The BBC reports that Disney is using a loophole in the Sonny Bono Copyright Term Extension Act [PDF] to avoid over $1 Billion in liability for theft and piracy of Winnie-the-Pooh's copyright (Disney claims victory in Pooh tussle). Disney is contesting a lawsuit for systematically under reporting the royalties they owe to the people who own Pooh's copyright - which has been leased to Disney since 1961. The plaintiffs against Disney represent those who purchased the Pooh copyrights from A.A. Milne back in the 1920s.
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Without the SBCTEA, Pooh would enter the public domain in 2006. However, Pooh is now expected to enter the public domain in 2026. Interestingly, though 17 USC 304 provides that authors and certain of their heirs may terminate any licensing agreements they may have made for copyrights prior to the extension (there is a specific time frame for this). So, for example, if you licensed a copyrighted work to the end of the copyright, that copyright has now been extended another 20 years. Congress decided that you (or your heirs) should be able to renegotiate that license for the remaining twenty years. Thus, licensees would not get a windfall simply because of the extension.
It is not clear how this will benefit Disney in the current litigation except that, since they are claiming that they hold a license renegotiated with Milnes' heirs for Pooh after 2004, Disney is in a much better position to negotiate a settlement to the current suit.
Frankly, I think that this loophole should be widely publicized. Widows and grandchildren and other heirs should begin to terminate the rights that companys think they have purchased. For example, had Disney purchased the rights to Pooh outright, Pooh's heirs could then terminate Disney's rights, rather than the people who currently own them. Of course, even better would be if the SBCTEA is declared unconstitutional, Disney loses the case, and the greedy idiots who have been thriving off of Milne's work in the 1920s were to stop getting royalties.
Also, I never before noted that 17 USC 304 is fascinatingly complicated and shows what an administrative pain-in-the-rear the SBCTEA really is.
Other coverage:
Reuters - Tug-Of-War Over Winnie the Pooh Heats Up
Yahoo! Australia & NZ - Disney Eyes Pooh Rights in 2004, Legal Foe Says No