Notices of Statutory Terminations

The U.S. Copyright Act (the “Copyright Act” or “Act”) allows, under certain circumstances, authors or their heirs to terminate an author’s grant of a transfer or license of one or more of the author’s exclusive rights under the Act to a third party. This right to terminate a copyright transfer is often referred to as the “Termination Right” or the “Statutory Termination Right.” The provisions in the Copyright Act that pertain to the Statutory Termination Right are set forth in Sections 203, 304(c), and 304(d) of the Act. In the context of the music publishing industry, contracts between songwriters and music publishers often include the transfer of the copyright in a musical work (via a grant or license) that may be subject to the Statutory Termination Right.

There are several factors and exceptions that must be considered in determining whether the transfer of the copyright in a musical work (aka a song) is subject to the Statutory Termination Right, and a specific time-sensitive procedure must be followed to terminate such a transfer. For a comprehensive explanation of the Statutory Termination Right and the process by which an author or heir may terminate a transfer of copyright, please visit the U.S. Copyright Office website page on Notices of Termination, available here. The Copyright Office has provided helpful information on a number of important topics related to the Statutory Termination Right, including:

• Eligibility to terminate
• Who may terminate
• When to terminate
• How to Record a Notice of Termination with the Copyright Office

The Copyright Office has also established specific rules that guide how The MLC should handle termination claims from rightsholders. These rules outline how The MLC reviews termination notices and manages royalties for songs or song shares affected by these claims or disputes. The MLC is in the process of incorporating these rules into a Statutory Terminations Policy, which will be available on The MLC’s website upon publication.

The Copyright Office has also established specific rules that guide how The MLC should handle termination claims from rightsholders. These rules outline how The MLC reviews termination notices and manages royalties for songs or song shares affected by these claims or disputes. The MLC is in the process of incorporating these rules into a Statutory Terminations Policy, which will be available on The MLC’s website upon publication.

Please note that the specific rules apply mainly to the compulsory blanket mechanical license (“blanket license”) established under the Music Modernization Act (“MMA”) and administered by The MLC. The application of the law related to the Statutory Termination Right may differ in situations outside of the blanket license context.

You must give The MLC notice of your statutory termination claim by completing and submitting a Termination Notice Form. A copy of the Termination Notice Form is available here. Before you complete and submit the Termination Notice Form, you should review the Termination Notice Form Guidelines, available here, and gather all necessary information and documentation.

The Copyright Office has established specific rules that set forth the process The MLC must use to (1) analyze notices of statutory termination claims received from rightsholders and (2) determine how to administer royalties for works and shares of works subject to statutory termination claims or related disputes. The MLC is in the process of incorporating these rules into a Statutory Terminations Policy, which will be available on The MLC’s website upon publication.

If you submitted a Termination Notice Form and have questions concerning your submission, please contact publisherservices@themlc.com.

Royalties that become available for distribution after The MLC has implemented and given effect to a Termination Claim can be categorized as either Post-termination Activity Royalties or Pre-termination Activity Royalties.                        

Post-termination Activity Royalties are royalties related to activity that takes place after the termination date. The specific rules established by the Copyright Office direct The MLC to pay royalties related to post-termination activity to post-termination owners.

Pre-termination Activity Royalties are royalties related to activity that took place before the termination date, such as previously unmatched royalties, reprocessed royalties, and DSP adjustments to previously distributed royalties. The specific rules established by the Copyright Office direct The MLC to pay royalties related to pre-termination activity to post-termination owners. However, if the pre-termination owner contacts The MLC and provides documentation demonstrating they are entitled to continue to collect royalties for pre-termination activity, The MLC will pay royalties related to pre-termination activity that become available for distribution after the termination date to the pre-termination owner.

Examples:

If a work has a termination date of January 31, 2024 and the pre-termination owner has not demonstrated that they are entitled to royalties related to pre-termination activity:

• Pre- and Post- termination Activity Royalties: The MLC will pay Pre- and Post- termination Activity Royalties available for distribution after January 31, 2024 to the post-termination owner.

If a work has a termination date of January 31, 2024 and the pre-termination owner has demonstrated that they are entitled to royalties related to pre-termination activity:

• Post-termination activity royalties: The MLC will pay royalties available for distribution after January 31, 2024, which relate to activity that took place on or after February 1, 2024, to the post-termination owner.
• Pre-termination Activity Royalties: The MLC will pay royalties available for distribution after January 31, 2024, which relate to activity that took place on or before January 31, 2024, to the pre-termination owner.

Royalties that become available for distribution after the termination date can be categorized as either:

Post-termination Activity Royalties: royalties related to activity that takes place after the termination date.

Pre-termination Activity Royalties: royalties related to activity that took place prior to the termination date, such as previously unmatched royalties, reprocessed royalties, and DSP adjustments to previously distributed royalties.

The Copyright Office rule directs The MLC to pay any royalties that become due after the termination date (regardless of when the activity that generated those royalties took place) to the post-termination owner. However, if the pre-termination owner contacts The MLC and demonstrates that they are entitled to collect royalties for pre-termination activity, The MLC will pay those royalties to the pre-termination owner.

To notify The MLC of a claim to pre-termination activity royalties, a pre-termination owner must submit a written claim to publisherservices@themlc.com.

In your claim, please identify yourself as a pre-termination owner seeking future payment of royalties from pre-termination periods and provide information sufficient for The MLC to identify the works or shares at issue.

In 2022, when the Copyright Office initiated the proceeding that resulted in the rules published on July 9, The MLC voluntarily suspended its former Statutory Termination Policy pending the outcome of the proceeding. The MLC also began holding royalties for uses of musical works subject to statutory termination claims.

The rules replace The MLC’s prior interim Statutory Terminations Policy and outline how The MLC should (1) analyze notices of statutory termination claims received from rightsholders and (2) determine how to administer royalties for works and shares of works subject to statutory termination claims or related disputes. In accordance with the rules, The MLC will handle termination claims as follows:

The MLC will correct previously processed usage

The rules require The MLC to follow a multi-step process for (1) debiting payments made to pre-termination owners under The MLC’s prior interim Statutory Terminations Policy, and (2) crediting those payments to post-termination owners. In September 2024, The MLC notified all affected Members with detailed information about this adjustment process and the steps they need to take. If you received a notice and have questions about the information included in the notice, please contact publisherservices@themlc.com.

The MLC will process royalties currently on hold

The MLC will apply the rules to the held royalties and begin paying those royalties to rights owners in the November 2024 royalty distribution.

The MLC will apply the process set forth in the rules going forward

Post-termination Activity Royalties: The rules require The MLC to distribute all royalties related to activity that takes place after the termination date to the post-termination owner. The MLC will begin paying these royalties to post-termination owners in the December 2024 distribution.

Pre-termination Activity Royalties: If the pre-termination owner contacts The MLC and provides documentation indicating they are entitled to continue to collect royalties for pre-termination activity, The MLC will pay royalties related to pre-termination activity that becomes available for distribution after the termination date to the pre-termination owner.

Please see the section on this webpage entitled “I am the pre-termination owner of a work. How do I submit my claim to royalties that relate to activity that took place before to the termination date?” for additional information on how a pre-termination owner may provide The MLC with notice indicating entitlement to collect pre-termination royalties.

If you submitted a Termination Notice Form and have questions concerning your submission, please contact publisherservices@themlc.com.