Richard Busch

Richard Busch, Contributor

3/05/2012 @ 11:21AM |764 views

Artists to Labels: "HASTA LA VISTA, BABY!"

An epic battle is looming. The relationship between artists and media companies is set to take a page out of Terminator 2: Judgment Day. In T2,

Terminator 2: Judgment Day

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John Connor sent the T-800 Terminator played by Arnold Schwarzenegger back in time to protect his mother and ten-year-old self from Skynet, the artificial intelligence system that became self-aware and attempted to exterminate humankind. In 1976, Congress passed a revised Copyright Act, which included termination rights designed to allow artists and authors to reach back in time and protect their work from their younger selves.

The way this plays out could affect your ability to access certain music, books, and other media. Spotify, iTunes, and other music providers could be prohibited from providing specific tracks. Injunctions related to and uncertainty in copyright ownership could take down commercials and prohibit, for at least a period, advertising containing copyrighted material in dispute.

Congress knew media companies, especially record labels, had taken the rights to artists’ works through initial agreements when the artists were young, hungry, and perhaps a bit naive. In the pre-digital world, the only way for an artist to reach a wide audience was to sign with a major media company. This gave the biggest companies incredible leverage over young, untested artists. Those artists were almost always forced to give up their copyrights. Enter Congress and the 1976 Copyright Act to allow artists to harness their inner John Connors with a T-800 of their own.

The 1976 Copyright Act, which went into effect on January 1, 1978, created windows for artists to take back the valuable copyrights assigned or licensed to media companies, beginning 35 years after the transfer of the copyrighted work. The first such window under the 1976 Copyright Act opens January 1, 2013. Many artists have already employed their T-800s by providing notice that they plan to exercise their termination rights. A cottage industry of small companies has even arisen to help artists file their termination notices.

These termination rights will potentially have a massive impact on artists and media companies. Books published in 1978 include Charles Bukowski’s Women, Hubert Selby Jr.’s Requiem for a Dream, and Stephen King’s The Stand. Albums out that year include Waylon Jennings and Willie Nelson’s Waylon & Willie, Lou Reed’s Street Hassle, Prince’s first album For You, Tom Waits’ Blue Valentine, and Cheap Trick’s Heaven Tonight. The threat of losing ownership of these works and thousands more is, I am sure, keeping executives at these companies up at night. Record labels are especially dug in to fight for ownership rights. Artists are poised for a Total Recall of the rights transferred by their younger selves.

Record labels are ready for this fight because billions are at stake. Every business, however, can be affected by termination rights. Every copyright from sound recordings, to your start-up’s brochure, to the photograph on your website is subject to the Copyright Act and is thus subject to a potential termination.

This fight between the artists, and record labels has mostly, until now, taken place out of the public eye. However, the secret battle is easily as fierce as anything James Cameron could dream up. The major record labels claim sound recording copyrights belong to them in perpetuity because of something called the “work for hire” doctrine. However, the labels know that argument is likely to fail in the courts, and have been sharpening their knives to bring other procedural challenges. For instance, under the cover of night around the turn of the millennium, the labels used their lobbying power to change the Copyright Act to prevent artists from reclaiming their copyrights. Due to vehement backlash from artists, that secret change lasted less than a year. No amount of backlash will stop the record labels from nonetheless fighting with artists.

With the first terminations not becoming effective until January 1, 2013, the battle so far has largely consisted of posturing on the part of the labels. That is likely to change in the next few months. Once the calendar turns to 2013, the copyright termination battle will go public. Judgment Day begins January 1. Artists and record labels are ready. Are you?

Full Disclosure: I am representing artists who have filed termination notices.

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