Monday, May 18, 2009

Supreme Court won't hear Steinbeck termination case; declines to clarify 'agreement to the contrary'

Several months ago I pointed to an interesting cert. petition that asked the Supreme Court to clarify the circumstances under which a copyright holder may terminate a grant pursuant to 17 U.S.C. §§ 203, 304(c), or (d). Those provisions permit copyright holders, who may have licensed their rights early in the copyright term, unaware of how valuable they would turn out to be, to re-capture those rights decades later, by following a set of highly technical steps.

The termination provisions are limited by statutory provisions that seek to make the termination rights inalienable, i.e., not waivable by the copyright owner. Specifically, Congress included in the various termination provisions a right to termination "notwithstanding any agreement to the contrary." 17 U.S.C. §§ 203(a)(5), 304(c)(5), (d)(1). Just what constitutes an "agreement to the contrary" is a hotly contested issue, as licensees try various gambits to thwart efforts by authors and their heirs to re-capture valuable rights. One such gambit is to have the copyright owner terminate prior to the opening of the statutory window, and then immediately re-grant to the licensee, thus purporting to re-start the termination clock.

Are such termination-and-re-grant schemes prohibited "agreements to the contrary"? Depends whom you ask. In Penguin Group v. Steinbeck, the Second Circuit said such an agreement was not barred, while the Ninth Circuit in Classic Media, Inc. v. Mewborn, held that a purported re-grant of rights involving Lassie constituted an "agreement to the contrary."

The Supreme Court had a chance to clear up the purported circuit split. But today it declined. This issue is sure to recur as more and more authors and heirs seek to terminate grants, and licensees dream up new ways to stop them. I'm sure this won't be the last attempt to get the Supreme court to clarify this very tricky area of law.

Additional case documents avalaible through Scotusblog here.

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