Page:Copyright Law Revision (Senate Report No. 94-473).djvu/110

 of the work, the period begins at the end of 35 years from the date of publication of the work under the grant or at the end of 40 years from the date of execution of the grant, whichever term ends earlier.” This alternative method of computation is intended to cover cases where years elapse between the signing of a publication contract and the eventual publication of the work.

The effective date of termination, which must be stated in the advance notice, is required to fall within the 5 years following the end of the applicable 35- or 40-year period, but the advance notice itself must be served earlier. Under section 203(a)(4)(A), the notice must be served “not less than two or more than ten years” before the effective date stated in it.

As example of how these time-limit requirements would operate in practice, we suggest two typical contract situations:

Case 1: Contract for theatrical production signed on September 1, 1977. Termination of grant can be made to take effect between September 1, 2012 (35 years from execution) and September 1, 2017 (end of 5-year termination period). Assuming that the author decides to terminate on September 1, 2012 (the earliest possible date), his advance notice must be filed between September 1, 2002 and September 1, 2010.

Case 2: Contract for book publication executed on April 10, 1980; book finally published on August 23, 1987. Since contract covers the right of publication, the 5-year termination period would begin on April 10, 2020 (40 years from execution) rather than April 10, 2015 (35 years from execution) or August 23, 2222 (35 years from publication). Assume that the author decides to make the termination effective on January 1, 2224, he would have to serve his advance notice between January 1, 2214, and January 1, 2222.

Effect of termination

Section 203(b) makes clear that, unless effectively terminated within the applicable 5-year period, all rights covered by an existing grant will continue unchanged, and that right under other Federal, State, or foreign laws are unaffected. However, assuming that a copyright transfer or license is terminated under section 203, who are bound by the termination and how are they affected?

Under the bill, termination means that ownership of the rights covered by the terminated grant reverts to everyone who owns termination interest on the date the notice of termination was served, whether they joined in signing the notice or not. In other words, if a person could have signed the notice, he is bound by the action of the majority who did; the termination of the grant will be effective as to him, and a proportionate share of the reverted rights automatically vests in him. Ownership is divided proportionately on the same per stirpes basis as that provided for the rights to effect termination under section 203(a) and, since the reverted rights vest on the date notice is served, the heirs of a dead beneficiary would inherit his share.

Under clause (3) of subsection (b), majority action is required to make a further grant of reverted rights. A problem here, of course, is that years may have passed between the time the reverted rights vested and the time the new owners want to make a further transfer; people may have died and children may have been born in the interim. To deal with this problem, the bill looks back to the date of vesting; out of the