Copyright Transfers for Businesses—Don’t Forget: Record the Assignment

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[author: Kaiser Wahab]

When purchasing or selling a copyright one has to understand two major concepts: 1) a copyright is not a single slab of intellectual property, but rather a bundle of rights; and 2) sometimes it makes sense to give notice to the world (by recording the transfer with the United States Copyright Office.)   When generally referring to transfer of copyrights and their underlying rights, the phrase “assignment” is used.  The following discusses how assignments generally come about and the advantages of recording them.

The Mechanics of a Copyright Assignment

As mentioned a copyright is not a single right, but rather a set or bundle of rights.  That bundle is comprised roughly of: the right to make copies of the work, the right to make derivative works of the work, the right to display the work, the right to perform the work, etc.  Hence, an assignment can speak to all or some or one of the above rights.  Moreover, these assignments can be further tailored and focused on particular rights, territories, time frames, and a vast variety of other specifics.  Keep in mind also that one can exclusively (versus, logically, non-exclusively) assign such rights, meaning that the recipient is the only one who can exploit that assignment.  While an assignment of non-exclusive rights can be made without a written contract evidencing such assignment, under the Copyright Act any exclusive assignment needs to be made pursuant to a written agreement.   In addition, a copyright may also be transferred by virtue of the law or another legal mechanism (e.g., a court judgment, a will, a divorce, etc.)  However, these mechanisms are beyond the scope of this article.

Joint Authors and Copyright

Speaking to a very special case of copyright ownership, “joint authorship,” the need for written agreements is all the more pronounced.  That is because under the law, two joint authors in a work equally possess the right to assign rights in the copyright.  As a result, a collaboration or copyright administration agreement that restricts and defines the rights of the authors to do so is very much called for (one of the parties is usually granted the sole right to handle and administer the rights in the joint work, provided a full accounting is rendered to the other). And any assignment arising out of that relationship should similarly be documented in writing.

Why should you Record an Assignment of Copyright?

If you are an assignee, (i.e., the copyright was assigned to you), there are manifold benefits to “recording” that assignment.  Recording simply refers to filing that assignment agreement with the US copyright office.  This is akin to a variety of other instances where documents evidencing a transfer are recorded with a third party government office (the most familiar of which to many is the recordation of a mortgage and deed transfer with the county clerk, another familiar one is the filing of a UCC-1 lien, which is made pursuant to state law and the uniform commercial code.)

One may ask why record if one already has a copyright transfer agreement in place that should bind the assignor and the assignee?  Although an agreement may bind the assignor and the assignee to the terms of the transfer, there may be third parties out there that may not have an understanding that the copyright is off limits. Hence, the primary benefit to recording is girding the assignee’s rights against third parties who are not privy to nor bound by the transfer agreement. The following illustrates how and when this kind of notice can be critical:

A. When Jockeying for Position with a Group of Transferees.  Sometimes there are situations where the original owner (or the joint owner/author) irresponsibly made a cluster of assignments to third parties. Such transfers could have been exclusive or non-exclusive. In that scenario, the first recorded assignment may have priority, especially if the recorded agreement laid down restrictions on assignability that the transferor violated with the other transfers.

B. To Provide Notice in General or Constructive Notice to the World. When acquiring an assigned copyright, sometimes you want to shout it out to the world.  The filing and recording of the transfer document can create a “constructive notice” (which means even if the third party was not actually notified of such assignment, the agreement can be used against such party to an extent, e.g., to increase a damages award against such party for infringement).  Quick tip: recording an unregistered copyright’s transfer has little value.  Hence, before recording, or concurrently with recording, one should register the copyright with the copyright office.

Published In: Administrative Agency Updates, General Business Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Wahab & Medenica LLC | Attorney Advertising

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