§4001 Assumption of Contractual Obligations Related to Transfers of Rights in Motion Pictures

Summary

When the copyright in a U.S. motion picture is transferred and the transfer is not limited to public performance rights, the new owner must follow any union-made rules that say the buyer must keep paying residuals and giving required notices, as long as those payments and notices apply after the transfer. The new owner must follow those agreements if the buyer knew or had reason to know the union contract applied, or if a court confirms an arbitration award against the seller and the seller cannot pay it within 90 days. "Knows or has reason to know" means actual knowledge, constructive notice from a recorded copyright document or from a union website that shows the film is covered (but only if the transfer happens after the film is finished or within 18 months before the copyright registration or first U.S. publication), or other clear facts showing the contract applies. Transfers that only give public-performance rights to a TV station, cable system, or programmer are excluded while they are just showing the film, but the exclusion does not apply if the buyer is acting like a distributor or producer. Transfers that are only security interests (like a mortgage) and later transfers by the secured party are also excluded. A new owner who is held to these duties can delay payments that are in a real dispute between the union and the prior owner, but the union’s claims still keep accruing. The law does not change what the union contracts already say. If the seller failed to tell the buyer about union obligations and the buyer becomes liable only because the seller couldn’t pay an award, the seller must pay the buyer’s damages. Disputes go to U.S. district court, which may award costs and reasonable attorney fees. The Comptroller General, with the Register of Copyrights, must study the industry causes and effects and report to Congress within 2 years after the chapter’s effective date. Definitions: - "Transfer of copyright ownership" — a change in who owns the copyright under U.S. law. - "Motion picture" — the meaning given in 17 U.S.C. 101.