Gap in Termination Provisions, 32316-32321 [2011-13845]

Agencies

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

[Federal Register Volume 76, Number 108 (Monday, June 6, 2011)]
[Rules and Regulations]
[Pages 32316-32321]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-13845]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201

[Docket No. RM 2010-5]


Gap in Termination Provisions

AGENCY: Copyright Office, Library of Congress.

ACTION: Final rule.

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SUMMARY: The Copyright Office is amending its regulations governing 
notices of termination of certain grants of transfers and licenses of 
copyright under section 203 of the Copyright Act. The amendments are 
intended to clarify the recordation practices of the Copyright Office 
regarding the content of certain notices of termination, and the 
circumstances under which such notices will be accepted by the Office. 
In particular, they clarify that the Copyright Office will record 
section 203 notices of termination of grants for works created after 
1977 even when the agreement to make a grant was made before 1978.

DATES: Effective Date: June 6, 2011.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, P.O. 
Box 70400, Washington, DC 20024. Telephone: (202) 707-8380. Telefax: 
(202) 707-8366. All prior Federal Register notices and public comments 
in this docket and a related inquiry are available at https://www.copyright.gov/docs/termination.

SUPPLEMENTARY INFORMATION:

Background

    The Copyright Act gives authors (and some heirs, beneficiaries and 
representatives who are specified by statute) the right to terminate 
certain grants of transfers or licenses within the time frames set 
forth in the statute and subject to the execution of certain conditions 
precedent. Termination rights (also referred to as ``recapture 
rights'') are equitable accommodations under the law. They allow 
authors or their heirs a second opportunity to share in the economic 
success of their works. These termination rights are codified in 
sections 203, 304(c), 304(d) and 203 of Title 17 of the United States 
Code. They do not apply to copyrights in works made for hire or grants 
made by will. Sections 304(c) and 304(d) establish termination rights 
for works that had subsisting copyrights on January 1, 1978, the 
effective date of the 1976 Copyright Act. Section 203, which is the 
subject of this rulemaking, establishes termination rights for works 
subject to grants of transfers or licenses made on or after the 
effective date of the 1976 Copyright Act, but only to the extent they 
were executed by the author.
    The current rulemaking addresses a narrow fact pattern that was 
also the subject of a related notice of inquiry published March 29, 
2010. (75 FR 15390). Through the notice of inquiry, the Office sought 
comments as to whether or how the termination provisions apply in 
circumstances where an author agreed to make a grant prior to January 
1, 1978, but the work in question was created on or after January 1, 
1978--circumstances raised by some authors and songwriters and their 
representatives in discussions with the Copyright Office and some 
congressional offices. Such grants are sometimes called ``Gap Grants'' 
in light of a perception that in creating the section 304 termination 
process and the section 203 termination process, as described above, 
Congress may have created a ``gap'' by failing to address circumstances 
in which authors (or would-be authors) agreed to make grants 
prospectively, before January 1, 1978, for works they did not create 
until on or after that date.
    In response to the Notice of Inquiry seeking comments on the so-
called ``gap,'' the Copyright Office received sixteen initial comments 
and nine reply comments. These comments are available online on the 
Copyright Office Web site, at https://www.copyright.gov/docs/termination/. Most concluded that the termination right provided in 
section 203 of the Copyright Act is applicable to Gap Grants as 
currently codified, reasoning that a grant is not fully executed under 
the law until the relevant work has been created. Multiple commenters 
expanded on this point, observing, in turn, that there can be no 
author, no copyright interest and no grant of copyright under Title 17 
until there is first a work of authorship. One comment, however, urged 
caution, questioning whether, at least in the case of written grants, 
Congress intended the date of execution for the purposes of section 203 
to mean the date the grant was signed. This view could not apply to 
grants made orally, but it would mean section 203 cannot apply to any 
fact patterns in which grants are executed in writing and signed prior 
to January 1, 1978.
    Based on the comments received and its own analysis, the Copyright 
Office concluded that the better interpretation of the law is that Gap 
Grants are terminable under section 203, as currently codified, because 
as a matter of copyright law, a transfer that predates the existence of 
the copyrighted work cannot be effective (and therefore cannot be 
``executed'') until the work of authorship (and the copyright) come 
into existence. In arriving at this conclusion, the Copyright Office 
looked at the plain meaning of Title 17, including section 203, as well 
as the legislative history of the termination provisions. It also 
considered transfer of copyrights and renewal rights under common law, 
prior to enactment of the termination provisions. See Analysis of Gap 
Grants Under the Termination

[[Page 32317]]

Provisions of Title 17 (December 7, 2010), available at https://www.copyright.gov/reports/gap-grant%20analysis.pdf (hereinafter the 
``December Analysis'').
    In the December Analysis, the Copyright Office also concluded that 
legislation to clarify the statute would be beneficial, not only to 
better achieve the policy objectives for book authors, songwriters and 
other intended beneficiaries of the provision, but in order to provide 
confidence and certainty for publishers and other grantees with respect 
to copyright title, transfers and licensing transactions in the 
marketplace. Id. And the Office acknowledged that its own recordation 
practices required clarification, so that stakeholders would know 
whether and how to timely record termination notices pertaining to gap 
grants. Id.
    The Office's recordation practices are the focus of the current 
rulemaking, initiated in a notice of proposed rulemaking published in 
November. 75 FR 72771 (November 26, 2010). In the notice of proposed 
rulemaking, the Office stated its current practices, which permit the 
recordation of a notice of termination under section 203 when the 
notice states that the grant was executed on a specified date that is 
on or after January 1, 1978. It observed that a person serving and 
submitting a notice of termination based on the rationale described 
above would be justified in including in the notice, as the date of 
execution of the grant, the date that the work was created, and that 
for purposes of clearly identifying the grant being terminated, it may 
be useful (in the case of written grants) also to state the date the 
grant was signed. Such recordation by the Office would be without 
prejudice as to how a court might ultimately rule on whether the 
document is a notice of termination within the scope of section 203. 
See 37 CFR 201.10(f)(5).
    The notice of proposed rulemaking sought comment on amendments to 
Copyright Office regulations that would clarify that, consistent with 
existing recordation practices, the Office reserves the right to refuse 
a document for recordation as a section 203 notice of termination if 
the date of execution of the grant, as reflected in the document 
submitted as a notice of termination, falls before January 1, 1978. The 
notice proposed an amendment to the existing regulations on notices of 
termination that would clarify certain circumstances under which, based 
on certain procedural failures drawn from the clear language of the 
Copyright Act, the Office will refuse to index as notices of 
termination documents submitted under section 203. These circumstances 
included a recital in a notice of termination of a date of execution of 
the grant that falls before January 1, 1978 (as discussed above), an 
effective date of termination that does not fall within the allowed 
statutory period (17 U.S.C. 203(a)(3)), improperly timed service of the 
notice of termination (17 U.S.C. 203(a)(4)(A)), or submission of 
documents for recordation as notice of termination on or after the 
effective date of termination (17 U.S.C. 203(a)(4)(A)).
    Specifically, the notice of proposed rulemaking proposed to amend 
Sec.  201.10(f)(4) of the Copyright Office regulations, which currently 
provides that 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, by adding the 
following language: ``Conditions under which a notice of termination 
will be considered untimely include: The date of execution stated 
therein does not fall on or after January 1, 1978, as required by 
section 203(a) of title 17, United States Code; the effective date of 
termination does not fall within the five-year period described in 
section 203(a)(3) of title 17, United States Code; or the documents 
submitted indicate that the notice of termination was served less than 
two or more than ten years before the effective date of termination.''
    The effect of the proposed amendment would have been that if a 
notice of termination of a Gap Grant provided, as the date of execution 
of the grant, a date on or after January 1, 1978, the Office would 
record the notice as a notice of termination under section 203. The 
Office would not question that date even if it knew that an agreement 
to grant the transfer or license was signed before January 1, 1978, 
since there would be legitimate grounds to conclude that the grant 
could not actually have been ``executed'' until the work that was the 
subject of the grant had been created.

Comments

    The Office received seven comments in response to the notice of 
proposed rulemaking. All of the commenters expressed support for the 
general proposition that the Office should record notices of 
termination of Gap Grants, although not all necessarily agreed that 
such notices actually meet the requirements for notices of termination 
under section 203.
    Most groups representing authors and performers who submitted 
comments generally supported the proposed rule, although some proposed 
more extensive regulation. The Future of Music Coalition characterized 
the proposal as ``an appropriate compromise to facilitate the notice of 
termination filing requirements for Gap Grants,'' but noted that ``this 
rulemaking is not a substitute for statutory clarification.'' It noted 
that under an approach that bases the date of execution of a grant upon 
the date the work was created, there may be difficulties in 
establishing the actual date of creation of the work and noted that an 
approach that considers the date of creation to be the date of 
execution would be less friendly to authors, especially when individual 
contracts apply to works created piecemeal or involve the transfer of 
multiple future works.
    In a jointly filed comment, The Authors Guild and the Songwriters 
Guild of America endorsed the Copyright Office's December Analysis as 
well as the proposed regulation, but suggested a further amendment that 
would affirmatively state that the Office will record notices of 
termination of Gap Grants under section 203. They proposed the 
following language: ``Notices of termination for works created on or 
after January 1, 1978, the grants of transfers and licenses of 
copyrights for which were entered into before January 1, 1978, will be 
accepted under section 203.''
    Attorney Casey del Casino's comment characterized the proposed 
regulation as ``an important step in addressing and attempting to 
correct what is clearly an oversight on the part of Congress with 
respect to so-called `gap works,' '' but noted that ``the use of the 
date of creation in the proposed rule change, while doctrinally sound, 
may in reality be problematic'' because the date of creation of a work 
is not always easy to ascertain, especially if the specific date of 
creation must be recited in the notice of termination. He suggested 
that the problem could be ameliorated if only the year of creation must 
be provided. Alternatively, he suggested that when the date of creation 
is unknown or unascertainable, it should be sufficient to provide the 
date of publication, a date which is generally easier to determine. 
Karyn Soroka of Soroka Music Ltd. offered a similar comment.
    Attorneys Michael Perlstein, Bill Gable and Kenneth Freundlich also 
expressed concern about practical difficulties likely to generate 
litigation if further clarification could not be achieved through 
legislation or ``best practices,'' noting that ``neither authors nor 
their grantees (e.g. publishing companies) were ever on notice that 
they needed to retain documents evidencing date of creation (as

[[Page 32318]]

distinguished from date of delivery, for example), and that even if 
such documents may once have existed neither party often will have 
preserved them.'' They therefore proposed guidelines that they 
characterized as ``author-friendly, consistent with legislative and 
judicial intent that authors and their heirs benefit from the 
termination statutes.'' These guidelines proposed a hierarchy of five 
criteria to be used to determine the date of execution of a grant, 
culminating in a default rule for unpublished works with no registered 
copyright and no author-provided proof of creation. In such cases, 
there would be a rebuttable presumption the work was created (which 
thereby executed the grant) on the statutorily fixed date of January 1, 
1978.
    Those representing grantees of rights also supported the Office's 
proposal to amend its regulations to make clear that the Office will 
record notices of termination of Gap Grants, but they sought additional 
amendments that they believe would make it clearer that recordation 
does not mean the notices are legally valid. In other words, they 
argued that the Office should take care to articulate that its 
acceptance and recordation of Gap Grants under section 203 is without 
prejudice to a court ruling that Gap Grants are not terminable as a 
matter of law.
    For example, the Software and Information Industry Association 
(SIIA) stated that the better practice would be for the Copyright 
Office to leave any merits-based evaluation to the courts and suggested 
that the amended regulation clarify that the Office's decision to 
record such terminations has been made simply to help preserve the 
filing party's rights, reserving the ultimate determination of the 
issue for the courts. While acknowledging that the Office has concluded 
that there are legitimate grounds to conclude that Gap Grants may be 
terminated under section 203 because they could not have been 
``executed'' before the works subject to the grants were actually 
created, SIIA requested that the amended regulation make clear that 
``there are also legitimate grounds to assert that in the case of a 
grant signed (or, in the case of an oral license, agreed to) before 
January 1, 1978 regarding rights in a work not created until January 1, 
1978 or later, such a grant was `executed' on the date such grant was 
signed and that the termination provisions of section 203 of Title 17 
do not apply to any such grants''; that ``the Copyright Office was not 
and is not making any merit-based evaluation of the arguments either 
way''; and that the regulation ``simply would act to help preserve the 
filing party's rights, reserving the ultimate determination of the 
issue for the courts.'' SIIA Comment at 2.
    The Recording Industry Association of America (RIAA) raised the 
same point as SIAA, as well as a finer point the Office had not 
previously considered. It observed that the proposed amendment would 
recite the Copyright Office's right to refuse to record a notice of 
termination if, in the judgment of the Office, the notice is untimely, 
but also would treat the recital by an author of the date of execution 
(in the notice of termination itself) as an issue relating to 
timeliness of the notice. As a result, the Office's act of recording a 
notice of termination of a Gap Grant could be construed as a judgment 
by the Office that the particular notice is timely. Having defined the 
issue of date of execution of the grant as an issue relating to 
timeliness of the notice, the effect of the regulation might be to give 
the Office's judgment as to timeliness in such cases greater weight 
than the Office intended.

Discussion

    The Copyright Office recognizes the practical concerns raised by 
some commenters with respect to establishing an effective date of 
execution based on the date of creation of a work. How does one recall 
and prove the date of creation, especially in the absence of supporting 
documentation? The task is obviously challenging, but it is not unique 
to Gap Grants and it is not new. For example, authors who wish to 
terminate oral agreements (grants of nonexclusive rights do not require 
a signed writing) must reconstruct dates from memory or supporting 
conduct or documentation. To be clear, the Copyright Office is not 
suggesting that requiring authors to reconstruct precise dates decades 
after the fact is an optimal policy solution; it is merely pointing out 
that the challenges exist irrespective of Gap Grant scenarios. Indeed, 
as noted in the December Analysis, the challenges will be ongoing for 
purposes of section 203. That is, in every instance where a grant of 
rights has been or will be made prospectively, whether in writing or 
orally, the author will need to determine the date of execution of the 
grant separately from the date the grant was initiated, in order to 
secure an effective date of termination. This would seem to be a 
particular problem for grants that did not or will not cover the 
publication right, although this too is not entirely clear. When the 
grant covers the publication right, section 203 allows for termination 
during a 5-year window commencing 35 years from publication or 40 years 
from the date of execution of the grant, whichever is sooner. Thus the 
question: can an author perform the statutory calculation if she cannot 
ascertain both a date of execution of the grant and (if the work was 
published) a publication date?
    The proposals of some commenters were aimed at simplifying the 
practical challenges noted above and providing guidance to authors and 
grantees alike for the sake of the marketplace. Consider, for example, 
the suggested hierarchy of five criteria to be used to determine the 
date of execution of a grant that was proposed by Mr. Perlstein, Mr. 
Gable and Mr. Freundlich (including the suggestion that the date of 
publication may be used as a proxy) and the year of creation solution 
proposed by Mr. del Casino. While these may be useful ideas, they beg 
some important questions: Does the Copyright Office have the authority 
to promulgate these kinds of solutions under its rulemaking authority? 
And if it does, are such regulations within the scope of the regulatory 
action that was proposed in the current rulemaking?
    Starting with the latter point, the current rulemaking sought 
comment on a proposal to make limited procedural revisions to existing 
Copyright Office regulations. These revisions would make clear that as 
long as the notice of termination identified the date of execution of 
the grant as a date on or after January 1, 1978, the Office would not 
refuse to record it for lack of timeliness. In explaining the reasons 
for the proposed regulatory amendment, the notice observed, consistent 
with many comments submitted in response to the March 2010 notice of 
inquiry, that ``there are legitimate grounds to assert that, in the 
case of a grant signed (or, in the case of an oral license, agreed to) 
before January 1, 1978 regarding rights in a work not created until 
January 1, 1978 or later, such a grant cannot be `executed' until the 
work exists.'' 75 FR 72772, (November 26, 2010). Therefore, ``[a] 
person serving and submitting a notice of termination based on the 
rationale described above would be justified in including in the 
notice, as the date of execution of the grant, the date that the work 
was created.'' Id. This is the rationale the Copyright Office later 
found to be persuasive and documented in its December Analysis.
    The Copyright Office notes that some of the alternative solutions 
proposed in some of the comments submitted by representatives of 
authors appear to go beyond the scope of the limited procedural rule 
governing recordation practice that was proposed in this rulemaking 
proceeding. Moreover, none

[[Page 32319]]

of the commenters who urged caution in response to the Office's 
proposal have had an opportunity to respond to the new proposals made 
in those comments. The Office concludes that to adopt a rule that goes 
beyond that which was proposed in the notice of proposed rulemaking 
would be beyond the scope of the current rulemaking and would require 
notice and opportunity for further comment by all interested parties. 
The Office does not wish to postpone the issuance of a final regulation 
in the current rulemaking, but is considering publishing a new notice 
of inquiry that will address the additional proposals.
    The Office also has questions regarding the scope of its regulatory 
authority to publish new proposals, practical solutions or alternatives 
to documenting the date of execution of the grant, even in instances 
when said date is elusive by reasonable standards and where many 
stakeholders would welcome guidance. As a general matter, the Copyright 
Office is authorized to issue regulations based upon existing law and 
the statutory grant of authority to establish regulations for the 
administration of the statutory functions and duties made the 
responsibility of the Office, such as the administration of a 
recordation program. See 17 U.S.C. 702. Moreover, the existing 
regulations, as well as the final regulation adopted today, follow 
Copyright Office practice with respect to the content of notices of 
termination. Since the Office first issued regulations governing 
notices of termination in 1977, the regulations have provided that a 
notice of termination must recite the relevant date used to calculate 
the period during which termination may be effected. See Final 
Regulation, Termination of Transfers and Licenses Covering Extended 
Renewal Term, 42 FR 45916, 45917 (September 13, 1977) (imposing 
requirement, for notices of termination under section 304(c), that 
notices recite the date copyright was secured because ``the period 
during which termination may be effected is measured from the date 
copyright was originally secured''). When the Office first proposed 
regulations governing notices of termination under section 203, it 
proposed that such notices include ``identification of the date of 
execution of the grant being terminated'' for the same reason. Notice 
of Proposed Rulemaking, Notice of Termination, 67 FR 77951, 77953 
(December 20, 2002). No one submitted comments in opposition to the 
proposed regulation, and the requirement was subsequently adopted in 
interim and final regulations. See Interim Rule, Notice of Termination, 
67 FR 78176 (December 23, 2002) and Final Regulation, Notice of 
Termination, 68 FR 16958 (April 8, 2003). This history notwithstanding, 
the Copyright Office does recognize that terminations effected under 
section 203 are only now ripe, meaning that they are possible for the 
first time as of January 1, 2013. This is not to say notices could not 
be filed sooner. Indeed, for grants entered into thirty-five years ago, 
during 1978, they could first be filed as of 2003, as early as 10 years 
prior to the earliest possible effective date. But we do allow for the 
fact that stakeholders are now focused on the issue to an increasing 
degree, as the actual effective dates for section 203 begin to loom.
    The Copyright Office also wishes to underscore that the existing 
regulations, and the regulation adopted today, do not provide that a 
notice of termination should identify the date of creation of the work. 
Rather, the regulation requires identification of the date of execution 
of the grant because for purposes of section 203, the date of execution 
is central to establishing the 5-year window, 35-40 years later, during 
which termination is permissible and may be effected. But, as noted 
above and in the Office's more extensive Analysis of Gap Grants Under 
the Termination Provisions of Title 17, the purpose of the regulation 
being adopted today is to permit recordation of a notice of termination 
of a Gap Grant when the terminating party recites, as the date of 
execution of the grant, the date the work was created. The notice of 
termination need not expressly recite that the work was created on a 
particular date (although it may do so). However, for purposes of 
establishing timeliness, it seems prudent, if not essential, that the 
notice recite a date of execution of the grant. This said, and as 
stated above, the Office is not unwilling to consider the issue more 
fully in a separate proceeding, which could address questions including 
whether current regulatory authority would allow the Office to publish 
practical solutions or alternatives to documenting the date of 
execution, for the sake of providing guidance to authors and grantees 
alike and for the sake of establishing clarity in the marketplace.
    The Office also believes the existing regulations on notices of 
termination offer some relief to terminating parties when they cannot 
precisely identify the date the work was created. Section 201.10 has, 
since it was first adopted in 1977, included a ``harmless error'' 
provision. That provision currently provides that ``errors made in 
giving the date or registration number referred to in paragraph 
(b)(1)(iii), (b)(2)(iii), or (b)(2)(iv) of this section * * * shall not 
affect the validity of the notice if the errors were made in good faith 
and without any intention to deceive, mislead, or conceal relevant 
information.'' 37 CFR 201.10(e)(2). Thus, since 1977 harmless errors in 
identifying ``the date copyright was originally secured i[n] each work 
to which the notice of termination applies,'' the requirement set forth 
in paragraph (b)(1)(iii), have not affected the validity of the notice. 
More pertinently, harmless errors in reciting the date of execution, 
the requirement set forth in paragraph (b)(2)(iii) of section 201.10, 
also have not affected the validity of a notice of termination under 
section 203 since regulations governing section 203 notices of 
termination were first adopted. This provision should provide relief 
for terminating parties who provide a date of execution which, although 
it is as accurate as the terminating party is able to ascertain, turns 
out not to be the actual date of execution of the grant (i.e., in the 
case of a Gap Grant, the actual date the work was created), so long as 
the date is provided in good faith and without any intention to 
deceive, mislead or conceal relevant information.
    Of course, if the wrong date is recited in the notice and a court 
subsequently determines that the actual date of execution was at a time 
that places the effective date of termination or the date of service of 
the notice of termination outside of the statutory windows, the 
harmless error doctrine will be of no assistance. But that would not be 
the result of the misstatement in the notice of termination of the date 
of execution; rather, it would be because upon a review of all the 
relevant facts, a court concludes that the actual date of execution was 
too early or too late to provide a basis for the service of the notice 
of termination.
    With respect to the specific regulatory text proposed in the notice 
of proposed rulemaking, the RIAA's comment has persuaded the Copyright 
Office that treating the identification of the date of execution as a 
matter of ``timeliness'' is the wrong approach because it conflates two 
different topics: (1) Whether a notice of termination was served and/or 
submitted for recordation on time, and (2) whether the grant that is 
the subject of the notice of termination was made at a time that 
qualifies it for termination under section 203. The analysis of the 
first topic assumes that the grant is terminable under section 203; it 
simply examines whether the notice was served and recorded in the 
permissible time frame. In contrast, the analysis of the second topic 
addresses the very

[[Page 32320]]

eligibility of the grant for termination under section 203.
    Moreover, as originally drafted, the proposed amendments to Sec.  
201.10(f)(4) related only to section 203 notices of termination, even 
though Sec.  201.10(f)(4) in fact covers both section 203 and section 
304 notices of termination. In particular, the following passage 
ignored the fact that paragraph 4 is supposed to cover both types of 
termination:

    Conditions under which a notice of termination will be 
considered untimely include: The date of execution stated therein 
does not fall on or after January 1, 1978, as required by section 
203(a) of title 17, United States Code; the effective date of 
termination does not fall within the five-year period described in 
section 203(a)(3) of title 17, United States Code.

    The Office has therefore concluded that the language relating to 
identification of the date of execution of the grant should not be 
included in Sec.  201.10(f)(4), but should be moved to a separate 
paragraph (f)(5) addressing only the issue of date of execution. The 
other proposed revisions to Sec.  201.10(f)(4), describing situations 
in which a notice of termination will be considered untimely, should 
remain but should be amplified by a reference to section 304(c)(3) 
(which, like section 203(a)(3), requires that the effective date of 
termination fall within a prescribed time frame) following the language 
that currently addresses situations in which the effective date of 
termination does not fall within the five-year period specified by 
section 203(a)(3). As a result, the second sentence of Sec.  
201.10(f)(4) shall read as follows: ``Conditions under which a notice 
of termination will be considered untimely include: The effective date 
of termination does not fall within the five-year period described in 
section 203(a)(3) or section 304(c)(3), as applicable, of title 17, 
United States Code; or the documents submitted indicate that the notice 
of termination was served less than two or more than ten years before 
the effective date of termination.'' As noted in the notice of proposed 
rulemaking, the circumstances identified in this paragraph (b)(4) are 
not intended to be an exhaustive list of procedural failures that may 
result in failure to record notices of termination.
    For the sake of clarity, the new paragraph addressing 
identification of the date of execution shall also specifically address 
the issue of Gap Grants:

    (5) In any case where an author agreed, prior to January 1, 
1978, to make a grant of a transfer or license of rights in a work 
that was not created until on or after January 1, 1978, a notice of 
termination of a grant under section 203 of title 17 may be recorded 
if it recites, as the date of execution, the date on which the work 
was created.

    The sole remaining issue is whether, as SIIA suggested, additional 
language is necessary to clarify that this regulation is not a 
``merits-based determination that could be incorrectly used by authors 
as authority for the applicability of section 203 of Title 17.'' As 
stated in the notice of proposed rulemaking, the Office's recordation 
of notices of termination of Gap Grants is without prejudice to how a 
court might ultimately rule on whether any particular document 
qualifies as a notice of termination within the scope of section 203, 
consistent with longstanding practices for all notices of termination 
recorded by the Office. By permitting recordation of such a notice of 
termination, the Office permits the terminating party to move forward 
based upon a reasonable interpretation of the statute. Refusing to 
permit recordation of a notice of termination of a Gap Grant would put 
the Office in the position of imposing an unjustified impediment to the 
ability of an author or an author's heirs to assert what may well be a 
viable right to terminate a grant. If there is any dispute over the 
validity of such a notice of termination (or of notices of termination 
of Gap Grants in general), that dispute should be settled in the courts 
(or in Congress, if Congress accepts the Office's suggestion to enact 
legislation that will clarify the status of Gap Grants).
    The amendment proposed in the notice of proposed rulemaking 
included, in Sec.  201.10(f)(4), the already-existing language that 
``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.'' However, that language would no longer apply 
to recordation of Gap Grants now that the language relating to Gap 
Grants is being expanded and moved to a separate paragraph. In 
considering the issue further, the Office concludes that the proposed 
language is no longer necessary in Sec.  201.10(f)(4) because the 
existing regulatory text in Sec.  201.10(f)(5) (which will be 
renumbered as Sec.  201.10(f)(6) following the insertion of the new 
paragraph (f)(5)) makes it clear that recordation of a notice of 
termination does not mean that the notice meets the requirements of the 
law:

    ``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.''

    However, we have modified that paragraph to include a reference to 
``a court of competent jurisdiction,'' as this phrase appears in the 
existing language in paragraph (f)(4) and was included in the notice of 
proposed rulemaking.

List of Subjects in 37 CFR Part 201

    Copyright, General provisions.

Final Regulation

    In consideration of the foregoing, the Copyright Office amends part 
201 of 37 CFR, 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; section 201.10 also issued under 17 
U.S.C. 203 and 304.

0
2. Section 201.10 is amended as follows:
0
a. By revising paragraph (f)(4);
0
b. By redesignating paragraphs (f)(5) and (f)(6) as paragraphs (f)(6) 
and (f)(7);
0
c. By adding a new paragraph (f)(5);
0
d. In redesignated paragraph (f)(6), by removing ``met.'' and adding in 
its place ``met, including before a court of competent jurisdiction.''


Sec.  201.10  Notices of termination of transfers and licenses.

* * * * *
    (f) * * *
    (4) Notwithstanding anything to the contrary in this section, the 
Copyright Office reserves the right to refuse recordation of a notice 
of termination as such if, in the judgment of the Copyright Office, 
such notice of termination is untimely. Conditions under which a notice 
of termination will be considered untimely include: the effective date 
of termination does not fall within the five-year period described in 
section 203(a)(3) or section 304(c)(3), as applicable, of title 17, 
United States Code; or the documents submitted indicate that the notice 
of termination was served less than two or more than ten years before 
the effective date of termination. If a notice of termination is 
untimely or if a document is submitted for recordation as a notice of 
termination on or after the effective date of termination, 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.

[[Page 32321]]

    (5) In any case where an author agreed, prior to January 1, 1978, 
to a grant of a transfer or license of rights in a work that was not 
created until on or after January 1, 1978, a notice of termination of a 
grant under section 203 of title 17 may be recorded if it recites, as 
the date of execution, the date on which the work was created.
* * * * *

    Dated: May 27, 2011.
Maria A. Pallante,
Acting Register of Copyrights.

Approved by
James H. Billington,
The Librarian of Congress.
[FR Doc. 2011-13845 Filed 6-3-11; 8:45 am]
BILLING CODE 1410-30-P