Termination rights - A first step towards reparations in the creative industries

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(Photo: Goethe Institute/ Supplied)
(Photo: Goethe Institute/ Supplied)
  • Copyright law includes the right to copy, use, sell or distribute as well as preventing others from copying or using your work.
  • When a creative signs an agreement that grants all or a combination of these rights to a person or company, it's an assignment of copyright.
  • In what is considered a bold move, the South African government has proposed the inclusion of termination rights as a standard feature of all copyright assignments of literary and musical work.

On 24 November 2020, American comedian Dave Chapelle released a video on his social media of a short stand-up routine titled "Unforgiven". Controversially, in the widely circulated comedy routine, Chapelle encouraged his audience and fans NOT to watch the Dave Chappelle Show, which turned him into a household name. According to the artist, the contract he signed for the show meant he wasn't participating equitably in the profits from the show.

"Do you know why Prince, the famous rock star that was a friend of mine, [he] called himself The Artist when he came back? He calls himself The Artist because that's what they call us in our contracts. Oh, these contracts are crazy. You should hear the terminology they say in these contracts, 'to use your name and likeness in perpetuity throughout the universe'. Who the f**k could possibly know what that means? Nobody does. It's so complicated, in fact, that when you're a kid like me, you have to hire somebody to tell you what that means, and you sit down at the table and you do the contract game. And that's how I got with Comedy Central, I signed a contract

"But I signed the contract the way that a 28-year-old expectant father that was broke signs a contract. I was desperate. I needed a way out, and it wasn't good money, and it wasn't good circumstances, but eh, 'what else am I goin' to do?', I said. And all these white people sitting around the table told me, 'Trust us, Dave, it's a good contract'. And I looked around the table and they all seemed to agree it was a good contract… but what if they were all friends, and I didn't know it?"

Aside from the often-unaddressed issue of close relationships across the contract, which is an inherent aspect of a small industry like South Africa's, Dave Chapelle highlights a typical set of circumstances in which many artists sign their copyright assignments.

Coupled with the unpredictable cultural reset the show turned out to be, this all meant that when he signed he could not have anticipated it's real value, and should have a chance now – years after the height of the show's success – to renegotiate. If Dave Chapelle's contract was subject to a regime of automatic termination rights, his contract would have automatically been up for negotiation at some predefined point.

The motivating factor behind the automatic inclusion of termination rights in South Africa's proposed Copyright Amendment Bill is to place a powerful tool in the hands of anyone who has signed an exploitative contract which passes their copyright to someone else. Yet most people who work in the creative and entertainment industries have never heard of termination rights (also known as reversion rights), despite the fact that these rights have the potential to revolutionise the way in which creatives access their intellectual property rights.

Copyright law is a bundle of rights including the right to copy, the right to use, the right to sell or distribute and the right to prevent other people from copying, using or selling your work. When a creative signs an agreement that grants all or a combination of these rights to a person or company, it is called an assignment of copyright. In what is considered a bold move, the South African government in its latest iteration of a Copyright Amendment Bill (CAB) has proposed the inclusion of termination rights as a standard feature of all copyright assignments of literary and musical work. It drastically changes the default position from copyright assignments that are potentially for the entire life of the copyrighted work, to a much shorter period.

It reflects a policy position that, at some point, copyright granted and the right to make decisions on the exploitation of the copyright held, should revert back to the creative. The government has determined that "certain point" of reversion to be 25 years. It fulfils an expectation that at a reasonable point, long-term success should translate into leverage. It wages war on those whose business model is based on exploitation and adds to a global conversation about a movement for parity in copyright.

[The inclusion of automatic termination rights has been one of the most polarising proposals in the Copyright Amendment Bill. It was included to tackle an indication that something may be structurally wrong, with how artists are signed and how copyright in their work is assigned. The argument from those who oppose the proposal for automatic termination rights, is that the entity which develops the artist, invests in the artist and distributes the artist's work, and to whom the artist assigns their copyright, assumes the risk, and therefore should reap the reward. The argument is that many artists are unsuccessful and the windfall from a successful artist is used to offset the losses from less commercially successful projects. Automatic termination rights operate to minimise the risk of exploitation in that model. The proposal is that after 25 years, the artist deserves to participate in whatever reward is left to be had. Under the current regime, even at the height of their success, the most successful artists have not gained enough leverage to renegotiate.

An indication that there is almost no amount of leverage that allows an artist to renegotiate their contract, and perhaps that a legislative fix is required.]

The creative and entertainment industry is founded on the assignment of copyright from the person who creates the work, to the person who will be able to pay them to use their work. There are many instances in which a creative may need to assign the copyright in their work. A creative may need to assign the copyright to a record company so that they can make copies of their work. A creative may need to assign the right to distribute to a publisher so that they can sell the work and collect royalties on the creative's behalf. A staff photographer for a newspaper may have signed an employment contract that automatically assigns copyright to the newspaper for all the photographs they take for the newspaper. A writer may need to assign their copyright to a movie studio so that they can use their script in their film. The effect of the proposed termination rights would mean that after 25 years, these standard industry copyright assignments would automatically come to an end and the copyright would revert back to the original creative.

The inclusion of automatic termination rights in South Africa's copyright regime presents a new risk for both the creative and the persons or entities they assign their copyright to. What if they can't come to an agreement? What if the creative wants substantially different terms or more money? What if the record label or network or streaming service is no longer interested in continuing the relationship? Consider if the copyright relates to an inseverable underlying work. An inseverable work is the body of work which newly created content copies from – for instance, the Logan movie (2017) based on the Marvel comics. Or a song that becomes a focal point of a movie, like any of the songs accompanying the dance sequences in the Step Up movie franchise.

If the creative or their heirs no longer want to have the song in the movie, the movie studio would either be unable to continue distributing the movie or invest money in substituting the song. In these complex cases, it is likely the parties would have to approach the newly proposed Copyright Tribunal for a solution, which may include a compulsory licence (a right to use with terms set by law or the courts) to ensure fairness for all parties involved. However, since the 25-year limit will now be a standard feature, all parties will be able to structure their copyright assignment agreements and business models to work around the risk of this new limited period of assignment.

The proposal that every copyright assignment includes termination rights which come into effect automatically after 25 years is an acknowledgement that most creatives would not foresee that even at the height of their careers, the imbalance of power reflected in their initial agreement would never be shifted to reflect a more equal relationship. It is a paternalistic proposal that seeks to superimpose a common understanding of the true value of the contract and allow the creative to renegotiate once they have reached that common understanding. Most creatives cannot predict the potential value of their copyright when they first sign the agreement to assign their copyright.

Even if the creative has an inkling of the potential success of their assigned work, the rationale is that entering into unfavourable terms is an initial cost of success which can be undone once leverage has been achieved. Many creatives find themselves looking for a lawyer to help them get back the copyright they assigned. Termination rights are an attempt to limit the number of creatives approaching the courts to get back their copyright assignments. It is good to know the law, but if the culture is exploitative, then loopholes will be found. So the government has leaned into a policy framework that forces fair contracting and business practices in the creative industries and creatives to make fair business practices the industry standard, if not at the initial contracting stage, then 25 years later.

Termination rights are the structural fix. They determine the point at which the investor should have made their money back and should be able to renegotiate the contractual relationship going forward, working collaboratively with the co-investors. Termination rights envision an alternative model where it becomes standard for a label, publishers and other parties involved in the value chain to make good on their investment and, at the same time, shift the balance of power in favour of the creatives at the height of their success.

There are several historical and modern examples in which the automatic inclusion of termination rights may have prevented a court process. Perhaps the most famous examples in a South African context are the examples of musician and composer Solomon Linda's Mbube and photographer Sam Nzima's Hector Pieterson photograph. Solomon Linda composed Mbube, a song that would subsequently be rerecorded as The Lion Sleeps Tonight and found itself included in the soundtrack of Disney's The Lion King (1994 and 2019). San Nzima was a staff photographer at The World when he took the series of photographs depicting Mbuyisa Makhubo carrying Hector Pieterson on 16 June 1976.

In both these examples, the creatives assigned their copyright for the lifetime of the copyright. Sam Nzima's photograph of Hector Pieterson was seen around the world. Mbube became a global hit as The Lion Sleeps Tonight. The assigned works became astronomically commercially successful in a manner the artists could never have predicted. Perhaps if automatic termination rights were included, Sam Nzima and Solomon Linda or their estates would have been able to renegotiate a fair share of the value extracted from their work. Solomon Linda composed a hit, one which almost a 100 years later is still resonating with audiences. His estate should be wealthy off of that. In 2006, the estate of Solomon Linda finally reached a settlement which included past and future royalties and an acknowledgement that The Lion Sleeps Tonight was derived from Mbube.

Termination and reversion rights acknowledge that most creatives would not forsee that even at the height of their careers the imbalance of power reflected in their initial agreement will never be shifted to reflect a more equal relationship. Where lack of commercial success has enabled largely black creatives to remain in obscurity, a second bite at success through termination rights may enable redress and bring many black creatives out from the shadows to hold their own trophies and reap their own rewards.

This article is the second of the Cav' series, which looks at art and policy-making on the continent. This article was produced in partnership with the Goethe CAV Platform, a platform to strengthen the cultural and creative industries by the Goethe-Institut.

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