Study on the implications of a 25-year reversion/termination right in Canada

Currently, the Canadian government is considering implementing two legislative proposals concerning a 25-year reversion right for authors. Section 14(1) of the Canadian Copyright Act currently provides that the copyright in a work reverts automatically to the author’s estate twenty-five years after the author’s death. The operation of the present reversion right is unrelated to the date of initial publication of the work or the date of assignment of the work; as a result, the right often vests long after publication.

Two committees, the Standing Committee on Industry, Science and Technology (INDU) and the Standing Committee on Canadian Heritage (CHPC), have concluded that authors or their estates should be granted a non-assignable, non-waivable right to regain control over a copyright at an earlier moment, that is twenty-five years after the author’s initial assignment of rights in the work. In particular, INDU proposes that:

That the Government of Canada introduce legislation amending the Copyright Act to provide creators a non-assignable right to terminate any transfer of an exclusive right no earlier than 25 years after the execution of the transfer, and that this termination right extinguish itself five years after it becomes available, take effect only five years after the creator notifies their intent to exercise the right, and that notice be subject to registration.

In this regard, the Canadian government commissioned Katfriend Paul Heald, the Richard W. and Marie L. Corman Research Professor of Law at Illinois College of Law, a study on the implications of a 25-year reversion right for authors.

The study

The study reports an empirical and qualitative analysis of the potential advantages and disadvantages of the recommendations made by INDU and CHPHC to Parliament in the context of the Copyright Act and the Canadian marketplace. It focuses on literary copyright and, to a lesser extent, music copyright. The reason for this particular focus is that the reversion is likely to be less important for other sorts of valuable works, like computer programs or video games, which are often works-made-for-hire (and therefore not subject to reversion) and usually have a shorter economic life than books or music.

Findings

The study tentatively recommends the adoption of a modified version of the proposal offered by INDU. Although the benefits of both proposals would likely be similar, the INDU proposal may offer lower transaction costs. The empirical data gathered in the study support the conclusion that a carefully crafted termination right would provide measurable benefits to both authors (or their estates) and to the Canadian public.

In light of the available data, the recommended termination right should:

• provide creators a non-assignable, non-waivable right to terminate any transfer of an exclusive right no earlier than 25 years after the execution of the transfer;
• extinguish itself five years after it becomes available;
• take effect no earlier than twelve months after the creator is notified of the intent to exercise the right;
• require that notice be subject to registration;
• require that termination can only be exercised by claimants holding 51% or more of the termination right; and
• provide protection for a transferee who properly licensed the copyrighted work to create its own authorized original work of authorship.

Read more about the study here. Let’s now wait and see what the Canadian government’s next step will be!