Opinion ID: 759273
Heading Depth: 2
Heading Rank: 2

Heading: Stewart v. Abend

Text: 48 Batjac contends that we are bound to reach the opposite result because of language used in Stewart v. Abend, 495 U.S. 207, 110 S.Ct. 1750, 109 L.Ed.2d 184 (1990). We disagree. In Abend, the Supreme Court did not discuss § 7 as grounds for its holding, but rather to rebut an argument advanced in the dissent. In relevant part, the Supreme Court stated: 49 The language change [to § 7] was suggested only to ensure that the publication of a new compiled work without proper notice, including smaller portions that had not been previously published and separately copyrighted, would not result in those sections moving into the public domain. See Note, 44 Brook. L.Rev. at 919-920. 50 Abend, 495 U.S. at 233, 110 S.Ct. 1750. 51 The issue that the Supreme Court addressed was whether continued publication of a derivative work--the motion picture Rear Window --infringed on the copyright of a pre-existing copyrighted work when the right to use the pre-existing work lapsed during the renewal period due to the death of the author of the pre-existing work. 495 U.S. at 213, 110 S.Ct. 1750. Despite an agreement by the author to transfer renewal rights to the moviemakers--Alfred Hitchcock and Jimmy Stewart--the executors renewed the copyright to the picture but refused to transfer the rights. Id. at 212, 110 S.Ct. 1750. 52 In an earlier appeal, this court had held that the copyright in the pre-existing work was not defective and that re-release of the film infringed on its copyright. Id. at 214, 110 S.Ct. 1750 (citing Abend v. MCA, Inc., 863 F.2d 1465, 1472 (9th Cir.1988)). This court's ruling created a circuit split with the Second Circuit which had held that statutory successors to the renewal copyright in a pre-existing work under § 24 could not 'depriv[e] the proprietor of the derivative copyright of a right ... to use so much of the underlying copyrighted work as already has been embodied in the copyrighted derivative work. Abend, 495 U.S. at 215, 110 S.Ct. 1750 (quoting Rohauer v. Killiam Shows, Inc., 551 F.2d 484, 492 (2d Cir.1977)). The Supreme Court affirmed this court's holding, finding that under § 24 the copyright in a pre-existing work is not extinguished during the renewal period with respect to its incorporation into the derivative work. Id. at 216, 110 S.Ct. 1750. 53 The case did not involve common law copyrights. It Had to Be Murder was a statutorily copyrighted story whose motion picture rights had been sold to predecessors of Hitchcock and Stewart. Hitchcock and Stewart acquired the rights and made the movie Rear Window. Any applicability of § 7 to an unpublished or common law protected right was not at issue. Were we to take the Court's stray comment out of context and hold that § 7 applies to common law copyrights, the effect in our case would be one Congress never intended. 54 The passage referring to § 7 injected itself into the opinion because the dissent in Abend argued that  § 7 was intended ... to give the original author the power to sell the right to make a derivative work that upon creation and copyright would be completely independent of the original work. 495 U.S. at 24445, 110 S.Ct. 1750 (Stevens, J., dissenting) (emphasis added). The dissent argued that when Congress deleted the word copyright and inserted publication, it was making clear that it was the publication of the derivative work, not the copyright itself, that was not to affect the force or validity of any subsisting copyright. Id. at 249, 110 S.Ct. 1750 (internal quotations omitted). In the dissent's view, this change clarified that the derivative work and the pre-existing work were independent and one could not affect the other. 55 The majority reached the opposite interpretation of § 7 and of Congress' intent in changing the language of § 7. It held that § 7 allowed a derivative work to be copyrighted while insuring that the pre-existing work retained full copyright protection over its use within the derivative work. 495 U.S. at 230-31, 110 S.Ct. 1750. The majority's insertion of the language relating to unpublished works, e.g., common law copyrights, came about in its response to the dissent's characterization of Congress' intent in revising § 7. The majority responded by arguing that the change to § 7 was meant to close a loophole in the section that would have protected subsisting works from derivative works with copyrights but not from the publication of derivative works without copyrights or with failed copyrights. It was not meant to change the relationship of derivative works to original works. Id. at 233, 110 S.Ct. 1750. For support of its position, the majority referenced the legislative history of the revision and cited to a law review note. Paraphrasing the note, 10 the Court inserted the language including smaller portions that had not been previously published and separately copyrighted, id., even though that language was neither supported by Hale's testimony to Congress, see Hearing, supra, nor by any cited authority in the law review note, see Note, supra at 919. 56 The district court found that this passage was dictum citing Nimmer on Copyright. See 1 Nimmer § 4.12[B] at 4-65 to 4-66. 11 Although dicta of the Supreme Court is entitled to considerable deference, see, e.g., McCoy v. Massachusetts Institute of Technology, 950 F.2d 13, 19 (1st Cir.1991), the factors surrounding this particular dicta warrant our conclusion that, in this case, it is not controlling. See United States v. Crawley, 837 F.2d 291, 292-93 (7th Cir.1988) (noting reasons for rejecting dicta, such as (1) unnecessary to the outcome of the case; (2) can be deleted without affecting the argument; (3) not grounded in the facts of the case; (4) issue addressed was not present as an issue in the case). 57 The reasons presented by the Seventh Circuit in Crawley for not following dicta are persuasively present here. In Abend, the majority's discussion of the legislative change was to refute the dissent's argument by showing that Congress intended to grant more protection to pre-existing works by expanding the definition of derivative works in response to the dissent's claim that the changes to § 7 provided less protection. As such, the disputed language referring to unpublished works was unnecessary to the Court's argument because the argument was over the subject of the § 7 sentence, while the disputed language relates to the object of the sentence. Nor was the Court facing an issue of common law copyright in an unpublished work, rather, it was trying to resolve a problem of renewal rights under § 24. The reference to unpublished works could be deleted without affecting the majority's argument. Abend upheld the Ricordi /Russell line of cases which hold that a pre-existing copyright holder can sue for infringement in the event that a public domain derivative work is used without authorization. See Russell v. Price, 612 F.2d 1123 (9th Cir.1979); G. Ricordi & Co. v. Paramount Pictures, Inc., 189 F.2d 469 (2d Cir.1951). It did not address the circumstance where the owner of the rights in an unpublished work is also the creator of the derivative work. 12 58 The complex public policy considerations surrounding the application of § 7 to unpublished works were not discussed by the Court in Abend. They lend support to our holding. We are concerned about letting unpublished works resurrect copyright protection over derivative works that have already entered the public domain. While statutory copyrights allow for a limited monopoly, common law rights are perpetual. So under the dual system of protection in place under the 1909 Act, if we were to agree with Batjac, an author could extend indefinite control over a derivative work through an unpublished pre-existing work. See Classic Film Museum, Inc. v. Warner Bros., Inc., 597 F.2d 13 (1st Cir.1979). While this problem has been eliminated by passage of the 1976 Act, the copyright in any film that has entered into the public domain under the 1909 Act could be resurrected by an unpublished screenplay. 59 The effective functioning of the Register also dictates our holding. As the district court noted since common law unpublished works are unrecorded, a person seeking to use the public domain work likely would not know and could not determine whether such a work existed. For example, in Batjac's application for copyright protection of McLintock!, Batjac did not note the pre-existing screenplay even though the registration form included a section to list Previous Registration or Publications. So GoodTimes and the Register could not have known that McLintock! was not fully in the public domain due to the existence of unpublished drafts of the screenplay. Since unpublished works are not kept within the records of the Register, the public would have no means to determine whether a work actually entered the public domain under Batjac's interpretation of § 7. The resulting market uncertainty would inhibit the public's use of public domain materials. 60 Nor would allowing Batjac to control the movie McLintock! advance the progress of science and useful arts. Rather, protection of unpublished screenplays merely would signal to authors that they need not follow the Copyright Act in order to maintain copyright protection. Batjac reaped the full reward of copyright protection in its screenplay. Batjac held copyright in both the motion picture and the screenplay and, as a result, was able to fully exploit the profit making potential of the screenplay in any manner it chose. We find no indication that Congress intended § 7 to allow authors to maintain perpetual monopolies over their copyrightable works. So we are compelled to find that § 7 does not apply to unpublished works protected by common law copyrights. Publication of the Screenplay 61 Since we hold that § 7 does not apply to unpublished works protected by common law copyrights, we look to the relevant facts surrounding the publication of McLintock! to determine if its publication also published the incorporated portions of the screenplay. The district court relied on Classic Film Museum, Inc. v. Warner Bros., Inc., 453 F.Supp. 852 (D.Me.1978), aff'd, 597 F.2d 13 (1st Cir.1979) and Harris Custom Builders, Inc. v. Hoffmeyer, 92 F.3d 517, 520 (7th Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 956, 136 L.Ed.2d 842 (1997), to hold that an unpublished screenplay protected by common law is published by a motion picture to the extent that it is incorporated. As Batjac held publication rights to both the screenplay and the motion picture, we agree. 62 Classic Film involved the identical issue we face here. In Classic Film, the defendant sought to use its common law copyright in an unpublished screenplay to exert control over any unauthorized duplication of the film, A Star is Born, which had entered the public domain through a failure to renew its copyright. 597 F.2d at 13-14. The First Circuit acknowledged that a statutory copyright in a pre-existing work protected that work from entry into the public domain by a derivative work under Ricordi, but declined to extend Ricordi to common law copyrights. Id. at 14. It reasoned that the perpetual protection provided to common law copyrights would swallow the rule of limited monopoly found in the constitution and copyright statutes because through the unpublished screenplay, an author could maintain perpetual control over the motion picture. Id. at 14-15. Classic Film reached its holding without resolving the scope of § 7 and whether publication of a motion picture constitutes publication of the screenplay. See 453 F.Supp. at 854 n. 1. 63 We do not agree with Batjac that the rationale supporting Classic Film is moot because Congress eliminated the potential for a perpetual monopoly by passage of the 1976 Act and eliminating common law rights. The district court in Classic Film addressed the impact of the 1976 Act noting that even under the 1976 Act a common law copyright would act to extend protection of the film beyond its statutory maximum. 453 F.Supp. at 856 n. 4. 13 The Register also argues that Classic Film turns upon impropriety of the moviemakers' use of artifice to extend the term limits set forth in the Act for copyrighted works and so continues to have force today. We agree. 64 An analogous result was reached under the 1976 Act by the Seventh Circuit in Harris. Under the 1976 Act, an unpublished work is entitled to copyright protection as long as it is unpublished, it is published with notice, or, if it is published without notice, it is registered within five years and subsequently published with notice. 17 U.S.C. § 405. As under the 1909 Act, an underlying work copyrighted under the 1976 Act remains copyrighted even if the derivative work enters the public domain. See 17 U.S.C. § 103(b). 65 In Harris, the plaintiff, Harris Custom Builders, Inc., produced a brochure containing abbreviated drawings from unpublished blueprint plans. 92 F.3d at 519. The brochure was not copyrighted and so entered into the public domain. Id. A builder subsequently used the drawings from the brochure. Harris sued claiming that the builder's use of the drawings infringed upon his copyright in the unpublished plans. Id. at 520. The Seventh Circuit disagreed and held that the drawings in the brochure were a derivative work and that the publication of the derivative work constituted publication of the pre-existing work. Id. (citing 1 Nimmer § 4.12[A] n. 2). The court noted that although the 1976 Act abolished common law copyright, that does not mean that one can claim copyright based on [a] work[ ] being unpublished [ ] after it is published with one's permission. Id. 66 The Harris court noted that its result would be different if the underlying work had been separately registered, id., and might also be different if a stranger had published the derivative work without permission of the owner of the underlying work, id. at 520-21. The court concluded: However, when it is Harris itself which publishes the abbreviated drawings, it can no longer claim a copyright based on their unpublished nature. Id. at 521. 67 Batjac argues that Harris is distinguishable because the plans published in the brochure were in the same medium as the blueprint plans and were virtually identical to the portion of the blueprint that was copied. In contrast, a screenplay and a motion picture are in different media, with the motion picture adding new audio and visual material. Batjac cites White-Smith Music Publ'g Co. v. Apollo Co., 209 U.S. 1, 17, 28 S.Ct. 319, 52 L.Ed. 655 (1908), for the proposition that publication in different media are not copies. 14 See also Nucor Corp. v. Tennessee Forging Steel Serv., Inc., 476 F.2d 386 (8th Cir.1973) (holding that construction of a three-dimensional building does not constitute publishing of the written plans). Batjac further contends that Harris does not apply because a motion picture is in no sense a copy of a screenplay. Rather a motion picture is an interpretation of a screenplay, a performance. We disagree. 68 Under common law, Batjac had a right of first publication which it exercised by publishing the motion picture. Unlike a performance, 15 the motion picture was recorded onto a fixed medium, film, that is reproducible and distributable. Batjac's common law right of first publication does not entail multiple first publication rights in every available medium. As holder of the common law rights in the screenplay and motion picture, Batjac chose to exercise its right to first publish in the medium of film. Batjac had the opportunity to secure copyright in the screenplay separate from the movie but chose not to do so. It cannot now attempt to regain its first publication rights 35 years after it produced the screenplay within the motion picture. 69 Our holding is supported by the protections provided to copyrightable material used in a motion picture under the 1909 Act. Section 3 of the 1909 Act protects all copyrightable component parts of a copyrighted work. 17 U.S.C. § 3 (repealed effective 1978). The McLintock! screenplay was copyrightable and is a component of the motion picture to the extent it was incorporated into the film. As such, it fell into the public domain with the motion picture. The Register points to Maljack Prods., Inc. v. GoodTimes Home Video Corp., 81 F.3d 881, 885 n. 3 (9th Cir.1996), to illustrate that the screenplays would either be components of the movie or otherwise part of the public domain. While Batjac disputes that a screenplay is a component part of a motion picture, any other result under the 1909 Act would grant an author multiple rights to first publication and would allow an author to publish in one medium with a statutory copyright but leave the work unpublished in a separate medium to extend copyright protection in perpetuity. See Classic Film, 597 F.2d at 14-15. 70 We find no statute or case law holding that a textual work can only be published by print. Rather, the Supreme Court has stated that [t]he right of first publication encompasses not only the choice whether to publish at all, but also the choices when, where, and in what form first to publish a work. Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 564, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985). 71 In addition, our holding is consistent with this court's decision in La Cienega Music Co. v. ZZ Top, 53 F.3d 950 (9th Cir.1995). In La Cienega, we held that publication of a musical composition called Boogie Chillen occurred when the recorded song was released to the general public, even though the recording existed in a different medium than the printed version of the composition. Id. at 952-53. We noted that otherwise a song left unpublished and protected by common law copyright would gain an advantage over a song copyrighted in compliance with the 1909 Act which would have only 28 years of protection. Id. at 953. Although the result of our holding in La Cienega has been subsequently changed by Congress' passage and enactment of H.R. 672, its reasoning is still sound. If Congress wants to prevent common law screenplays from entering into the public domain through publication of a motion picture, it can pass a law similar to H.R. 672. 72 Nor are we persuaded that § 2 of the 1909 Act works as a talisman to protect common law copyrights in this situation. Section 2 prevents the provisions of the 1909 Act from annulling or otherwise limiting common law copyright. 17 U.S.C. § 2 (repealed effective 1978). Our holding that § 7 is inapplicable, however, does not interfere with Batjac's common law copyright. It was not the 1909 Act, but rather Batjac's act of publication that annul[led] or limit[ed] Batjac's rights. Section 2 thus provides no comfort to Batjac. 73 As in Harris, Batjac controlled both the unpublished screenplay and the derivative motion picture. Batjac chose to publish the motion picture without separately seeking copyright protection for the screenplay. Having chosen to first publish in the medium of film, Batjac lost the right to again first publish those portions of the screenplay incorporated into the film. 74 AFFIRMED.