Under U.S. copyright law, there are some situations where a creator can transfer his or her copyright and later get it back.  Section 203 of the Copyright Act (17 USC  §203)  gives the requirements for a termination of transfer of copyright when the author executed the transfer on or after January 1,1978. (Other sections of the law govern termination of transfer when the author executed the transfer prior to January 1, 1978.)

The termination provisions are also called “recapture rights” or “the second bite of the apple.”  They are designed to give equitable relief when an author transferred copyright in a situation where there was an imbalance of power between the author and another entity, such as a publishing house or a recording company.  After time has elapsed—it is 35 years for works governed by §203—the author or his or her heirs (as defined by the statute) has a chance to take back the copyright.  This right does not apply to works for hire, derivative works the grantee made, or non-U.S. rights.  The provisions of §203 are due to take effect in 2013, but starting next year in 2011, authors may begin filing notices of termination.

A number of formalities must be observed in order to accomplish the termination of transfer, including filing a notice of termination with the Copyright Office.  Without the formalities, the termination of transfer cannot occur.

One issue that is causing controversy is the situation where the creator signed a transfer agreement before January 1, 1978, but created the work on or after that date.  Is that work governed by §203, with its 35-year termination clause or by the earlier provisions with longer periods before termination can be accomplished?  In March, the Copyright Office sought comments on the issue .  Many of those who submitted comments argued in favor of treating the “gap” works under §203, with the argument that copyright cannot vest until a work is created  The Recording Industry Association of America argued otherwise, asserting that Congress’s intent was to use the terms “executed” and “signed” interchangeably and analyzing the way the terms were used in the previous Copyright Act.

Although the courts will decide litigation around termination of transfer under §203, the U.S. Copyright Office is in charge of regulations around the filing of notices.  The Copyright Office must decide how to handle recording notices of termination for works created in this “gap” situation, and it must make the decision soon, before the courts have acted.

Under the proposed rule making, the Copyright Office is planning to allow notice of termination of transfer agreements in this gap situation to be recorded and indexed.  The authors will use the date of creation as the date of the execution of the grant, but may, for the purposes of clarity, also include the earlier date when the grant was signed.

The Copyright Office is taking comments on this proposal until December 27, 2010.

In the longer term, it is clear that, as the RIAA pointed out in their comments last spring,  “assessing the impact on authors and grantees with interests in multiple works from different time periods under different agreements is very complex” and “significant money is clearly at stake, because many works remain commercially important 35 years after their publication and many works are first published more than five years after the relevant contract is signed.”