The Right of Termination in Copyright Law
Recently, the U.S. Court of Appeals for the Second Circuit decided in Penguin Group (USA) Inc. v. Steinbeck that a new agreement made by an author’s surviving spouse may supersede the author’s previous copyright grant, and consequently extinguish the right of the author’s other heirs to reclaim the copyright through the invocation of a statutory termination right. Section 304(c) of the Copyright Act of 1976 permits publishers to hold the copyright granted to it by authors for the statutory period, after which time the author or the author’s heirs may terminate the original grant and recapture the copyright. However, an author’s termination right under section 304(c) applies only to grants made prior to January 1, 1978. Authors may not terminate grants that are made on or after this date. But what happens when an author grants a copyright before January 1, 1978, and subsequently, the author’s surviving spouse enters into an agreement to re-grant the copyright after this date? Has this subsequent agreement extinguished the section 304(c) right of termination? In Penguin Group, the Second Circuit held that this subsequent agreement superseded the prior pre-1978 grant and extinguished the statutory termination right of the author’s other heirs. However, this decision should not be perceived as a defeat for copyright holders. Indeed, the ability and prerogative to consent to the extinguishment of their statutory termination right should be perceived as an enormous bargaining chip that authors and their heirs can use in their subsequent negotiations with publishers.