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The US Court of Appeals for the Second Circuit held Wednesday that publisher Penguin Group will retain the right to publish ten John Steinbeck novels. The heirs involved in this copyright action already receive a percentage of the sales proceeds, but initiated this action because they believed they were entitled to a greater portion. The Second Circuit recognized the provision of the Copyright Act granting authors and certain family members the power to terminate prior assignments of copyright because so many "young authors enter into long-term contracts with publishers when their bargaining power is weak and their prospects for success uncertain," but held that this power is limited. The Second Circuit held:
Results of a Computer and Communications Industry Association report released last year indicated that fair use exceptions to US copyright laws create more than $4.5 trillion in revenue in the US annually, employ millions of workers, and represented one-sixth of the total US GDP in 2006. The Fair Use exception to US copyright law permits limited unauthorized use of copyrighted material for scientific, educational, journalistic, or research purposes.
Under our view, authors or their statutory heirs holding termination rights are still left with an opportunity to threaten (or make good on a threat) to exercise termination rights and extract more favorable terms from early grants of an author's copyright. But nothing in the statute suggests that an author or an author's statutory heirs are entitled to more than one opportunity, between them, to use termination rights to enhance their bargaining power or to exercise them...In this case, Elaine Steinbeck had the opportunity in 1994 to renegotiate the terms of the 1938 Agreement to her benefit...By taking advantage of this opportunity, she exhausted the single opportunity provided by statute to Steinbeck's statutory heirs to revisit the terms of her late husband's original grants of licenses to his copyrights. It is no violation of the Copyright Act to execute a renegotiated contract where the Act gives the original copyright owner's statutory heirs the opportunity and incentive to do so.The district court below had granted summary judgment for one of Steinbeck's sons and a granddaughter, finding that their 2004 "notice of termination" to Penguin Group superseded a 1938 copyright agreement between the publisher and the author.
Results of a Computer and Communications Industry Association report released last year indicated that fair use exceptions to US copyright laws create more than $4.5 trillion in revenue in the US annually, employ millions of workers, and represented one-sixth of the total US GDP in 2006. The Fair Use exception to US copyright law permits limited unauthorized use of copyrighted material for scientific, educational, journalistic, or research purposes.
