Opinion ID: 172572
Heading Depth: 2
Heading Rank: 2

Heading: Does the Amended APA Satisfy the Requirements of the Copyright Act?

Text: We next consider whether the amended APA constituted a writing sufficient to transfer copyrights under federal law. Under the Copyright Act, [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. 17 U.S.C. § 204(a). Section 204 is intended to protect copyright holders from persons mistakenly or fraudulently claiming oral licenses [or transfers]. Eden Toys, Inc. v. Florelee Undergarment Co., Inc., 697 F.2d 27, 36 (2d Cir.1982). As a result, Section 204 enhances predictability and certainty of ownership  `Congress's paramount goal' when it revised the [Copyright] Act in 1976. Konigsberg Intern. Inc. v. Rice, 16 F.3d 355, 357 (9th Cir.1994) (quoting Community for Creative Non-Violence v. Reid, 490 U.S. 730, 749, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989)). Novell argues that the Copyright Act imposes not only the requirement that a copyright transfer be in writing, but also that it state with sufficient clarity the copyrights to be transferred. See Aple. Br. 25-26; 34. Novell contends that Amendment No. 2 fails this test because its language is ambiguous. Since it is not clearly apparent which copyrights are required for Novell to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies, Novell asserts that Amendment No. 2 was not a valid instrument of conveyance. As an initial matter, we note that the language of 17 U.S.C. § 204(a) does not readily lend itself to the construction Novell seeks to give it. Section 204(a), by its terms, imposes only the requirement that a copyright transfer be in writing and signed by the parties from whom the copyright is transferred; it does not on its face impose any heightened burden of clarity or particularity. Likewise, Novell points to nothing in the legislative history of Section 204 which suggests that Congress envisioned it to invalidate copyright transfer agreements carrying material language subject to multiple reasonable interpretations. Nonetheless, some courts have understood Section 204(a) to impose requirements similar to that necessary to satisfy the statute of frauds. They have found that a writing is insufficient to transfer copyrights unless (1) it reasonably identifies the subject matter of the agreement, (2) is sufficient to indicate that the parties have come to an agreement, and (3) states with reasonable certainty the essential terms of the agreement. Pamfiloff v. Giant Records, Inc., 794 F.Supp. 933, 936 (N.D.Cal.1992) (citing Restatement (2d) of Contracts § 131 (1981)). Novell argues that Section 204's writing requirement would disserve the goals of predictability and certainty of copyright ownership if parties could fulfill it without making clear what copyrights they intend to transfer. But it is hardly clear that imposing strict requirements of clarity in order to effect a copyright transfer will always aid predictability and certainty of copyright ownership. [A]mbiguities in copyright grants are anything but rare in the jurisprudence. 3 Melville B. Nimmer and David Nimmer, Nimmer on Copyright § 10.08 (2009). The written memorialization of [an] agreement [transferring copyrights] inevitably fails to mandate only one pellucid interpretation. Id. If every copyright transaction were vulnerable to challenge whenever a party is able to point out some ambiguity within the governing agreement, parties might be forced to engage in costly, protracted litigation to determine whether the transfer is valid, putting into doubt the proper holder of the copyright. In the absence of any support from the language or legislative history, we are unwilling to read into Section 204 such an onerous restraint on the alienability of copyrights. As the Second Circuit has commented, [t]he need for interpretation of a contract does not necessarily mean that there is a bona fide issue as to whether the contract is a writing for purposes of section 204(a). In most cases, there will be no doubt that the contract is a section 204(a) writing, and the only substantial issue will be contract interpretation. Jasper v. Bovina Music, 314 F.3d 42, 47 (2d Cir.2002). In copyright as elsewhere, [t]he making of a contract depends not on the agreement of two minds in one intention, but on the agreement of two sets of external signs  not on the parties having meant the same thing but on their having said the same thing. Nimmer on Copyright, § 10.08 (quoting Tingley Sys. v. HealthLink, Inc., 509 F.Supp.2d 1209, 1216 (M.D.Fla.2007)). Where ambiguity persists in the language of a parties' shared agreement concerning a copyright transfer, the transfer is not invalidated; instead, we look to parol evidence to construe the terms of the agreement. See Nimmer on Copyright, § 10.08. We think that Section 204's writing requirement is best understood as a means of ensuring that parties intend to transfer copyrights themselves, as opposed to other categories of rights. See, e.g., Papa's-June Music, Inc. v. McLean, 921 F.Supp. 1154, 1158-59 (S.D.N.Y.1996) (although a writing need not explicitly mention copyright or exclusive rights to satisfy 204(a), the better practice is that it should). But when it is clear that the parties contemplated that copyrights transfer, we do not think that a linguistic ambiguity concerning which particular copyrights transferred creates an insuperable barrier invalidating the transaction. Thus, the majority of cases that Novell draws our attention to, in which alleged copyright transfers are found not to satisfy Section 204, involve transactions where it is not clear whether the parties intended that copyrights would transfer at all  not disputes over which specific copyrights were within the scope of an intended transfer. See, e.g., Radio Television Espanola S.A. v. New World Entertainment, Ltd., 183 F.3d 922, 927-28 (9th Cir.1999) (finding faxes referring to ongoing negotiations insufficient to confirm a finalized deal to transfer copyrights); Playboy Enterprises, Inc. v. Dumas, 53 F.3d 549, 564 (2d Cir.1995) (finding check legend allegedly purporting to recognize past assignment... of all rights, title and interest insufficient to transfer copyrights); Konigsberg Intern. Inc., 16 F.3d at 357 (letter written three and a half years after oral agreement did not constitute a writing sufficient to confirm parties' intent to transfer copyrights in earlier agreement). Notwithstanding the above, the district court found Amendment No. 2 insufficient to convey Novell's copyrights under Section 204 for several additional reasons. It first determined that Amendment No. 2 [did] not include any provision that purports to transfer ownership of copyrights. because it did not profess to amend Schedule 1.1(a), the Asset Schedule, and because [u]nlike the APA, Amendment No. 2 was not accompanied by a separate `Bill of Sale' transferring any assets. Dist. Ct. Op. 59. We are not persuaded that either prevents our recognition of a copyright transfer. Although Amendment No. 2 did not purport to amend Schedule 1.1(a), this does not mean that the balance of assets transferred to Santa Cruz remained unchanged. The transaction was structured such that Santa Cruz would acquire all of Seller's right, title and interest in and to the assets ... identified on Schedule 1.1(a), but that the Assets to be so purchased not include those assets (the `Excluded Assets') set forth on Schedule 1.1(b). App'x 264-65. Schedule 1.1(a), in turn, provided that Santa Cruz would receive  [a]ll rights and ownership of UNIX and UnixWare ... including all source code, a broad set of assets limited only by Schedule 1.1(b). As a result, any change to the set of Excluded Assets in Schedule 1.1(b) necessarily implicated those copyrights actually transferred under Schedule 1.1(a). Of course, it is not always the case that the absence of certain or all copyrights from an excluded asset schedule will suffice to indicate the inclusion of copyrights in the transaction. But a written asset transfer agreement may satisfy Section 204(a) even when it does not mention the word `copyright' itself. Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 413 (7th Cir.1992). And when a party acquires [a]ll rights and ownership in a set of items, as was the case here, courts have generally found such language sufficient to satisfy Section 204(a) in the absence of language excepting copyrights or other special circumstances. See ITOFCA, Inc. v. MegaTrans Logistics, Inc., 322 F.3d 928, 931 (7th Cir.2003) (written intent to transfer all assets can indicate intent to transfer copyrights); Shugrue v. Continental Airlines, Inc., 977 F.Supp. 280, 284-85 (S.D.N.Y.1997) (written agreement to transfer all right, title and interest in software indicated intent to transfer copyrights); Relational Design & Technology, Inc. v. Brock, No. 91-2452-EEO, 1993 WL 191323 at  (D.Kan. May 25, 1993) (transfer of all rights in software program included copyright). But see Playboy Enters. v. Dumas, 53 F.3d 549, 564 (2d Cir. 1995) (check legend indicating that payment was for past transfer of all right, title and interest was insufficient, by itself, to indicate a copyright transfer under Section 204). Of course, under the language of the original agreement, copyrights were expressly excluded from the assets transferred. But here, where a written agreement to the contract excised certain copyrights from that exclusion, we think the Copyright Act's writing requirement is satisfied. We also do not see why the absence of a Bill of Sale is fatal to an alleged transfer under the Copyright Act. Section 204 makes clear that the writing requirement can be satisfied not only by an instrument of conveyance but also by a note or memorandum of the transfer. 17 U.S.C. § 204(a). Amendment No. 2 was a writing signed by both parties evincing a clear intent to revise or clarify the formal schedule of copyrights transferred by Novell to Santa Cruz. The Copyright Act did not require more. For similar reasons, we reject the significance that the district court attributed to the fact that Amendment No. 2 revised the APA [a]s of the 16th day of October, 1996 as opposed to the date of the Bill of Sale. App'x 374. The Copyright Act does not require its writing requirement be fulfilled concurrently with the production of a Bill of Sale. [2] Cf. Eden Toys, Inc., 697 F.2d at 36 (the `note or memorandum of the transfer' need not be made at the time when the license is initiated; the requirement is satisfied by the copyright owner's later execution of a writing which confirms the agreement). We therefore conclude that the APA, as revised by Amendment No. 2, satisfied the Copyright Act's writing requirement.