One of the features of the Copyright Act of 1976, which took effect on January 1, 1978, are provisions that allowed either a creator or a creator’s heirs to reclaim copyright ownership of rights that had been assigned by the creator. The purpose of these provisions is based in equity. Prior to the provisions taking effect, once a creator signed away their rights in their creation, their rights were gone. It was based on a longstanding legal principle that once the owner of an item sold it to a third party, the former owner no longer had any rights over the item. If the owner of a car sells it to a third party, the former owner no longer has any right to the car. It is the same with furniture, a house, or any other item.
However, over the decades of the 20th century, as movies, music, and television became lucrative forms of income, it became clear that the above legal principle was having a very unfair result. One of the reasons is that a car, house, or other tangible property can be given a monetary value based on the current market and other resources. Anyone who has ever sold their car (or traded it) knows to look at Kelley Blue Book to determine a value for that car. However, intellectual property, particularly in the creative industry, can be almost impossible to value at the outset. Who knows what will be popular and become the next classic? What will fade into obscurity? Additionally, there tends to be a huge power imbalance between the negotiating power of a large corporation and an individual creator. Under the old Copyright Act, entertainment industries were making billions while many times the original creator was living in poverty.
The Copyright Act of 1978 sought to remedy this by creating a termination right, and giving the original creator (or their heirs) the ability to terminate the assignment. The idea was to force the large corporations back to the table to renegotiate the original deal to acknowledge the value of the creation and to allow the creator or their heirs to share in the profits. However, there is a window of time in which to assert termination rights. Additionally, there is a carve-out. Any work that is a “work-made-for-hire” is not subject to the termination provisions of the Act.
The copyright termination window has now opened for many of the Avengers characters in the Marvel Cinematic Universe: Thor, Iron Man, Dr. Strange, Black Widow, etc. Several heirs have already filed the required termination notices, and Disney is seeking a declaratory ruling by the court that they were works-made-for-hire and therefore exempt from the termination provisions of the Copyright Act. There’s no need to go into detail here, as The Hollywood Reporterhas an excellent write up outlining the situation facing Disney now, not only under US copyright law, but potential outcomes in other countries with different copyright laws should the termination succeed. You can read the article at https://www.hollywoodreporter.com/movies/movie-news/disney-copyright-termination-1235020849/. I suspect this case, should it proceed through the courts and not settle, could determine the future of termination rights.