Sixth Circuit Finds That Roger Miller’s Renewal Copyright Interests Were Properly Conveyed

Case: Roger Miller Music, Inc. v. Sony/ATV Publ’g, LLC, No. 05-6824/6880 (6th Cir. Feb. 13, 2007)

The One Sentence Summary: Defendant proves that it executed a valid contract conveying author’s renewal copyright interests.

What They Were Fighting About: On October 25, 1992, Roger Miller, a well-known country singer and writer, died. During his lifetime, Miller executed publishing agreements that conveyed the original copyrights of his songs to Tree Publishing (Sony’s predecessor). At issue was whether Miller properly conveyed the renewal copyright interests in his music. Specifically, in 1958, 1960 and 1962 Miller executed three publishing agreements that provided that he would sign a separate form for each renewal right he conveyed to Tree Publishing. Although no separate forms were ever signed, the parties entered into an agreement in 1969 that no such separate agreement was necessary for Miller to convey his renewal rights. The plaintiff (Miller’s estate) argued that the 1969 agreement did not encompass renewal rights and thus, it now had an ownership interest in Miller’s music and Sony was consequently infringing its copyrights. In turn, Sony argued that it owned the renewal copyrights pursuant to the 1969 agreement.

Federal Circuit Holdings:

• As a threshold issue, the Court held that the plaintiff’s claim for copyright ownership was timely. An ownership claim is barred three years from a “plain and express repudiation” of authorship. In the instant case, neither Miller’s estate nor Sony ever made a claim that it had exclusive ownership to the copyrights prior to the commencement of the action. Accordingly, the plaintiff’s ownership claim was not barred. In contrast, some of the plaintiff’s infringement claims were barred by the three-year statute of limitations for infringement claims because the plaintiff knew of potential infringements as early as 1995.
• The Court noted that the renewal term of a copyrighted work is distinct from the original copyright and can be therefore transferred independently of the original copyright. Furthermore, there is a strong presumption against the conveyance of renewal copyright interests simultaneous with the original copyright interest. Accordingly, a valid transfer of a renewal interest requires a clear and express grant. Nonetheless, if an author dies before the vesting of the renewal copyright (28 years after the creation of the original copyright), the party to whom the renewal copyright interest was conveyed loses the entitlement to that interest. Thus, an assignee of a renewal right assumes the risk that the right acquired may never vest in the assignor.
• The Court first addressed the validity of the 1969 agreement to assign Miller’s renewal rights without using the separate form originally contracted for. Given that the parties clearly intended to assign renewal rights the Court held that the contract was valid.
• The effect of finding the 1969 contract valid meant that Sony owned the renewal copyrights for songs authored in 1958-63. However, Miller died before the renewal rights for the songs he authored in 1964 vested. Accordingly, the contract alone did not convey the renewal rights to Sony. Whether Sony had an ownership interest in the 1964 songs was remanded to the district court.
  
  

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Disney Declared Victorious In Copyright Infringement Action Over EPCOT

Case: Corwin v. Walt Disney Co., Nos. 04-16554 and 05-12869 (11th Cir. 11/02/2006)

The One Sentence Summary: The 11th Circuit affirmed summary judgment in favor of Walt Disney World Company ("Disney") finding that plaintiff Orrin Corwin ("Corwin") failed to raise a genuine issue of material fact as to either: (1) Disney's access to a painting by Mark Waters of a theme park concept for a "Miniature Worlds" containing cities, villages and landscapes representing nineteen nations from six continents, or (2) as to "striking similarity" between Waters' illustration of "Miniature Worlds" and Disney's EPCOT.

What They Were Fighting About: Corwin, the sole heir and personal representative of the Estate of Mark Waters, filed a copyright infringement action against Disney alleging that Waters, while living in Hawaii in the 1960's, painted a rendering of a concept developed by Robert Jaffray ("Jaffray") for an international theme park in miniature and that Disney copied the rendering of Jaffray's concept to create EPCOT. In support of his assertions regarding Disney's access to the Waters painting, Corwin offered the testimony of Waters' former wife, Jaffray's widow, and Jaffray's daughter. In addition, Corwin submitted correspondence between Jaffray and Disney representatives to show that Jaffray pitched the idea to Disney and shared plans of the "Miniature Worlds" concept including the Waters illustration with Disney representatives. He also offered the reports of four experts, each indicating that there was similarity between the Waters proposal for "Miniature Worlds" and EPCOT. Disney, in turn, produced evidence of the independent creation of EPCOT. Disney explained that the idea for EPCOT arose from a concept called International Street (a cluster of buildings, including restaurants and shops, designed to feature other countries and cultures) and further developed to include architectural pavilions following Disney's participation in the 1964 World's Fair, and that ultimately the concept merged with Walt Disney's idea for a "City of Tomorrow." Disney moved for summary judgment and to exclude portions of the four expert reports submitted by Corwin as well as certain of Corwin's evidence on Disney's access to the Waters painting. The district court granted the Daubert motion to exclude portions of the expert reports, excluded certain testimony relating to Disney's access to the Waters painting as hearsay, and granted summary judgment in favor of Disney. Corwin appealed.

Federal Circuit Holdings:

• The 11th Circuit reviewed the grant of summary judgment de novo and affirmed the district court's grant of summary judgment, finding there was no genuine issue of material fact as to any of the essential elements of a copyright infringement claim.
• To establish copyright infringement, Corwin had to prove his ownership of the copyright in the Waters painting and that Disney copied the work to create EPCOT. To demonstrate copying, Corwin had to show that Disney had access to the copyrighted material and that there was substantial similarity between the Waters illustration of the concept "Miniatures World" and EPCOT. Although the Court acknowledged that Corwin owned the copyright to the Waters painting, the Court explained that Corwin failed to establish Disney had access to the Waters illustration. The evidence Corwin submitted on this point consisted of inadmissible witness testimony. Waters' former wife had no direct personal knowledge of the painting or of the transaction between Waters and Jaffray relating to the "Miniatures World" concept. Jaffray's widow and Jaffray's daughter each admitted they did not attend the alleged meeting between Jaffray and Disney and could only speculate about what materials Jaffray might have taken with him to the alleged meeting. In addition, the correspondence between Jaffray and Disney representatives did not provide any indication that Disney ever had access to the painting. The 11th Circuit agreed with the district court that the evidence offered by Corwin was insufficient to raise a genuine issue of material fact as to access.
• In the 11th Circuit, even where a plaintiff cannot show the defendant had access to the work, a plaintiff may establish copying by demonstrating that the copyrighted work and the alleged infringing work are "strikingly similar." The Court explained that striking similarity exists "where proof of similarity in appearance is so striking that the possibilities of independent creation, coincidence and prior common source are, as a practical matter, precluded." The four expert reports submitted by Corwin were of no help to him on this point. The Court agreed with the lower court's determination that the bulk of the reports should be excluded from evidence because they focused the analysis on the uncopyrightable ideas (and common elements) behind the Waters painting, explaining neither the originality of the Waters arrangement of elements or "how, precisely, the expressive effect of Water's arrangement is duplicated by either EPCOT or the rendering thereof." What remained of the reports failed to support any assertion of striking similarity.
• Moreover, the Court rejected Corwin's claim that a 1981 rendering of EPCOT showed that Disney copied Waters' illustration of Jaffray's concept. Corwin was unable to refute the "significant differences" between the various elements depicted in Waters' painting of Jaffray's "Miniature Worlds" concept and the elements embodied in the 1981 rendering of EPCOT.
• The Court was convinced, as was the district court, by Disney's presentation of "overwhelming, uncontroverted evidence" of independent creation. In addition to the testimony of a high-level executive at Disney Imagineering (the creative development, design, and research and development arm of The Walt Disney Company and its affiliates), the record contained many drawings and correspondence relating to Disney's independent development of the concepts and designs that led to the creation of EPCOT.
• Having ruled against Corwin on nearly every substantive issue, the only item returned to the district court on remand was the award of costs to Disney, which impermissibly taxed as recoverable costs various items including witness and travel expenses.
  

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The Sixth Circuit Clarifies Exceptions to the First Sale Doctrine in Both Trademark and Copyright.

Case: Brilliance Audio, Inc. v. Haights Cross Communications, Inc., No. 05-1209 (6th Cir. 1/26/2007)

The One Sentence Summary:
The Sixth Circuit holds that in trademark law, the first sale doctrine does not apply where the alleged infringer provides insufficient notice of repackaging or where the alleged infringer sells goods materially different from those of the trademark holder; in copyright law, the record rental exception to the first sale doctrine applies only to musical works, not to audiobooks.

What They Were Fighting About:
Brilliance Audio, Inc. (“Brilliance”) sued Haights Cross Communications, Inc. (“Haights”) for trademark and copyright infringement. Brilliance produces and sells audiobooks through exclusive agreements with publishers and authors. Brilliance produces two versions of its audiobooks, a retail version and a library version, which differ in packaging and marketing. It has copyrights in these works and protectable rights in the federally-registered BRILLIANCE trademark. Haights is a direct competitor of Brilliance. Brilliance claims that Haights uses the Brilliance mark on the repackaged products, constituting trademark infringement. Brilliance also alleges that Haights is repackaging and relabeling Brilliance’s retail editions as library editions, which it then distributes for commercial advantage, constituting copyright infringement.

Sixth Circuit Holdings:

• In trademark law, the Sixth Circuit joins other circuits in holding that the “first sale doctrine,” a defense to claims of trademark infringement, has two exceptions.
• The first exception occurs where the notice that the item has been repackaged is inadequate. Here, Brilliance alleges that Haights is repackaging Brilliance’s retail editions as library editions, and that the notice of repackaging is inadequate because it misrepresents that Haights has a relationship with Brilliance and that Haights has obtained permission for its activities, possibly resulting in consumer confusion.
• The second exception occurs where an alleged infringer sells trademarked goods that are materially different than those sold by the trademark owner. Here, Brilliance alleges that the retail edition is different than the library edition, and that by packaging the retail edition as a library edition, Haights is altering the product in a manner likely to cause consumer confusion.
• In copyright law, the court found that the record rental exception to copyright’s first sale doctrine, codified at 17 U.S.C. § 109(b)(1)(A), applies only to sound recordings of musical works, and not to sound records of literary works, such as audiobooks. The court found the plain language of 109(b)(1)(A) ambiguous, and based its holding on a combination of the legislative history, the context in which the statute was passed, and the policy rationales behind trademark and copyright law.
  
  

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Columbia Pictures Prevails in Charlie's Angels Royalty Case

Case: Wagner v. Columbia Pictures Indus. Inc., No. B184523 (Cal. 2d App. Dist. January 8, 2007)

The One Sentence Summary: The California Court of Appeal affirmed summary judgment in favor of Columbia Pictures holding that Robert Wagner was not entitled to net profits from the Charlie's Angels movies under an earlier agreement relating to the Charlie's Angels television series.

What They Were Fighting About: Robert Wagner individually and as a trustee of his children's trusts sued Columbia Pictures claiming that he and the trusts were entitled to share in the net profits from the Charlie's Angels movies under an agreement with Spelling-Goldberg Productions ("SGP") relating to the 1970's Charlie's Angels television series. Under the agreement with SGP, Wagner and Natalie Wood (his then wife) were entitled to 50 percent of the net profits SGP received as consideration "for the right to exhibit photoplays of the [Charlie's Angels] series and from the exploitation of all ancillary, music and subsidiary rights in connection therewith." Wagner contended that the phrase "in connection therewith" meant he was to share in ancillary or subsidiary rights which bore any connection to the television series, not just "photoplays of the series." Columbia, who purchased the rights to the television series from SGP and separately purchased the motion picture rights to the series from the heirs of the show's writers, took the position that the phrase "in connection therewith" modified "the right to exhibit photoplays of the series" such that only the net profits received by exercising SGP's rights to exhibit photoplays of the series were included in the agreement with Wagner. The trial court agreed with Columbia and granted summary judgment in its favor concluding that the agreement did not entitle Wagner and the trusts to share in the profits from the movies. Wagner appealed.

Appellate Court Holdings:

• The California Court of Appeal affirmed summary judgment in favor of Columbia Pictures concluding that the agreement between Wagner and SGP was unambiguous in describing the (limited) circumstances under which Wagner was entitled to share in the net profits from the motion pictures.
• Wagner made several arguments in support of his position that the "subsidiary rights" provision in the contract with SGP for the television series entitled him to 50 percent of the net profits from the two Charlie's Angels movies produced and distributed by Columbia Pictures. First, he introduced evidence of the history underlying the negotiations of the contract for the Charlie's Angels television series to show he was entitled to share in net profits derived from the exploitation of ancillary or subsidiary rights which bore any connection to the television series.
• Prior to the development of the Charlie's Angels television series, Wagner and his wife Natalie Wood ("Wagners") entered into an agreement with SGP to star in a television movie-of-the-week, "Love Song." During the course of the negotiations of that agreement, the Wagners pushed for language in the contract that made clear they were to participate in "all revenues from all sources" relating to "Love Song." Various rounds of negotiations ensued over the precise definition of net profits, with SGP's counsel acknowledging at one point that the Wagners were to receive "income from any and all sources" and assuring them that the (then draft) agreement "so states." In the final "Love Song" contract net profits were defined as the net of "all monies received by Producer as consideration for the right to exhibit the Photoplay, and exploitation of all ancillary, music and subsidiary rights in connection therewith." This language was identical to the definition of net profits in the subsequent Charlie's Angels contract. Because the "Love Song" agreement was intended to give the Wagners a one-half share in the net profits received by SGP "from all sources" without limitation and the Charlie's Angels contract was based on that agreement and defined net profits in identical language, Wagner argued that the Charlie's Angels contract should be interpreted as providing the Wagners with a 50 percent share in SGP's income "from all sources" including the Charlie's Angels motion pictures produced by Columbia.
• Not so, explained the Court. "The problem with Wagner's extrinsic evidence is that it does not explain the contract language, it contradicts it." The Court noted that under the Parol Evidence Rule, extrinsic evidence is not admissible to contradict express (i.e. unambiguous) terms in a written contract. The Court remarked that even if the parties to the Charlie's Angels contract may have intended for the Wagners to share in the net profits from all sources, the parties simply "did not say so in their contract."
• Wagner next argued that he and the trusts were entitled to share in the profits from the movies because SGP acquired the motion picture rights to Charlie's Angels by exploiting its rights as producer to exhibit photoplays of the series. Again, the Court disagreed.
• Under copyright law, the script for the television series pilot was a "work made for hire" giving SGP absolute rights to exploit the series in other media, except as otherwise provided by contract. A provision of the writers’ contract with SGP incorporated a collective bargaining agreement between the producers and the Writers Guild. Under the “separated rights” provision of the Writers Guild collective bargaining agreement, the writers of the Charlie's Angels television series retained the right to exploit the material for certain purposes, including making a motion picture. While SGP owned the copyright to Charlie's Angels and held the exclusive film television rights in the literary material (i.e. the right to exhibit photoplays of the series), it held the separate right to generate motion pictures based on the series in trust for the writers. Had the writers offered the movie rights for sale within five years from the date they delivered the teleplay for the series to SGP, the producer (SGP) would have had a right of first refusal. Columbia produced sufficient evidence to convince the Court that SGP never acquired the motion picture rights from the writers. (Had that occurred, Wagner would have had a possible claim based on the “subsidiary rights” language of the agreement with SGP.) Because Columbia purchased the film rights on the open market from the heirs of the writers of the television series (after SGP's right of first refusal expired), the film rights were not acquired by SGP by exploiting its right to exhibit photoplays of the series and thus were not "ancillary" to the television series.

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