Be Wary of a Copyright Assignment or an Exclusive Copyright License

It’s an important day when an artist signs his first artist agreement, an author executes her first publishing contract, or a band strikes their first record deal. However, it’s even more critical that the creative parties signing these agreements understand what rights they may be giving away. Too often, creative parties realize after it’s too late that they have effectively transferred almost all rights in their work and even in future works.

Section 204 of the Copyright Act, a transfer of copyright ownership, other than by operation of law (including but not limited to corporate mergers, bankruptcy, foreclosure, court order, and intestate succession) is not valid unless an instrument of conveyance or a note or memorandum of the transfer is in writing and signed by the owner of the rights conveyed or such owner’s duly authorized agent. 17 U.S.C. § 204. Consequently, a publisher, studio, or producer will often incorporate language into a contract that transfers all intellectual property rights and copyright rights in a work away from the creative party. Sometimes, the non-creative party will do this in the form of an exclusive license, which often has the same effect as a copyright assignment.

Sometimes, agreements that provide for the transfer of or exclusive rights to such rights also include language that expressly states that all future works created by the creative party are considered a Work-Made-For-Hire and that, if necessary, the creative party agrees to sign additional documents assigning or exclusively licensing their rights in the copyright of the work. A Work-Made-For-Hire means that the creative party is an employee of an organization. It is their job to create the specific type of work being commercialized or that the creative party has been specifically commissioned and hired to complete a particular piece of work, but not in an employer-employee relationship, but rather in an independent contractor role. In either case, the non-creative party is seeking and asserting ownership or exclusivity in all rights in the copyright for all future works before they are even created.

It is highly recommended that a creative party, whether author or singer, retain a skilled lawyer to review any contract that threatens the ownership or rights in the copyright of a specific work or future works. Of course, it is not always a bad thing that these rights are transferred or exclusively licensed. Still, such rights should be understood by the creative party in the context of the overall agreement to provide the creative party with an exit strategy in case the relationship between the parties doesn’t work out. An artist, author, or singer, often spends their entire life trying to ‘catch a break’ or ‘make it big’ or ‘break out,’ why not spend the time and minimal expense to protect what took in some cases a lifetime to achieve?

Have you received your first contract? Contact McClanahan Powers today to schedule your consultation to protect your art.

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