Under Section 203 of the 1976 Copyright Act, assignments of copyrights by authors after January 1, 1978, are subject to termination starting 35 years through 40 years after the date of the grant, regardless of any term stated in the agreement. Congress intended that authors have the opportunity to repossess copyrights and enjoy future rewards of their creative works at a point in time when they have a better sense of their works' values and more bargaining power. This "second bite at the apple" protects authors from transfers for which they were inadequately compensated. To protect authors' interests, the Copyright Act does not allow them to contract away or waive these termination rights in advance. Conversely, works-made-for-hire are not subject to any terminations. This is the key consequence in deciding whether a record company owns a sound recording as a work-made-for-hire or as an assigned copy-righted work.
Adam H. Dunst,
"It's Mine! No, It's Mine! No, It's Mine!" Works-Made-For-Hire, Section 203 of the Copyright Act, and Sound Recordings,
7 Vanderbilt Journal of Entertainment and Technology Law
Available at: https://scholarship.law.vanderbilt.edu/jetlaw/vol7/iss3/1