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Being a Musician is a Business (The 25-Year Reversion Rule)

Musician Bryan Adams’ arrived in Ottawa on September 18, 2018 to address the House of Commons heritage committee on Canada’s Copyright Act.

As more detailed below, our copyright law provides for a reversionary interest in a creators’ copyright 25 years after his or her death regardless of any assignment or license of his or her work (such as a song or book).

Bryan Adams’ suggestion is that the 25-year period start when the assignment is made as opposed to when the creator dies.

If I give a publisher certain rights to my music, for the duration of the copyright term of that music, those rights would be transferred to my estate 25 years after my death. However, under the proposed amendments, the rights would transfer back to me in 25 years from now.

 

The Existing Law

The existing provision in our copyright law provides that if a creator of a work is the first owner of her copyright (for example, she wrote a song or book on her own as opposed to in her capacity as an employee, whereby rights are automatically owned by the employer), 25 years after the author dies, her copyright becomes owned by her estate, notwithstanding any assignment or license of the work to someone else.

 

The Copyright Act states:

Limitation where author is first owner of copyright

  • 14(1) Where the author of a work is the first owner of the copyright therein, no assignment of the copyright and no grant of any interest therein, made by him, otherwise than by will, after June 4, 1921, is operative to vest in the assignee or grantee any rights with respect to the copyright in the work beyond the expiration of twenty-five years from the death of the author, and the reversionary interest in the copyright expectant on the termination of that period shall, on the death of the author, notwithstanding any agreement to the contrary, devolve on his legal representatives as part of the estate of the author, and any agreement entered into by the author as to the disposition of such reversionary interest is void.
  • Restriction. (2) Nothing in subsection (1) shall be construed as applying to the assignment of the copyright in a collective work or a licence to publish a work or part of a work as part of a collective work.

 

In Canada, works go into the public domain 50 years after the author’s death. As such, under the existing law of the land, rights are controlled by the estate for the 25 years before the works go into the public domain.

 

Potential Concerns

On the surface a shorter assignment period offers creators more control over their work and more potential for reaping the long-term financial benefits that stem from commercially successful creations. However, this may have unintended consequences for artists in the shorter term.  One concern from someone who works with emerging artists is that changing the rule may impact how much publishers and labels are willing to advance on licensed work, as the recoupment period may be shortened.

I work with many emerging artists who have an immediate need to monetize their work.  For many, those advance payments are needed to simply pay the rent so that they can remain focused on their music instead of going back to a day job that takes up their time and creativity. I encourage everyone to plan for success, and while the ability to get your rights back in 25 years sounds exciting, many up and coming artists would be more excited to receive sufficient financial support from a label or publishing company in the present.

A publisher normally tries to equally own a writer’s compositions, indefinitely. When helping artists to negotiate co-publishing deals I may try to get the publisher to agree to give some rights back if the publisher doesn’t generate sufficient financial success within a certain amount of time. For example, if the publisher can’t earn the artist $5K from sync placements after 4 years, the publisher’s 50% of the composition is provided back to the writer.

If the rights granted to the publisher by the artist go back to the artist after 25 years, a concern is that a publisher would be less likely to provide mechanisms for rights to revert before 25 years is up.

Also, if an advance under a co-publishing deal is $25,000, how much would it be reduced if the rights are granted for 25 years instead of the duration of copyright, being the author’s life plus 25 years? Even if the advance is reduced by $5,000, that $5,000 to most people is worth a lot more now than the possibility of $5,000 or more in 25 years when the writer can seek a new deal with the same or a different publisher, if she so chooses.

On the label side, if an artist brings an existing completed album to a label to help market and distribute it, the label is likely either being granted the right to own the master recordings, or the label is granted a license to distribute the music for a specific number of years, in a certain territory, in certain media… such as 10 years in Canada for digital distribution.

If proposed changes to the assignment period are approved, will 25-year deals with Canadian labels become the default going forward? That’s better than losing rights to the masters forever, but a lot worse than licensing the rights for fewer than 25 years.

Under both publishing and record label deals, will offers to artists more likely be arranged in ways that would circumvent the 25-year rule by having the label or publisher being the first owner of the copyright?  Meanwhile, the majority of artists don’t have record labels or publishers so changing the 25-year law would be less impactful than royalties increasing for the use of their music.

 

Where Do We Go From Here?

It’s difficult to predict the value of the benefit of this amendment to composers and authors in Canada. I want artists receiving as much revenue as possible from the exploitation of their music. However, I would prefer instead of an artist getting her rights back from a label or publisher after 25 years, that she licenses her rights for 5 or 10 years, contingent upon the label or publisher being a respectful partner that provides a reasonable share of revenues generated, and has some skin in the game by investing in the artist.

Encouraging changes to the Copyright Act that would amend the 25-year rule idea isn’t the only way we can show our support for artists. Far from it. We can support our authors by buying their books. We can support musicians buy attending shows, buying t-shirts, investing financially in a musician’s career, and joining the conversation about better royalties.

 

Edwards PC, Creative Law is a boutique law firm provides legal services to Music, Film, Animation, TV, Digital Media, Game, Software and Publishing industry clients. For more information and blogs, please visit www.edwardslaw.ca

Regarding music law, Byron Pascoe works with musicians and music companies to assist with record label agreements, publishing contracts, distribution deals, producer agreements, band agreements, etc.

© 2018 Edwards PC

* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards PC, Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.

 

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