Eliot Van Buskirk at Wired.com's Epicenter has issued the following report:

Copyright Time Bomb Set to Disrupt Music, Publishing Industries

The late ’70s, when punk exploded and disco imploded, were tumultuous years for the music industry. A time bomb embedded in legislation from that era, the U.S. Copyright Act of 1976, could bring another round of tumult to the business, due to provisions that allow authors or their heirs to terminate copyright grants — or at the very least renegotiate much sweeter deals by threatening to do so.

At a time when record labels and, to a lesser extent, music publishers, find themselves in the midst of an unprecedented contraction, the last thing they need is to start losing valuable copyrights to ’50s, ’60s, ’70s and ’80s music, much of which still sells as well or better than more recently released fare. Nonetheless, the wheels are already in motion.

“The termination that’s going to be coming up is going to be a big problem for the record companies and publishers,” said attorney Greg Eveline of Eveline Davis & Phillips Entertainment Law.

“It’s written into the statute,” said entertainment lawyer Robert Bernstein. “It’s just a matter of time.”

The Copyright Act includes two sets of rules for how this works. If an artist or author sold a copyright before 1978 (Section 304), they or their heirs can take it back 56 years later. If the artist or author sold the copyright during or after 1978 (Section 203), they can terminate that grant after 35 years. Assuming all the proper paperwork gets done in time, record labels could lose sound recording copyrights they bought in 1978 starting in 2013, 1979 in 2014, and so on. For 1953-and-earlier music, grants can already be terminated.

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