Termination Rights in The Music Industry
What Are Termination Rights and Work For Higher Limitations?
Smokey Robinson sued his wife, Claudette Rogers Robinson, seeking declaratory judgment that he may terminate and “recapture” the copyrights to all the songs he wrote during their marriage, and that she cannot claim interest in them under California community property law. So, what are Smokey’s termination rights?
Section 203 of the 1976 Copyright Act (the “Act”) allows authors who assign ownership rights in their work to regain sole copyright ownership thirty-five years later. Terminating ownership will allow artists to take the right to use, adapt, promote and collect revenue back from the assignees (i.e. the record label) to whom the artist originally granted the right. However, because artists have to wait thirty-five years to exercise their termination right, it’s still unclear how Section 203 applies to the music industry. In anticipation of the forthcoming flood of litigation kicked off by Smokey’s suit among others, this article attempts to shed some light on the termination rights of artists.
So as an Artist, What Does the Termination Right Mean to Me?
As an author, you may assign exclusive rights in your works of authorship. When you do, the assignee enjoys the right to use the work as if he or she were the creator. However, Section 203’s copyright termination right allows you, as the author, to terminate that assignment thirty-five years later. In this way, the law allows the assignee to benefit from the initial rewards for investing time and money into the creation of the work, but allows you as the original creator the opportunity to take back the assignment after the work has been exploited in the market for thirty-five years.
The ability to terminate a copyright transfer is not automatic though. For it to be activated, the burden is on you as the artist (or your heirs) to strictly follow these procedural steps:
- You must serve formal notice to the assignee of your intent to terminate the grant of copyright and register a copy of the notice in the Copyright Office prior to the date on which your termination is to take effect.
- The formal notice must be served no more than ten years and no less than two years prior to the effective date of termination.
- It must be in writing, must be signed, and must state the effective date of termination. The stated effective date must be within a five-year window beginning thirty-five years after the transfer was made.
It’s important to follow each of these procedural steps, otherwise you risk losing the right to terminate your copyright transfer.
Do Works-Made-for-Hire Qualify?
Although most copyright assignments qualify for this termination right, works that are “made for hire” do not. The Act provides that:
“[i]n the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all the rights comprised in the copyright.” 17 U.S.C. § 201(b).
A “work made for hire” is defined as either: (1) a work made by an employee within the scope of that employment, or (2) a work “specially ordered or commissioned” for use in one of nine enumerated categories prescribed by the Act, and the artist has agreed in writing, signed by both parties, that the work shall be a “work made for hire.” In other words, a work made for hire can arise through one of two mutually exclusive means: one for formal employees and one for certain independent contractors.
When a work is made for hire, the assignee actually becomes the author; it is as if the original artist never even existed. The termination right does not apply to works made for hire because “there was no transfer [of copyright] in the first place, and therefore no transfer [of copyright] to terminate.” Simply put, for works made for hire, an artist is the author in fact but the assignee is the author in law.
Was Your Music Made for Hire?
The Recording Industry Association of America (RIAA), the organization that legally represents the major record labels in the United States, has announced its position that the termination right does not apply to sound recordings because they fall into the work made for hire exception. Although the jury is still out on whether termination rights apply to sound recordings, there is little to suggest they don’t. In any event, courts have used the following approaches to determine whether a work in general was made for hire.
Employee During Scope of Employment?
The first way a work may be considered “made for hire,” and thus excluded from an artist’s termination right, is if a formal employee made it within the scope of his or her employment. In other words, if you work or worked as music producer or composer for a label or recording company, look to the following 12 factors to determine whether you’re an “employee” under the Act. If you, as the artist, answer “yes” to most of the following questions, you are more likely NOT an employee.
(1) high skill level required to produce the work?
(2) you provided the equipment and tools?
(3) you provided the location of the recording?
(4) duration of the relationship between you and the hiring party was short?
(5) hiring party had little control over the manner and means by which the work was made?
(6) you had discretion over when and how long to work?
(7) you were paid per work produced as opposed to hourly/salary?
(8) hiring party had little or no role in hiring and paying assistants?
(9) the work you made was beyond the ordinary business of the hiring party?
(10) you could turn down additional projects the hiring party assigned?
(11) hiring party provided little or no additional benefits/perks? (i.e. health insurance, 401k, etc.)
(12) you were taxed as independent contractor as opposed to an employee.
Even if a work does not constitute a work made for hire because a formal employee did not make it, the work may still be considered a work made for hire if an independent contractor made it. However, it’s much harder for a hiring party to show that an independent contractor made the work for hire.
First, individual sound recordings, standing alone, do not constitute works made for hire in the independent contractor context. Only sound recordings that are assembled into an album qualify. Even then, no court has addressed whether collective works such as “albums” qualify as “work made for hire” protection.
Anyway, an independent contractor’s musical work may constitute a work made for hire if it is: (1) “specially ordered or commissioned” by the hiring party, (2) an album or other collective work, not a single, (3) created “for use” in that album or collective work, and (4) parties agreed to it in a signed writing that explicitly states the work will be a work made for hire.
 17 U.S.C. § 203 (2013)
 Jessica Johnson, Application of the Copyright Termination Provision to the Music Industry: Sound Recordings Should Constitute Works Made For Hire. 67 U. Miami L. Rev. 661, 663 (2013)
 Donald S. Passman, All You Need to Know About the Music Business 320 (8th ed. 2012).
 Johnson, supra, at 664 (citing Mike Masnick, Dear Musicians: The RIAA Is About to Totally Screw You Over (Again!), n. 2).
 Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989).
 17 U.S.C. § 101 (2006).
 Ballas v. Tedesco, 41 F. Supp. 2d 531, 541 (D.N.J. 1999) (holding that sound recordings, standing alone, do not constitute works made for hire); Staggers v. Real Authentic Sound, 77 F. Supp. 2d 57, 64 (D.D.C. 1999).
 17 U.S.C. § 101 (2006).
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