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Copyright Grantees Served Sour Grapes in Steinbeck Dispute

By Jason Linder, Eric Carsten, and Annette Meyerson
August 31, 2006

In 1976 and again in 1998, Congress extended subsisting copyrights, by 19 and 20 years respectively. See Pub. L. 94-553, 90 Stat. 2541 (1976) (extending renewal term for pre-1978 works to 47 years, for 75 years total protection); Pub. L. 105-298, 112 Stat. 2827 (1998) (extending renewal term for pre-1978 works an additional 20 years, for 95 years total protection). Seeking to allow authors and their kin to share in the benefits of the newly extended terms, Congress afforded them a mechanism known as statutory termination. See 17 U.S.C. '304(c) and (d). The mechanism allows abrogation of contracts executed prior to Jan. 1, 1978, otherwise valid under state law, by which an author (or certain other specified persons) had transferred away copyright interests. To bolster and protect this termination right, Congress mandated that it may be effected 'notwithstanding any agreement to the contrary.' 17 U.S.C. '304(c)(5); see also 17 U.S.C. '304(d)(1).

This summer, the Southern District of New York gave broad effect to that language. In Steinbeck v. McIntosh & Otis, Inc., 433 F. Supp. 2d 395 (S.D.N.Y. 2006), the court held that a post-1978 contract canceling a pre-1978 grant and then re-granting the exact same copyright interests previously conveyed does not extinguish the statutory termination right. Any other construction, the court found, would render the post-1978 agreement an impermissible 'agreement to the contrary.' While it is consonant with decisions of the Second Circuit, the district court's holding is in tension with, and likely contrary to, recent decisions arising out of the Ninth Circuit. Whether this apparent conflict among the circuits will soften or sharpen awaits further judicial development and, perhaps, resolution by the U.S. Supreme Court.

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