In a decision with potentially far-reaching implications for copyright transactions, the U.S. Court of Appeals for the Fifth Circuit held that statutory termination rights under the U.S. Copyright Act can revest worldwide copyright interests, not merely U.S. rights, when the terminated grant arises under U.S. law.

Congress enacted termination rights to address the unequal bargaining power faced by authors who assigned copyrights early in their careers. While courts and practitioners have long treated foreign exploitation rights as immune from termination, the Fifth Circuit rejected that assumption. In a dispute involving the 1962 musical composition “Double Shot (Of My Baby’s Love),” written by Cyril Vetter and Donald Smith but assigned to Windsong Music Publishers in 1963 for $1, the court concluded that where the author’s rights derive from U.S. copyright law, termination restores the full bundle of rights — including those exploited abroad.

The ruling departs from earlier authority limiting termination to domestic rights and calls into question the durability of legacy grants purporting to convey perpetual worldwide interests. Although the decision is binding only within the Fifth Circuit, it introduces a possible paradigm shift for copyright chain-of-title analysis, catalog valuations, cross-border licensing strategies, and assignments of rights from artists with limited bargaining power. Rightsholders, publishers and counsel should reassess existing agreements in light of the court’s expansive interpretation of termination’s territorial scope.