Copyright Law: Spring 2002 Professor Susanna Fischer CLASS 15 March 11, 2002

GOALS FOR CLASS To learn about transfer of copyright ownership

WRAP UP POINTS: TRANSFERS OF COPYRIGHT OWNERSHIP Copyright ownership may be transferred via exclusive licenses or assignments or by operation of law. Other copyright rights can be non-exclusively licensed. Transfers of copyright ownership must be in writing and signed by copyright owner (or agent of owner). Nonexclusive licenses can be oral and/or implied from conduct.

WRAP UP POINTS: TRANSFERS OF COPYRIGHT OWNERSHIP The 1976 Act recognizes the divisibility of copyright ownership - rights can be separately owned. Only a copyright owner (assignee, exclusive licensee) can sue for copyright infringement.

WRAP-UP POINT: RECORDATION Transfers of copyright ownership and/or other signed documents relating to copyright (like wills) can be recorded. Recordation (within 1 month of transfer if executed in U.S.) operates as constructive notice giving transferee priority over subsequent transferees.

WRAP-UP POINT: RECORDATION Written signed nonexclusive licenses prevail over conflicting transfers of copyright ownership even if transfers recorded, if license before transfer or license executed in good faith without notice of transfer or before its recordation.

TERMINATION OF TRANSFERS 1976 Act has some provisions retaining 1909 Act power for authors and survivors to terminate transfers of copyright at a certain stage into the copyright term These provisions are section 203 and section 304© We will study them later in the semester

Peregrine case (C.D. Cal. 1990) What does this case hold?

Peregrine case (C.D. Cal. 1990) What does this case hold? Section 205, provision for recordation of transfers of copyright ownership in the Copyright Office, preempts state laws such as UCC providing for recording of security interests in various state offices Thus, if a bank takes a security interest in copyrights in many works (like the 145 films at issue in Peregrine), it will have to record these in the Copyright Office

Peregrine case (C.D. Cal. 1990) There is much criticism of this case, but subsequent bankruptcy courts have followed it Why has this case been criticized?

Peregrine case (C.D. Cal. 1990) There is much criticism of this case, but subsequent bankruptcy courts have followed it Why has this case been criticized? Because it complicates relatively simple business transactions and also creates uncertainty for past lenders who only made UCC filings Some legislative proposals to overturn this decision, but none enacted so far.

The Securitization of IP? Bowie bonds were a securitization of David Bowie’s royalties, the first securitization of IP assets Some commentators have argued that, despite media hype, there have not been many of these deals in practice and their proliferation is unlikely.

SCOPE OF GRANT You were asked to read a number of cases about the proper scope and interpretation of various license agreements (contracts!) This is an important issue in practice. The question, arising from the general principle of divisibility, is: what copyright has the licensor licensed (or the assignor assigned). We are going to compare the approaches of these cases broadly, but you should make sure you read them carefully.

Comparing Cohen and Boosey What was the difference in approach that the 9th Circuit in Cohen and the 2d Circuit in Boosey took to interpreting the scope of a license agreement? Was there a different policy rationale underlying these decisions? Note that both cases involved both licenses and assignments - in Cohen, Paramount acquired H & J’s rights by assignment and in Boosey, Boosey acquired Stravinsky’s rights by assignment.

COHEN V. PARAMOUNT PICTURES (9th Cir. 1988) Issue? Does a synchronization license conferring the right to exhibit a film using a copyrighted musical composition (distribution right) in motion picture theatres and “by means of television” include the right to distribute the videocassette of the film? Holding?

Comparing Cohen and Boosey Cohen takes the approach that the scope of a license only includes rights that lie “within the unambiguous core meaning of the term”. Effectively favors licensor/author due to policy of Copyright Act. Boosey takes the approach that the language of the license is controlling and that the law should not favor either party.

COHEN V. PARAMOUNT PICTURES: holding Ninth Circuit held that the scope of the license did not include the right to use the musical composition in a videocassette copy of the film. Reverses summary judgment in favor of Paramount.

COHEN V. PARAMOUNT PICTURES: reasoning The language of the license was not broad and contained an express reservation to the licensor of rights not granted by the terms of the license. Moreover, most importantly, home VCRs were not invented at the time the license was executed. The 9th Circuit was concerned about an inappropriate windfall gain to the licensee, which it felt would violate the purpose of the Copyright Act to encourage authors to produce new works.

COHEN V. PARAMOUNT PICTURES: reasoning So to get around this case, you should word licenses as broadly as possible, e.g. the right to exhibit, distribute, exploit, market and perform perpetually throughout the world by any means or methods now or hereafter known.

Boosey & Hawkes v. Disney: 2d Cir Stravinsky composed “The Rite of Spring” Disney entered into 1939 license to use it in the 1940 film Fantasia (in a sequence on dinosaurs) and to distribute it (outside of U.S. because in public domain under U.S. law

Boosey & Hawkes v. Disney Exhibited it in movie theatres under 1939 license for years 1991 film released in video Issue: Did the 1939 Agreement authorize video distribution of the “Rite of Spring”?

Boosey & Hawkes v. Disney: Holding Second Circuit’s Holding: the scope of the license was theoretically broad enough to cover the video distribution of the “Rite of Spring” - remands for trial to determne whether it in fact violated the ASCAP condition (Case eventually settles).

Boosey & Hawkes v. Disney:Reasoning New use analysis should rest on “neutral principles of contract interpretation”, not “solicitude for either party” Should not, as in Cohen, favor author Language of license broad enough to include the new use and thus the burden of negotiating an exception should fall on the licensor (author)

Boosey & Hawkes v. Disney:Reasoning Of course author now deprived of profits from new use. Not totally clear from Second Circuit’s opinion if foreseeability of new use required. They held that this new use was foreseeable. Policy rationale: approach in new use cases that favors licensors actually “gives rise to antiprogressive incentives”

1939 Agreement “In consideration of the sum of $6,000…S does hereby give and grant unto Disney... The nonexclusive, irrevocable right, license, privilege and authority to record in any manner, medium or form and to license the performance of, the musical composition hereinbelow set out.”

Paragraph 4 Disney’s license to the work “is limited to the use of the musical composition in synchronism or timed relation with the motion picture”

ASCAP CONDITION “The right to record the musical composition as covered by this agreement is conditioned upon the performance of the musical work in theatres having valid licenses from ASCAP or any other performing rights society having jurisdiction in the territory in which the said musical composition is performed.”

Paragraph 7 “the licensor reserves to himself all rights and uses in and to the said musical composition not herein specifically granted”

Random House v. Rosetta Books: Which approach does the S.D.N.Y take?

Random House v. Rosetta Books Contracts signed by Styron, Vonnegut and other authors published by Random House provided that RH had exclusive right to publish works “in book form”. Signed a clause promising not to use retained rights in a way that would compete with RH exercise of transferred rights Later conveyed Rosetta books exclusive right to publish electronic version of books Issue: does license to RH preclude Rosetta from publishing electronic versions of books?

Is an e-book a book? How did district court rule on RH claim for a preliminary injunction against Rosetta?

Is an e-book a book? How did district court rule on RH motion for a preliminary injunction against Rosetta? The district court denied RH’s motion

Is an e-book a book? How did district court distinguish Boosey?

Is an e-book a book? How did district court distinguish Boosey? 1. Language in Boosey was broader Was it? and 2. new use in Boosey within same medium as original grant -here new use was a separate medium from original use 3. Unlike movie cases, book publishers did not create a new derivative work 4. Policy rationale of fears that licensees would not encourage innovative technological developments did not apply

“Arising Under” Copyright or Contract Law Licenses are contracts so one might think that disputes over license agreements would be governed by state law, not federal copyright law. Yet clearly some issues involving licenses, such as whether the writing requirement of the Copyright Act are met, arise under federal law. Courts have had difficulty in determining when such claims “arise under” federal law.

New York Times v. Tasini Recent Supreme Court decision concerning clash between copyright owner of collective work and freelance author of a contribution to that collective work. What was the issue for the Supreme Court to decide?

New York Times v. Tasini Does s. 201(c ) protect publishers from infringing freelancers’ copyrights where publishers entered into agreements with database services (such as LEXIS/NEXIS to include freelancers’ articles in the databases without freelancers’ consent?

SECTION 201(c) Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.

A Revision? Was the reproduction/distribution of the articles in the databases a “revision of the collective work”? In the view of Justice Ginsburg, author of the majority opinion (and, perhaps notably for her decision, mother of Professor Jane Ginsburg, author of your casebook)? In the view of Justice Stevens, author of the dissent? What do you think?

Policy Justice Ginsburg noted that there might be policy concerns in finding for the freelancers, as the publishers argued. What were these concerns and how does Justice Ginsburg address them? What does Justice Stevens have to say about these policy concerns?

Did the Freelancers Win the Battle But Lose the War? In Tasini a pyrrhic victory? Will publishers just force the freelancers to enter into assignments or work for hire agreements?