Recordation of Notices of Termination of Transfers and Licenses; Clarifications, 12554-12556 [E9-6649]

Agencies

• Library of Congress
• Copyright Office
• Copyright Office, Library of Congress

[Federal Register Volume 74, Number 56 (Wednesday, March 25, 2009)]
[Rules and Regulations]
[Pages 12554-12556]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-6649]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201

[Docket No. RM 2008-1]


Recordation of Notices of Termination of Transfers and Licenses; 
Clarifications

AGENCY: Copyright Office, Library of Congress.

ACTION: Final rule.

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SUMMARY: The Copyright Office is adopting amendments to its regulations 
governing the recordation of notices of termination and certain related 
provisions.

DATES: EFFECTIVE DATE: March 25, 2009.

FOR FURTHER INFORMATION CONTACT: Maria Pallante, Associate Register for 
Policy and International Affairs, Copyright GC/I&R, P.O. Box 70400, 
Washington, DC 20024-0400. Telephone (202) 707-8380. Fax (202) 707-
8366.

SUPPLEMENTARY INFORMATION: The Office published a Notice of Proposed 
Rulemaking in the Federal Register on January 23, 2008 (73 FR 3898), 
seeking public comment on five proposed amendments to its regulations 
at Sec.  Sec.  201.1, 201.3, 201.4 and 201.10 of Chapter 37. These 
were: 1) an amendment communicating the Office's practices as to its 
receipt of notices of termination that are untimely; 2) an amendment 
clarifying that recordation of a notice of termination by the Office 
does not necessarily mean that the document is legally sufficient; 3) 
an amendment updating the legibility requirements for all recorded 
documents, including notices of termination; 4) an amendment making 
minor explanatory edits to the fee schedule for multiple titles within 
a document (adding ``e.g. a Notice of Termination'' as an example); and 
5) an amendment establishing a new mailing address to which notices of 
termination should be sent. (For ease of explanation only, the 
amendments are herein referred to as amendments one through five.)
    The Office received two comments, each on February 22, 2008, from 
Law Professor Daniel N. Ballard, University of the Pacific McGeorge 
School of Law, and from Terrie Bjorkland on behalf of the American 
Federation of Television and Radio Artists (AFTRA). Both commentators 
questioned the basis for, and the likely impact of, amendment number 
two. Mr. Ballard first suggested that there is no justification for the 
proposed language, and second suggested that rather than being neutral 
on its face, the language, as worded, might create ``an improper bias 
against the termination of copyright interests.'' Ms. Bjorkland 
observed that the proposal emphasizes the inconclusive impact of the 
filing of a notice, doing ``little to give artists a sense of comfort 
that the Copyright Office is facilitating the protection of their right 
of termination.'' In addition, she expressed opposition to amendment 
number one, questioning why the Office should make a determination that 
a notice is untimely, when ``it is incumbent upon the challenging party 
to contest the validity of the notice, if appropriate.'' After 
considering these comments, the Office is adopting all of the 
aforementioned amendments, but in doing so is rephrasing amendment 
number two.

Background

    The Copyright Office is an office of public record which receives 
and records documents that pertain to copyright, including, 
specifically, notices of termination. Notices of termination may be 
served by authors (and certain heirs, beneficiaries or representatives 
of authors who are specified by statute) to extinguish the exclusive or 
nonexclusive grants of transfers or licenses of copyright or the 
divisible rights thereunder. The provisions have an equitable function: 
they exist to allow authors or their heirs a second opportunity to 
share in the economic success of their works.
    The termination provisions are set forth in three sections of the 
law: Sections 304(c), 304(d) and 203 of the 1976 Copyright Act, Title 
17 of the United States Code. The sections are similar, though not 
identical, and they govern distinct categories of works. (None of the 
sections applies to copyrights in works made for hire or grants made by 
will.)
    Section 304(c) governs any work in which the copyright was 
subsisting in its first or renewal term as of January 1, 1978, and 
provides for termination of the exclusive or nonexclusive grant of a 
transfer or license of the renewal copyright (or any right under it) 
executed before January 1, 1978. Termination may be exercised at any 
time during a five year period beginning at the end of fifty-six years 
from the date copyright was originally secured.
    Section 304(d) provides a termination right for a subset of works 
for which the termination right under section 304(c) expired (and was 
not exercised) on or before the effective date (October 27, 1998) of 
the ``Sonny Bono Copyright Term Extension Act,'' which extended the 
copyright term by 20 years. It provides for termination of the 
exclusive or nonexclusive grant of a transfer or license of the renewal 
copyright (or any right under it) at any time during a five year period 
beginning at the end of 75 years from the date copyright was originally 
secured.
    Section 203 is limited to grants executed by the author. It 
provides for termination of the exclusive or nonexclusive grant of 
copyright (or any right under copyright) executed on or after January 
1, 1978 (regardless of whether the copyright was secured prior to 
1978). Termination may be exercised at any time during a period of five 
years beginning at the end of thirty-five years

[[Page 12555]]

from the date of publication of the work under the grant or at the end 
of forty years from the date of execution of the grant, whichever is 
earlier.
    By all accounts, the termination provisions are dense and 
formalistic, particularly for a non-lawyer. In summary, the author (or 
if the author is deceased, the party specified by statute) must serve 
the notice of termination in writing on a grantee or the grantee's 
successor-in-title not less than two or more than ten years before the 
effective date, in a form and manner prescribed by regulation.\1\
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    \1\If the author executed the grant but is no longer living, the 
termination interest is owned and may be exercised by the author's 
widow or widower and any children or grandchildren on a per stirpes 
basis (subject to certain conditions concerning the disposition of 
partial interests of multiple authors and heirs), or if the 
aforementioned are deceased, by the author' executor, administrator, 
personal representative, or trustee. 17 U.S.C. 203(a)(1)-(2); 17 
U.S.C. 304 (c)(1)-(2); 17 U.S.C. 304(d)(1). Moreover, under Sections 
304(c) and 304 (d), if the author is no longer living and the grant 
has been executed by one or more persons designated by statute, 
termination may be exercised by the surviving person or persons who 
executed it. 17 U.S.C. 304(c); 17U.S.C. 304(d); 17 U.S.C. 
304(a)(1)(c). Note that this is not true of Section 203, which 
applies only to grants executed by authors. 17 U.S.C. 203(a).
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    A copy of the notice of termination must be recorded with the 
Copyright Office before the effective date of termination. 17 U.S.C. 
304(c)(4)(A); 304(d)(1); 203(a)(4)(A). (Emphasis added.) The 
particulars of the recordation process are prescribed by regulation. In 
short, the copy must be legible and must include the following 
elements: 1) either actual signatures or reproductions of signatures 2) 
a statement setting forth the date the notice was served 3) an 
indication of the manner of service and 4) submission of the 
appropriate filing fee. 37 CFR 201.4(c)(3); 37 CFR 201.10(f).
    A discussion of the amendments follows.

DISCUSSION OF PROPOSED AMENDMENTS

Timeliness of Notices of Termination

    The Copyright Office cannot accept a notice of termination that is 
untimely because, under the law, lateness is a fatal mistake. (By 
contrast, see 37 CFR 201.10(e) for examples of forgivable, harmless 
errors.) Thus, before the Copyright Office records a notice, it reviews 
for timeliness. Specifically, it confirms that the notice has been 
served within the relevant statutory time frame (as derived from the 
facts stated in the notice), and has been received by the Office prior 
to the stated effective date of termination.
    In practice, if in the judgment of the Office the document is 
untimely, the Office will take one of two actions. If the notice is 
premature, the Office will return it with an explanation, so that the 
serving party may resubmit the notice to the Office at a later date 
(and, as necessary, resubmit the notice to the party being served). On 
the other hand, if the document is tardy, the Office will offer only to 
record and index the document according to its general recordation 
practices, as a ``document pertaining to copyright.'' 17 U.S.C. 205(a); 
37 CFR 201.4(a)(2). It will not accept the document as a ``notice of 
termination,'' meaning that it will not be specially indexed as such. 
Whether such general recordation by the Copyright Office will be 
sufficient in any particular instance to effect termination as a matter 
of law is an issue that only the courts may resolve.
    Notwithstanding the objection expressed by AFTRA with respect to 
amendment one, the Office's practice is consistent with the statute. 
Moreover, since the amendment restates the longstanding practice of the 
Office (i.e. it does not introduce a new practice), the Office 
maintains that the amendment is merely educative, and may prove helpful 
to interested parties who are looking for guidance.

Recordation as Distinguished from Legal Sufficiency

    Under amendment two, the Office states a truism: the fact that the 
Office has accepted a document and recorded it as a notice of 
termination does not mean, necessarily, that the notice is sufficient 
to effect termination under the law. As proposed in the Notice of 
Proposed Rulemaking, the following sentence would have been introduced 
at the top of the paragraph: ``The mere fact that a notice of 
termination has been recorded does not mean that it is legally 
sufficient.'' The remainder of the paragraph would have followed and 
remained unchanged: ``Recordation of a notice of termination by the 
Copyright Office is without prejudice to any party claiming that the 
legal and formal requirements for issuing a valid notice have not been 
met.''
    On this issue, the Office does not find the stated concerns of the 
commentators to be entirely plausible. Recordation is a required act 
under the law but, once completed, it carries no legal presumption that 
termination has been properly effected. If authors or their 
representatives believe otherwise, it is all the more important that 
this fact be clearly and accurately stated. The reality is that the 
Office, aside from its review for timeliness (discussed above), does 
not confirm the validity of the alleged facts that are reported in each 
notice. To do so would be an impossible exercise. This means that the 
Office may accept and record a notice of termination even though any 
number of elements may ultimately prove to be wrongly stated and 
invalid under the law, from the named authors, to the designation of 
beneficiaries, to the date or characterization of the grant. In 
instances where termination has not been perfected in the first place, 
recordation of the notice is of no consequence. The proposed amendment 
would not have changed this result --- only confirmed it for clarity's 
sake.
    Nevertheless, the Office is not wedded to the particular 
formulation of the point as originally proposed. In his comments, Mr. 
Ballard objected, in particular, to use of the phrase ``mere fact,'' 
which he saw as ``loaded language'' that would, in practice, undermine 
the termination process by favoring grantees over authors. In response, 
the Office has removed ``mere fact'' and constructed a new formulation, 
which in part repeats the operative language of the statute. It reads 
as follows: ``A copy of the notice of termination shall be recorded in 
the Copyright Office before the effective date of termination, as a 
condition to its taking effect. However, the fact that the Office has 
recorded the notice does not mean that it is otherwise sufficient under 
the law.'' The existing sentence will follow: ``Recordation of a notice 
of termination by the Copyright Office is without prejudice to any 
party claiming that the legal and formal requirements for issuing a 
valid notice have not been met.''

Legibility of Notices of Termination and Other Documents Pertaining to 
Copyright

    Amendment three is relatively minor, but nonetheless underscores 
the mission of the Copyright Office as an office of public record. It 
updates the legibility requirement by replacing the reference to 
``microform copies'' with a broader, more flexible reference to 
technology. As revised, a document must be ``legible and capable of 
being imaged or otherwise reproduced in legible copies by the 
technology employed by the Office at the time of submission.'' 
(Emphasis added.) The Office received no objections to this revision.

Fee Requirements for Notices of Termination

    With respect to fees, it is the Copyright Office' experience that 
parties who submit notices of termination for recordation sometimes 
miscalculate the amount due, especially where grants of rights in 
multiple works are being

[[Page 12556]]

terminated by virtue of one document. Amendment four adds the notice of 
termination as an express example in the schedule of fees under section 
201.3(c)(16), specifying that the basic fee for recordation of a notice 
of termination containing a single title is $95, and the fee for 
recordation of a notice of termination containing more than one title 
is an additional $25 per group of 10 titles. The Office received no 
objections to this revision.

Mailing Address for Notices of Termination

    Finally, because notices of termination are time-sensitive, a delay 
in processing may have serious consequences. Amendment five officially 
activates the special post office box at the Copyright Office, from 
which notices of termination can more easily be sorted and routed for 
recordation. This revision also deletes the address for the now-defunct 
Copyright Arbitration Royalty Panel (CARP). See 72 FR 45071 (August 10, 
2007). The Office received no objections to this revision.

List of Subjects in 37 CFR Part 201

    Copyright.

Final Regulations

    For the reasons set forth above, the Copyright Office amends part 
201 of title 37 of the Code of Federal Regulations as follows:

PART 201 - GENERAL PROVISIONS

0
1.The authority citation for part 201 continues to read as follows:

    Authority: 17 U.S.C. 702.

0
2.Section 201.1 is amended by revising paragraph (b)(2) to read as 
follows:

Sec.  201.1 Communication with the Copyright Office.

* * * * *
    (b)* * *
    (2)Notices of Termination. Notices of termination submitted for 
recordation should be mailed to Copyright Office, Notices of 
Termination, P.O. Box 71537, Washington, DC 20024-1537.

Sec.  201.3 [Amended]

0
3.Amend Sec.  201.3(c)(16) by removing the phrase, ``Recordation of 
document, including a Notice of Intent to Enforce (NIE) (single 
title),'' and adding in its place the phrase ``Recordation of document 
(single title), e.g. a Notice of Termination or a Notice of Intent to 
Enforce (NIE)''.
0
4.Amend Sec.  201.4 by revising paragraph (c)(3) to read as follows:

Sec.  201.4 Recordation of transfers and certain other documents.

* * * * *
    (c)* * *
    (3)To be recordable, the document must be legible and capable of 
being imaged or otherwise reproduced in legible copies by the 
technology employed by the Office at the time of submission.
* * * * *
0
5.

    Section 201.10(f) is amended as follows:a. By adding paragraph 
(f)(1)(iii);
    b. By redesignating paragraph (f)(4) as (f)(5);
    c. By adding a new paragraph (f)(4);
    d. By revising redesignated paragraph (f)(5); and
    e. By adding paragraph (f) (6).
    The revisions and additions to Sec.  201.10 read as follows:

Sec.  201.10 Notices of termination of transfers and licenses.

* * * * *
    (f)* * *
    (1)* * *
    (iii)The copy submitted for recordation must be legible per the 
requirements of Sec.  201.4(c)(3).
* * * * *
    (4)Notwithstanding anything to the contrary in this section, the 
Copyright Office reserves the right to refuse recordation of a notice 
of termination if, in the judgment of the Copyright Office, such notice 
of termination is untimely. If a document is submitted as a notice of 
termination after the statutory deadline has expired, the Office will 
offer to record the document as a ``document pertaining to copyright'' 
pursuant to Sec.  201.4(c)(3), but the Office will not index the 
document as a notice of termination. Whether a document so recorded is 
sufficient in any instance to effect termination as a matter of law 
shall be determined by a court of competent jurisdiction.
    (5)A copy of the notice of termination shall be recorded in the 
Copyright Office before the effective date of termination, as a 
condition to its taking effect. However, the fact that the Office has 
recorded the notice does not mean that it is otherwise sufficient under 
the law. Recordation of a notice of termination by the Copyright Office 
is without prejudice to any party claiming that the legal and formal 
requirements for issuing a valid notice have not been met.
    (6)Notices of termination should be submitted to the address 
specified in Sec.  201.1(b)(2).

    Dated: March 16, 2009
Marybeth Peters,
Register of Copyrights.
    Approved by:
James H. Billington,
The Librarian of Congress.
[FR Doc. E9-6649 Filed 3-24-09; 8:45 am]
BILLING CODE 1410-30-S