1. 2012 ADVANCED TRADEMARK LAW SEMINAR March 14, 2012 ACC Quick Hit Joseph Petersen Partner Kilpatrick Townsend

2. 2012 ADVANCED TRADEMARK LAW SEMINAR THE TERMINATOR

3. 2012 ADVANCED TRADEMARK LAW SEMINAR OVERVIEW Why do you need to know about termination?

4. 2012 ADVANCED TRADEMARK LAW SEMINAR OVERVIEW What do you need to know about termination?

5. 2012 ADVANCED TRADEMARK LAW SEMINAR WHY DID CONGRESS UNLEASH THIS BEAST UPON US? Congress sought to protect authors by granting them and their heirs a statutory right to terminate earlier assignments and licenses of their copyrights during a five-year window, and providing that agreements to make further grants of their copyrights would be, with one narrow exception, unenforceable.

6. 2012 ADVANCED TRADEMARK LAW SEMINAR WHY SHOULD YOU CARE? TERMINATION IS A HOT ISSUE AND GETTING HOTTER Under Section 203 of the 1976 Copyright Act, transfers of interests in copyrights by authors after January 1, 1978 are subject to termination starting 35 years through 40 years after the date of the grant, regardless of the term stated in the agreement (even if the grant was perpetual).

7. 2012 ADVANCED TRADEMARK LAW SEMINAR WHY SHOULD YOU CARE? 2013 is the year that the works will be subject to termination under section 203.

8. 2012 ADVANCED TRADEMARK LAW SEMINAR THE 1976 ACT Section 304(c) governs transfers executed before January 1, 1978, and by its own terms covers only works in either their first or renewal term on January 1, 1978. The section does not apply to works that were not published as of January 1, 1978.

9. 2012 ADVANCED TRADEMARK LAW SEMINAR THE 1976 ACT Under § 304(c), the duration of time for which the grant of rights remains in effect is measured from the date copyright is originally secured (most likely the date of publication), regardless of when the rights were actually transferred, so long as that transfer occurred prior to 1978. The 1976 Act provides for a five-year window beginning at the end of the original fifty-six year copyright term in which an author may terminate his or her prior grant of rights.

10. 2012 ADVANCED TRADEMARK LAW SEMINAR WHY SHOULD YOU CARE? Termination issues arise across the entire spectrum of creative works and industries. If the work is capable of being copyrighted, it is capable of being terminated. –Logos –Music –Software –A vast sea of other copyrighted works

11. 2012 ADVANCED TRADEMARK LAW SEMINAR NOTICE OF TERMINATION Termination is not automatic. Notice must be sent no later than 2 years before the termination is to take effect (which must be within the 5 year window). Notice must be sent no sooner than 10 years before the date the termination is to take effect (again, which must be within the 5 year window).

12. 2012 ADVANCED TRADEMARK LAW SEMINAR NOTICE OF TERMINATION Upon serving a valid notice, the authors or their heirs have a vested interest in the rights that were previously granted. Those rights vest on the date termination becomes effective.

13. 2012 ADVANCED TRADEMARK LAW SEMINAR LIMITATIONS Termination rights, though potentially quite significant, are subject to important limitations: –“works for hire” are not subject to termination. –derivative works based on the granted work “prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination.” –terminations recapture only U.S. rights; and –an author’s right to terminate a past grant must be exercised within a statutorily prescribed period of time or the termination right is lost forever.

14. 2012 ADVANCED TRADEMARK LAW SEMINAR WORK FOR HIRE If the work is a work made for hire, the creator of the work does not have a termination right. What then, is a work for hire? Answer depends on whether work was created under the 1909 Copyright Act (which governed until January 1, 1978) or the 1976 Copyright Act.

15. 2012 ADVANCED TRADEMARK LAW SEMINAR 1909 ACT Until the 1960’s, courts applied the work-for-hire doctrine only to cases in which a traditional employer/employee relationship existed between the hiring party and the creator of the work. The doctrine was ultimately broadened to encompass certain situations in which an entity commissioned a work by an independent contractor.

16. 2012 ADVANCED TRADEMARK LAW SEMINAR 1909 ACT No written agreement is necessary. Instead have to show that the work was created at the “instance and expense” of a third party. In order to satisfy this test need to show that the hiring party was the motivating factor in producing the work and that the hiring party had the right to direct and supervise the manner in which the creator performed his or her work.

17. 2012 ADVANCED TRADEMARK LAW SEMINAR 1976 ACT As with the 1909 Act, works created by employees within the scope of the their employment are works made for hire. As a consequence, the employer is the author of the work.

18. 2012 ADVANCED TRADEMARK LAW SEMINAR 1976 ACT Independent contractors/freelancers specially ordered or commissioned; certain types of works –Contribution to a collective work –As 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 Parties must expressly agree in a signed writing that work is a work made for hire

19. 2012 ADVANCED TRADEMARK LAW SEMINAR DERIVATIVE WORKS Derivative works based on the original work for which the grant was given and prepared under authority of the grant before its termination may continue to be “utilized” under the terms of the grant after its termination.

20. 2012 ADVANCED TRADEMARK LAW SEMINAR “INALIENABILITY” OF TERMINATION RIGHTS Termination rights are frequently called “inalienable.” This is because the termination provisions contain the following provision: –“Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.” 17 U.S.C. sections 203(a)(5), 304(c)(5)

21. 2012 ADVANCED TRADEMARK LAW SEMINAR BEST PRACTICES Assess copyright status of key logos, marketing materials Carefully consider protections afforded by derivative works Carefully consider work for hire doctrine

22. 2012 ADVANCED TRADEMARK LAW SEMINAR QUESTIONS? Joseph Petersen JPetersen@kilpatricktownsend.com