Try Your Hand - § 203 "Second Bite" Termination 3
The Hypothetical: Bill Thorne, a prominent electric bass player, was hired by Beetime Records to accompany famous rock star Amy Nova for a recording session on February 1, 1980. Part of that session was released as Nova’s now legendary SuperNova album. Just before the recording session began, Thorne signed an agreement stating that any works of authorship that he created during the session would be "works made for hire" as that term is defined in §101 of the Copyright Act of 1978, or in the alternative that he assigned the entire copyright in those works to Beetime Records. Looking back on it now, Thorne realized that he was paid very little to help make an album that went platinum and is still selling well. He heard about a copyright law provision that allows musicians like him to get a second chance to negotiate terms. He has asked you, his attorney, for your advice.
Question 3: Suppose that Thorne properly serves notice on Beetime Records at least two years before February 1, 2015, designating that date as the date he wishes to terminate, but then dies before that date, survived by his wife and two children. (We don’t like sending a talented bassist to his death, but it’s part of the hypothetical business.) In his will, Thorne bequeathes all of his copyright interests in any sound recordings he has made to Barbara Lethkow, his longtime manager, to whom he believed he owed his successful career as a studio musician. On February 1, 2015, Lethkow, Thorne’s wife, and Thorne’s children disagree about what to do. Who gets to decide, and who gets to share in the proceeds of any new assignment or license negotiated with Beetime Records? Would your answer be different if Thorne had not served a termination notice on Beetime before he died? This is tricky!
Answer: This really requires a close reading of the statute. Under §203(b)(2), "[t]he future rights that will revert upon termination of the grant become vested on the date the notice of termination has been served." That means that when Thorne served the notice on Beetime, the rights vested in him, and passed upon his death through his will to Lethkow (assuming that state law does not override the terms of his will).
If Thorne died before having served a termination notice, the ownership of his interest is governed by the order of succession set forth in §203(a)(2). Under §203(a)(2)(A), Thorne's wife would own one-half of the termination interest, because there are surviving children; §203(a)(2)(B), each of the two children would own equal parts of the other one-half, i.e., each would own a one-quarter interest. Under §203(a)(1), termination may be effected by those persons who own a total of more than one-half of the termination interest; thus, Thorne's wife would have to get at least one of her children to agree to terminate the transfer, and neither she nor either child could terminate alone.
A Caveat: Note that we have assumed that Bill Thorne separately transferred his interest in the Beetime sound recordings. If he had executed a transfer together with other session musicians as co-authors of a joint work, then under §203(a)(1), the majority of authors would have to agree to terminate the transfer.
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