Opinion ID: 3035128
Heading Depth: 4
Heading Rank: 1

Heading: “Agreement to the Contrary”

Text: [1] Faced with the reality that she is dealing with a post1978 agreement, Clare attempts to circumvent the 1983 agreement by claiming that another provision of the CTEA, 17 U.S.C. § 304(c)(5), requires this court to regard the 1983 agreement as an “agreement to the contrary” that does not prevent her from terminating SSI’s rights to the Pooh works. Section 304(c)(5) states that a “[t]ermination . . . may be effected notwithstanding any agreement to the contrary, including any agreement to make a will or to make any future grant.” 17 U.S.C. § 304(c)(5). [2] The statute does not define the phrase “agreement to the contrary,” although it does provide two examples of agreements that would constitute an “agreement to the contrary”: “an agreement to make a will” and an agreement “to make any future grant.” Id. The undisputed fact that the 1983 agreement does not fall into either category supports the district court’s finding that the 1983 agreement is not “an agreement to the contrary.” See Sutton v. Providence St. Joseph Med. Ctr., 192 F.3d 826, 834 (9th Cir. 1999) (“When a statute contains . . . specific items and a general item, we usually deem the general item to be of the same category or class as the more specifically enumerated items.”). To support her theory that the 1983 agreement falls under the category of “an agreement to the contrary,” Clare reads the Supreme Court’s decision in Stewart v. Abend, 495 U.S. 207 (1990), as holding that Congress intended to make the termination right inalienable for authors and their families. Stewart, however, did not interpret the “agreement to the contrary” language of section 304(c)(5) or its counterpart under section 203(a)(5).7 In fact, the only discussion in Stewart per- 7 Apart from other differences, the counterpart provision found under section 203 covers transfers effected on or after January 1, 1978, whereas MILNE v. STEPHEN SLESINGER, INC. 16019 taining to inalienability is the Court’s relatively brief portrayal of the evolution of copyright law, beginning with the Copyright Act of 1790 and ending with the 1976 Copyright Act. See 495 U.S. at 230 (noting only that “[t]he 1976 Copyright Act provides a single, fixed term, but provides an inalienable termination right”) (citing 17 U.S.C. § 203). Accordingly, Stewart does not support the broad “plain meaning” that Clare attributes to section 304(c)(5). Clare also relies on the Second Circuit’s decision in Marvel Characters, Inc. v. Simon, 310 F.3d 280 (2d Cir. 2002), to support her claim that the 1983 agreement is an “agreement to the contrary” under section 304(c)(5). The contract at issue there was a settlement agreement between the parties, which ended a series of lawsuits filed in the 1960s by the creator of a copyrighted work. Id. at 283-84. The creator argued that the settlement agreement should not be given effect because it contractually changed the nature of the copyrighted work, labeling it as a “work made for hire” many years after its creation. Id. at 284-85. The effects of this after-the-fact label were to make the creator an “employee for hire” rather than the author of the copyrighted work, and to foreclose his right to terminate the grant he had made in the copyrighted work. Id. at 283-84. Thus, unlike the issue presented in the case at bar, the issue facing the Second Circuit was “whether § 304(c)(5)’s phrase ‘any agreement to the contrary’ includes a settlement agreement stating that a work was created for hire[.]” Id. at 290 (quoting 17 U.S.C. § 304(c)(5)). After examining the legislative history and considering the purpose of section 304(c), the court concluded “that an agreement made subsequent to a work’s creation which retroactively deems it a work for hire constitutes an agreement to the contrary under § 304(c)(5) of the 1976 Act.” Id. at 292 (intersection 304(c) covers transfers before that date. 17 U.S.C. §§ 203(a), 304(c). 16020 MILNE v. STEPHEN SLESINGER, INC. nal quotation marks omitted). The Second Circuit held that an employer cannot contractually transform a creator or author of a copyrighted work into an “employee for hire.” Id. The court expressed concern that if it held otherwise, works not satisfying the relationship-based “for hire” test could be coerced by post-facto agreements that designate such works to be something they are not: “works for hire.” Id. at 291-92. The facts, reasoning, and holding of Marvel have little relevance to this case because, here, there is no after-the-fact attempt to recharacterize the work or a prior agreement. Instead, the 1983 agreement involves contractual provisions that operated prospectively through the revocation of an existing grant and the making of a new one. As the district court recognized, “[t]he parties in the 1983 [a]greement did not attempt to change or modify the nature of their association with one another, or alter the character of their long-standing author/grantee relationship.” Reinforcing this reasoning are the undisputed facts that the 1930 grant was expressly revoked by the Pooh Properties Trust, which made a new grant of rights to SSI that, inter alia, was more lucrative for the author’s heirs. The fact that the 1983 agreement was meant to protect the continuing viability of the author’s grant of rights to SSI is evident from the agreement itself. In that vein, it is important to note that the parties describe their 1983 agreement as a “new agreement for the future which the parties believe would not be subject to any right of termination under 17 U.S.C. Secs. 203 or 304(c)” (emphasis added). Neither Marvel nor any other of Clare’s cited authority supplies a basis for us to question the district court’s decision or to undo the 1983 agreement, which was freely and intelligently entered into by the parties.8 The beneficiaries of the 8 Also not well taken is Clare’s citation of Rano v. Sipa Press, Inc., 987 F.2d 580 (9th Cir. 1993), to support her perspective that section 304(c) MILNE v. STEPHEN SLESINGER, INC. 16021 Pooh Properties Trust were able to obtain considerably more money as a result of the bargaining power wielded by the author’s son, Christopher, who was believed to own a statutory right to terminate the 1930 grant under section 304(c) of the 1976 Copyright Act. Although Christopher presumably could have served a termination notice, he elected instead to use his leverage to obtain a better deal for the Pooh Properties Trust. His daughter, Clare, was a beneficiary of this new arrangement, and her current dissatisfaction provides no reason to discredit the validity of the 1983 agreement and the rights conferred thereby.