Do Termination of Transfers Matter?

Yes, termination of transfers matter quite a bit. But figuring out how they work and why they are in the statute can be head-scratching. Termination of transfers are the result, ultimately, of two factors. First, the Supreme Court's belief that it could make better policy than Congress; and second, Congress's decision in the 1976 Act to switch to a term of protection measured by life of the author, rather than, as under the 1909 Act, from the date of first publication.

The 1909 Act provided for two terms, an original term of 28 years, and a renewal term also of 28 years but dependent upon a proper renewal in the final year of the original term. The purpose of this arrangement was (hard as it is to believe) to give the author a second bite at the apple: because it was believed difficult to calculate the market value of a work at its inception, it would be hard to calculate what an assignment of the renewal term was worth. Congress therefore considered the renewal term to be an opportunity for the author or his or her heirs to renegotiate the terms of an assignment made during the original term. But that plan worked only if the author was not permitted, during the original term, to also convey the renewal term. If the author could convey the renewal term along with the original term, the plan failed.

In Fred Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643 (1943), this question was squarely presented. In a 6-3 opinion by Justice Frankfurter, the Court held the author could assign in futuro the renewal right. For those who have read the catty comments about legislative history made by Frankfurter previously as law professor, his phrasing of the issue will come as a surprise. It will also come as a surprise to those who believe that the Scalian textualist approach to statutory construction is and always has been mainstream. Here's how Frankfurter posed the issue presented:

"Plainly, there is only one question before us -- does the Copyright Act nullify an agreement by an author, made during the original copyright term, to assign his renewal? The explicit words of the statute give the author an unqualified right to renew the copyright. No limitations are placed upon the assignability of his interest in the renewal. If we look only to what the Act says, there can be no doubt as to the answer. But each of the parties finds support for its conclusion in the historical background of copyright legislation, and to that we must turn to discover whether Congress meant more than it said."

After traversing the history of U.S. copyright acts and legislative history, Frankfurter got to the real point, and that point was his preferred policy:

"If an author cannot make an effective assignment of his renewal, it may be worthless to him when he is most in need. Nobody would pay an author for something he cannot sell. We cannot draw a principle of law from the familiar stories of garret-poverty of some men of literary genius. Even if we could do so, we cannot say that such men would regard with favor a rule of law preventing them from realizing on their assets when they are most in need of funds. Nor can we be unmindful of the fact that authors have themselves devised means of safeguarding their interests. We do not have such assured knowledge about authorship, and particularly about song writing, 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."

Whether one agrees with this or not (and great judges like Judge Pierre Leval do agree with the policy expressed by Frankfurter), the Court should not have ended up where it did, since it conceded the statute was plain and plainly to the contrary. In the 1976 Act, Congress took care of this by making termination of transfers inalienable. There are of course two of them. The first, in Section 304, deals with works protected under the 1909 Act, and gives the right to terminate the extra 19 years added in 1976 (28+28+19). An extra opportunity to terminate was added for the 20 years tacked on by the Sonny Bono Act (28+28+19+20) in case the author missed the deadline for the 19 year termination. (I take credit for this third bite).

The second termination, in Section 203, deals with terminations of transfers made after January 1, 1978 and thus this right includes 1909 Act works too if the transfer was made after 1/1/78. Some works may thus have both 304 and 203 termination rights. Or, a work created from 1909 to 1977 may not have a Section 304 termination right at all if it was unpublished and protected federally only by virtue of Section 303.

Importantly, there is no termination of transfer right if the work was made for hire. Terminations could have been made automatic. This would have greatly simplified things. But in the rough-and-tumble of lobbying, this didn't happen, and the current Rube Goldberg provisions are a result. Whether the very low termination right (perhaps 4% on average, but much higher for musical works) is the result of this complexity (and if so it mirrors renewal) or is the result of a lack of a desire to terminate is, no doubt, a highly partisan affair.