Opinion ID: 204157
Heading Depth: 3
Heading Rank: 1

Heading: Termination instruction

Text: LAMCO first argues that the district court erred when it applied New York law, rather than the Copyright Act, when instructing the jury on whether there had been an effective termination of the 1982 contract. We review this claim of instructional error de novo. SEC v. Happ, 392 F.3d 12, 28 (1st Cir.2004). A jury instruction is erroneous if it is misleading, confusing, or incorrect as a matter of law. Davignon v. Clemmey, 322 F.3d 1, 9 (1st Cir.2003). Ordinarily, unless a contract provides otherwise, it is governed by the law of the state in which it was formed. See U.S. Trust Co. v. New Jersey, 431 U.S. 1, 19 n. 17, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977); see also Norfolk & W. Ry. Co. v. Am. Train Dispatchers Ass'n, 499 U.S. 117, 130, 111 S.Ct. 1156, 113 L.Ed.2d 95 (1991). Where a contract formed in a particular state is silent with respect to certain terms, state rules of enforcement and interpretation may serve to fill those gaps. See U.S. Trust Co., 431 U.S. at 19 n. 17, 97 S.Ct. 1505 (The obligations of a contract long have been regarded as including not only the express terms but also the contemporaneous state law pertaining to interpretation and enforcement.); see also Norfolk & W. Ry. Co., 499 U.S. at 130, 111 S.Ct. 1156 (Laws which subsist at the time and place of the making of a contract, and where it is to be performed, enter into and form a part of it, as fully as if they had been expressly referred to or incorporated in its terms.) (quoting Farmers' and Merchs. Bank of Monroe v. Fed. Reserve Bank of Richmond, 262 U.S. 649, 660, 43 S.Ct. 651, 67 L.Ed. 1157 (1923)); Walthal v. Rusk, 172 F.3d 481, 485 (7th Cir.1999) (explaining that a contract reached in Illinois that was silent as to duration was terminable at will under Illinois law). Here, the contract was formed in New York and is silent with respect to termination. Under New York law, such a contract remains in force for a reasonable time and is subject to termination upon reasonable notice. Italian & French Wine Co. of Buffalo, Inc. v. Negociants U.S.A., Inc., 842 F.Supp. 693, 699 (W.D.N.Y.1993) ([W]ell-settled New York law [] provides that a contract with no stated duration is terminable only after a reasonable duration and after reasonable notice is given.); see also Laugh Factory, Inc. v. Basciano, 608 F.Supp.2d 549, 556 (S.D.N.Y.2009); Rogers v. HSN Direct Joint Venture, 1999 U.S. Dist. LEXIS 12111, at , 1999 WL 595533 (S.D.N.Y. Aug. 6, 1999). LAMCO, however, argues that the Copyright Act preempts this default rule of termination because the Act and the default rule are in conflict. Walthal, 172 F.3d at 485 (explaining, when deciding whether the Copyright Act preempted state law, that state contract law cannot provide the basis of a decision if that law conflicts with federal law). LAMCO argues further that, under the Copyright Act, Varona's notice of termination had to be in writing. We discern no conflict between the federal law and New York law, because we conclude that the sections of the Copyright Act cited by LAMCO are inapplicable in this case. Accordingly, we reject LAMCO's preemption argument. LAMCO first directs our attention to § 204 of the Copyright Act, applicable to the transfers of copyright ownership. 17 U.S.C. § 204. It provides in relevant part: Execution of transfers of copyright ownership. (a) 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. Id. § 204(a). LAMCO suggests that this section is applicable to the alleged termination of rights at issue in this case. The logic is as follows. West Side transferred an exclusive license to ACEMLA through the 1982 contract. Upon West Side's termination of that contract, ownership of the copyright would be transferred from ACEMLA back to West Side. Because the effect of the contract termination was to transfer copyright ownership,  204 applied and required a writing to effectuate the transfer. And, because there was no writing, no transfer of ownership interest could have occurred. Section 204, which requires a writing signed by the transferor, however, applies to the transfer or grant of copyright ownership, not to the termination of such a transfer or grant. LAMCO cites no case suggesting otherwise, nor are we are aware of any such case. Moreover, extending  204 to the termination of copyright interests would lead to untenable results. A transferee of a copyright interest could effectively veto a lawful termination of that interest by refusing to reconvey that interest to the terminating party under  204. For example, in this case, LAMCO, the transferee, could have prevented West Side from terminating the exclusive license by simply choosing not to reconvey the license to West Side through either an instrument of conveyance, or a note or memorandum of transfer. Next, LAMCO cites § 203, which explicitly deals with termination of transfers and licenses granted by an author. 17 U.S.C. § 203. Under that section, an author, or an author's statutory heirs, may, under certain conditions, terminate an exclusive grant of a license by serving an advance notice in writing ... upon the grantee or the grantee's successor in title. Id. § 203(a)(4) (emphasis added). That section, however, is also inapplicable. According to its plain language,  203 only applies where an author or an author's statutory heirs are terminating the grant. Id. § 203(a)(1)-(2); 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright §§ 11.03[B], at 11-40.5 (2007) (Grants executed on or after January 1, 1978 are subject to termination only if executed by the author. ) (emphasis added). West Side is neither the author nor a statutory heir of the author. Furthermore, LAMCO does not contend that West Side should be treated as either an author or statutory heir for purposes of § 203. In light of the plain language of § 203, there is no basis to conclude that § 203 applies to this contract.
LAMCO also argued below that it was entitled to relief even under New York law. The contention is that, under the circumstances of this case, only written notice of termination could constitute reasonable notice under New York law, and the court should have instructed the jury accordingly. In support of this argument, LAMCO contended that New York law would require a party who is terminating an exclusive license to comply with § 203's termination provision, whether or not the terminating party is an author or statutory heir. We need not linger over this argument. On appeal, LAMCO makes only a passing reference to the argument, fails to cite any authority in support of it, and does not develop the argument in any meaningful way. As a result, the argument is waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir.1990) (noting the settled appellate rule that issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived).