United States: Ya Down With TPP?: How The Trans-Pacific Partnership Could Answer The Question Of Artists' Termination Rights In Sound Recordings

Last Updated: August 27 2015
Article by M. Ryder Lee

In a recent blog, I wrote about whether the U.S. Copyright Act's work-made-for-hire doctrine applies to copyrights in sound recordings as that status affects artists' termination rights in transfers. The responses I received were positive but widely varied in that they tended to advocate strongly for one side of the issue or the other. While I maintain that there are good arguments on both sides, I thought I'd revisit the question in light of an "unofficial" proposed change in the law that recently came to my attention and which was not brought up in the healthy debate that followed my last blog on the topic. This "unofficial" proposal is found in the leaked drafts of the controversial Trans-Pacific Partnership (TPP).

The TPP is an ambitious trade agreement being negotiated between representatives from the United States and other Asia-Pacific countries. It is estimated that the TPP would eventually cover a region that represents more than half of global output and over forty percent of world trade. A trade agreement on that scale will naturally need to address a myriad of complex intellectual property issues, and it does.

On November 13, 2013, a draft of the TPP agreement's chapter on intellectual property rights was leaked on the WikiLeaks website. As tends to happen with WikiLeaks, many of online analyses of the IP chapter perhaps go too far in casting a conspiratorial light or prophesizing it as the death knell for authors, artists and creators. But the draft, as leaked, could indeed alter significant aspects of U.S. intellectual property law if enacted. For the purposes of our discussion here about who is deemed the author of a sound recording, a provision labeled Article QQ.G.9 could stand to affect an author's right to terminate a transfer under the Copyright Act. It provides:

"Each Party shall provide that for copyright and related rights, any person acquiring or holding any economic right in a work, performance, or phonogram: may freely and separately transfer that right by contract; and by virtue of a contract, including contracts of employment underlying the creation of works, performances, and phonograms, shall be able to exercise that right in that person’s own name and enjoy fully the benefits derived from that right."

If passed, this language on its face would seem to mandate that any contractual transfer of copyright be unencumbered by law. Because the termination right is a statutorily-granted limit on free contractual transfer, that right of authors as it currently exists under the Copyright Act would arguably be inconsistent and out of compliance with Article QQ.G.9. More interestingly, while the specific inclusion of "phonograms" (sound recordings) in the language is noteworthy in that it would seem to force the issue of artists' termination rights in sound recordings before the courts, the provision could easily be read to eliminate termination rights in copyright transfers for all works.

With fast-track authority having been granted by Congress, if the signatory nations do come to a final agreement on the trade deal, it will be interesting to see whether the final language of Article QQ still contains provisions at odds with current U.S. copyright law; particularly with respect to the work-made-for-hire doctrine and whether it applies to sound recordings. On one hand, a final treaty provision clearly answering that question could altogether preclude litigation by post-1978 recording artists seeking to have the courts decide the issue. On the other hand, if the final language of the treaty does not clearly answer that question – as the leaked draft does not – the courts will be left to sort it out as usual. The latter scenario seems more likely: the final language will be vague enough to challenge its meaning and effect through litigation. This time, however, the pool of potential parties may not be limited to just recording artists and record labels.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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