Opinion
97 Civ. 4636 (LAP).
December 20, 2000.
ORDER AND MEMORANDUM
This case determines the ownership of the copyrights to the story outline, screenplay and motion picture Pendulum ("Pendulum"). Plaintiff brought an action for, among other things, a judgment declaring that he is the owner of the renewal copyrights as the sole heir of his father pursuant to 17 U.S.C. § 304 (a)(2)(B), and for copyright infringement against defendants Columbia Pictures Industries, Inc. ("Columbia"), Encore Media Corporation and Home Box Office (collectively, "defendants").
The lighter in question is alleged to be a BIC J-15 model. See Memorandum of Law in Support of BIC's Motion for Summary Judgment ("Def. Mem.") at 2. It is undisputed that the J-15 model is subject to the regulations promulgated by the CPSC.
Defendants have moved for summary judgment declaring that the copyrights are owned by Columbia. Plaintiff has cross-moved for partial summary judgment declaring that the renewal copyrights in the motion picture and in the story outline and screenplays of Pendulum "insofar as they are disclosed in the motion picture" have vested in plaintiff. For the reasons discussed below, defendants' motion is granted and plaintiff's motion is denied.
BACKGROUND
While the subject matter of this case involves literary works, the case is essentially one of contract interpretation. Plaintiff asks the Court to ignore clear language in various agreements and contracts while spinning his own tale to support his position. As a preliminary matter, plaintiff has no personal or hearsay knowledge of the contractual arrangements involved in this case, (Def. Decl. Ex. R at 67), or the events that took place, (Pl. Decl. at 1), and fails to present any evidence to support his interpretation of the events. While I am sympathetic to plaintiff's desire to have a "symbolic" connection to his father by attempting to retain the Pendulum copyrights, (id. Ex. E203), the copyrights are not his to retain.
I. The Short Story
Like the screenwriting process itself, I begin with a broad outline of the rather complicated facts of the case before presenting the detailed story. The events material to this case occurred between 1967 and 1968. Stanley Niss ("Niss") was a Hollywood screenwriter and producer who died in 1969. In early 1967, Niss was employed by Metro-Goldwyn-Mayer ("MGM") to work on a project based on two Dashiell Hammett stories. In May 1967, Niss contracted with MGM to develop a new project he had previously presented to MGM; this project came to be called "Pendulum." In November 1967, MGM quitclaimed to Columbia its rights in the Pendulum project. That same month, Niss entered into contracts with Columbia to finish the Pendulum screenplay and produce and distribute the motion picture. Finally, in June 1968, Pendulum Productions ("Pendulum Productions"), a California corporation established by Niss to produce the film, entered a memorandum of agreement with Columbia that specified various details of the previous Niss-Columbia contract. The film Pendulum was released in 1969 bearing the copyright "Pendulum Productions." The original copyright expired on December 31, 1996. The question before me is who owns the copyrights to the Pendulum properties.
The various contracts involved in this action range in date from May 26, 1967 to November 29, 1967. Plaintiff asserts that the contracts were backdated and do not reflect the actual date of execution. See e.g., Pl. Rule 56.1 Statement ¶¶ TT, UU, VV; Pl. Mem at 6 n. 21. Defendants do not contest plaintiff's assertions with respect to ¶¶ TT, UU, VV. Plaintiff, however, does not make any claim that the contracts are invalid or void for any reason. In any event, the precise dates of the contracts do not change their legal significance or the outcome of this motion for summary judgment. Accordingly, for purposes of this motion, I will use the dates that appear on the contracts.
II. The Long Story
A. Niss' Pre-Pendulum Employment With MGM
On January 26, 1967, Niss entered into an employment agreement with MGM to write a treatment and screenplay based on two Dashiell Hammett stories ("Hammett contract"). (Id. Exs. E137-E150; E12). Niss delivered the completed treatment on March 23, 1967 and began the "first consultation period" that was to last no more than three weeks. (Id. Exs. E136; E138).
A "treatment" is "an adaptation of a story, book, play or other literary dramatic or dramatico-musical material for motion picture purposes in form suitable for use as the basis of a screen play." (Pl. Decl. Ex. E74).
Plaintiff asserts that Niss' employment under the Hammett contract ended on April 14, 1967. (Pl. Mem. at 5). However, plaintiff offers no probative evidence on this point.
B. MGM-Niss Pendulum Contracts
On April 18, 1967, Niss sent a three-page inter-office memorandum on MGM stationery to Lewis Morton, then the executive head of MGM's Studio Story Department. (Id. Exs. E54-E56; E53). The memo presented the story outline ("Story Outline") for "Pendulum," which Niss believed "might make a good film." (Id. Ex. E56). On May 23, 1967, Niss submitted to MGM 28 pages of an unfinished screenplay of Pendulum "as further inducement for MGM to accept his proposal." (Pl. Mem at 6). On May 26, 1967, Niss entered into an employment agreement ("Employment Agreement") with MGM to write a treatment of not less than 50 pages based on the Story Outline. (Pl. Decl. Exs. E38-E40).
In his inter-office memo, Niss does not name the story, but in the subsequent employment agreement, the story carries the name "The Pendulum." (See Pl. Decl. Ex. E38).
In the Agreement, MGM refers to the Story Outline as the "Basic Story."
The Employment Agreement provided that MGM would pay Niss $8,750 for the treatment. (Id.). It also gave MGM an irrevocable option to employ Niss to write three drafts of the Pendulum screenplay for an additional $25,000 ("Screenplay Option") which would be paid upon delivery of the final screenplay. (Id.). The option could be exercised no later than three weeks after delivery of the treatment. (Id. E38).
The Employment Agreement referenced a separate agreement, also dated May 26, 1967, in which Niss granted to MGM an irrevocable option to acquire from Niss all rights in the Story Outline for $5,000 ("Story Option"). (Id. Exs. E38; E34-36).
The Screenplay Option and Story Option were to work in tandem, that is, MGM's exercise of the Screenplay Option under the Employment Agreement was deemed to be an exercise of the Story Option. (Id. Ex. E44). The Employment Agreement required that "[n]otice of exercise of [the Screenplay] option must be in writing; oral notice of exercise of said option shall be ineffective." (Id. Ex. E38).
The Employment Agreement also referenced a "doubled starred" rider dated May 26, 1967, (id. Ex. E37), which provided that in the event MGM did not exercise the Screenplay Option and the Story Option, all rights in and to the [Story Outline] and in and to said treatment shall revert to [Niss] upon the condition precedent that [Niss] pay to [MGM] one hundred percent (100%) of [MGM's] "costs" in connection with such [Story Outline] and treatment in the event that [Niss] makes any subsequent sale, lease or other disposition of said [Story Outline] and/or said treatment, or any variation thereof, to any other person, firm or corporation.
(Id.). The "costs" would include the $8,750 paid to Niss under the Employment Agreement to write treatment as well as fringe benefits and expenses related to his employment. (Id.).
Finally, the Employment Agreement incorporated by reference and annexed MGM's Standard Terms. (Id. Ex. E40; see id. Ex. E41-E43). Thus, when read together, the term of the writing period for the treatment was to commence on May 29, 1967 and was not to exceed nine weeks. (Id. Exs. E39; E41 ¶ 2).
Defendants argue that "[t]he term of Niss' employment in writing the treatment, though initially estimated at 9 weeks, was expressly deemed to `continue until the completion of all the writer's services hereunder,' with the duration of each period to `continue until the delivery of the respective item of work.'" (Def. Rule 56.1 Statement ¶ 7, quoting the Standard Terms ¶ 2; see also id. ¶ 37).
This interpretation, however, cannot be sustained. Paragraph 2 of the Standard Terms specifically states that "[s]ubject to the maximum times stated in paragraph 3 of the principal agreement," the term of each writing period will "continue until the delivery of the respective item of work." (Pl. Decl. Ex. E41). Thus, only if the maximum times are not defined in the principal agreement, as they were in this case, will the writing periods continue until delivery of the item of work. Defendants rely on their interpretation of the writing period provision to argue that since Niss never wrote a treatment for the Pendulum project, the writing period for the treatment continued beyond nine weeks and that the time to exercise the Screenplay and Story Options had not expired when MGM quitclaimed to Columbia its rights in the Pendulum materials. Therefore, defendants assert the rights had not reverted to Niss. See id. ¶¶ 20, 21. Such an interpretation, however, is not necessary to find that MGM sold the rights in the Pendulum project to Columbia and that these rights did not revert to Niss. See discussion below.
The Standard Terms also included an exclusivity provision and ownership of work provision. The exclusivity provision required that "during the term [of the Employment Agreement Niss] shall render services exclusively for [MGM] and shall not render services for the writer or any other person or company." (Id. Ex. E42 ¶ 5). The ownership of work clause provided, among other things, that MGM, "as employer of the writer, shall be the sole and exclusive owner of the work, in whatever stage of completion it may be from time to time, including but not limited to the copyright thereof and all renewals and extensions and rights of renewal and extension of copyright thereof. . . . The writer by virtue of his . . . employment hereby assigns all such rights to [MGM], without condition, reservation or limitation." (Id. Ex. E42 ¶ 7). The ownership of work clause further required the writer to provide upon request by MGM a certificate stating that the writer was a paid employee under contract with MGM and that MGM is the owner of all rights in the work, including the copyright and all renewals. (Id.). Finally, the ownership of work provision stated:
All rights hereby vested in or granted to [MGM] do so vest immediately upon the creation of the work, whether or not the writer completes the writer's services, whether or not this agreement is terminated, with or without cause, before the expiration of its appointed term, and whether or not the writer executes the certificate prescribed above.
(Id.).
Notwithstanding the detailed contracts, Niss never wrote a treatment, (Pl. Mem. at 8; Def. Decl. Ex. O at 8), and MGM did not give written notice exercising its options. Rather, Niss continued to write drafts of the Pendulum screenplay, and MGM paid him. The parties agree that MGM paid Niss the $8,750 plus fringe benefits, (Def. Response to Pl. Rule 56.1 Statement ¶ J), and also acknowledge that Niss wrote two Pendulum manuscripts while under contract with MGM, one dated July 12, 1967 of 172 pages; the other dated August 16, 1967 of 160 pages (id. ¶¶ I, M; Pl. Decl. Ex. E52).
C. MGM-Columbia Quitclaim/Niss-Columbia Contracts
In an agreement dated November 29, 1967 (the "Quitclaim"), MGM quitclaimed to Columbia "all of [MGM's] right, title and interest in and to" the Pendulum property. (Id. Exs. E50-E51).
Attached to the Quitclaim and incorporated by reference therein was an itemized list of the Pendulum properties including the 28-page manuscript dated May 23, 1967 "together with the title, theme, plot, characters, story, copyright, right of copyright (including renewals and/or extensions) and all other rights and interests of whatever kind pertaining to said literary work"; the May 26, 1967 Employment Agreement between MGM and Niss; the Story and Screenplay Options dated May 26, 1967; the July 12, 1967 manuscript; and the August 18, 1967 manuscript. (Pl. Decl. Ex. E52).
Of particular importance in this document is a separate waiver signed by Niss that reads:
Notwithstanding that pursuant to the provisions of the double-starred rider to Paragraph 2 of the [Employment Agreement] the rights in the property were to revert to the undersigned in the absence of this agreement, the undersigned hereby agrees that such rights shall not revert to the undersigned, and the undersigned hereby approves and consents to the foregoing agreement between [MGM] and [Columbia].
(Id. Ex. E51).
On November 29, 1967, Columbia and Niss entered into an authors contract ("Authors Contract") by which Columbia acquired "all common law rights and/or all copyrights and/or the right to secure copyright . . . in and to `Pendulum'." (Id. Ex. E47 ¶ 1).
The contract provided that Niss "grant(s), sell(s), assign(s), and set(s) over to [Columbia] forever all renewals of copyright and also the right to renew and secure renewals of copyright." (Id.).
Additionally, the contract stated that Niss "warrant(s) and represent(s) that [he] is the sole owner of the copyright and the right to secure copyright, and of the manuscript of such work, and all rights of every character in such work and (has) . . . full right and authority to grant the rights hereby conveyed." (Id. Ex. E47 ¶ 3). Under the contract, Niss also agree(s) to duly execute and deliver or cause to be duly executed and delivered, to [Columbia] any and all further assignments and other instruments that may be necessary or expedient to carry out and effectuate the purposes and intent of this agreement and to convey to [Columbia] all rights in such work, during the original term of the United States copyright and other copyrights in such work and during all renewals and extensions thereto. In case of the failure or refusal of [Niss] to so execute and deliver or cause to be so executed and delivered any assignment or other instrument herein provided for, then [Columbia] shall be deemed to be, and [Niss] hereby nominates, constitutes and appoints [Columbia], the true and lawful attorney in fact of [Niss], irrevocably, to execute and deliver all such assignments and other instruments in the name of [Niss]. (Id. Exs. E47-E48 ¶ 6). Finally, the Authors Contract provided that [Niss] acknowledges that he has been advised by [Columbia] that concurrently with the execution hereof [Columbia] is entering into an agreement with [MGM] under and pursuant to the terms of which [Columbia] is acquiring all the right, title and interest, if any, of [MGM] in, to and with respect to the [Pendulum property], and as an inducement to [Columbia] to enter into this agreement and to the aforesaid agreement with [MGM] [Niss] acknowledges and agrees that no further or additional moneys are or shall be payable to [Niss] under or pursuant to the terms of any agreement between him and [MGM], or otherwise, and that the amounts herein provided to be paid to [Niss] are in lieu of any other payments to which [Niss] might be entitled in connection with and with respect to the use, exploitation and turning to account of the [Pendulum properties] and the rights therein and with respect thereto.
(Id. Ex. E49 ¶ 9).
The Authors Contract called for Columbia to pay Niss $50,000 upon its execution and delivery as well as other sums relating to the release of a sequel to the original Pendulum film, a remake of the original Pendulum film, or a television release utilizing the Pendulum properties. (Id.).
Columbia required Niss to "furnish" a corporation with which Columbia would also contract for the production and distribution of the Pendulum film. (Id. Ex. 123; Def. Response to Pl. Rule 56.1 Statement ¶ JJ). "[A] newly formed single purpose corporation whose sole purpose was to produce the specified motion picture" was beneficial both to the independent producer and Columbia by, among other things, limiting liability to the producer and improving the financial picture of the studio.
(Def. Decl. Ex. EE, Response to Interrogatory 19).
In addition, the bank providing financing for a film required such a "sole purpose" corporation whose obligations were limited to the specific film and guaranteed by Columbia. (Id.). On November 23, 1967, Pendulum Productions was incorporated in California.
(Pl. Decl. Ex. E23-26).
The three incorporators and directors included Niss' attorney, Richard Mark, his law partner and associate; Niss was neither an incorporator nor a director of the corporation. (Kopald Decl. at 1).
On November 27, 1967, Pendulum Productions and Columbia entered into a production-distribution agreement ("P-D Agreement") for the film Pendulum. (Pl. Decl. Exs. E57-E59).
The agreement provided that Niss would function as the film's "individual producer and writer" and would be paid $50,000. (Id. Ex. E57). The P-D Agreement also stated that the film would be financed by a bank loan, was subject to various Columbia approvals (e.g., locations, budget), and that "Columbia will acquire rights in [the] original screenplay from [MGM] and [Niss] and will grant [Niss a] one (1) picture license." (Id. Exs. E57-E59 ¶¶ 5, 12, 13a, 19).
The P-D Agreement also included a separate typewritten note at the end of the agreement:
It is agreed that a formal agreement will be prepared and executed in due course covering the above terms and provisions and such other incidental and ancillary provisions as are usual and customary with Columbia in such agreements.
(Id. Ex. E59).
In April 1968, Niss, as president, and Richard Mark, as secretary-treasurer, signed a corporate resolution authorizing Pendulum Productions to borrow $2,300,000 from the Bank of America. (Def. Decl. Ex. CC). This was the loan referred to in the P-D Agreement, (Pl. Decl. Ex. E59), and guaranteed by Columbia (Def. Decl. Ex. X).
On June 14, 1968, Pendulum Productions and Columbia signed a detailed production and distribution agreement (the "June 1968 Agreement"), specifying, among other things, the budget, financing (including details with respect to the bank loan), schedule, delivery, editing and distribution of the film. In the agreement, Pendulum Productions acknowledged that Columbia had granted Pendulum Productions "the right to utilize [the] original screenplay in and in connection with the production, distribution and exploitation of the picture." (Id. Ex. B at 1). The June 1968 Agreement also provided:
The copyright in the picture and all renewals and extensions thereof shall be held in [Columbia's] name or (in [Columbia's] discretion) in that of any of [Columbia's] subsidiaries and a copyright notice may be affixed to the picture and physical properties thereof accordingly. [Columbia] or any said subsidiary may renew and extend such copyright. Such copyright shall be held by [Columbia] or said subsidiary for [Pendulum Productions and Columbia's] benefit as [Columbia's] interests may hereunder appear. [Columbia] shall comply with all copyright formalities in connection with the Picture in accordance with [Columbia's] practices from time to time currently in effect but shall in no event incur any liability in the event of any defect in any copyright or renewal or extension thereof.
(Id. at 61-62).
Finally, as security for performance of the agreement, Pendulum Productions agreed to grant, bargain, sell, assign, transfer, hypothecate, mortgage, pledge and set over to [Columbia] the picture and all of [Pendulum Productions'] right, title and interest therein, and grant to [Columbia] a first and continuing lien upon the picture and upon all of the items delivered by [Pendulum Productions] to [Columbia] in connection with the picture, and upon the literary, dramatic and musical material used therein or acquired in connection with the production thereof, and upon the copyright of said literary, dramatic and musical material to the extent that you own the same, and upon [Pendulum Productions'] interest in the copyright of the picture. . . .
If at any time [Columbia] deem[s] it necessary or advisable that any further instrument or instruments be executed and delivered by [Pendulum Productions] to establish more definitely [Columbia's] lien on the property rights and material above described, or any part thereof, or to create, maintain, evidence or defend [Columbia's] said lien or rights hereunder, then [Pendulum Productions] agree[s], from time to time, upon written demand by us, to execute and deliver any such instrument or instruments consistent with this agreement and in form satisfactory to [Columbia].
In case of [Pendulum Productions'] failure or refusal to execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered to [Columbia], any such additional instruments, then [Columbia] shall be deemed to be and [Pendulum Productions] hereby nominate[s], constitute[s] and appoint[s] [Columbia Pendulum Productions'] true and lawful attorney-in-fact irrevocably to execute and deliver all such instruments in [Pendulum Productions'] name or otherwise, it being acknowledged that such power is a power coupled with an interest.
(Id. at 67-69).
Notwithstanding the clear language in the June 1968 Agreement, in January 1969, Pendulum Productions registered the copyright for the film Pendulum in the name of Pendulum Productions. (Pl. Decl. Ex. E21). The initial term of the copyright was 28 years and, thus, the initial copyright was to expire on December 31, 1996. 17 U.S.C. § 304(a)(1)(A).
The copyright notice was dated 1968.
On July 10, 1987, Columbia wrote to plaintiff in an attempt to identify the successor-in-interest to Pendulum Productions in order to acquire a copyright assignment from Pendulum Productions. (Def. Decl. Ex. II). On August 30, 1987, plaintiff wrote to Columbia and, assuming he was the successor-in-interest to Pendulum Productions, stated that "[f]or purely sentimental reasons, [he was] reluctant to assign the copyright" to "Pendulum." (Pl. Decl. Ex. E203). In response, Columbia referred plaintiff to the June 1968 Agreement and explained that the agreement required that the copyright in the film was to be in the name of Columbia or its subsidiary and that Pendulum Productions agreed to execute any additional instruments. (Pl. Dec. Ex. E204-06). Plaintiff refused to sign the copyright assignment. Relying on the attorney-in-fact provision in the June 1968 Agreement, on January 17, 1969, Columbia signed a copyright assignment from Pendulum Pictures to Columbia. (Def. Decl. Ex. D). In February 1996, Columbia renewed its copyright. Pl. Decl. Ex. E191-93). The renewal listed Pendulum Productions as the author of the film. (Id. at E192). In May 1996, plaintiff also filed a registration of renewal copyright of "Pendulum," listing Niss as the author of the film. (Id. at E94-E95).
Columbia had released Pendulum in the video market and was concerned about acts of piracy. Columbia stated that it required the copyright assignment in order to defend and protect its and Pendulum Productions' interests in any copyright infringement actions. (Def. Decl. Ex. II).
Plaintiff filed the instant suit in 1997 seeking, among other things, a declaration that he is the owner of the copyrights to the Story Outline, screenplay and motion picture pursuant to 17 U.S.C. § 304(a)(2)(B). Plaintiff filed an amended complaint in September 1999. Defendants filed a motion for summary judgment declaring that the copyrights are owned by Columbia. Plaintiff cross-moved for partial summary judgment declaring that the renewal copyrights in the motion picture and in the story outline and screenplays of Pendulum "insofar as they are disclosed in the motion picture" have vested in plaintiff.
While plaintiff cites 17 U.S.C. § 304(a)(2)(B), I believe the subsection he means to rely upon is 17 U.S.C. § 304 (a)(1)(C)(ii), which states: In the case of any . . . copyrighted work [by an individual author], the widow, widower, or children of the author, if the author is not living, shall be entitled to a renewal and extension of the copyright in such work for a further term of 67 years.
ANALYSIS
I. Legal Standard
"A motion for summary judgment may not be granted unless the court determines that there is no genuine issue of material fact to be tried and that the facts as to which there is no such issue warrant judgment for the moving party as a matter of law." Chambers v. TRM Copy Centers Corp., 43 F.3d 29, 36 (2d Cir. 1994); see Fed.R.Civ.P. 56(c); see generally Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986). An issue of fact is genuine when "a reasonable jury could return a verdict for the nonmoving party," and facts are material to the outcome of the particular litigation if the substantive law at issue so renders them. Anderson, 477 U.S. at 248.
The burden of establishing that no genuine factual dispute exists rests on the party seeking summary judgment. Chambers, 43 F.3d at 36. "In moving for summary judgment against a party who will bear the ultimate burden of proof at trial," however, "the movant's burden will be satisfied if he can point to an absence of evidence to support an essential element of the nonmoving party's claim." Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995); accord Gallo v. Prudential Residential Servs., Ltd. Partnership, 22 F.3d 1219, 1223-24 (2d Cir. 1994) ("[T]he moving party may obtain summary judgment by showing that little or no evidence may be found in support of the nonmoving party's case."). The moving party, in other words, does not bear the burden of disproving an essential element of the nonmoving party's claim.
If the moving party meets its burden, the burden shifts to the nonmoving party to come forward with "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P.56(e); accord Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525-26 (2d Cir. 1994). The nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. Instead, the nonmovant must "`come forward with enough evidence to support a jury verdict in its favor, and the motion will not be defeated merely . . . on the basis of conjecture or surmise.'" Trans Sport v. Starter Sportswear, 964 F.2d 186, 188 (2d Cir. 1992) (citation omitted).
In assessing materials such as affidavits, exhibits, interrogatory answers and depositions to determine whether the moving party has satisfied its burden, the court must view the record "in the light most favorable to the party opposing the motion" by resolving "all ambiguities and draw[ing] all factual inferences in favor of the party against whom summary judgment is sought." Chambers, 43 F.3d at 36. "If, as to the issue on which summary judgment is sought, there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party, summary judgment is improper." Id. at 37.
"On cross-motions for summary judgment, the standard is the same as that for individual motions. In evaluating each motion, the court must look at the facts in the light most favorable to the non-moving party. See Aviall, Inc. v. Ryder Sys., Inc., 913 F. Supp. 826, 828 (S.D.N Y 1996), aff'd, 110 F.3d 892 (2d Cir. 1997). `Simply because the parties have cross-moved, and therefore have implicitly agreed that no material issues of fact exist, does not mean that the court must join in that agreement and grant judgment as a matter of the law for one side or the other. The court may conclude that material issues of fact do exist and deny both motions.' Id. (internal citation omitted)."
McGovern v. Local 456, Intern. Broth. Of Teamsters, Chauffeurs Warehousemen Helpers of America, AFL-CIO, 107 F. Supp.2d 311, 316 (S.D.N.Y. 2000). See also Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir. 1993).
II. Columbia Owns The Copyright In The Story Outline And Screenplay
A. The Story Outline and Screenplay Were Works for Hire
1. The Copyright Act of 1909 and Work For Hire The Story Outline and drafts of the screenplay were written in 1967 and therefore fall under the Copyright Act of 1909 (the "1909 Act") and the case law interpreting the 1909 Act. Playboy Enterprises, Inc. v. Dumas, 53 F.3d 549, 553 (2d Cir. 1995).
Under the 1909 Act, 17 U.S.C. § 26 (repealed), an "author" of a work includes "an employer in the case of works for hire." Id. at 554; Brattleboro Publishing Co. v. Winmill Publishing Corp., 369 F.2d 565, 567 (2d Cir. 1966). An "employer" includes someone "who hires another to create a copyrightable work," whether the creator of the work is a traditional employee or an independent contractor. Playboy, 53 F.3d at 554. In the absence of an agreement to the contrary, an employer is the author of a work and thereby owns the copyright if the work is created at the "instance and expense" of the employer. Id.; Brattleboro, 369 F.2d at 567. The "instance and expense" test is met "`when the motivating factor in producing the work was the employer who induced the creation.'" Playboy, 53 F.3d at 554, quoting Siegel v. National Periodical Publications, Inc., 508 F.2d 909, 914 (2d Cir. 1974) (internal quotation marks omitted). Additionally, "in the work-for-hire context under the 1909 Act, `an essential element of the employer-employee relationship, [is] the right of the employer to direct and supervise the manner in which the writer performs his work.'" Playboy, 53 F.3d at 554, quoting Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213, 1216 (2d Cir.), cert. denied, 409 U.S. 997 (1972) (internal quotation marks omitted and change in original).
The copyright in a work made for hire is not subject to reversion. Under 17 U.S.C. § 304(a)(1)(B)(ii), "[i]n the case of any work copyrighted by a corporate body . . . or by an employer for whom such work is made for hire, the proprietor of such copyright shall be entitled to a renewal and extension of the copyright in such work for the further term of 67 years."
2. The Pendulum Story Outline and Screenplay
The Story Outline and drafts of the screenplay (the "Work") were works for hire, written at the instance and expense of MGM. Under the 1909 Act, the "expense" prong is met when "a hiring party simply pays an independent contractor a sum certain for his or her work." Playboy, 53 F.3d at 555. Here, there is no factual dispute that MGM paid Niss the $8,750 stated in the Employment Agreement (plus fringe benefits and costs) for the work Niss completed prior to the Quitclaim to Columbia. (Def. Response to Pl. Rule 56.1 Statement; Pl. Decl. Ex. E118). Thus, the Work was written at MGM's expense. The Work was also produced at the instance of MGM.
Plaintiff argues that the Work was not written at the instance and expense of MGM because MGM was not the motivating factor in Niss' development of the project. Rather, plaintiff relies on Siegel to argue that his father had fully developed the Pendulum story and, therefore, under the 1909 Act, his father was the author of the Work. (Pl. Mem. at 14-15). This argument is without merit.
Siegel involved the creation in 1933 of cartoons "suitable for newspaper syndication" featuring the Superman character. 508 F.2d at 911. In 1937, the cartoonists entered into an employment agreement with Detective Comics, Inc. ("Detective") to develop new cartoons. The agreement stated that all work done by the cartoonists during the term of the contract was deemed owned by Detective. In 1938, the cartoonists submitted the 1933 Superman comics to Detective, which directed the cartoonists to "revise and expand" the cartoons for publishing. Id. Thereafter, the cartoonists entered an agreement granting Detective all their rights in the Superman comic strip. Id.
Affirming the dismissal of the complaint on the grounds of res judicata, the Court of Appeals, in dicta, stated that the cartoons were not works for hire. First, the court found that the Superman cartoon had been "spawned" by the cartoonists four years before they were hired by Detective. Second, the Superman character was "completely developed long before the employment relationship was developed." Third, the revisions made at the direction of Detective "were simply to accommodate Superman to a magazine format." Id. at 914.
The instant case is distinguishable from Siegel. First, the Work was not fully developed prior to Niss' May 26, 1967 contract with MGM. The Story Outline represented the "bare bones" of a story, (Pl. Decl. Ex. E56), and the 28-page screenplay was incomplete (Id. Ex. E52). Second, unlike the four years which transpired between the development of the Superman character and the cartoonists' employment by Detective, the Story Outline is dated at most four days after Niss completed work for MGM under the Hammett contract and fewer than six weeks before Niss entered the Employment Contract with MGM. Additionally, the 28-page script is dated only three days before the Employment Agreement. Third, Niss was already under contract with MGM to develop the Pendulum project when he submitted to MGM the July 1967 and August 1967 draft screenplays. See In re Marvel Entertainment Group, 97 Civ. 638, 2000 WL 1677764 (D.Del. 2000) (comic book characters were not fully developed before employment and therefore the employer holds the copyright. The court stated in reference to two particular characters, "Here, Wolfman merely had a nascent idea for a character and a story. Even assuming that Wolfman produced a half-page write-up of the character's background and look, Wolfman had not completely developed the characters of Blade and Deacon Frost as the plaintiffs had in Siegel. Wolfman's Siegel argument does not account for the transition from a story idea to a story ready for publication.
While plaintiff argues that the dates on the contracts were backdated and were actually executed at times months later, for purposes of his argument, plaintiff accepts the April 18, 1967 date on the Story Outline and asserts that his father conceived and wrote this outline after Niss was no longer employed by MGM on the Hammett project. (Pl. Mem. at 5). Plaintiff offers no evidence to show when his father conceived and/or wrote the Story Outline. Additionally, in the Story Outline, Niss states that he recently read a news story about a murder that he believed would make the basis of "a good film." (Pl. Decl. Ex. E56). The article to which Niss refers is not included in the evidence, and, therefore, there is no record of the date of the article. Plaintiff states that "[a]round [the time the Hammett contract terminated on April 14, 1967], reports in the news of a double murder in Los Angeles gave [Niss] the idea of an original screenplay. (Pl. Mem. at 5). From all the evidence offered, it is clear that plaintiff has no knowledge of when Niss conceived and wrote the Story Outline.
Wolfman spent time and energy while employed at Marvel developing a script with proposed panel art and text for `The Tomb of Dracula.' Wolfman performed this work at the instance and expense of Marvel.").
Plaintiff's own admissions also support the conclusion that MGM was the motivating factor in Niss' development of the Work.
Plaintiff concedes that it was his father's practice to offer a new idea to the studio for which Niss had most recently worked.
(Pl. Mem. at 6 n. 19).
In fact, plaintiff asserts that Niss wrote the Story Outline and sent it to Lew Morton on April 18, 1967 "to sell the project to MGM." (Pl. Mem. at 5). Additionally, plaintiff argues that his father wrote 28 pages of a draft screenplay "as further inducement for MGM to accept his proposal." (Id. at 6). On May 26, 1967, Niss and MGM entered into the Employment Agreement, providing that MGM would pay Niss $8,750 for a treatment and giving MGM an option to employ Niss to write a screenplay. Thus, MGM was the motivating factor for the development of the Pendulum project.
This finding is supported by Wilkes v. Rhino Records Inc., 96 Civ. 56238, 1997 WL 800275 (9th Cir. 1997), in which the Court of Appeals for the Ninth Circuit held that the copyright in works created by an artist before he was hired by the Monterey International Pop Festival Foundation were works made for hire.
The Court found that the artwork was created "for the purpose of auditioning for [the] position" of art director of the Monterey Festival and, thus, the Festival was the motivating factor for the production of the artwork. Id. at **1.
Similarly, Scherr v. Universal Match Corp., 417 F.2d 497 (2d Cir. 1969), held that the United States Government held any copyrights in a statue produced by two servicemen. In Scherr, two army servicemen on leisure time made a "small clay table model of an infantryman." Id. at 499. "[T]heir creativity caught the eye of a public relations officer who brought them and their work to the attention of the deputy post commander [who] suggested the construction of a larger, life-size statue of an infantryman which would serve as a symbol of Fort Dix." Id.
As in Wilkes and Scherr, Niss "auditioned" to write the Pendulum project by sending his superior at MGM the three-page Story Outline, and "caught the eye" of MGM as evidenced by the May 26, 1967 Employment Agreement. MGM was the author of the Work and the owner of the copyrights.
3. Columbia Acquired the Rights to the Story Outline and Draft Screenplays from MGM
Plaintiff argues that the rights in the Work reverted to Niss at the time of the MGM-Columbia Quitclaim. As a result, plaintiff asserts, Niss sold the project to Columbia directly. (Pl. Mem. at 8-10).
This argument is squarely contradicted by the documentary evidence. First, Niss signed a separate waiver contained in the Quitclaim agreement that stated that "such rights shall not revert to" Niss and that Niss "approves and consents to the foregoing agreement between [MGM] and [Columbia]." (Id. Ex. E51). Thus, Niss, himself, acknowledged that MGM owned the rights to the Work and that Columbia as the buyer under the Quitclaim acquired those rights.
Additionally, under the Authors Contract, Columbia acquired "all common law rights and/or all copyrights and/or the right to secure copyright . . . in and to `Pendulum', (id. Ex. E47 ¶ 1), and Niss granted to Columbia all renewals of copyright, (id. Ex. E47 ¶ 3). Niss also acknowledged that under the MGM-Columbia agreement, Columbia acquired "all the right, title and interest, if any, of [MGM] in, to and with respect to the" Pendulum property. (Id. Ex. E49 ¶ 9).
Plaintiff argues that the fact that Columbia had Niss sign an assignment of rights in the Pendulum project signifies Columbia's acknowledgment that the work was not a work-for-hire, that Niss owned the rights, and that Columbia did not purchase the rights from MGM. (Pl. Mem. at 10). In response, Jared Jussim, Executive Vice President of Columbia and a thirty-year employee of the company, states Depending upon, inter alia, the facts of the particular transaction and the varying practices of the attorneys handling the transaction, an assignment may have been executed even though a screenplay was created as a work-for-hire. . . . The fact that Columbia . . . obtained an assignment from Stanley Niss does not change the pre-existing status of those draft screenplays as works-for-hire, the rights to which were transferred by MGM to Columbia. Def. Decl. Ex. P at 4.
Finally, under the Authors Contract Columbia paid Niss $50,000 for the Story Outline and draft screenplays, and Niss agreed that this payment was "in lieu of any other payments to which [Niss] might be entitled" from MGM in connection with the Pendulum project and the rights therein. (Id.).
Plaintiff argues that at the time of the Quitclaim, Columbia reimbursed on Niss' behalf MGM's costs pursuant to the double-starred rider, thereby causing the Pendulum rights to revert to Niss and permitting him to make a subsequent sale of the project to Columbia. (Pl. Mem. at 9-10). Such an argument flies in the face of the documentary evidence. As discussed previously, Niss, himself, signed a waiver acknowledging that the rights in the Pendulum Work did not revert to him by operation of the Quitclaim. In addition, rather than a payment on Niss' behalf, the reimbursement appears to represent consideration for MGM's transfer of its rights in the Work, that is, the payment matched the moneys MGM had already incurred in employing Niss to write the Pendulum project.
Thus, as a result of the Quitclaim, Columbia stepped into MGM's shoes and became the owner of the copyrights in the Pendulum Story Outline and draft screenplays.
III. Columbia Owns The Copyright In The Film Pendulum
A. The Film Was a Work For Hire
The film Pendulum was also a work for hire. As is clear from the contemporaneous documents, Columbia is the author of the film. First, it is beyond question that Columbia underwrote the costs of the entire production, including guaranteeing the $2.3 million bank loan. Second, under the P-D Agreement, Columbia agreed to pay Niss an additional $50,000 in his capacity as producer of the film. Third, although Columbia required Niss to establish a corporation through which to produce the film and Niss acted as the producer, at all times Columbia retained the right "to direct and supervise the manner in which the work was performed." Playboy, 53 F.3d at 554. For example, Columbia retained control over the budget, financing, locations, title, purchase of music, cutting and editing, shooting and delivery schedule, and advertising. See Def. Decl. Exs. W, B, X.
Plaintiff also argues that the renewal copyrights have vested in him because the film was not copyrighted by MGM or Columbia. (Pl. Mem. at 19). This argument must fail as well.
The June 1968 Agreement plainly stated that "[t]he copyright in the picture and all renewals and extensions thereof shall be held in [Columbia's] name or (in [Columbia's] discretion) in that of any of [Columbia's] subsidiaries." (Def. Decl. Ex. B at 61-62).
The fact that Pendulum Productions registered the original copyright in its own name evidences that the corporation breached the agreement, not that it is the owner of the copyright.
Additionally, while the film was produced through Pendulum Productions, Columbia was the "ultimate employer." The film was paid for by Columbia, and the work was ultimately done for Columbia. See Excel Promotions Corp. v. Babylon Beacon, Inc., 207 U.S.P.Q. 616, 620 (E.D.N.Y. 1979) (the advertiser, not the newspaper, was the ultimate employer and owner of the copyrights in the ads where the advertiser paid for the production and printing of the ads and it was the advertiser for whom the ads were ultimately prepared. "The fact that the plaintiff-paper is the employer of [the] staff [that produced the ads] is irrelevant.").
Defendants make an alternate argument that the film was a work for hire of Pendulum Productions and, therefore, the copyright is not subject to reversion under 17 U.S.C. § 304(a). (Def. Mem. at 5). I do not reach this argument because I find that Columbia was the ultimate employer and owner of the copyright in the film.
Finally, plaintiff argues that the renewal rights vest in him because Pendulum Productions was the alter ego of Niss and, therefore, the film was not copyrighted by an employer, but rather by Niss as an individual. (Pl. Mem. at 20-21). Plaintiff points to the fact that Pendulum Productions' board was comprised of Niss' attorney, his law partner and associate, (Kopald Decl.), and makes the unsupported allegation that "[n]o one besides my father participated in the management of Pendulum Productions, and no one else had any interest in it." (Pl. Mem. at 20).
These facts, in and of themselves, do not lead to the conclusion that Pendulum Productions was Niss' alter ego. There is no indication that Pendulum Productions was a sham corporation, and plaintiff does not argue that his father perpetrated a fraud by establishing the corporation. In fact, the evidence shows that corporate formalities were adhered to, (see e.g., Def. Decl. Ex. CC), and that both parties benefitted from the corporate structure (id. Ex. EE, Response to Interrogatory 19). The corporation was established solely to produce the film, and the record contains no evidence that it was used for any other purpose.
Even assuming arguendo that Pendulum Productions is the owner of the copyright, which it is not, the corporation would be the owner, not plaintiff.
Accordingly, I find that the film Pendulum was a work for hire and that Columbia is the author of the film and owner of the copyright.
Defendants further contend that pursuant to the June 1968 Agreement, Columbia properly completed the copyright assignment in 1989 giving all rights in the film Pendulum to Columbia. (See Def. Decl. Ex. D). Because I find that the film is a work for hire and that Columbia is the ultimate employer, I do not address this aspect of defendants' argument.
CONCLUSION
For the reasons set forth above, I hold that Columbia is the owner of the copyrights in the Pendulum Story Outline, screenplay and motion picture. Accordingly, defendants' motion for summary judgment is granted and plaintiff's cross-motion for partial summary judgment is denied.
The Clerk of the Court shall mark this action closed and all pending motions denied as moot.
SO ORDERED: