Editing Copyright Law/Ownership of Copyright

{{:Copyright Law/TOC}}
The provisions of the Copyright Act that deal with the ownership of copyright are for the most part straightforward. They declare that the author of a work is the initial copyright owner; that joint authors are co-owners of copyright; that the employer in the case of a work made for hire is considered the author and is presumed to be the copyright owner; that copyright ownership of a contribution to a collective work is different from the copyright ownership of the collective work itself; that copyright may be transferred in whole or in part; and that copyright ownership is distinct from ownership of the physical object in which the copyrighted work is embodied (a distinction discussed at [[Copyright Law#History and Background|History and Background]]).<ref name="ftn140">17 U.S.C. §§ 201, 202.</ref> What remains is to explicate these principles and also to consider the somewhat unusual provision of the Copyright Act that gives to an author who has transferred the copyright the power to terminate that transfer and recapture the copyright.

==Initial Ownership of Copyright==

Under section 201(a) of the Copyright Act, copyright ownership of a work vests initially in the author. The statute deals not only with works authored by an individual but also with works that are jointly authored and works that are prepared at the direction of others such as employers and commissioning parties.

=== Joint works ===

If the work is a “joint work,” the authors are co-owners of the copyright. The term “joint work” is defined in section 101 to mean “a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.” If a popular song is created collaboratively by composer and lyricist, they are both regarded as co-owners of the copyright. If, however, the tune is written initially as a purely instrumental work without lyrics, is marketed that way, and the lyrics are added at a later date by a lyricist at the composer’s invitation, the work is not a “joint work” within the statutory definition.

A work may be treated as a joint work under the Copyright Act even though the contributions of the collaborating authors are by no means equal, whether measured by quantity, quality, or commercial value. Even though, for example, the musical public may be enthralled by a song’s catchy melody and may have only the faintest recollection of the accompanying lyrics, both composer and lyricist will be treated as joint authors provided the statutory definition is satisfied. It is commonly recognized, however, that to be a joint author one’s contribution must be more than ''de minimis'' and must manifest original authorship. Therefore a homebuyer who makes suggestions or provides fragmentary sketches to an architect cannot claim joint authorship of the final and detailed architectural plans;<ref name="ftn141">Meltzer v. Zoller, 520 F. Supp. 847 (D.N.J. 1981).</ref> an explanation by a business person to a computer programmer regarding the operations of the business and the desired functions to be performed through the program does not make the business person a joint author of the program;<ref name="ftn142">Whelan Assocs., Inc. v. Jaslow Dental Lab., Inc., 609 F. Supp. 1307 (E.D. Pa. 1985), ''aff’d on other grounds'', 797 F.2d 1222 (3d Cir. 1986).</ref> and a person does not become a joint author of a play merely by contributing factual research and general character suggestions.<ref name="ftn143">Childress v. Taylor, 945 F.2d 500 (2d Cir. 1991). ''But see'' Gaiman v. McFarlane, 360 F.3d 644 (7th Cir. 2004) (comic book joint authorship). There is some question whether, to be a joint author, one’s creative contribution—no matter how detailed and substantial—must be fixed in a tangible medium of expression. ''Meltzer'', 520 F. Supp. 847 (homeowner did not “fix” specific suggestions).</ref> In these situations, where there is a stark imbalance between the contributions of each of the two (or multiple) authors, the courts are concerned that a finding of joint authorship will result (as developed immediately below) in an equal sharing of the proceeds derived from the exploitation of the copyrighted work; before the “subordinate” author can make a convincing claim to such equal financial rewards, he or she must do more than contribute general ideas, suggestions or the like, and should bear the burden of protecting his or her financial

interests through a negotiated contract.<ref name="ftn144">''See'' ''Childress'', 945 F.2d 500.</ref> There is also an apparent concern that a less demanding rule will too readily invite claims of joint authorship on the part of any number of persons who are involved in a collaborative creative enterprise (such as putting the final touches to the text of a play or screenplay), and who make minor suggestions that are adopted by the playwright or director.<ref name="ftn145">Erickson v. Trinity Theatre, Inc., 13 F.3d 1061 (7th Cir. 1994).</ref> To rationalize these safeguards, courts have come to adopt the approach that—in addition to the statutory requirement of a mutual subjective intention to merge contributions into a unitary work—it is also necessary, to create a joint work, that there be a mutual intention to share authorship, as manifested by shared credit or billing and by shared approval over revisions, promotion and the like.<ref name="ftn146">Thomson v. Larson, 147 F.3d 195 (2d Cir. 1998). ''See also'' Aalmuhammed v. Lee, 202 F.3d 1227 (9th Cir. 2000).</ref>

Although the copyright law has never expressly defined the nature of the co-ownership held by joint authors, courts through the years have treated joint copyright owners as tenants in common, each owning an undivided interest in the whole of the copyright. Each co-owner is therefore entitled to exercise all of the exclusive rights set forth in section 106 of the Act, or to license other persons to exercise those rights; but there is a duty to account to all other co-owners for their respective shares of the proceeds of authorized exploitation.<ref name="ftn147">''Larson, ''147 F.3d 195.</ref> Upon the death of a co-owner of copyright, his or her share passes pursuant to will or through the usual intestate channels; it is not automatically vested in the surviving co-owners.

Thus, if Composer and Lyricist together write a popular song, either one of them may license the performance of the song or its recording onto a motion picture soundtrack, subject to a duty to account to the other for half of the proceeds (subject to any contractual agreement to share in some other proportion). If Composer dies, his half interest in the copyright will pass to his widow if she is named as legatee in the will, and not to Lyricist by way of survivorship.

If, however, the song was not created as a “joint work” within the statutory definition—for example, because the melody is written one year and the lyrics are added years later—then Composer would own the copyright only in the tune, and Lyricist would own the copyright only in the words. Neither could exploit the entire song, or license a third person to do so, without securing the consent of the other—and the duration of copyright protection would be calculated separately for each of the two components.

=== Works made for hire ===

A most important concept in the area of copyright ownership is the “work made for hire.” If a biochemist employed by a pharmaceutical company prepares as part of her duties a technical manual on the company’s research and development procedures, the manual would be a clear example of a “work made for hire.” In such a case, section 201(b) of the Copyright Act declares that the employer rather than the creative human employee is considered the “author” for all purposes under the Act. Moreover, the employer is deemed to be the owner of the copyright unless the employer and employee agree otherwise in a signed writing.

Because characterizing a work as one “made for hire” has implications not only for ownership of copyright, but also for duration (as noted above, the “life-plus-70” formula does not apply) and other important aspects of the statute, it is useful to set out the statutory definition in section 101:

{{Quote|A “work made for hire” is—(1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.}}

The elaborate definition is a congressional reaction to the failure of the 1909 Act to define the phrase and to the confusion in much of the case law that had developed under that Act.<ref name="ftn148">For works created before 1978, the work-for-hire precedents under the 1909 Act will still govern. ''See'' Twentieth Century Fox Film Corp. v. Entm’t Distrib., 429 F.3d 869 (9th Cir. 2005); Martha Graham Sch. & Dance Found., Inc. v. Martha Graham Ctr. of Contemporary Dance, Inc., 380 F.3d 624 (2d Cir. 2004).</ref>

Despite the detail, the definition of “work made for hire” proved soon after 1978 to be a source of disagreement among a number of courts of appeals. In particular, there was confusion as to whether a commissioned work could become the equivalent of a work prepared by an employee when the commissioning party closely supervised the execution of the work by the independent contractor. A unanimous Supreme Court dispelled such a misconception in its 1989 decision in ''Community for Creative Non-Violence v. Reid'',<ref>490 U.S. 730 (1989).</ref> which involved conflicting ownership claims in a statue that was prepared by a sculptor at the request of a group devoted to advocacy of the rights of the homeless. The Court examined the 1976 Act’s structure, its purpose, and the underlying legislative and judicial history, and concluded that—absent compliance with the strict requirements in the second part of the definition of “work made for hire”—a work will be such only if it is created within the scope of employment by a person found to be an “employee” under the rules of agency commonly applied in tort cases. There is to be essentially an airtight differentiation of works by employees and works by independent contractors, and the latter must fall within both the subject-category and writing requirements to be works made for hire. The Court held that whether the “employee” standard is satisfied is a factual determination to be made on a case-bycase basis by examining a number of circumstances.

{{Quote|In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party. See Restatement [of Agency, Second] § 220(2) (setting forth a nonexhaustive list of factors relevant to determining whether a hired party is an employee). No one of these factors is determinative.<ref name="ftn149">''Id''. at 751–52 (citations and footnotes omitted).</ref>}}

The outcome in ''Reid'' is of great significance to many freelance writers and artists whose works do not fall within the “independent contractor” subject-matter categories of the statutory definition, or who have not stipulated in writing that their work has been made for hire. Because under ''Reid'' their works will be found ''not'' to be works made for hire, the freelancers (or their surviving family members) are given the power, as will be seen shortly below, after a substantial number of years to recapture the copyright from the putative “employer” and to assert all the rights of ownership. The power to terminate copyright transfers does not apply to works made for hire.<ref name="ftn150">Nor are the artist-protective provisions of the Visual Artists Rights Act (section 106A of the Copyright Act) applicable to works made for hire. ''See'' Carter v. HelmsleySpear, Inc., 71 F.3d 77 (2d Cir. 1995).</ref>

Although the Supreme Court, in ''Reid'', stressed the importance of advance predictability in resolving questions of ownership, the multifactor definition of “employee” that it borrowed from the Restatement of Agency is of course among the most elusive definitions in the law. Accordingly, courts of appeals have gradually come to identify those fewer elements that are the most important in applying the first part of the “work made for hire” definition: the hiring party’s right to control the manner and means of creation; the skill required; whether the hiring party has the right to assign additional projects; the provision of employee benefits; and the tax treatment of the hired party.<ref name="ftn151">Aymes v. Bonelli, 980 F.2d 857 (2d Cir. 1992) (emphasizing in particular the latter two factors).</ref> Moreover, under the statutory definition, even an “employee’s” creative work will not be a work for hire if it is prepared otherwise than “within the scope of employment,” and here too the pertinent definition is provided by the Restatement of Agency.<ref name="ftn152">Shaul v. Cherry Valley–Springfield Cent. Sch. Dist., 363 F.3d 177, 185–86 (2d Cir.</ref><ref name="ftn153"> ); Avtec Sys., Inc. v. Peiffer, 21 F.3d 568 (4th Cir. 1994).</ref>

=== Collective works ===

Another area of confusion under prior law had been the respective rights of, on one side, persons contributing articles to journals, magazines, encyclopedias, and other “collective works” and, on the other side, the person who owns copyright in the collective work. Section 101 of the 1976 Act defines “collective work” as “a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.” Collective works are thus a species of “compilation,” and as with all compilations,<ref name="ftn154">''See'' [[Copyright Law/The Subject Matter of Copyright#Compilations and Derivative Works|The Subject Matter of Copyright § Compilations and Derivative Works]].</ref> a copyright in a collective work embraces only those elements of original authorship manifested therein, which may be no more than the choice of contributions and the sequence in which those contributions are published. Section 201(c) makes clear that copyright in an individual contribution vests initially in the author of that contribution and is distinct from copyright in the collective work as a whole. Absent an express written transfer from that author, the owner of copyright in the collective work (e.g., the magazine) does not own the copyright in the individual contribution, but is presumed to have acquired “only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.” The publisher cannot, therefore, revise the contribution itself or publish it in an altogether different magazine.

A significant question was decided in 2001 by the Supreme Court, interpreting the statutory language just quoted. In ''New York Times Co. v. Tasini'',<ref>533 U.S. 483 (2001).</ref> freelance authors had contributed articles to (and been paid therefor by) newspapers and magazines, which had published those articles in hardcopy form. Nothing was said, orally or in writing, about the electronic publication rights because in many cases the Internet and the CD-ROM were not yet on the scene when the freelancers authorized publication. When, at a later date, the newspapers and magazines licensed the distribution of those articles online (in LexisNexis, among other places) and on disks, the authors complained that they had never initially conveyed those rights and that they were thus entitled to new and separate compensation therefor. The respective rights of the publishers (the owners of copyright in the hardcopy collective works) and the authors turned upon whether the statutory presumption that the former may make “any revision of that collective work” embraced the incorporation of the articles in digital compilations. The Supreme Court held for the authors. The Court found that the articles were individually searchable from among the thousands of articles in the electronic databases and could be retrieved by the user altogether out of the context of the hardcopy collective work, so that it was a distortion of language to find that the latter had merely been “revised.”

Courts of appeals have differed, however, on the question whether there is an allowable “revision” under section 201(c) when the electronic version visually reproduces the totality of the pages and journal issues as they appeared in the print version, including photographs, advertisements and the like.<ref name="ftn155">''Compare'' Faulkner v. National Geographic Enters. Inc., 409 F.3d 26 (2d Cir. 2005), ''with'' Greenberg v. National Geographic Soc’y, 244 F.3d 1267 (11th Cir. 2001).</ref>

==Transfer of Copyright Ownership==

Copyright, like other forms of tangible and intangible property, can be transferred ''inter vivos'' or upon death from the author, or a subsequent copyright owner, and transferred again. This basic principle is affirmed in section 201(d)(1) of the 1976 Act, which provides: “The ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will or pass as personal property by the applicable laws of intestate succession.”

Under prior law, courts developed an important distinction between an “assignment” of copyright, which carried the entire copyright to a person who then was known as the “proprietor” or owner of copyright, and a “license,” which carried to another less than the entire copyright, for example, only the right to dramatize a novel or to publicly perform a musical composition. Copyright was generally said to be “indivisible,” in the sense that only one person at any given time could validly claim to “own” it. The concept of indivisibility and the distinction between an assignment and a license were important under the 1909 Act, because only the name of the “proprietor” could properly be placed in the copyright notice (the insertion of the wrong name could thrust the work into the public domain), and only the “proprietor” could bring an action for copyright infringement.

The 1976 Act made a significant break with the past when it abandoned the concept of indivisibility of copyright ownership along with its more dubious ramifications. Section 201(d)(2) provides:

{{Quote|Any of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by section 106, may be transferred as provided by clause (1) and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title.}}

Thus, a person who owns no more than an exclusive license to perform publicly a dramatic work or a musical composition (but not to make or sell copies) is nonetheless regarded as the “owner” of that right. It is that person who can properly bring an action for infringement of that particular exclusive right.<ref name="ftn156">Section 501(b).</ref> The Copyright Act refers to the conveyance of either all rights or less than all rights as a “transfer,” and it eliminates the significance of characterizing a transfer as either an assignment or a license.

Under current law, what is important in connection with copyright transfers is whether the transfer is exclusive or nonexclusive.<ref name="ftn157">The influence of the old law, however, is still felt. For example, the Court of Appeals for the Ninth Circuit, incorporating doctrine developed under the 1909 Act, has held that the transferee of an exclusive right must, in order to make a valid retransfer of that right to a third party, give notice to and secure the assent of its own initial transferor. Gardner v. Nike, Inc., 279 F.3d 774 (9th Cir. 2003).</ref> Section 204(a) provides that “a transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent.” Because section 101 defines “transfer of copyright ownership” to include both assignments and exclusive licenses, a grant of an exclusive license of any of the rights or subdivisions of rights in section 106 must be manifested in a signed writing if it is to be effective, by virtue of the copyright statute of frauds set forth in section 204(a). The grant of a nonexclusive license—for example, separate grants to several production companies to perform a dramatic work—will be valid even without a signed written memorial (although, of course, the practicing attorney will routinely give or take such a license by written agreement). Such a transfer can often be inferred simply from the conduct of the parties, without any kind of writing.<ref name="ftn158">Effects Assocs. v. Cohen, 908 F.2d 555 (9th Cir. 1990) (short footage was prepared at request of motion picture producer; for lack of a writing, this was found to transfer to the latter an implied nonexclusive license to incorporate the footage, and distribute it, as part of the film).</ref>

In the interest of maintaining intelligible records relating to copyright ownership, the Copyright Office not only ''registers'' initial (and renewal) claims of copyright but also ''records'' “any transfer of copyright ownership or other document pertaining to a copyright,” under section 205(a) of the Copyright Act. Recordation of a transfer of copyright in a registered work will provide constructive notice of the facts stated in the recorded document; and, much like a recording system for real estate, copyright recordation will protect the transferee of the copyright against subsequent conflicting transfers even to good-faith purchasers.<ref name="ftn159">Sections 205(c), (e), (f).</ref>

Even when there is a valid transfer of an exclusive right—properly documented by a signed writing—there are many cases in which, after the passing of years and the development of a commercially remunerative new technology, the parties dispute whether the grant was meant to embrace the new technology. This first became an issue when dramatization rights were granted prior to the advent of motion pictures, and when film rights were granted prior to the advent of television. More recently, there have been disputes about whether the grant of film rights includes the right to make and distribute videocassettes and DVDs of the film, and whether magazine or book publishing rights embrace digital versions (online and in CD-ROM form). The principal complicating factor is that in most such cases the contract was made before the new technology was even known, let alone commercially widespread, so that it is something of a fiction to describe contract interpretation as a search for the parties’ “intentions.”

The court decisions (placing weight more on contract analysis than analysis of the Copyright Act) do not form a consistent pattern: some courts emphasize the lack of awareness of the new technology and the obligation of the drafter (usually the large media company) to make its intentions clear;<ref name="ftn160">''E.g''., Cohen v. Paramount Pictures Corp., 845 F.2d 851 (9th Cir. 1988) (music incorporated in motion picture, later distributed in videocassettes).</ref> other courts emphasize that new technologies will ordinarily be facilitated through a contract presumption favoring transfer of rights.<ref name="ftn161">''E.g.'', Boosey & Hawkes Music Publishers, Ltd. v. Walt Disney Co., 145 F.3d 481 (2d Cir. 1998) (Stravinsky’s transfer of music rights for Disney film ''Fantasia'', later distributed in videocassettes) (relying on Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150 (2d Cir. 1968)).</ref> Most recently, book publishers have been found not to have taken transfers of the right to publish in the form of electronic books, so that several major authors were held to have acted lawfully when conveying “e-Book” rights to digital publishers.<ref name="ftn162">Random House, Inc. v. Rosetta Books, L.L.C., 150 F. Supp. 2d 613 (S.D.N.Y.).</ref> And a similar result was reached (as explained immediately above) by the Supreme Court in ''New York Times Co. v. Tasini'',<ref name="ftn164">533 U.S. 483 (2001).</ref> when the Court interpreted section 201(c) of the Copyright Act to give to a freelance author, rather than to his or her newspaper or magazine publisher, the right to distribute articles online and on CD-ROM, in the absence of an express contract to the contrary.

==Termination of Transfers==

An unusual and important feature of the 1976 Copyright Act is its grant to the author or to the author’s survivors of the power to terminate transfers of copyright. It will be recalled that the principal purpose of the renewal provisions of earlier U.S. copyright statutes was to give to authors the power at the end of the initial term of copyright to reclaim the copyright for a second term free and clear of any earlier transfers or encumbrances, and to afford authors an opportunity to renegotiate assignments and licenses with a better knowledge of the economic value of their works. It will also be recalled that the renewal right has been abolished for works created or first published on or after January 1, 1978, the term of copyright protection of which is now the life of the author plus 70 years. If, for example, a work is created in 1979 and the author transfers copyright in 1980, that copyright might continue— depending on when the author dies—for another 75 or 125 years, without any renewal term that can restore an unencumbered copyright to the author.

Congress therefore decided to grant to authors and their survivors a power to recapture the copyright, similar to the right to claim the renewal copyright provided under the 1909 Act and its predecessors. The very elaborate provisions for the termination of transfers of copyright are set forth in section 203. Given the background just recounted, the power to terminate under section 203 applies only to copyright transfers (and licenses), whether exclusive or nonexclusive, executed by the author on or after January 1, 1978. By serving a timely notice of termination, the author may effect such a termination—and recapture an unencumbered copyright—“at any time during a period of five years beginning at the end of thirty-five years from the date of execution of the grant.” Mindful of the controversial Supreme Court decision that held that the author could, during the initial term of copyright, validly transfer his interest in the renewal term, Congress provided to the contrary in section 203(a)(5) with regard to the power to terminate transfers: “Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.”<ref name="ftn165">The Court of Appeals for the Second Circuit held that, when an agreement settling a dispute about copyright ownership stipulated that the work had been “made for hire” many years before, this constituted an “agreement to the contrary” (because the termination power does not apply at all to works made for hire) and thus did not validly extinguish the author’s termination power. Marvel Characters, Inc. v. Simon, 310 F.3d 280 (2d Cir. 2002). ''But compare'' Milne ''ex rel.'' Coyne v. Stephen Slesinger, Inc., 430 F.3d 1036 (9th Cir. 2005) (1983 renegotiation by author’s heir revokes 1930 grant of Winnie the Pooh merchandising rights, and so deprives later heir of termination right under section 304(d) governing pre-1978 transfers).</ref> Although the termination power is inalienable, it must be exercised in a timely manner, through the proper procedures, and by the proper persons announced in the statute; the transfer is not terminated automatically when 35 years have passed.

Section 203 is detailed and complex, but its main points can be summarized here. The termination power does not apply to works made for hire, and it applies only to ''inter vivos'' grants made by the author (not by the author’s will, and not by the author’s widow, widower or children). If the notice of termination is to be served after the author’s death, then the author’s surviving family members may terminate the author’s earlier grant, provided they can amass more than one half of the author’s termination interest as calculated pursuant to a statutory formula (e.g., the author’s widow would own one half of such termination interest, and each of three surviving children one sixth). Particularly significant is the provision, in section 203(b)(1), that

{{Quote|A derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination, but this privilege does not extend to the preparation after the termination of other derivative works based upon the copyrighted work covered by the terminated grant.}}

Thus, the copyright is not necessarily returned to the author or family altogether unencumbered. For example, assume that our hypothetical novelist transferred in 1980 an exclusive license to base a motion picture on his novel, the motion picture is released in 1985, and the author terminates his transfer effective 2015. The motion picture producer (or its successor as copyright owner in 2015) may continue to exhibit and distribute the film thereafter, pursuant to the terms of the 1980 license. But the film producer may not after 2015 remake the film with a new cast; that would be an infringement of the author’s recaptured copyright.

It is appropriate at this point to mention that the statute contains a different provision for termination of transfers of copyright that were made ''prior'' ''to'' January 1, 1978. Recall that Congress, in enacting the 1976 Copyright Act, provided that works then in statutory copyright would have their term of renewal automatically extended from 28 years to 47 years (resulting in a total of 75 years of protection). Prior to the effective date of the statute, many persons had already transferred their renewal interests to third persons, with both parties believing that the renewal term would last for only 28 years. When Congress added 19 years to the renewal term, effective January 1, 1978, it also decided that persons who had previously transferred their renewal interests should be allowed to recapture those transfers at the end of 56 years from the initial date of copyright, so that the statutory “windfall” of the additional 19 years could be enjoyed by the author or the author’s survivors, rather than by the then current owner of the renewal term.

Section 304(c) therefore provides that “in the case of any copyright subsisting in either its first or renewal term on January 1, 1978, other than a copyright in a work made for hire, the exclusive or nonexclusive grant of a transfer or license of the renewal copyright or any right under it, executed before January 1, 1978”—by the author or by any of the statutory successors to the renewal term under the 1909 Act, otherwise than by will—is subject to termination, effective 56 years from the date copyright was originally secured. The details regarding the serving of notice, the persons entitled to do so, the inalienable but nonautomatic nature of the termination right, and the like are essentially identical to those provided in section 203 for transfers made ''after'' January 1, 1978.

When Congress in 1998 added 20 years to the various copyright terms, it once again decided to address the issue of persons who had transferred renewal interests prior to January 1, 1978, because neither such a transferor nor his or her transferee could have at that time foreseen the extension of the renewal term from 28 years to what is now 67 years. Accordingly, section 304(d) provides that such a renewal-term transfer may be terminated (provided there has been no earlier termination and recapture of the 19-year addition) in the same manner, by the same class of persons, and with the same consequences as under section 304(c), effective during the five-year period beginning at the end of 75 years from the beginning of the copyright term.<ref name="ftn166">''See'' ''Milne'', 430 F.3d 1036 (1983 agreement with author’s heir displaced author’s 1930 transfer, so that neither could be terminated under section 304(d)).</ref>

In 1985 a divided Supreme Court rendered a controversial decision regarding the language in sections 203 and 304 that provides that when a copyright transfer is terminated, derivative works lawfully prepared under contract prior to termination may continue to be utilized after termination. In ''Mills Music, Inc. v. Snyder'',<ref>469 U.S. 153 (1985).</ref> simplifying the facts slightly, a songwriter conveyed his interest in the initial and renewal terms of copyright to a music publisher, prior to January 1, 1978; the publisher in turn entered into licenses for the manufacture of phonograph records and tapes of the song, with the license fees to be paid half to the publishing company and half to the songwriter. When the songwriter’s widow validly terminated the transfer of the latter part of the copyright renewal term, effective 56 years from the date of initial copyright, there was no doubt that the recording company could lawfully continue to manufacture and distribute recordings of the song. The question that remained was whether the termination entitled the widow to 100% of the recording royalties or whether the publishing company (no longer the copyright owner) remained entitled to 50% of those royalties. The Court majority held that the publishing company could continue to collect 50% of the recording royalties “under the terms of the grant after its termination,” in the language of the statute.

==References==
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	The provisions of the Copyright Act that deal with the ownership of copyright are for the most part straightforward. They declare that the author of a work is the initial copyright owner; that joint authors are co-owners of copyright; that the employer in the case of a work made for hire is considered the author and is presumed to be the copyright owner; that copyright ownership of a contribution to a collective work is different from the copyright ownership of the collective work itself; that copyright may be transferred in whole or in part; and that copyright ownership is distinct from ownership of the physical object in which the copyrighted work is embodied (a distinction discussed at [[Copyright Law#History and Background\|History and Background]]).<ref name="ftn140">17 U.S.C. §§ 201, 202.</ref> What remains is to explicate these principles and also to consider the somewhat unusual provision of the Copyright Act that gives to an author who has transferred the copyright the power to terminate that transfer and recapture the copyright.		The provisions of the Copyright Act that deal with the ownership of copyright are for the most part straightforward. They declare that the author of a work is the initial copyright owner; that joint authors are co-owners of copyright; that the employer in the case of a work made for hire is considered the author and is presumed to be the copyright owner; that copyright ownership of a contribution to a collective work is different from the copyright ownership of the collective work itself; that copyright may be transferred in whole or in part; and that copyright ownership is distinct from ownership of the physical object in which the copyrighted work is embodied (a distinction discussed at [[Copyright Law#History and Background\|History and Background]]).<ref name="ftn140">17 U.S.C. §§ 201, 202.</ref> What remains is to explicate these principles and also to consider the somewhat unusual provision of the Copyright Act that gives to an author who has transferred the copyright the power to terminate that transfer and recapture the copyright.