Opinion ID: 516047
Heading Depth: 3
Heading Rank: 1

Heading: Reconciling Sections 7 and 24

Text: 48 Judge Friendly, writing for the Second Circuit, saw his task as reconciling the first clause of section 7, which grants copyright protection to derivative works, with the section 24 provision for renewal of the underlying copyright. In Rohauer, the Second Circuit found that no prior cases addressed this question, and then relied on the new property right theory propounded in Edmonds v. Stern, 248 F. 897 (2d Cir.1918), and on the relative equities to hold that defendants' broadcast of the Son of the Sheik movie did not infringe the renewal copyright in the underlying novel. Rohauer, 551 F.2d at 490-93. 49 In Edmonds v. Stern, the Second Circuit held that the owners of a derivative copyright in an orchestral arrangement of a song had a property right wholly separate and independent from the property right in the underlying song. 248 F. at 898. According to the court, when the author of the original work gave consent to the creation of a derivative work, a right of property sprang into existence, not at all affected by the conveyance of any other right. Id. The Second Circuit in Rohauer viewed its holding as only a slight extension of the Edmonds decision. 551 F.2d at 492. 50 Abend argues that Rohauer's adoption of the new property right theory to reconcile sections 7 and 24 violates the traditional rule that a derivative copyright protects only the new material contained in the derivative work, not the matter derived from the underlying work. Russell v. Price, 612 F.2d 1123, 1128 (9th Cir.1979), cert. denied, 446 U.S. 952, 100 S.Ct. 2919, 64 L.Ed.2d 809 (1980). Shortly before Rohauer, the Second Circuit affirmed the traditional rule in Gilliam v. American Broadcasting Co., 538 F.2d 14 (2d Cir.1976). In Gilliam, plaintiffs, a group of writers and performers, sought to enjoin ABC from broadcasting edited versions of programs that plaintiffs had written and performed for broadcast by BBC. The scriptwriters' agreement between plaintiffs and BBC gave the plaintiffs maximum control over the script and precluded BBC from altering a program once it was recorded. Id. at 17. BBC licensed the programs to Time Life Inc. for distribution, which in turn entered into an agreement with ABC for broadcast of the programs. Prior to broadcast, the programs were severely edited. Plaintiffs described the editing as mutilation. Id. at 18. They successfully argued that the editing of the program--the derivative work--infringed plaintiffs' copyright in their script--the underlying work. The court held that section 7 provided protection for the derivative work, so long as it did not affect the force or validity of the underlying copyright. But, according to the Second Circuit in Gilliam, ownership of the derivative copyright does not carry with it the right to affect the scope or ownership of the copyright in the underlying script. Id. at 20 (emphasis added). The Second Circuit in Gilliam firmly declared that the ability of the copyright holder to control his work remains paramount in our copyright law. 8 Id. at 21. 51 Abend also contends that Rohauer's adoption of the new property right theory fails adequately to distinguish precedent, particularly G. Ricordi & Co. v. Paramount Pictures Inc., 189 F.2d 469 (2d Cir.), cert. denied, 342 U.S. 849, 72 S.Ct. 77, 96 L.Ed. 641 (1951). 9 In Ricordi, Long, the author of the novel Madame Butterfly, authorized Belasco to write a play based on the novel. Both Long and Belasco subsequently assigned the right to make an opera based on the play to the plaintiff Ricordi. In 1904, Ricordi copyrighted the opera. Later Ricordi obtained the renewal rights to the opera. Long renewed the copyright in his novel in 1925, and, before his death, assigned the movie rights to Paramount, the defendant. At the same time, Paramount acquired from Belasco's trustee the movie rights to the play. Belasco had never effected renewal of the play's copyright. Ricordi sued for a declaration that he was entitled to produce a movie of the opera. The court held that Ricordi's interest extended only to what was copyrightable as new matter in its operatic version. Ricordi, 189 F.2d at 471. According to the court, [a] copyright renewal creates a new estate, and ... the new estate is clear of all rights, interests or licenses granted under the original copyright. Id. Thus, Ricordi acquired no rights under author Long's renewal, which was clear of all rights granted under the original copyright, and therefore Ricordi could not make general use of the novel for a motion picture version of Long's copyrighted story.... Id. 52 Abend argues that under Ricordi, a renewal copyright creates a new estate that cuts off any rights acquired during the original term of the copyright. Rohauer, however, found Ricordi distinguishable for a fundamental reason: in Ricordi, the agreement between the authors and the plaintiff did not purport to extend beyond the original term of Long's copyright; Ricordi had never bargained for any rights in the renewal term. 10 Rohauer, 551 F.2d at 491. By contrast, in both Rohauer and the case before us, the authors clearly agreed to assign the motion picture rights to the owners of the derivative work during the renewal term. Id. 53 We find the distinction between Ricordi and Rohauer unconvincing because in both situations there is no effective grant of motion picture rights to make a derivative work during the renewal term. In Ricordi, no grant existed because the parties never included renewal rights in the agreement. In Rohauer and our case, the agreements evidenced the intention of each author to assign renewal rights, but renewal rights never vested in either author because each died before the time for renewal accrued, i.e. one year prior to the expiration of the original term. In Miller Music Corp. v. Charles N. Daniels, Inc., 362 U.S. 373, 80 S.Ct. 792, 4 L.Ed.2d 804 (1960), the Supreme Court held that an assignment of full copyright renewal rights by the author prior to the time for renewal--i.e. within one year prior to the expiration of the original 28-year copyright term--cannot defeat the right of the author's statutory successor to the renewal copyright when the author dies before the time that the right for renewal has accrued. In Miller Music, Black and Daniels composed a song and assigned all rights in it to Villa Moret, Inc., which obtained the original copyright. Before the time when renewal rights accrued, Black assigned his renewal rights to Miller Music. Black died before he could effect renewal. His brother became executor and renewed the copyright under section 24, and Daniels ultimately acquired the renewal copyright from Black's brother. Miller Music sued Daniels for infringement. The Supreme Court held for Daniels, stating that the next of kin obtains the renewal copyright free of any claim founded upon an assignment made by the author in his lifetime. These results follow not because the author's assignment is invalid but because he had only an expectancy to assign.... 11 Id. 362 U.S. at 375, 80 S.Ct. at 794. The Court held that section 24 creates contingency interests, and that [u]ntil [the renewal period] arrives, assignees of renewal rights take the risk that the rights acquired may never vest in their assignors. A purchaser of such an interest is deprived of nothing. Like all purchasers of contingent interests, he takes subject to the possibility that the contingency may not occur. Id. at 378, 80 S.Ct. at 796. 12 54 Miller Music provides ineluctable authority for Abend's position. Since Woolrich died before the renewal period arrived, his purported assignment of renewal rights is ineffective and irrelevant; the most defendants' predecessors could have acquired was an expectancy in the right to use the story that underlies the derivative work during the story's renewal period. The distinction Rohauer draws between cases where the author never agreed to assign renewal rights, like Ricordi and Fitch v. Shubert, 20 F.Supp. 314 (S.D.N.Y.1937), and cases like ours, where the author's agreement is plainly unenforceable against his statutory successors, is meaningless. Accord 1 Nimmer on Copyright Sec. 3.07[A], at 3-28, 3-29; see also Mills Music, Inc. v. Snyder, 469 U.S. 153, 183 n. 8, 105 S.Ct. 638, 655, 83 L.Ed.2d 556 (1985) (White, J., dissenting) (If an author had assigned his rights in the renewal term at the time that he assigned rights in the initial term, a grantee might safely release a derivative work prepared under authority of the first-term grant. But if the author had died before his renewal rights vested, his statutory successors acquired those rights, and any previous assignment was rendered null. (Citations omitted.)). 55 Rohauer virtually ignores Miller Music. It dismisses Miller Music by stating merely that Miller Music and other Supreme Court cases were concerned with the relative rights of persons claiming full assignment or ownership of the renewal term of an underlying copyright, rather than with the competing rights of the owner of a renewal copyright in the underlying work and the owner of the copyright in the derivative work. Rohauer, 551 F.2d at 490. The Rohauer court fails to explain why this distinction rendered Miller Music irrelevant to the case before it. 13 In our view, the fact that Miller Music involved competing claims to the underlying copyright weakens defendants' argument. If Miller Music makes assignment of the full renewal rights in the underlying copyright unenforceable when the author dies before effecting renewal of the copyright, then, a fortiori, an assignment of part of the rights in the underlying work, the right to produce a movie version, must also be unenforceable if the author dies before effecting renewal of the underlying copyright. 56 The legislative history behind section 24 lends further support to Abend's position and the Supreme Court's decision in Miller Music. In Hearings before the Committees on Patents on the Proposed Copyright Act, Mr. W.B. Hale, representative of the American Law Book Company, discussed the problem of obtaining renewal rights from joint authors of composite works. He testified that: 57 it is only possible to cover the right of renewal of the actual author. The right of renewal is contingent. It does not vest until the end. If he is alive at the time of renewal, then the original contract may pass it, but his widow or children or other persons entitled would not be bound by that contract. 58 Legislative History of the 1909 Copyright Act K77 (E. Brylawski A. Goldman eds. 1976). Congress understood that the renewal right provided by section 24 was to be contingent. Because the contingent nature of the renewal right would cause hardship to owners of composite works, Congress exempted composite works from this aspect of the renewal provision in the 1909 Act. See 17 U.S.C. Sec. 24. Significantly, Congress did not include a similar exemption for derivative works. 14