What Software Developers Need to Know About Copyright Termination Rights
Recently, copyright termination rights have been in the press in the context of major musicians seeking to reclaim their copyrights from record companies. For an overview of the issue in the recording industry, please read this article by Larry Rother with the New York Times, here. However, the option to terminate copyright assignments and licenses has far-reaching, and potentially disruptive consequences in other fields, particularly in the graphic design and software industries.
Section 203 of the Copyright Act of 1976 permits “authors” to terminate assignments and licenses of copyrights made after January 1, 1978. A helpful resource is available at the United States Copyright Office’s website, here. Termination may occur 35 years after the work has been assigned or licensed. Notice of an author’s intent to terminate can be given as early as thirty years after the grant and as late as 40 years after the grant.
Termination rights apply to works other than “works made for hire.” Many agreements, including independent contractor agreements, include intellectual property assignment clauses weighted heavily in favor of the client or recipient of the intellectual property created by the author/contractor. In a typical intellectual property-assignment clause, the author agrees to assign all copyrights to the client and that the work created is a “work made for hire.” However, the Copyright Act defines a “work made for hire” as a work created by an employee for an employer; or a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas. (17 U.S.C. § 101).
The Copyright Act permits authors to terminate an assignment no matter how strict the language of a grant. Over the last two decades many companies, and not just software firms, hired software programmers on an independent contractor basis, rather than as employees, to develop programs. Software code is protected under the United States Copyright Act, and eventually, will be subject to termination rights. The effects of copyright termination in the software field will differ from the experience of the recording industry. Whereas “Darkness on the Edge of Town” by Bruce Springsteen and Kenny Rogers “The Gambler” have remained relatively unchanged over time, software code is altered or reused for multiple clients. Software changes over time. This is a challenge for developers seeking to terminate their copyright assignment because (a) it may be difficult to identify the programmer’s specific code string and (b) determining the commercial value of a 35-year old string of code. Similar to the issue facing the recording industry, for every “Y.M.C.A” by the Village People or “The Long Run” by the Eagles, there are thousands of other songs with limited or no commercial value.