The Next Big Copyright Fight

Spiderman ImageThe Aereo ruling is out and the fallout is still being settled. Over the next few months and years, we’ll get a glimpse at how other courts interpret the ruling and get a handle on the practical impacts of the decision on other companies and technologies.

However, copyright watchers are already wondering what will be the next big Supreme Court battle in the subject. On that front, there’s no shortage of topics of interest. In fact, the House Judiciary Committee is currently doing an evaluation of the entirety of copyright law in the U.S., looking for possible areas that might be ripe for changes and updates.

But the next likely big copyright fight in the Supreme Court is likely to be something different. In fact, at its core it isn’t a copyright issue at all, but one about employment, contracts and who owns the work after it is created.

The issue is copyright termination and it’s not only been the subject of a slew of lower court rulings and earlier settlements, but already has at least two cases on appeal to the Supreme Court already.

The interest and opportunity is there, all that remains to be seen is when and if the Supreme Court will take it up.

The Basics of Copyright Termination

For a more thorough explanation of the issue, check out my previous article on the topic. However, the principle is fairly simple, under the Copyright Act of 1976, which took effect in 1978, a creator has the right to terminate an agreement or transfer of their work after a certain number of years.

That number of years is 56 years for works created before 1978 and 35 for those created after. That means those taking advantage of the 35 year term could first terminate their rights in 2013 with new rights coming available for termination every year thereafter. Creators have a ten-year window with which to file notices of termination and many have lined up to do just that.

However, this is a wrinkle in copyright termination. It doesn’t apply to works made for hire. This means that, even with copyright termination, a creator who was an employee at the time of the work’s creation or otherwise met the obligations of a work for hire is not eligible to terminate or alter their agreement.

The problem is that many older creations were made before the Copyright Act of 1976, which spelled out the requirements for a work for hire and it’s unclear if the creations qualify as such. Even in may of the works created after, it’s unclear if the relationship between creator and rightsholder is that of a work for hire or just a mere license.

This has resulted in a massive fight over copyright termination and one that has spread across industries.

Music, Comics and More

Much of the initial focus on copyright termination was paid to the music industry. The core issue there is whether master recordings are works for hire or creations linseed by the creator to the label. Labels argue the former, musicians have argued the latter and multiple lawsuits have erupted over it.

In 2000, there was a failed attempt to add sound recordings to the “Work for Hire” clause in the copyright code but, even without that specific language, the record labels feel confident that the law is on their side. The courts, for the most part, seem to back up that notion.

Earlier this year, musician Geroge Clinton lost a key around over the rights to three of his songs. Though the dispute was over a debt and not copyright termination itself, the judge ruled that the songs were originally works for hire and, thus, could be forcibly transferred away from Clinton to settle an outstanding bill.

However, that ruling hinged largely upon the specifics of Clinton’s situation, as have the other rulings, making not necessarily an indication of future cases.

A similar war is under way in the comic book industry where the estates of Jack Kirby, creator of X-Men, Spider-Man and more, and the estate of Joe Shuster, a co-creator of Superman, have both petitioned the Supreme Court to overturn lower court rulings that went against them in their copyright termination fights.

The Kirby estate in particular has seen strong support, including several Hollywood guilds, who have petitioned the court to take the case.

These cases could have huge impacts not just on the comic book industry, but the film industry as well. Not only are suprehero movies among the most popular films distributed, but it could pave the way for others authors to reclaim rights to the works that were made into films.

In short, billions of dollars worth of rights are possibly at stake and the Supreme Court has been silent on the issue but that may change soon enough. If not with the Kirby and/or Shuster case, with any of the other lawsuits that are pending.

Why The Issue?

At first blush, this whole dustup over copyright termination might seem a bit odd. After all, shouldn’t an artist, author, actor, performer, etc. know whether the work is for hire or not? In an ideal world, there would be no question.

In most cases there is no such question. But the record industry an the comic book industry are both rare examples of work environments that were anything but what the copyright act envisioned.

Both industries, especially in decades gone past, are known for allowing a great deal of creative control to their creators. Though record studios advance money to record albums and guide the process, in most cases, it’s the artist who is in the lead of the creative process. Likewise, the comic industry grew based on giving authors and artists independence, as is cited in some of the Kirby briefs.

But what these fields have in common is that they tend to be somewhat in between the traditional idea of what is a work for hire and what is a creative work licensed by a third party. Book publishing, for example, tends to operate clearly in one of two fields, either publishing companies with in-house authors or publishing contracts indicate it is not a work for hire.

As such, the book publishing industry has had a lot fewer high-profile legal wars over copyright termination.

The other issue that has drawn this matter to the record and comic book industry has been the nature of those industries themselves. Both are heavily reliant on a lucrative back catalogues of intellectual property. Whether it’s songs or characters, older content in these industries is still very lucrative and can be licensed, distributed and otherwise profited from with ease.

While every industry has its classics that are remain gold mines decades later, for other fields its fewer and farther between, certainly less core to the business model.

Still, any copyright termination ruling at the Supreme Court level would determine the fate of billions of dollars worth of intellectual property. Even a narrow ruling could provide clear guidance to other, similar cases, possibly creating an unforeseen domino effect.

In short, if the Supreme Court does take the issue, it’s impact will be great, even if it doesn’t intend it to be.

Bottom Line

Though this storm has technically been brewing since the Copyright Act of 1976 took effect, it’s become especially serious in the past 5 years. Due to the bizarre nature of pre-1972 sound recordings, the first sound recordings became eligible for termination in 2013.

Couple that with the fact that comic book creations from the 50s and 60s are just now becoming eligible for termination rights and you have a potent mix.

While this may not be the most public battle and its impact will likely not be very consumer-facing compared to Aereo, which shut down a popular TV viewing service, it could drastically impact copyright for decades to come, in particular relationships between creators and rightsholders.

While it’s hard to say when this issue will reach the Supreme Court or in what form, given the number of lawsuits, the value of what’s at stake and the almost unlimited number of scenarios playing out, it seems almost guaranteed it will at some point.

In short, the next copyright fight will be the current one, but it’s the one that hasn’t been making the headlines of Aereo and its counterparts over the past few years.

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