Reversionary Rights: Unusual Ways to Have a Second Bite at the Copyright Apple - Chicago-Kent

Ashley Rovner | November 16, 2016

Reversionary rights offer a unique way for an author’s heirs to regain control of copyrights automatically, once 25 years have passed after the death of the author.[1] These sneaky provisions, present in the United Kingdom, Spain, Canada, and other British territories, often slip by unnoticed by lawyers and the heirs of copyright owners because the general idea is that copyrights can be transferred either by contract or enter into the public domain, usually, 70 years following the death of the author. However, when reversionary rights are in play, heirs, successors, or legal representatives of authors who owned copyrights can gain ownership of copyright back, regardless of contracts that grant ownership to third parties for periods longer than 25 years after the death of the author.[2] Comparing these provisions to copyright laws in the United States, for example, leads to very interesting differences in the treatment of copyrights around the world.[3] Most importantly, while reversionary rights have been hiding in the shadows for years, copyright law is constantly expanding given the digitization of most of the world’s information.[4] Even though only a few cases have been heard regarding reversionary rights in recent years, those low numbers could increase very soon. Therefore, lawyers should take note on how to change their tactics to make sure clients affected by these rights are properly informed.[5]

In the United States, rights granted to authors of copyrights usually retain ownership of their copyright(s) for their entire lives plus an additional 70 years.[6] During that time, there is the possibility that the copyright owner transfers ownership of the copyright to another person or entity.[7] If a copyright owner chooses to transfer their interest in the United States, there is a chance that they will choose to terminate that transfer, creating a “second bite at the apple” after a period of 35 years.[8] By doing so, the copyright ownership, which, for musicians, may have been transferred to record labels or music publishers, reverts back to the original owner. The benefit of this reversionary right allows authors, such as songwriters and recording artists, to terminate poorly made deals from the beginning of their careers since, after 35 years, they may have more leverage and experience to create better deals for themselves.[9] There are some exceptions to this termination right, including works made for hire and derivative works. Generally, however, the termination right under the U.S. Copyright Act allows authors to regain copyrights in order to form new, potentially more lucrative deals later in their careers.[10]

Comparing U.S. copyright laws to that of the U.K. and several of its territories, including Canada, shows a clear difference in how transfers and termination of copyrights function across the world. Starting with the U.K., copyright reversionary rights are first laid out in the Copyright Act of 1911, which created provisions that sought to eliminate the risk of “imprudent decisions” made by the author as the “weaker party” when forming copyright contracts.[11] In these provisions, also known as the Dickens Provision and which apply to both the U.K. and all countries that were part of the British Commonwealth as of 1911, any assignment of copyright “was to be terminated by the operation of the Act, and, irrespective of the terms of the contract, 25 years after the death of the author.”[12] If the contract assigned a copyright for a longer term than 25 years after the author died, then the contract is void and the copyright automatically reverts by operation of law to the author’s heirs.[13] This automatic reversion 25 years after the death of the author is a major difference between U.K. and U.S. copyright laws, since the U.S. does not have a provision that automatically overrides contracts that extend copyrights and the British reversionary right does not require timely notice and filing of the notice to the grantee.[14] However, the catch with the U.K. Copyright law comes from the Copyright Act of 1956, which replaced the 1911 Copyright Act.

In the 1956 Act, the reversionary right applies only to grants made by the author on or before June 1, 1957.[15] This means that authors who first own copyright in a work cannot assign the copyright before June 1, 1957 if the copyright granted also included a grant of ownership for a period beyond the death of the author plus 25 years.[16] Therefore, on one hand, unless the heirs of the author know that the assignment of copyright automatically reverted back to them 25 years after the death of the author, then these copyrights are actually being unfairly exploited by assignees that do not actually own those copyrights.[17] On the other hand, if the heirs of authors know about this reversionary interest, contracts made by the author with third parties to extend the ownership of copyright assignment past the author’s death plus 25 years are nullified, leading to the automatic reversion of copyright ownership to the author’s heirs.[18]

There are certain circumstances that need to be fulfilled in order for heirs of authors to automatically gain reversionary rights to copyrights under the U.K. Copyright Act of 1911.[19] First, the authors must be the first copyright owner of the work, and second, the author made the grant being terminated and grants made by the author’s heirs are not terminable under the Copyright Act of 1911.[20] Countries that were once apart of the British Commonwealth have largely done away with these automatic reversion provisions since the passage of the Copyright Act of 1911.[21] However, there are still several countries that still have reversionary rights in their Copyright Acts, including New Zealand, South Africa, Australia, Hong Kong, and Canada.[22] The most appealing part of the reversionary rights in the U.K. and these other countries is the fact that there is no time limit on claiming these rights.[23] The heirs of the author may claim reversion at anytime following the 25^th year after the author’s death.[24] Therefore, reversionary rights revert back to the author’s heirs to own and reassign as they choose the moment the 25^th anniversary of the author’s death arrives, creating the potential for any contracts affected by reversionary rights to be voided immediately.[25]

Apart from the United Kingdom, Canada is another country that specifically included reversionary rights in its Copyright Act, specifically in Section 14(1) and (2).[26] Section 14(1) states,

14. (1) Where the author of a work is the first owner of the copyright therein, no assignment of the copyright and no grant of any interest therein, made by him, otherwise than by will, after June 4, 1921, is operative to vest in the assignee or grantee any rights with respect to the copyright in the work beyond the expiration of twenty-five years from the death of the author, and the reversionary interest in the copyright expectant on the termination of that period shall, on the death of the author, notwithstanding any agreement to the contrary, devolve on his legal representatives as part of the estate of the author, and any agreement entered into by the author as to the disposition of such reversionary interest is void.[27]

Section 14(2) states that, “nothing in subsection (1) shall be construed as applying to the assignment of copyright in a collective work or a license to publish a work or part of work as part of collective work.”[28] Both sections create a reversionary right that favors the heirs of the authors of the copyrighted works, and makes clear that after June 4, 1921, any grant of interest in a copyrighted work will be terminated 25 years after the death of the author and will revert back to the heirs of the author to enjoy the benefits.[29]

There are certain circumstances where the reversionary rights do not apply, however, and these exceptions reflect similar laws once passed in the U.K. Copyright Act of 1911, including: works discussed in Section 14(2), works where the author was not the first owner of copyright, works protected by Crown copyright, variations on works made for hire, posthumous works, joint works, and collective works.[30] In one Canadian publication, these reversionary rights in Canada, also known here as the Dickens Provision, served to address a situation where the copyrighted work had become more valuable over time and following the death of the author.[31] Just as in the United Kingdom’s Copyright Act, the purpose of these reversionary rights is to allow an author’s heirs to have the opportunity to handle copyrights and create new royalty terms to reflect any increased value in the works concerned.[32]

The bottom line regarding reversionary rights, especially for heirs of authors who owned copyright rights before the author died, is to look to see if there are copyrights in these areas governed by reversionary rights rules. If there are copyrights in the U.K., Canada, Spain, or others that do have reversionary rights in their Copyright Acts, then heirs could own copyrights to authors’ works without even knowing about them. If the heirs of these authors find out that they own copyrights, they have the power to disassemble contracts that have assigned the copyrights to other third parties. Therefore, heirs have the opportunity to re-exploit copyrights only 25 years after the death of the author instead of waiting longer period of time instead of remaining unaware of their ownership at all. Lawyers and heirs to copyright owners must be aware that separate analysis for each work at issue must be done for the United States, for each and every reversionary territory, and for the rest of the world when looking to license or acquire rights in copyrighted works.[33]

[1] Paul Torremans, Reversionary Copyright: A Ghost of the Past or a Current Trap to Assignments of Copyright?, 2 Intell. Prop. Q. 77, 78 (2012).

[2] Lisa Atler, Copyright Reversions: Protecting Your Musical Copyrights, Wixen Music Publishing, Inc., http://www.wixenmusic.com/publishing-101/copyright-reversions/ (last visited Sept. 26, 2016).

[3] Bob Tarantino, Long Time Coming: Copyright Reversionary Interests in Canada, 375 Développments récents en droit de la propriété intellectuelle 1 (2013), available at https://ssrn.com/abstract=2368464.

[4] Id.; For more information on the United States’ cases discussing reversionary rights to heirs of copyright holders, see Brief for Respondents-Cross-Appellants, In re Estate of Stravinsky, 4 A.D.3d 75 (N.Y. App. Div. 2003) (Nos. 380, 81); First Amended Complaint, Melodie Hollander v. BMG Music Publishing, Inc. et al., No. BC 274873 (Cal. Superior June 2, 2003); Complaint & Jury Demand, Elvis Presley Enterprises, LLC, et al. v. Carlin Music Corporation, No. 06-CV-13740 (S.D.N.Y. Dec. 5, 2016).

[5] Id.

[6] 17 U.S.C. §302 (1976).

[7] 17 U.S.C. §204 (1976).

[8] 17 U.S.C §203 (1976); Adam Holofcener, The Right to Terminate: A Musicians’ Guide to Copyright Reversion, Future of Music Coalition (Feb. 16, 2012), https://futureofmusic.org/article/fact-sheet/right-terminate-musicians%E2%80%99-guide-copyright-reversion.

[9] Id.

[10] Id.

[11] Torremans, supra note 1, at 78.

[12] Id.; Alan J. Hartnick, Stanley Rothenberg: Final Thoughts on the Dickens Provision, 54 Copyright Soc’y U.S.A. 565, 567 (2007); Atler, supra note 2.

[13] Id.

[14] Hartnick, supra note 12, at 565.

[15] Id.; Atler, supra note 2.

[16] Torremans, supra note 1, at 79.

[17] Id.

[18] Atler, supra note 2.

[19] Id.

[20] Id.

[21] Id.

[22] Id.; Hartnick, supra note 12, at 567.

[23] Id.

[24] Id.