THE EMERGING SPLIT THE SECOND AND NINTH CIRCUITS ........................................ B. 381 THE SECOND CIRCUIT'S BROAD INTERPRETATION OF § 304(c) (5) IS MORE FAITHFUL TO THE STATUTE'S LANGUAGE AND LEGISLATIVE HISTORY THAN THE NINTH CIRCUIT'S NARROW READING ........................ 382 C. THE SECOND CIRCUIT'S LIBERAL APPLICATION OF § 304(c)(5) LEADS TO MORE FAIR AND CONSISTENT RESULTS AND ESTABLISHES A MORE WORKABLE LEGAL STANDARD THAN THE NINTH CIRCUIT'S RESTRICTIVE APPROACH .............................................. IV . CONCLUSION ............................................. Published by Digital Commons @ Georgia Law, 2007 386 387 1 Journal of Intellectual Property Law, Vol. 14, Iss. 2 [2007], Art. 6 J. INTELL PROP. L [Vol. 14:357 I. INTRODUCTION In a world where a best-selling novel becomes a movie and a blockbuster film becomes a book and where both spawn sequels, television series, video games, and other merchandise, the transfer and licensing of copyrights for publishing and for production of derivative works provide the intangible foundation for multimillion-dollar entertainment and retail industries. But what about the unknown author who penned that manuscript and desperately sold the publishing rights on the cheap, the musician suckered out of his song rights for much-needed pennies, the starving screenwriter who got the raw end of the deal, and all of their respective families? For those authors who could not have known when they signed on the dotted line how successful their copyrighted work would be or that legislation would later extend the duration of the copyrights they were transferring,' Congress created a safeguard: termination rights. Termination rights, or termination of transfer rights, provide statutory procedures through which an author of a copyrighted work (or upon the author's death, his statutory heirs) may, in certain circumstances, nullify previous transfers of copyrights and 2 renegotiate bargains that more accurately reflect the true value of the work. While termination rights serve as an escape route for an author, or his heirs, bound by the terms of a bargain that was entered before the market value of the copyright to the author's work could be determined, termination rights are a constant threat to the publishing house, the record company, and the film producer whose rights to future profit from the author's work could be erased by a valid notice of termination. Termination rights, though first inscribed in U.S. copyright law in the Copyright Act of 1976, 3 are a topic of increasing importance in the twenty-first century. Of the three termination provisions of the 1976 Act, 5 304(c) and § 304(d) will continue to be employed for the next few decades to terminate transfers made before 1978. 4 Copyright transfers made in, or after, 1978 will begin to enter the window for exercise of termination rights under 5 203(a) beginning January 1, 2013, with notices of termination perhaps already issued.' I Since the fifty-six-year total copyright term was enacted in the Copyright Act of 1909, Congress has extended that term several times, including most recently with the enactment of the Sonny Bono Copyright Term Extension Act (CTEA). See Sonny Bono Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (1998) (codified in scattered sections of 17 U.S.C.). 2 Mills Music, Inc. v. Snyder, 469 U.S. 153, 172-73 (1985). 3 17 U.S.C. § 203, 304 (2000). 4 See 17 U.S.C. § 304(c), (d). ' See Michael I. Rudell & Neil J. Rosini, 'Grapes of Wrath' Case Shows Difficulies of Copyright Termination, N.Y. L.J. Aug. 25, 2006, at 3 (noting that notices of termination can be issued up to ten years before the effective date of the termination). https://digitalcommons.law.uga.edu/jipl/vol14/iss2/6 2 Scott: Oh Bother: Milne, Steinbeck, and an Emerging Circuit Split Over t 2007] TERMINATION RIGHTS Termination rights are generally accepted to be inalienable,6 such that they cannot be transferred or surrendered. Thus, it seems clear that one could not expressly transfer or surrender termination rights as part of the consideration of a contract.8 However, a less clear case exists where copyright transferees argue that certain post-transfer agreements entered into with an heir of the author preclude the exercise of termination rights.' Capitalizing on the differences between the requirements for termination of pre-1978 transfers and termination of transfers made during or after 1978,1" these transferees argue that the author's heir has effectively surrendered the author's family's termination rights by executing a non-terminable post-1978 agreement that replaced a previously terminable pre-1978 agreement executed by the author." While at least one trial court in the Second Circuit has rejected such an (...truncated)