26 August 2005

The Dotted Line

The Copyright Act tells us that

A "transfer of copyright ownership" is an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a nonexclusive license.

17 U.S.C. § 101. A little later, it tells us that

A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent.

17 U.S.C. § 204(a). So, then, what is sufficient? (And, of course, why might I be asking this question?)

The Fifth Circuit recently reminded us that the statute, not being all that ambiguous, probably means what it says:

Lyrick alternatively argues that the parties acted as if they had a deal for several years, making it unfair for Big Idea to rely on a hyper-technical § 204(a) argument. The Ninth Circuit rejected a similar argument in Konigsberg when it required a writing even in the face of ample evidence of an agreement, including that Rice had written the bible and had been paid for it. Section 204(a) requires a writing. Although Lyrick argues that enforcing this requirement would be unjust, we will not add an exception to the statute.

Lyrick Studios, Inc., v. Big Ideas Prods., Inc., No. 03–10837 (5th Cir. Aug. 5, 2005), slip op. at 15–16.

So, then, where is this going? Several places, actually.

  • Certain Big Media Companies with longstanding franchises—you know who you are—are fond of claiming that "all submissions become the property of Big Media Company." Well, not if it wasn't signed! Further, unless there's a document actually acknowledging such terms, it's highly questionable under the Lyrick reasoning that even a signed cover letter would create a "contract." (Of course, winning this is going to be rather expensive…)
  • Although it is never cited, Lyrick seems comfortable with footnote 6 in Tasini: Courts may not second-guess whether a particular transaction or use is in the best interests of the actual copyright holder, so long as the copyright holder asserts a claim regarding that transaction. The subtext of the footnote—indeed, all of Tasini—is that publishing and distribution contracts are to be construed strictly in favor of the copyright holder.
  • Perhaps the most important point, though, is that Lyrick essentially holds that there is a federal common law of contracts concerning transfers of copyright. Under the facts as stated, a Texas court would probably have held that there was indeed a contract between Lyrick and Big Ideas. In perhaps any other context, I suspect that the Fifth Circuit would have deferred to Texas-state-law reasoning. That is not what happened; and that, in turn, presents some interesting Erie and federalism questions. At least, if you're a civil procedure nerd like me they're interesting…