An author (or their heirs) may terminate a copyright assignment, or other transfer, under section 203(a) of the Copyright Act, 17 U.S.C. §§ 101, et seq. Depending on when the copyrighted work is published or not, an author may serve a notice of termination within a specific window of time at the end of thirty-five years from the date of publication, or forty years after the assignment/transfer, whichever is earlier. The termination notice must also be filed with the Copyright Office.

The requisite notice of termination sets forth the “effective date” of termination, within the five-year termination window, when the previously transferred rights under copyright can be recaptured by the author. A notice of termination may be served by the author at any time between ten (10), and two (2) years before the effective termination date. 17 U.S.C. § 203(a)(4)(A).

The termination right is a way for an author, who may have lacked bargaining power earlier, to extract more equitable compensation for the work many years later for works that have stood the test of time. An author's exercise of the termination right often results in a new license by the author to the terminated grantee. This termination right applies to copyright assignments, but not works-made-for-hire (such as works made by an employee within the scope of employment).

An exception to this termination right, however, allows derivative works created before the termination to continue to be utilized by the terminated grantee under 17 U.S.C. § 203(a)(3), so as to balance the rights in those derivative works against those of the original author.

Top Guns' Termination Notice

This “prior derivative works exception” to a copyright termination notice is at issue in the recent lawsuit filed against the producers of the hit “Top Gun: Maverick” movie in Yonay v. Paramount Pictures Corp., No. 2:22-cv-03846 (C.D. Cal. June 6, 2022).

The original Top Gun movie in 1986 gave a “suggested by” credit to a non-fiction magazine article, “Top Guns,” written by Ehud Yonay that was published in 1983. Paramount secured from Mr. Yonay an exclusive “Assignment of Rights” of motion picture and allied rights in the “Top Guns” article.

Decades later, Tom Cruise, the star of the original Top Gun, announced in 2017 that a sequel was in the works. Filming wrapped around June 2019.

On January 23, 2018, Yonay's heirs served a statutory termination notice to Paramount with an effective date of January 24, 2020 for the termination. The Yonay complaint also alleges that the sequel “was not completed until May 8, 2021.”

One of the key issues will be whether the “Top Gun: Maverick” movie was sufficiently completed before the January 2020 termination date, including the impact of post-production editing, and the COVID-19 pandemic, in determining the completion date for the movie.

Another key issue is whether a fictional film about naval aviators training at the Navy Fighter Weapons School is transformative of a non-fiction article about real naval aviators training at the Navy Fighter Weapons School. Derivative works may be infringing, but transformative works are not. Alleging that the sequel is clearly “derived” from the earlier Yonay article, the complaint includes a multi-page “Chart of Similarities” between the two.

The Yonay complaint was filed after “Top Gun: Maverick” had grossed nearly $300M in the U.S., so expect a dogfight.

The copyright attorneys at Thomas P. Howard, LLC litigate nationwide and in Colorado.