The Copyright Act of 1976 decrees that the author shall have a right exercisable only once for each separate literary work under exclusive license and for a brief window of time after 35 years from the date of a work’s publication to terminate a license. (There are some qualifications to this, but not necessary to explain the concept). There are two provisions concerning statutory termination, one [Section 304(c)] relates to literary works published prior to January 1, 1978; the other [Section 203] relates to literary works published after January 1, 1978. Both sections can be thought of as gifts from Congress to authors, or their estates, or spouses and children to renegotiate with the licensee of an economically valuable work or terminate licenses entered into at the beginning of an author’s career when he or she was in an unequal bargaining position with the licensee. We are going to confine our comments to Section 203, for post-1978 publications. The procedures for exercising the right are complicated.
If your literary work was published in 1978, 2013 is an important (in fact, the opening) year because if you acted properly in accordance with the time requirements for notice you are either in the process of renegotiating the license or taking steps to terminate an exclusive license for further exploitation with another licensee. If you started publishing in 1988, to take a random subsequent year, your important year is 2023, which means that this year, 2013 is the opening year for giving notice. Notice can be served at anytime between 2013 and 2021.
What was the purpose of the Act and how does it work? In its Report on the passage of the Copyright Act of 1976 the House of Representatives stated that “The purpose of the Act was to “safeguard[ ] authors against unremunerative transfers” [that is, transfers at the beginning of their careers] and address “the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited.” H.R. Rep. No. 94-1476, at 124 (1976). Section 203 reads in pertinent part:
In the case of any work other than a work made for hire, the exclusive or nonexclusive grant
of a transfer or license of copyright or of any right under a copyright, executed by the author
on or after January 1, 1978 … is subject to termination.
In other words, you have to own the copyright to be eligible to terminate the license. This issue has come up in some cases involving the superman character. There are no termination rights because the cartoonists created the superman stories and character as works made for hire.
You are familiar I know with the standard grant of rights provision in a publishing contract. It states that the grant is exclusive to the Publisher for “the term of copyright and all renewals thereof.” Well, this is not exactly accurate because 35 years from publication of a literary work is likely to be less than halfway through the current term of copyright which is life of the author plus 70 years. Nothing in the grant of rights language takes away the author’s statutory termination right which is non-waivable. In order to receive the benefit of the Act the author has to give notice to the licensee at least 2 years before the date of termination. The notice can be served anytime within a 10 year window preceding the anniversary date of the publication year. In other words, for a termination to be effective in 2013, notice had to have been given between 2003 and 2011. If notice was given in 2012, the earliest date for termination would be 2014.
The problem is that there is another window, a 5 year window. In other words, if the critical year is 2013 the window closes in 2018 so that if the notice is not served between 2008 and 2016 the right is irretrievably lost. Who benefits? The author if he or she is still living, the author’s estate if there is no living spouse and children, or living spouse and children if there are any. If there are only children and grandchildren, the termination interest can only be exercised by the action of a majority of them. Very, very complicated particularly if the family is at odds with each other.
The publishing world is a vortex of change. There has been a steady flow of news reports, court filings by the Department of Justice, judicial decisions followed by settlements, merger announcements, controversial contract terms for new digital imprints and much more besides. We find publishers, brick and mortar bookstores, and distributors all trying to adjust their business models to respond to revolutionary changes in the production and distribution of literary material. All these changes have immense consequences for authors. It appears that the Kindle reader introduced in 2007 was as upsetting to the marketplace as the change from manuscript books to print books in the 15th century. Before Kindle, readers bought print on paper books; now paper and ebook sales are close to equal in fiction genres and gradually approaching equality in non-fiction.
When paper was King, there were two publishing models: traditional for the general reading public and vanity for the family. Splitting production and delivery has triggered a variety of new models. Just as movable type replaced the quill, electronic production is impinging on the market for print books. Traditional publishers pay a premium up front in the form of an advance against royalties for the right to publish and distribute an author’s work. Vanity publishing is essentially an arrangement in which authors pay for printing and other services. There are two models for ebooks: self-publishing for a fee is a vanity like model in which authors keep a significant portion of proceeds; or licensing to an epublisher such as Open Road or RosettaBooks for a royalty (but no advance) based on a percentage of net proceeds.
Traditional publishers have expanded their business models over the past few years. They are already publishing ebooks under the advance and royalties formula and they are also searching for new relationships with authors. We can see this with the recent introduction by Random House of the Hydra, Alibi, Loveswept and Flirt digital imprints. When Random House announced contract terms for these imprints there was an uproar. Science fiction and other authors and literary agents were horrified. This brouhaha was reported by Victoria Strauss in her Writer Beware Blog of March 7, 2013. She later reported on March 12 that “Based on strong criticism from writers’ groups, authors, and agents, Random House has decided to make major changes in its digital contract.” The Hydra Model is essentially a collaborative or partnership relationship in which the author agrees to license a literary work to a publisher for a share in the net proceeds from ebook sales. In the Hydra contract initially proposed there was no advance. After the response from authors and agents Random House posted a “Special Message” on March 12. The Hydra initiative has now been subdivided: there is a profit sharing model and a traditional advance and royalties model.
Two further points about changes in the publishing industry. First, in the Business Day section of Friday March 8, 2013, the New York Times reported that attempts are under way to create a marketplace for secondhand digital books. This is an extraordinary development. We all know about the market for print books; they are owned by the purchaser who can resell them. The “first sale” doctrine has been reaffirmed in the past week by the U.S. Supreme Court in Kirtsaeng v. John Wiley & Sons, Inc. At the present time electronic books are not owned because downloading is a license rather than a purchase in the traditional sense. Amazon and Apple have created algorithms for setting up an exchange for digital material. Amazon in fact received a patent for its algorithm in January of this year.
The second point concerns the domain name extension dot book. I’m quoting from a PW report of March 11: “In a filing with ICANN … the Association of American Publishers came out against a bid by Amazon to buy the .book domain name for its exclusive use, saying such an application would be counter to public interest.” To permit a company like Amazon to own a registrar for the dot book domain name would be equivalent to Citibank or Bank of America becoming the registrar for dot bank.
All this is playing out along with disputes between Barnes & Noble and Simon & Schuster about paying for shelf space (Report in the New York Times) and Amazon’s announced purchase of the social site Goodreads (from the same source). None of this suggests the demise of print publishing, but it disproportionately impacts authors whose works are less and less available in physical formats.
Productive authors increase in status and over time become recognized by the general public as the source of their literary works. At the beginning of a career authors simply start out as names. They become brands when readers recognize them as sources for goods and services in a trademark sense. Names can acquire value separate from the individuals who answer to them. Authors who have achieved “brand” recognition qualify for trademark registration, as exemplified by J.K. Rowling whose licensees own a host of trademarks in a variety of jurisdictions and Classes. Domain names are different from trademarks in that anyone can purchase a domain name, even the name of an author who has become a brand. There is no gatekeeper to say “you can’t do that!” If challenged in a proceeding under the Uniform Domain Name Resolution Policy (UDRP) the purchaser will most likely forfeit the domain name, but he cannot have been prevented from registering the domain name that is identical or confusingly similar to the author’s name. Again taking J.K. Rowling as an example: in 2004 a Uruguayan domiciliary purchased and . Joanne Rowling (the owner of the trademark) filed a complaint and the domain name registrations were transferred to her.
Many authors do not have trademark registrations but own domain names corresponding to their “brand” which is either their persona (“J.K. Rowling,” not Joanne Rowling) or personal name. Some authors have been chagrined to learn that someone has beaten them to their “names” on the Internet. I will name names in a moment. Other authors may not realize that their names have been registered as domain names. For example, Joyce Carol Oates is a distinguished author who does not own her domain name. The domain name is “owned” by Alberta Hot Rods. Alberta Hot Rods is a serial cybersquatter. Among the names this cybersquatter has purchased and then forfeited in UDRP proceedings are authors Michael Crichton and Jeffrey Archer, Pamela Anderson and Amber Smith (models and actresses), Tom Cruise and Kevin Spacey (actors) and Larry King (television personality). Ms. Oates has not (yet) challenged the bad faith use of her name. She is not alone.
U.S. trademark law recognizes “common law [unregistered] rights” to a personal or persona name if it has acquired “secondary meaning” and is identified as the source of goods or services. In contrast to Joanne Rowling, authors Crichton and Archer owned common law unregistered rights to their names. Even if they never register their names as trademarks, productive authors have the right to maintain a proceeding under the UDRP and capture the domain names that infringe their rights. Unproductive authors are probably out of luck, unless their single works have achieved great success in the marketplace. Joyce Carol Oates and other distinguished authors have standing to maintain proceedings to police their names and ensure that only they can use them. At present, does not resolve to an active website; that is, held passively for the very good reason that any content would constitute an infringement of the author’s right to her personal or persona name.
The UDRP is an on-line arbitration regime available to trademark owners which includes unregistered (common law) rights. Rogue domain names for “Harry Potter” () have been successfully shut down. Titles for example that cannot be copyrighted can be trademarked if they are associated as the source of goods or services. “Harry Potter” has featured in a dozen or more domain names; all have been captured by licensees in UDRP proceedings. HARRY POTTER is a registered trademark for clothing; HARRY POTTER AND THE DEATHLY HALLOWS is a registered trademark for printed matter and paper goods (including notebooks, diaries, greeting cards, photographs and calendars).
Authors who have prevailed over the past year in capturing domain names corresponding to their personal names include Delia Ephron (bestselling author, screenwriter, and playwright), Louise Rennison (author of the Confessions of Georgia Nicolson series for teenage girls), Gary Regan (Cocktail Columnist for San Francisco Chronicle, host of gazregan.com, and publisher of newsletters for bartenders worldwide) and Nathaniel Branden (author, lecturer, therapist and corporate consultant focusing on self-esteem and personal development).
If Author has not already, she should make sure that her personal or persona name has not been appropriated and if it has to take action to recapture it.
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