In 2013, a time bomb embedded in the Copyright Act of 1976 starts to detonate, as valuable copyrights fall back into the hands of artists who decide that they would prefer to own their songs, rather than allowing their label and publisher to keep selling them. Recordings released in 1978 will be up for copyright termination in 2013, even if artists legally sold those songs away decades ago. Recordings from 1979 fall into this category in 2014, and so on, over the years.
Lipps Inc - Funky Town (1980)
These are valuable copyrights, useful for licensing in movies, advertisements, and videogames in addition to being sold in iTunes and elsewhere. Wouldn't it be convenient if the labels could devise a way to hang on to those sound recordings? After all, everyone from the guy behind "Funkytown" (listen above) to The Eagles is lawyering up to take back songs sold to labels and publishers.
Indeed, Mitch Glazer, later hired as a lobbyist for the RIAA, gave the labels some grounds to keep these copyrights by adding a provision to the Copyright Act in 1999 that attempts to categorize sound recordings as "works for hire" made by musicians as employees of the labels. The U.S. Registrar of Copyrights objected strongly to the addition because it changed the law, rather than correcting an oversight. (Update: The provision was repealed [thanks, Eriq Gardner], although sources we've spoken with say the "works for hire" issue is still at play today.) Our courts - possibly the Supreme Court - will likely have to untangle the whole mess after artists start trying to get their songs back next year, with notices already being filed.
One magical option for the labels would be to create a new sound recording copyright for these songs - say, by remastering them for iTunes. It did seem a bit odd that Apple, after listening to audiophiles complain for nearly nine years about the sound quality of songs sold in iTunes, would unveil its "Mastered for iTunes" program the very year before these old copyrights started reverting. Could the labels' ace in the hole be a plan to sell newly-copyrighted remasters while allowing the old and busted ones to revert?
After hearing from multiple lawyers and other sources (some who would not comment on the record), we're convinced that Mastered for iTunes cannot allow record labels to defuse this copyright time bomb - even though movie studios have been granted new copyrights for colorizing black-and-white movies. As it turns out, the difference between the regular version of the song and the "remastered for iTunes" version is too small, from a legal perspective, to justify a new copyright (and with it another 35 years of label control). For a new copyright, a band would have to go farther than that - say, by recording a new version.
Steve Gordon summed things up by phone, putting our mind at east that "Remastered for iTunes" cannot be a copyright land-grab disguised as an improvement in compressed sound quality. Casey Rae-Hunter, deputy director of the Future of Music Coalition agreed, saying that there's not enough change in expression between the original and the remaster. (Apple and all four major labels declined to respond.) Then we heard back from New York entertainment lawyer John Tormey III, Esq. (email) with a remarkably in-depth explanation of why Remastered for iTunes won't stop copyrights from reverting to artists starting next year.
If you're interested in the intricacies of this situation, buckle up:
First of all, none of my comments are intended to speak to Apple's specific situation, or the specific situation of Apple adversaries if any.
Second, the two parts to your question may be apples-to-oranges, to some degree. Though there will always be exceptions, those in your hypothetical question taking action to retrieve "revert[ed]" music-related copyrights under the Termination Of Transfer provisions of the U.S. Copyright Act – See 17 United States Code (U.S.C.) § 203, and 17 U.S.C. § 304 – would more typically be songwriters or their families seeking a "return home" of rights in the old songs (compositions), rather than in their corresponding masters (sound recordings). Those are two different rights, albeit corresponding to the same album material perhaps. In fact, the United States Copyright Office (USCO) has two different forms for these two different rights – USCO "Form PA" corresponds to songs (compositions), whereas USCO "Form SR" corresponds to masters (sound recordings).
Traditionally in pop music record-deal history, songs have been exploited by and through publishing companies and performance rights societies as agreed and permitted by the original songwriter (generally speaking and to simplify, "publishing") – whereas rights to the masters traditionally originated with, and often stayed with, the record labels. So, the songwriter/musician signed to a traditional record deal may have retained his/her "publishing" and even received a per-unit record royalty (or been stiffed out of one, perhaps), but that doesn't mean that the songwriter/musician ever had ownership in the master (sound recording).
But for the sake of your hypothetical, let's assume that a songwriter/musician somehow originally held both sets of rights (1. Songs, 2. Masters) in the same initially-self-produced album. And now, there's a later-occurring transferee or licensee, like an Internet distribution company, trying to stave off the songwriter/musician's family's pursuit of revert[ed] (or as I sometimes colloquially say, "recaptured") rights under the Termination Of Transfer provisions of § 203 or § 304.
Sure, your hypothetical Internet company can try to claim a "new copyright" in a newly-reworked master, and can even try to file a new (or additional) Form SR with the United States Copyright Office (USCO) corresponding to it, but: (A) the USCO, federal courts, and jury might still disregard the Internet company's claim and filing post facto, and adjudicate to same effect when the claimed "new" right is administratively-tested and/or forensically-tested; (B) the Internet company may be making the "new" claim and filing for "bluff" purposes alone and full well know how flimsy their theory is under their own fact-pattern, never having any intention to go to court or even to the USCO with the "new copyright" theory; and (C) the analysis could be affected by whether the copyright in and to the original, underlying sound recording has already fallen into the public domain (PD) at time of the remastering. If a party in the old chain-of-title for the original master failed to timely file a renewal when the statute required, for example, the copyright in the underlying original work could already be PD, and a new claim and filing won't bring it back from the dead.
"Derivative work" is a term of art under the Copyright Act. Under the Copyright Act, a "derivative work" is defined as a work based upon one or more pre[-]existing works… such as a new musical arrangement – or, yes, a "transformed" "sound recording" – your very case. See 17 U.S.C. § 101. Depending upon factual circumstances, one could argue that a remaster based upon an original master, is a derivative work of the original master, yet I think that would pre-suppose audibly-detectible differences between the first and second master such that USCO, judge, and jury wouldn't otherwise simply hear the two as identically the same. Jurors, particularly, aren't always musicians [our emphasis].
Let's assume, though, that your hypothetical new master is significantly audibly-distinct from, and even improved with respect to, the first master. Still, as stated by the Second Circuit, a derivative (work) copyright is a good copyright only with regards to the original embellishments and additions made [to] the underlying work [our emphasis]. See, e.g., Harvey Cartoons v. Columbia Pictures, 645 F. Supp. 1564, 1570 (SDNY, 1986). Copyright in a derivative… work merely protects against copying or otherwise infringing… the original contribution contained in the derivative work. Harvey Cartoons v. Columbia Pictures, 645 F. Supp. 1564 (SDNY, 1986). See also Rohauer v. Killiam, 551 F.2d 484 (2nd Cir. 1977).
So, yes, the Internet company could try to claim a "new" copyright in the new master. But that claim is limited to the incrementally-added material, at best. And that "new" claim shouldn't extend the old copyright term in the underlying master – else the limitations on the term of copyright under 17 U.S.C. § 302 would be rendered meaningless thereby. Imagine record labels re-registering new masters every few years, on into perpetuity perhaps, subverting the purpose and intent of the Copyright Act – which instead only intends to confer a limited but not perpetual lawful monopoly to rights-holders.
Rather, the best that the Internet company in your hypothetical can hope for, when claiming and registering a copyright in the new master, is to seek protection in the new additions made to the old work. That being said, if a USCO Examiner, federal judge, and/or jury can't actually hear the changes between the old and new work, then the claimant is going to have a difficult if not impossible time as a practical matter alone, using federal law and the judicial process to enforce those "new" claimed rights [our emphasis]. Also, if the original underlying sound recording has already fallen into the public domain, the claimant will likely not evoke much judicial sympathy under the hot lights of litigation, to say the least, as the claimant's new action will look more like a ruse trying to resuscitate dead rights than anything else. In other words, under most scenarios, there won't likely be much substance to the remasterer's "new claim".
As for whether or not the claimant could try to use the new claim or filing for the re-master as a shield against songwriter descendants proceeding under the Copyright Act's Termination Of Transfer provisions (17 U.S.C. § 203, and 17 U.S.C. § 304), I doubt that that approach would be effective under most circumstances, except maybe as a bluff perhaps. The statute and legislative intent are clear that the party acting pursuant to the Termination Of Transfer provisions of the Copyright Act, should be entitled to recapture (or as the statute says, "rever[sion]") of the original rights as the statute provides. Most "recapturing" parties in your hypothetical would likely be pursuing recaptured rights to compositions rather than sound recordings. The majority of such Termination Of Transfer scenarios in music will be songwriter-families recapturing rights to songs and not masters. Their songwriter forebears often never maintained rights in the masters to begin with.
There you have it.