1. COPYRIGHT GRANTS AND THE E-SIGN ACT Jeanne M. Hamburg Norris, McLaughlin & Marcus, P.A. 875 Third Avenue New York, New York (212) 808-0700 jmhamburg@nmmlaw.com RPAC Annual Conference May 8, 2006

2. Program Overview of the Requirements of the Copyright Act re: Written Transfers of Copyright Purpose of E-SIGN Act Summary of Provisions of E-SIGN Act Most Relevant to Copyright Transfers Application of E-SIGN Act to Copyright Grants

3. Requirements of the Copyright Act Relating to Signed Writings Copyright Act requires any “transfer of copyright ownership” to be  In writing  Signed by the owner of the rights conveyed or such owner’s duly authorized agent “Transfer of copyright ownership” is in turn defined as “an assignment, mortgage, exclusive license, or any other conveyance, alienation or hypothecation of a copyright or any of the exclusive rights comprised in a copyright….but not including a nonexclusive license

4. When must a transfer of copyright be in writing signed by owner of rights? Whenever there’s a conveyance of copyright or exclusive rights thereunder. Does not apply to “nonexclusive” grants though a writing is recommended. Notarization is not required, but there is value in such an acknowledgment in the event of a legal contest Practical application in publishing context:  A signed writing is required in the case of a publishing agreement which assigns copyright to the publisher or grants the publisher exclusive rights under copyright (e.g. to publish or create derivative works in any medium of expression)

5. Background on E-Sign Act Became effective in 2000 Enacted to bring uniformity to the law governing electronic signatures and records Prior to enactment, area was governed by a patchwork of inconsistent and conflicting State laws

6. Purpose of E-SIGN Act Implements a national uniform standard for all electronic transactions that encourages the use of electronic signatures, electronic contracts and electronic records by providing legal validity for these instruments when signatories comply with E-SIGN Act standards Prevents any legal challenge to a document simply because it is in an electronic format and/or is electronically signed

7. In general terms, when does E-SIGN ACT apply? Any “transaction in or affecting interstate or foreign commerce”. The federal government cannot regulate purely intra-state matters.  Is every copyright grant one which “affects interstate or foreign commerce”? E.g. between people or institutions residing in different states or countries Or which impacts the sale of goods in interstate commerce (across state lines) or in foreign countries Some exceptions to applicability of Act but no mention of (or exception for) copyright grants in the E-SIGN Act

8. Application of E-Sign Act Defines “Electronic Signature” as  “an electronic sound, symbol or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record” Broad definition  Technology-neutral  Includes any symbol or process that is properly connected with the contract and shown to have been made or later adopted by a person having the intent to sign it  Brings to mind age-old rule that any symbol (even an “X”) made with the intent to serve as a signature will suffice

9. Electronic Signature (continued)  Variety of approaches can be used: use of encryption technology which links a person’s identity to a specially encrypted private key that is issued to only one bearer and then is used to electronically sign a communication, which can then be opened by someone with the public key (the recipient) Approach must link the signature to the document; prevent interception and alteration of the digitally signed document before it reaches the sender, or recipient recipient has “duty of care” to determine whether the electronic signature was created by the person to whom it is attributed

10. Notarization: E-SIGN ACT Requirements NOT required for grants of copyright to be effective BUT evidence of the presumptive validity of the grant E-SIGN Act: notarization requirement satisfied if “electronic signature of the person authorized to perform” the notarization “together with all other information required to be included by other applicable statute, regulation, or rule of law [e.g. notary’s id number, State and County in which notary is certified, expiration date of commission], is attached to or logically associated with the signature or record”  Incorporates electronic signature requirements, including authentication requirements

11. Requirements Relating to Electronic Contracts Legal effect, validity or enforceability of an electronic record of a contract will be upheld only if:  it’s in a form that is capable of being retained and accurately reproduced for later reference by all parties or persons who are entitled to retain the contract or record

12. E-SIGN Act Requirements for Electronic Records If the law requires retention of a record—including an “original” contract or record, that requirement is satisfied by retaining an electronic record of the information in the contract or other record that:  Accurately reflects the information set forth in the contract or record; and  Remains accessible to all persons legally entitled to access for the period required by law  Accessible in a form that is capable of being accurately reproduced for later reference through transmission or printing or otherwise

13. Summary E-SIGN ACT provides much-needed uniform standards guiding the validity and enforceability of electronic signatures and records As yet its application in the copyright context has not been legally challenged Guidance on practical implementation of E- SIGN Act for publishers – fellow panelists

14. Jeanne M. Hamburg, Esq. Specializing In:  All aspects of copyright and trademark law  both in litigation and in the transactional area