Amicus Curiae Brief — Steinbeck v. Penguin Group Group (USA), Inc. (No. 08-1039)

(2) FILED |

No. 08-1039 MAR 1.8 2999

_ OFFICE OF THE G

SEE COS CHERK |

jn The

Supreme Court of the Gnited States

THOMAS STEINBECK and BLAKE SMYLE,

Petitioners,

v.

PENGUIN GROUP (USA) INC., et al.,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Second Circuit

BRIEF AMICUS CURIAE OF

PROFESSORS PETER S. MENELL AND

DAVID NIMMER IN SUPPORT OF PETITIONERS

+

PETER S. MENELL Davib NIMMER

UNIVERSITY OF CALIFORNIA, Counsel of Record

BERKELEY UNIVERSITY OF CALIFORNIA,

SCHOOL OF LAW Los ANGELES

2240 Piedmont Avenue SCHOOL OF LAW

Berkeley, California 405 Hilgard Avenue

94720-2150 Los Angeles, California

(510) 642-5489 90095-1476

310) 203-7079

TABLE OF CONTENTS

Page

REG Es 8 I ARIE kokissicichccsarsccionenen 1

BUBEMEARY OF ARGUING .0.cccsssdscestesecsscsaccereees 3

ARGUMENT...... se ictinecgds dunes aucimeanide ptt eee ee 4

I. Statutory Background of Copyright Recap-

I ciincs ess dcsanndnsiniy ceavndioncgneen cabana aaa aneanne +

A. 1909 — The Right of Renewal and its

Judge-Made Alienability in Fisher uv.

TOIT foiicicccitindeeees made ee i

B. 1976 — Congress Overrides Fisher by

Introducing Termination of Transfer as

an Author’s Inalienable Right of Re-

COPA onic otccreton ash pak ateaa ese tena ee 6

1. Termination of Copyright Grants

Made Prior to the 1976 Act.............. 8

2. Statutory Inheritance Scheme......... 8

C. 1998 ~— Congress Extends Copyright

Duration Again, Grants Authors a Sec-

ond Inalienable Right of Recapture...... 9

. JIE oo ae ee rer romentrae ae 10

A. By Making Termination Rights Alien-

able, the Second Circuit Resurrects

Fisher v. Witmark and its Unfortunate

Effects on Authors .. 12

B. The Steinbeck Rule Is Unpredictable

Because It Looks to State Law Rather

Than the Federal Statute to Determine

the Validity of Federal Copyright In-

SOTreses ..... 3.2.

TABLE OF CONTENTS — Continued

Page

C. The Steinbeck Decision Overrides Con-

gress’ Intent to Vest Copyright Inter-

ests in Statutory Successors ................. 16

CONCLUSION

ill

TABLE OF AUTHORITIES

Page

CASES

Classic Media, Inc. v. Mewborn, 532 F.3d 978

Ce ee NE cc scaruciscarerctaneavciaaeecarees 3,14, 15

Fred Fisher Music Co. v. M. Witmark & Sons,

She UF. Pe iia passim

Larry Spier, Inc. v. Bourne Co., 953 F.2d 774

Ear Sa eT vkcsvicccies cdbausdcasavnsseipeicekanetateveeeucmeans 16

Mills Music, Inc. v. Snyder, 469 U.S. 153 (1985) ........ 5

Milne v. Stephen Slesinger, Inc., 430 F.3d 1036

(9th Cir. 2005), cert. denied, 548 U.S. 904

(i citvtcandcaa eee ae 2,14, 15,16, 18

New York Times Co. v. Tasini, 5383 U.S. 483

> 3b Sean RUN Net Oe Pal tal harc sghdga seme akgubme eve packed 10

Penguin Group (USA) Inc. v. Steinbeck, 537

F.3d 193 (2d Cir. 2008)....... Lashed Sato meaaasaneaae passim

Saroyan v. William Saroyan Found., 675

F. Supp. 843 (S.D.N.Y. 1987), aff’d mem., 862

Pee Dee Ce Ca Fe assent csuaoncese 16

Siegel v. Warner Bros. Entm’t, Inc., 542

PF. Supp. 2a FOSS (C.D. Ch, BOS) ann nsvicncucecccesesaccen sd

Steinbeck v. McIntosh & Otts, Inc., 4383 F. Supp.

Se Sa (Tee ee hie passim

iV

TABLE OF AUTHORITIES — Continued

Page

STATUTES

ee IE as sda anscsdnincevauncna checid cerniee eee 11

Be, ee i decks nines onccn'savnsiasikuvssescatubsnuniniataes 8, 11

Re Fes NE ebiiscshsenesincicarecssmavieitonsienel 9,16

Ee Bera Ds sa tens sesvnicciccpercdinassndenensacs 4,7,9,10

Be ee ar NE sinc csaen vi ntacasssavtsondechaicteboneaiesenedt 14

ee ee oe asa Vet Gud ae ommmaaetanneeien 7,8

ee We te NE aogin ba dee Saodneodicnxessaicors canened ce loeaneen 8,11

Be ee te asbsicisssmeertiessrseensitaeucneen 17

ee Rah A NE ID 5s Sadctiacscicecewinvccadsietconedineveunaoasaas 9,16

Ee Ree ee es signe ndvsnivecicnvatrexenstrarrnseale passim

Ee ie a thichetisktna kcicdhnstieumannees 9,10, 11

Oe Hees fe sokiicke sone ccvsccnvadeavisiseviacassieas 4,10,16

Pub. L. No. 105-298, 111 Stat. 2827............ ESR 9

Pub. L. No. 349, §§ 23-24, 35 Stat. 1075 (1909) .......... 4

OTHER AUTHORITIES

1964 Revision Bill, H.R. 1947, 88th Cong.

8§ 16(a), 22(c) (1964) (codified as 17 U.S.C.

8§ 203(a), 304(c) (1976)).... | | an

Bill Gable, Taking it Back, L.A. Lawyer, June

2008, at 34

TABLE OF AUTHORITIES — Continued

Page

Discussion and Comments on the Report of the

Register of Copyrights on the General Revision

of the U.S. Copyright Law, 88th Cong. (H.

I a a ic shes tesa xe ceaaenenssscdannccaeines 6

H.R. Rep. No. 60-2222 (1909)........... ane raped 4

H.R. Rep. No. 94-1476 (1976), reprinted in 1976

2B Ste ee |: i ee ae 7,8

Report of the Register of Copyrights on the

General Revision of the U.S. Copyright Law,

87th Cong., 53 (H. Comm. Print 1961)..................... ¢

y

>

INTERESTS OF AMICI

Professors Peter S. Menell and David Nimmer

submit this brief based on their longstanding aca-

demic interest in the sound development of copyright

policy and their specific concern with its termination-

of-transfer provisions, which underlie this case.

David Nimmer is Professor from Practice at the

UCLA School of Law, where he teaches seminars on

advanced copyright doctrine. Since 1985, he has

authored the updates to Nimmer on Copyright. In

addition, he writes numerous articles about domestic

and international copyright law.

Peter S. Menell is Professor of Law at the Uni-

versity of California at Berkeley School of Law and

Director, Berkeley Center for Law & Technology,

where he writes and teaches in the field of intellec-

tual property law.

In addition to their independent efforts, Profes-

sors Menell and Nimmer often collaborate in the

explication of copyright law, most recently in

lhe parties have consented to the filing of this brief.

Counsel of record for all parties received notice at least 10

days prior to the due date of the amici curiae’s intention to file

this bref

No counsel for a party authored this brief in whole or in

part, and no counsel or party made a monetary contribution

intended to fund the preparation or submission of this brief. No

person other than the University of California made a moneta*y

contribution to its preparation or submission

Unwinding Sony, 95 Cal. L. Rev. 941 (2007), and

Legal Realism in Action: Indirect Copyright Liability’s

Continuing Tort Framework and Sony's De Facto

Demise, 55 UCLA L. Rev. 143 (2007). An ongoing

aspect of their collaboration has been the termina-

tion-of-transfer doctrine of U.S. copyright law. See

Sound Recordings, Works for Hire, and the Termina-

tion-of-Transfers Time Bomb, 49 J. Copyright Soc’y

387 (2001); Preexisting Confusion in Copyright’s Work

For Hire Doctrine, 50 J. Copyright Soc’y 399 (2003).

Apart from scholarly pursuits, Prof. Nimmer

served as counsel of record on behalf of Clare Milne,

granddaughter of Winnie-the-Pooh author A.A. Milne,

in a prominent termination-of-transfer copyright

case, referenced below in the substance of this brief.

See Milne v. Stephen Slesinger, Inc., 430 F.3d 1036

(9th Cir. 2005), cert. denied, 548 U.S. 904 (2006). The

termination-of-transfer aspect of that case is over,

albeit a contract aspect continues as to other parties

in district court; Ms. Milne is not a party to the

ongoing case, and Prof. Nimmer is not involved in it.

None of the parties to that case have advised, partici

pated, or supported this amucus filing.

The authors of this brief have received no com-

pensation for their efforts, from any source. The

[UIniversity of California has kindly defrayed all

printing expenses.

SUMMARY OF ARGUMENT

For a century, Congress has sought to protect

authors and their families by allowing tnem to grant

their copyrights for exploitation and then, decades

later, recapture those same rights. After judicial

interpretation of the 1909 Act frustrated this intent,

Congress spoke unambiguously in 1976: “Termination

of the grant may be effected notwithstanding any

agreement to the contrary....” 17 U.S.C. § 304(c)(5)

(emphasis added). Yet, in the case below, the Second

Circuit has eviscerated that clear Congressional

command by enabling a grantee to renegotiate the

terms of the grant so as to frustrate recapture by the

author’s family. Penguin Group (USA) Inc. v. Stein-

beck, 537 F.3d 193 (2d Cir. 2008). Notwithstanding

the unequivocal meaning of the word “any” in

§ 304(c)(5), explicated unmistakably in the legislative

history, the Second Circuit decision invites grantees

to engage in all manner of opportunistic behavior to

frustrate Congress’ clearly expressed language and

intent. The Second Circuit’s decision conflicts with

the Ninth Circuit’s recent holding that a re-grant did

not block an author's statutory successors from

exercising termination. See Classic Media, Inc. uv.

Mewborn, 532 F.3d 978 (9th Cir. 2008). By granting

certiorari in this case, this Court can address this

division in the circuit courts, restore the intergenera-

tional equity that Congress legislated, and remove

the cloud now hanging over innumerable copyrighted

works.

ARGUMENT

Statutory Background of Copyright Re-

capture

Prior to the 1976 Act, an author’s future interest

in his work was the right to renew copyright for a

second term. In theory, the right of renewal gave

authors and their families a second chance to benefit

from the work by canceling unremunerative transfers

and regaining copyright. Yet authors rarely got what

Congress had originally intended, as_ publishers

routinely required authors and their families to

assign renewal rights in advance. Because Congress

concluded that alienable reversionary interests did

not adequately compensate authors for their works, it

explicitly made those rights inalienable and unwaiv-

able when it granted the termination-of-transfer right

under the current Act in 1976 and again via an

amendment in 1998. 17 U.S.C. §§ 2038(a)(5), 304(c)(5),

(d\ 1).

A. 1909 - The Right of Renewal and its

Judge-Made Alienability in Fisher ov.

Witmark

Under the 1909 Act (which governed until Janu

ary 1, 1978, the effective date of the current Act),

authors enjoyed a twenty-eight year term of copyright

protection and held the right to renew for an addi-

tional twenty-eight years. Pub. L. No. 349, §§ 238-24,

35 Stat. 1075, 1080-81 (1909). Congress intended this

right to be “exclusive” to authors and their families so

that they “could not be deprived of this right.’

Rep. No. 60-2222, at 15 (1909). Nevertheless, in 1943,

this Court upheld an author’s assignment of the right

to renew copyright in his musical composition “When

Irish Eyes are Smiling.” Fred Fisher Music Co. v. M.

Witmark & Sons, 318 U.S. 643 (1943). Fsher refused

to read the 1909 Act as imposing a restriction on the

alienability of renewal interests because the statute

did not explicitly provide one. Jd. at 655-56 (reasoning

that if Congress had intended “statutory restraints

upon the assignment by authors ot their renewal

rights, it is almost certain that such purpose would

have been manifested.”). As Justice White later

observed, Congress’ attempt to grant authors and

their families a future copyright interest “was sub-

stantially thwarted by this Court’s decision in Fred

Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643

(1943).” Mills Music, Inc. v. Snyder, 469 U.S. 153, 185

(1985) (White, J., dissenting); see also Siegel v. War-

ner Bros. Entm't, Inc., 542 F. Supp. 2d 1098, 1140

(C.D. Cal. 2008) (noting that the “re-valuation

mechanism provided by the renewal term under the

1909 Act was largely frustrated by the Supreme

Court’s decision in Fred Fisher Music, 318 U.S. at

656-59, allowing authors to assign away at the outset

all of their rights to both the initial and the renewal

term.)

6

B. 1976 - Congress ‘)verrides Fisher by

Introducing Termination of Transfer

as an Author’s Inalienable Right of

Recapture

What the Fisher Court permitted under the 1909

Act, Congress explicitly forbade in the amended

legislation. In 1961, the Copyright Office submitted a

comprehensive study of copyright law to Congress so

that it might revise the 1909 Act. The report noted

that the “reversionary feature of the present renewal

system has largely failed to accomplish its primary

purpose. It has also been the source of more confusion

and litigation than any other provision in copyright

law.” Report of the Register of Copyrights on the

General Revision of the U.S. Copyright Law, 87th

Cong., 53 (H. Comm. Print 1961). The study then

commented that “the primary purpose of the rever-

sionary interest would seem to require that the

renewal interest be made unassignable in advance.”

Id. at 53-54. Congress included this suggestion in its

very first draft of the revised copyright bill.

The Draft Committee entertained several sugges

tions to update the author's reversionary right so as

to remedy what was referred to as “the deficiency of

the Supreme Court in Witmark v. Fisher.” Discussion

and Comments on the Report of the Register of Copy

rights on the Gen U.S. Copyright

Law, &8th Cong., 93 (H. Comm. Print 1963). These

included limiting all copyright assignments. to

tWently years with mubomats reversion thereafter:

permitting termination of assignment deemed to be

unfair to authors; and granting termination of as-

signments rights to authors who were only paid a

lump sum upfront. The committee debates over

reversion were quite spirited, and ultimately Con

gress chose to include sections granting authors the

right to terminate an assignment of copyright. 1964

Revision Bill, H.R. 1947, 88th Cong. §§ 16(a), 22(c)

(1964) (codified as 17 U.S.C. 88 208(a), 304(c) (1976)).

Crucially, the proposed statute guaranteed authors a

second opportunity to control copyright by ensuring

that “[tlermination of the grant may be effected

notwithstanding any agreement to the contrary.” /d.

S$ 16(a)(1), 22(c)(1) (codified as 17 U.S.C. 8§ 203(a)(5),

304(c)(5) (1976)). It would take almost twelve years

and many more drafts before Congress enacted the

Copyright Act of 1976, but this language survived

verbatim in order to “protect authors against unre-

munerative transfers.” II.R. Rep. No. 94-1476, at 124

(1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5740; see

also Mills Music, 469 U.S. at 172-73 (noting that

Congress’ intent to “relieve authors of the conse-

quences of ill-advised and unremunerative grants

that had been made before the author had a fair

opportunity to appreciate the true value of his work

product is plainly defined in the legislative history

and, indeed, is fairly inferable from the text of § 304

itself.” )

8

1. Termination of Copyright Grants

Made Prior to the 1976 Act

Notably, the 1976 Act provided that grants of

copyright in newly created works were to be termina-

ble after thirty-five years from the date of the grant,

17 U.S.C. § 203(a), while grants of copyright made

under the 1909 Act would be terminable fifty-six

years after copyright was first obtained. Jd. § 304(c).

For Congress,

The arguments for granting a right of

termination under section 304 are even more

persuasive than they are under section 203;

[extending the duration of existing copy

rights by nineteen years] represents a com-

pletely new property right, and there are

strong reasons for giving the author, who is

the fundamental beneficiary of copyright un

der the Constitution, an opportunity to share

in it.

H.R. Rep. No. 94-1476, at 140, reprinted in 1976

U.S.C.C.A.N. at 5756. Thus, Congress determined

that the new property right of an extended copyright

term should pass to the author and his or her statu-

tory successors (widow/widower, children, and grand-

children) rather than copyright assignees.

2. Statutory Inheritance Scheme

Moreover, the 1976 Act provided that if the author

did not survive to exercise his termination right, the

interest would be distributed to his family members

9

as a statutory class. See 17 U.S.C. §§ 203(a)(2),

304(c)(2). Congress specifically made this scheme

inalienable: “Termination of the grant may be effected

%”

notwithstanding any agreement to the contrary... .

Id. §§ 208(a)(5), 304(c)(5) (emphasis added). The au-

thor’s family takes the interest despite any assign-

ment or will of the author divesting them of copyright

ownership. This provision shows Congress’ intent to

give the author’s statutory successors, rather than

the author’s assignees or devisees, the benefits of

copyright recapture — including the new property

right of an extended term of protection.

>. 1998 ~- Congress Extends Copyright

Duration Again, Grants Authors a Sec-

ond Inalienable Right of Recapture

In 1998, the Sonny Bono Copyright Term Exten-

sion Act (“CTEA”) extended copyright terms for

another twenty years. Pub. L. No. 105-298, 111 Stat.

2827. Again wishing to bestow this additional term on

authors and their families, Congress once again

adopted the same termination device. See 17 U.S.C

§ 304(d). Section 304(d) allows the author’s statutory

successors to recapture copyrights that had been

granted decades earlier, so long as they had not

already exercised their termination nights. Again,

the law granted authors and their successors a

statutory termination right, allowing them to abro-

gate agreements by which the author had sold the

extended term, “notwithstanding any agreement to

10

the contrary.” Id. § 304(c)(5), incorporated by reference

in id. § 304(d)(1).

II. Analysis

The plain meaning of the phrase “(t]ermination

of the grant may be effected notwithstanding agree-

ment to the contrary” is that authors and their suc-

cessors may terminate copyright assignments in spite

of any contractual device that purports to divest them

of the right; its plain legislative intent is to override

Fisher by guaranteeing that authors and their suc-

cessors have the opportunity to regain copyright. This

Court has remarked that termination of transfer

rights are “inalienable.” Stewart v. Abend, 495 U.S.

207, 230 (1990): see also New York Times Co. v. Ta-

sint, 533 U.S. 483, 496 n.3 (2001) (characterizing the

statutory termination regime as creating an “inalien-

able authorial right to revoke a copyright transfer”

under 17 U.S.C. § 203(a)(5), the post-1978 provision

coordinate to § 304(c)(5) for pre-1978 works). Yet the

Second Circuit held in the case below that statutory

successors’ termination rights are alienated when the

copyright owner renegotiates an existing grant.

Penguin Group (USA) Inc. v. Steinbeck, 537 F.3d 193,

202-03 (2d Cir. 2008). The decision harms the statu-

tory successors of innumerable copyrights. It also

undermines Congress’ intention of shielding authors

from the pressures of unequal bargaining power that

had produced unremunerative transfers in the crea-

tive arts. The Court's review is appropriate and

necessary for three reasons.

1]

First, the Second Circuit’s construction directly

negates the plain language and intent of the statute.

Congress made the termination rights inalienable

because to do otherwise, as the assignable renewal

interests of the 1909 Act demonstrated, would not

sufficiently protect authors and their successors.

Second, the case below superimposes state con-

tract law over the federal copyright statute to evalu-

ate the legitimacy of federal copyright interests.

Not only does this unpredictable standard invite

litigation, it heralds further inconsistent law among

the circuits.

Third, the decision will strip many authors’

surviving children and grandchildren of their statuto-

rily mandated copyright interests. Those children and

grandchildren may now find their ability to terminate

previous grants of copyright vanished through no

fault of their own.

Critically, the case below implicates numerous

valuable copyrights, as all copyrights that are not

works-made-for-hire are subject to termination. 17

U.S.C. $§ 203(a), 304(c), (d). Without this Court’s

immediate guidance, authors and their successors

can expect protracted courtroom battles when they

attempt to enforce their statutorily mandated recap-

ture rights. Accordingly, the Court must grant review

to prevent the uncertainty the Second Circuit’s deci-

sion will engender regarding sections 203, 304(c) and

304(d).

12

A. By Making Termination Rights Alien-

able, the Second Circuit Resurrects

Fisher v. Witmark and its Unfortunate

Effects on Authors

The Second Circuit in the case below turned back

the clock to the Fisher regime, under which publish-

ers could contractually block authors and _ their

families from exercising copyright reversion. Ironi-

cally, the court did so by interpreting the statutory

provision that was intended to overrule the Fisher

decision: “Termination ... may be effected notwith-

standing any agreement to the contrary....” 17

U.S.C. § 304(c)(5). Indeed, the Second Circuit stated

that it did not “read the phrase ‘agreement to the

contrary so broadly that it would include any agree-

ment that has the effect of eliminating a termination

right.” Steinbeck, 537 F.3d at 202.

Forgetting for a moment that the court somehow

read the phrase “any agreement to the contrary” to

mean “only some agreements to the contrary,” the

history of copyright law teaches that alienable rever-

sionary interests stand to benefit publishers — and

copyright lawyers’ — at authors’ expense. By granting

inalienable termination rights to authors and their

statutory successors, Congress sought to prevent the

“confusion and litigation” spawned by the alienable

One copyright practitioner recently referred to termina

tion of transfers as “the gift that keeps on giving ... although

potentially fraught with peril.” Bill Gable, Taking it Back, L.A

Lawyer, June 2008, at 34

13

renewal rights of the 1909 Act. The Second Circuit’s

decision reintroduces the uncertainty surrounding

countless future copyright interests by holding that a

renegotiation of a copyright grant is a substitute for

its termination.

Just as Fisher sanctioned publishers’ practice of

securing renewal rights from authors and their

families in order to preclude future copyright rever-

sion, so now does Steinbeck encourage publishers to

renegotiate copyright grants to prevent statutory

successors from later exercising termination. The

decision below once again gives publishers an easy

tool to block termination without having to confer

adequate benefits on authors and their families. With

a slight adjustment to the royalty rates or other

contractual terms, an assignee will claim that a

renegotiation superseded the original grant and

thereby escape the prospect of termination. Copyright

law has been here before; the scenario that the Sec-

ond Circuit generates is identical to that which

Congress tried to remedy in 1976. This Court’s review

is warranted to interpret the termination-of-transfer

language faithfully.

B. The Steinbeck Rule Is Unpredictable

Because It Looks to State Law Rather

Than the Federal Statute to Determine

the Validity of Federal Copyright In-

cerests

The Copyright Act permits authors and their

successors to terminate a grant if they comply with

14

statutory notice and timing requirements. The Sec-

ond Circuit’s decision imports the different legal

regime of state law, such that federal termination

becomes inoperative when publishers have engaged

in machinations of regranting, rescission, or novation.

The availability of termination rights, which are

federally granted property interests, now turns on

whether there has been a superseding agreement

under applicable state contract law. Indeed, the

Steinbeck court looked to New York state law to

determine whether Steinbeck’s original grant to

Penguin in 1938 had been superseded by Penguin’s

renegotiated contract with Steinbeck’s widow in 1994.

537 F.3d at 200-01. Such an inquiry guarantees

further inconsistent law, encourages strategic forum

shopping, and conflicts with clear federal policy pre-

empting state laws that interfere with federal copy-

right law mandates and protections. See 17 U.S.C.

§ 301(a).

As noted in the petitioner’s brief, a circuit split

has emerged over whether and in what circumstances

a renegotiated grant extinguishes the right to termi-

nate the original transfer. In contrast to Steinbeck,

the Ninth Circuit recently held that a re-grant did

not block an author’s statutory successors from

exercising termination because they did not use their

termination rights as leverage during the renegotia-

tions. Mewborn, 532 F.3d at 989. The Ninth Circuit

distinguished its prior decision in Milne v. Stephen

Slesinger, Inc. — allowing a grantee to “rescind and

c

regrant’ a copymght license for the express purpose of

15

blocking the author’s family members from exercising

their statutory termination rights, 430 F.3d 1036,

1046 (9th Cir. 2005), cert. dented, 548 U.S. 904 (2006)

— on the ground that the rights-holder there “had —

and knew that he had — the right to vest copyright in

himself at the very time he revoked the prior grants

and leveraged his termination rights to secure the

benefits of the copyrighted works for A.A. Milne’s

heirs.” Mewborn, 532 F.3d at 989. None of these

decisions follow the clear dictate of the federal statut«

that “[tlermination of the grant may be effected

notwithstanding any agreement to the contrary.” 17

U.S.C. § 304(c)(5) (emphasis added)

How many more judicial roadblocks can the

circuits place in front of authors and _ statutorily

designated successors? After Milne, Steinbeck, and

Mewborn, not only will courts have to apply state law

to determine whether a copyright assignment has

been superseded, they will have to investigate

whether the relevant parties knew that they pos-

sessed termination interests at the time and whether

they received just benefits from the renegotiated

terms. Having courts measure the adequacy of such

bargains is neither an appropriate nor predictable

method of determining a property right that “may be

exercised notwithst ing any agreement to the

contrary.

16

C. The Steinbeck Decision Overrides

Congress’ Intent to Vest Copyright In-

terests in Statutory Successors

The decision below invites crafty assignees to

undermine the statute most readily in those situa-

tions where the statutory successors take the termi-

nation interest, but the author’s will devises his

copyright ownership interest elsewhere. Rather than

bequeath their copyright royalties by will to their

surviving family members, authors at times name in

their will a favored charity, a mistress, or a testa-

mentary trust to act for the benefit of numerous

)

interests. Notwithstanding those testamentary

8 7

dispositions, Congress vested the right to terminate

transfers automatically in the author’s statutory

successors (the surviving widow and children, and in

the case of pre-deceased children, then the author’s

srandchildren). i7 U.S.C. §§ 203(a)(2), 304(c)(2),

(d)(1). Aware that the copyright bar would exercise

its ingenuity to devise strategems to sidestep the

Author William Saroyan preferred to leave his writings to

his sister and a foundation as opposed to his own children. See

Saroyan v. William Saroyan Found., 675 F. Supp. 843, 843-44

S.D.N.Y. 1987), aff’d mem., 862 F.2d 304 (2d Cir. 1988)

Composcr Dave Dreyer left a portion of his earnings to his

ress. See I rer rv Spu i Trice l Bourrie ( ‘O., 953 F.2d 774, 7476

ar. 1992

AA. Milne left his interests in Winnie-the-Pooh not

directly to his widow and surviving son, Christopher Robin

Milne, but instead to a testamentary trust created for the

4

benefit of vamous charities along with his tamily members. Se

Milne. 430 F.3d at 1039

termination interest, Congress further specified that

the rights would not be subject to defeasement:

“Termination of the grant may be effected notwith-

standing any agreement to the contrary....” 17

U.S.C. § 304(c)(5). Yet the Second Circuit’s rule per-

mits those rights to be eliminated when the inheritor

of an author’s copyright interest (the charity, mis-

tress, trust, etc.) revisits the terms of a transfer —

even if the statutory successors are not party to the

negotiations.

In fact, this scenario applies to the situation

below. John Steinbeck devised the entirety of his

copyrights to his widow, Elaine. Steinbeck, 573 F.3d

at 196. Though Elaine only held a one-half share of

the right to terminate transfer of the copyrights, she

received all of the benefits when she renegotiated the

agreement with the publisher. Jd.’ The author’s son

and grandson, who together held the other half share

of the termination interest, received none. Jd. Allow-

ing the author’s devisee to unilaterally disinherit

some (and, under other circumstances, all) members

of the statutory class violates the statute.

The statute requires a majority share to exercise termina-

tion. 17 U.S.C. § 304(c\ 1). Therefore, Elaine would have been

unable to exercise termination on her own, even though the

Second Circuit concluded that she “exercised the single opportu-

‘

I 3d

)

ere)

nity [for termination) provided by statute.” Sternbeck,

at 204

18

Moreover, the rule of law adopted below encour-

ages publishers to escape the possibility of termina-

tion by heading straight to the bargaining table with

the author’s testamentary devisee, regardless of

whether he or she happens to be one of the statutory

successors. The result is nothing other than a wind-

fall to the testamentary devisee and publisher alike.

Sometimes the lucky heir named in the will may turn

out to be a surviving spouse locking out hostile chil-

dren from the author’s former marriage; in other

instances, publishers may tender compensation to

some of the author’s progeny in order to induce them

to give up their advance termination right, to the

prejudice of other children or grandchildren; some-

times the device may be labeled “rescission and

regrant” (as it was in Milne); at other times, it will

purport to “cancel and supersede the previous agree-

ments” (as in the case below): sometimes the new

grant will occur when termination itself could already

proceed under the statute, at other times prior to the

termination window opening

The decision below allows all these variations

and more. Not one of them produces the result that

Congress intended. The bedrock rule that should

apply across the board is the one that Judge Owen

articulated in the district court, before being reversed

by the Second Circuit in the ruling below: “To protect

this mght and prevent creators or statutory heirs

from contracting away, for whatever reason, this

absolute right to ‘recapture’ for the years of extended

protection any pre-1978 copyright grant, the statute

19

declares void any contract the effect of which is in

contravention of or which negates either of these

termination rights.” Steinbeck v. McIniosh & Otis,

Inc., 433 F. Supp. 2d 395, 399 (S.D.N_Y. 2006)

CONCLUSION

The Second Circuit’s decision in Steinbeck un

dermines the provision of the Copyright Act that

guarantees the right of reversion to authors and their

statutorily mandated successors. In so doing, it

disrupts the overall statutory scheme, blocks authors’

successors from realizing their statutory interests,

and casts a pall of confusion over the ownership of

many valuable copyrights. Congress could not have

more clearly manifested its intent that authors and

This statutory prohibition is intended to be broadly

applied to invalidate such unlawful contracts and lib

erally protect termination nights. Indeed, copyright

termination abrogates freedom of contract in two ways

It allows for the invalidation of the original contractual

transtier, and it abrogates subsequent attempt 3 to corT

tract around the termination nght it create

Steinbeck, 433 F Supp. 2d at 399 n.10 (citations omitted

Any interpretation of the 1994 Agreement having the

effect of disinhenting the statutory heu.rs to the term

nation interest in favor of Elaine’s heirs [the chil-

dren of the surviving widow, not themselves related to

the deceased author! must be set aside as contrary t

tne very purpose of the termination statute which pro

tects children and vrandchildren, and not just widow

id. at 402 n.23

20

their families should enjoy an inalienable right to

terminate transfer, and the Second Circuit could not

have more patently violated it. This Court’s review of

the case below is essential to restore not merely the

integrity and clarity of Congress’ language, but the

dual promises that copyright law will fairly protect

authors from overreaching and secure the interests of

statutorily designated successors.

Respectfully submitted,

DAVID NIMMER

UNIVERSITY OF CALIFORNIA,

Los ANGELES

SCHOOL OF LAW

405 Hilgard Avenue

Los Angeles, California 90095-1476

(310) 203-7079

March 18. 2009