Rescinded Use in Copyrights

by Terry Masters

United States copyright law protects artists and ensures them control and profit from their work. In an Internet age where new and exciting ways of exploiting artistic creations on a worldwide scale seem to evolve almost daily, it is more important than ever that artists understand how to grant and terminate permission for a third party to use their creations. Legally rescinding permission to use a creative work gives the artist another opportunity to sell the rights in the work under more favorable terms.

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Applicable Law

With the passage of the Copyright Act of 1978, the US government made the federal copyright statute the only method for enforcing copyrights in the country. The right of an artist to transfer his interest is established by the statute, but the terms of any transfer agreement are governed by general contract law, except in instances where the grant of permission does not specify a termination date.

Contract Recission

The federal copyright statute allows holders of copyrights to assign the entire interest in the work unconditionally or license all or part of the interest to a third party. Assignments and licenses can be rescinded under contract law according to the terms of the agreement. If a license or assignment establishes conditions under which the agreement can be terminated, such as a violation of a prohibited use, the creator can rescind the agreement by following the procedure specified in the contract.

Recission of Pre-1978 Assignments or Licenses

In some instances, artists assigned unconditional rights to a third party without specifying a termination date and ended up with a small payment for a creation that went on to make the third party millions of dollars. To recompense artists from the unfair results of these bad bargains, Congress established a reversionary right that gives artists one opportunity to rescind a grant after the fact. For assignments and licenses without an end date and entered into prior to 1978, the artist has a five-year window to rescind the agreement that begins 75 years from the date of the original copyright.

Recission of Post-1978 Assignments or Licenses

The conditions and procedures for rescinding licenses or assignments with no time limits granted post-1978 are detailed in Section 203 of the Copyright Act. An artist can terminate the agreement in a five-year window beginning at the end of 35 years from the date of the agreement. If the agreement includes a right to publish the work, the time period runs 35 years from the date the work was published or 40 years from the date of the agreement, whichever is earlier.

Works Made for Hire

The statutory right of termination is available only to the creators of original works. If a work was made for hire, only the entity that owns the copyright can rescind an agreement by contract law. If the agreement does not address rescission or provide a termination date for the grant of rights, the owner has no legal recourse to terminate the contract.