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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2008

## Text

(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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_0184%3A5. Public record. Not legal advice.