Opinion ID: 899620
Heading Depth: 2
Heading Rank: 1

Heading: Renewal Rights

Text: We review de novo both the grant of summary judgment and the district court's interpretation of the Agreement. See Ment Bros. Iron Works Co. v. Interstate Fire & Cas. Co., 702 F.3d 118, 120-21 (2d Cir. 2012); Mullins v. City of New York, 653 F.3d 104, 113 (2d Cir. 2011). In reviewing a grant of summary judgment, we must construe the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor. See Mullins, 653 F.3d at 113. - 19 -
For artistic works still in their initial term of copyright protection on January 1, 1978, the Copyright Act establishes two terms of protection: an initial term of twenty-eight years from the date [the copyright] was originally secured and a renewal term of sixty-seven years. 17 U.S.C. § 304(a)(1)(A), (a)(1)(C). The renewal term of a copyright is not merely an extension of the original copyright term but a 'new estate . . . clear of all rights, interests or licenses granted under the original copyright.' P.C. Films Corp., 138 F.3d at 456-57 (quoting G. Ricordi & Co. v. Paramount Pictures, Inc. , 189 F.2d 469, 471 (2d Cir. 1951)). Its purpose is to 'provide authors a second opportunity to obtain remuneration for their works' and 'to renegotiate the terms of the grant once the value of the work has been tested.' Id. at 457 (alteration omitted) (quoting Stewart v. Abend, 495 U.S. 207, 217, 218-19 (1990)). An author may assign his renewal rights during the copyright's initial term, but there is a strong presumption against the conveyance of renewal rights. - 20 - Corcovado Music Corp. v. Hollis Music, Inc., 981 F.2d 679, 684 (2d Cir. 1993). This presumption may be rebutted by an express assignment of renewals of copyright or extensions of copyright, or by general words of assignment, such as forever, hereafter, or perpetual, if the parties' clear intent was to convey renewal rights. P.C. Films Corp., 138 F.3d at 457 (quoting Corcovado Music Corp., 981 F.2d at 684-85; Siegel v. Nat'l Periodical Publ'ns., Inc., 508 F.2d 909, 913 (2d Cir. 1974)) (internal quotation marks omitted). In Siegel, we explained that words like forever may be indicative of an intent to convey renewal rights, but this intent is to be determined by the trier of the facts. Siegel, 508 F.2d at 913. 9 In P.C. Films Corp., we affirmed the district court's conclusion, reached after a bench trial, that the term perpetual indicated a clear intent to convey renewal rights. 138 F.3d at 454. There, the parties had agreed to 9 This is not to suggest that summary judgment may never be granted when a contract contains only general words of assignment. Rather, it means that general phrases like forever are merely some evidence of the parties' intent to convey renewal rights. As always, summary judgment should be granted if the record as a whole demonstrates there is no genuine dispute regarding the parties' intent. See Fed. R. Civ. P. 56(a). - 21 - use the term perpetual after months of negotiations conducted by sophisticated and expert parties, each represented by counsel. Id. at 455. Furthermore, there was undisputed testimony that the assignee would not have entered the agreement for less than a perpetual term and that, in his understanding, the term 'perpetual' . . . was not coterminous with the initial copyright term. Id. at 457. We construe the Agreement according to state law principles of contract interpretation, even though the subject matter of the Agreement concerns issues of federal copyright law. See Kennedy v. Nat'l Juvenile Detention Ass'n, 187 F.3d 690, 694 (7th Cir. 1999); P.C. Films Corp. v. Turner Entm't Co., 954 F. Supp. 711, 714 n.6 (S.D.N.Y. 1997), aff'd sub nom. P.C. Films Corp. v. MGM/UA Home Video Inc., 138 F.3d 453 (2d Cir. 1998); 1 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 1.01[B][3][a] (rev. ed. Supp. 2013) ([T]he vast bulk of copyright contractual issues must be resolved under state law, given the silence of the Copyright Act in addressing such issues as . . . how to construe ambiguous contractual language . . . .). - 22 - Because the Agreement was made entirely in New York and performance was complete upon execution, New York law governs its construction. See Brink's Ltd. v. S. African Airways, 93 F.3d 1022, 1030-31 (2d Cir. 1996); P. S. & E., Inc. v. Selastomer Detroit, Inc., 470 F.2d 125, 127 (7th Cir. 1972). 10 When interpreting a contract [under New York law], the 'intention of the parties should control, and the best evidence of intent is the contract itself.' Cont'l Ins. Co. v. Atl. Cas. Ins. Co., 603 F.3d 169, 180 (2d Cir. 2010) (alterations omitted) (quoting Hatalmud v. Spellings, 505 F.3d 139, 146 (2d Cir. 2007)). At the outset, the court must determine whether the language the parties have chosen is ambiguous, see Lockheed Martin Corp. v. Retail Holdings, N.V., 639 F.3d 63, 69 (2d Cir. 2011), after giving all words and phrases . . . their plain meaning, 10 While this case was originally filed in the Southern District of Illinois, we conclude that New York law would govern the contract whether we applied Illinois's or New York's choiceof-law rules. See Van Dusen v. Barrack, 376 U.S. 612, 639 (1964) (explaining that federal court sitting in diversity must apply choice-of-law rules of state where action was originally filed, even after a transfer for improper venue); see also Ferens v. John Deere Co., 494 U.S. 516, 531 (1990) (holding that transferor law should apply regardless of who makes the § 1404(a) motion). - 23 - Olin Corp. v. Am. Home Assurance Co., 704 F.3d 89, 99 (2d Cir. 2012) (quotation omitted). Furthermore, we do not consider particular phrases in isolation, but rather interpret them in light of the parties' intent as manifested by the contract as a whole. See JA Apparel Corp. v. Abboud, 568 F.3d 390, 397 (2d Cir. 2009). The language is unambiguous only if it has 'a definite and precise meaning, unattended by danger of misconception in the purport of the contract itself, and concerning which there is no reasonable basis for a difference of opinion.' John Hancock Mut. Life Ins. Co. v. Amerford Int'l Corp. , 22 F.3d 458, 461 (2d Cir. 1994) (alteration omitted) (quoting Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989)). But if the terms suggest more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement, then the agreement is ambiguous and extrinsic evidence may be considered to determine the parties' intent. Law Debenture Trust Co. of N.Y. v. Maverick Tube Corp., 595 F.3d 458, 466 (2d Cir. 2010) (quotation omitted). - 24 -
Applying the strong presumption against the conveyance of renewal rights, Corcovado Music Corp., 981 F.2d at 684, we conclude that the district court erred in holding as a matter of law that Friedrich had assigned his renewal rights to Marvel by signing the Agreement. We reach this conclusion for the following reasons.
The Agreement is ambiguous on its face. First, the critical sentence defining the Work covered by the Agreement is ungrammatical and awkwardly phrased: In consideration of MARVEL's commissioning and ordering from SUPPLIER written material or art work and paying therefor, SUPPLIER acknowledges, agrees and confirms that any and all work, writing, art work material or services (the Work) which have been or are in the future created, prepared or performed by SUPPLIER for the Marvel Comics Group have been and will be specially ordered or commissioned for use as a contribution to a collective work and that as such Work was and is expressly agreed to be considered a work made for hire. - 25 - This opaque cluster of clauses is simply not clear and parsing through its dense provisions does little to elucidate its meaning. Second, the language is ambiguous as to whether it covered a work published six years earlier. The introductory recitals indicate that the SUPPLIER wishes to have MARVEL order or commission work and that MARVEL only orders or commissions such . . . work on an employee-forhire basis. There is no explicit acknowledgement that the generic SUPPLIER ever performed work for Marvel previously, and certainly no specific mention of the Ghost Rider works. Marvel attempts to extract the phrase all work . . . which have [sic] been . . . created, prepared or performed by SUPPLIER for the Marvel Comics Group from the dense sentence quoted above, but the entire agreement suggests that this was a forward-looking contract only intended to cover work submitted after the Agreement was signed. 11 Read in this context, work that have [sic] been . . . created -- to the extent the phrase has a 11 Indeed, after reading the Agreement for the first time during a deposition, a Marvel representative concluded that the form contract appeared to only cover work created after the 1976 Act. - 26 - discernible meaning -- may refer to work that was inprogress when the Agreement was executed, even though Marvel may have commissioned that work, and the freelance artist may have begun working on it, before the Agreement was formally reduced to writing. See, e.g., Agreement (MARVEL has informed SUPPLIER that MARVEL only orders . . . work on an employee-for-hire basis. . . . SUPPLIER acknowledges, agrees and confirms that any and all work . . . have [sic] been and will be specially ordered or commissioned . . . [as] a work made for hire. ). Third, the language is ambiguous as to whether it conveys renewal rights. The contract contains no explicit reference to renewal rights and most of the language merely tracks the 1976 Act's definition of work made for hire. See 17 U.S.C. § 101 (defining term as a work specially ordered or commissioned for use as a contribution to a collective work . . . if the parties expressly agree in a written instrument signed by them). If the contract only covers work made for hire, Marvel would be the statutory author, see id. § 201(b); Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 743-44 (1989) (citing 1909 Copyright - 27 - Act § 62, 17 U.S.C. § 26 (repealed 1976)), and the SUPPLIER would not have any renewal rights that could be assigned to Marvel. Finally, Marvel relies heavily on the provision grant[ing] to MARVEL forever all rights of any kind and nature in and to the Work. Cf. Siegel, 508 F.2d at 91314. In context, however, for the reasons discussed above, it is not clear whether this broad language applies to work performed by Friedrich some six years earlier. The broadness of the language would be of no help to Marvel if the Agreement were intended to cover only future work. Moreover, that sentence goes on to provide that Marvel is the sole and exclusive copyright proprietor thereof having all rights of ownership therein, which again suggests Marvel is the statutory author by virtue of the fact that the work was made for hire. Thus, the Agreement could reasonably be construed as a form work -for-hire contract having nothing to do with renewal rights. According ly, the language by itself fails to overcome the strong presumption against the conveyance of renewal rights . Corcovado Music Corp., 981 F.2d at 684. - 28 -
Because the Agreement is reasonably susceptible of more than one meaning, it is ambiguous and we next look to extrinsic evidence in the record to determine whether there is a genuine dispute regarding the parties' intent at the time of the Agreement. See Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42, 51 (2d Cir. 2011). Here, the record demonstrates that Cadence extended this same one-page, forward-looking form contract to all its freelance artists to ensure that commissioned work would be deemed a work made for hire under the new 1976 Copyright Act. It did so shortly after the 1976 Act took effect on January 1, 1978. See 17 U.S.C. § 101; see also Copyright Act of 1976 § 102, Pub. L. No. 94-553, 90 Stat. 2541 (codified at note preceding 17 U.S.C.) (noting effective date of 1976 Act was January 1, 1978); Martha Graham Sch. & Dance Found., Inc. v. Martha Graham Ctr. of Contemporary Dance, Inc., 380 F.3d 624, 633-34 (2d Cir. 2004) (explaining that 1976 Act only governs whether a work created on or after January 1, 1978 is a work-for-hire). - 29 - When Friedrich signed the Agreement, he was doing other freelance work for Marvel and he believed the Agreement would only cover future work because that was what Cadence told him at the time. He was not paid anything separately for signing the Agreement. Moreover, Spotlight 5 had been published six years earlier by a different corporate entity (Magazine Mgmt.) and had grown so popular that Marvel had already reprinted it once and had launched a separate Ghost Rider comic book series. Given that context, it is doubtful the parties intended to convey rights in the valuable Ghost Rider copyright without explicitly referencing it. It is more likely that the Agreement only covered ongoing or future work. Hence, there is a genuine dispute regarding the parties' intent for this form contract to cover Ghost Rider. Even if the parties intended the definition of Work to extend to Ghost Rider, that alone would not mean that they intended the Agreement to convey Friedrich's remaining renewal rights in that work. First, the Agreement appears to create an employee for hire relationship, but the Agreement could not render Ghost - 30 - Rider a work made for hire ex post facto, even if the extrinsic evidence shows the parties had the intent to do so. The 1909 Act governs whether works created and published before January 1, 1978 are works made for hire, see Martha Graham Sch., 380 F.3d at 633-34, and that Act requires us to look to agency law and the actual relationship between the parties, rather than the language of their agreements, in determining the authorship of the work, Marvel Characters, Inc. v. Simon, 310 F.3d 280, 29192 (2d Cir. 2002). 12 Thus, regardless of the parties' intent in 1978, the evidence must prove Ghost Rider was actually a work made for hire at the time of its 12 Marvel Characters, Inc. v. Simon, 310 F.3d 280 (2d Cir. 2002), is instructive. There, an artist had sued Marvel, alleging he created the comic book character Captain America and therefore owned the renewal copyright in that work. Id. at 283. To settle the action, the artist agreed to assign the renewal rights to Marvel and stipulated that Captain America was a work for hire. Id. at 283-84. In 1999, the artist attempted to exercise his statutory right to terminate the assignment of renewal rights. Id. at 284 (citing 17 U.S.C. § 304(c)). Because the work was subject to the 1909 Act, we held 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. Thus, the settlement agreement did not preclude the artist from proving that he actually was the author and had the statutory right to terminate the assignment. Id. at 292-93. - 31 - creation. But the circumstances surrounding the creation of the work are genuinely in dispute. Second, there is little extrinsic evidence to suggest that the parties actually intended to assign anything other than an initial term of copyright and much evidence to suggest that they did not. See P.C. Films Corp., 138 F.3d at 457 ('[G]eneral words of assignment can include renewal rights if the parties had so intended.' (emphasis added) (quoting Siegel, 508 F.2d at 913)). Friedrich was unrepresented by counsel, was told that the Agreement only covered future work, and did not learn about the concept of renewal rights until 2005. There was no discussion about renewal rights when he signed the Agreement in 1978. A jury could reasonably conclude that the parties never even considered renewal rights when they made this contract. Accordingly, the district court erred in granting summary judgment based on the Agreement.