Court Opinion

ID: 71579
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:20:09+00
Date Added: 2024-06-11T17:13:30.178867
License: Public Domain

United States Court of Appeals,
                         Eleventh Circuit.

                               No. 96-2636.

    JACOB MAXWELL, INCORPORATED, Plaintiff-Counter-Defendant-
Appellant, Cross-Appellee,

                                    v.

 Michael VEECK, Individually and as General Partner of the Fort
Myers Miracle Baseball Club Partnership, et al., Defendants,

                         John Kuhn, Movant,

Marvin Goldclang, Individually and as General Partner of the Fort
Myers Miracle Baseball Club Partnership, Greater Miami Baseball
Club Limited Partnership, Defendants-Appellees, Cross-Appellants,

   Baseball Company of America, a Florida Limited Partnership,
Baseball Corp. of America, Inc., a New Jersey Corporation,
Defendants-Counter-Claimants-Appellees, Cross-Appellants.

                           April 18, 1997.

Appeal from the United States District Court for the Middle
District of Florida. (No. 93-372-CIV-FTM-24D), Susan C. Bucklew,
Judge.

Before CARNES, Circuit Judge, CAMPBELL* and CLARK, Senior Circuit
Judges.

      LEVIN H. CAMPBELL, Senior Circuit Judge:

      This appeal concerns an unhappy dispute between the composer

of a song entitled "Cheer!     The Miracle Is Here" and a minor league

baseball team, known as the Miracle, for whose promotion the song

was   written.   After   the   parties'   relations   turned   sour,   the

composer sued the Miracle claiming that its playing of the song at

games had been a breach of copyright.         Rejecting that contention,

the district court awarded summary judgment to the Miracle and

ruled that the Miracle had received an oral nonexclusive license

      *
      Honorable Levin H. Campbell, Senior U.S. Circuit Judge for
the First Circuit, sitting by designation.
authorizing the use that it made of the copyrighted song, and that

the composer's remedy, if any, lay in a state court contract action

for payment and damages.         The composer has appealed, and the

Miracle has cross-appealed from the district court's denial of its

request for attorney's fees.

                                      I.

     We   state   the   facts   in   the   light   most   favorable   to   the

non-moving party, Plaintiff-Appellant Jacob-Maxwell, Inc. ("JMI").

     In the spring of 1993, James Albion, president of JMI, agreed

to write a team song for the Miracle, a minor league baseball team.

Albion agreed to write the song free of charge, to provide the

Miracle with the Digital Audio Tape master, and to grant the

Miracle an exclusive license.        In return, Albion asked only that

the Miracle pay his out-of-pocket production costs and that the

team credit him as the author any time the song was played at games

or distributed on cassette tapes.          Albion told Michael Veeck, the

Miracle's Executive Director, that his production costs would be

somewhere between $800 and $1100.

     Albion wrote and produced the song, incurring production

expenses of $1050, and assigned ownership rights to JMI.                   He

delivered a master tape (though not the Digital Audio Tape master)

to John Kuhn, the Miracle's Director of Marketing and Promotion, on

July 2, 1993, and requested payment.          Kuhn told him he could not

issue a check immediately but asked if he could play the song at

the next day's game regardless.        Albion agreed.

     Over the course of the summer, the Miracle played the song

many times at games, never giving Albion the promised authorship
credit.      Albion was present at many of these games.       Albion

repeatedly demanded payment, and once communicated his expectation

that the lyrics and credits would be handed out to the fans, but

did not withdraw his permission to play the song at games.    To the

contrary, in July 1993, Albion wrote to Kuhn urging the Miracle to

continue to perform the song publicly.

      On August 9, Albion provided the Miracle with a written

invoice.      On August 30, the Miracle tendered Albion a check for

$500, telling him the rest would be handled later.       Because the

check was not marked "partial payment," Albion refused to accept

it.   On September 21, 1993, JMI formally registered the song with

the United States Copyright Office, and on October 12th JMI's

attorney wrote to the Miracle, notifying the team that its use of

the song constituted copyright infringement.   The team last played

the song on August 27, 1993.

      JMI sued the owners and operators of the Miracle Baseball Club

of Ft. Myers, Florida, alleging copyright infringement and breach

of contract. The district court granted the defendants' motion for

summary judgment on the copyright claim, holding that Albion had,

by his conduct, granted the Miracle a nonexclusive license to play

the song at the times it did.      The court dismissed the pendent

state law breach of contract claim without prejudice.1
                                  II.

          On appeal, JMI argues that because the oral agreement had

been for an exclusive license, the district court erred in finding

      1
      The defendants' state law counterclaim was likewise
dismissed without prejudice.
an implied nonexclusive license.

     The     Copyright   Act   provides,    "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).        It is

undisputed that any arrangement between the parties for granting an

exclusive license to the Miracle was never written down and that,

therefore, no valid transfer to the team of copyright ownership

under the Copyright Act took place.

      In contrast to an exclusive license, a nonexclusive license

to use a copyright " "may be granted orally, or may even be implied

from conduct.' "     Effects Associates, Inc. v. Cohen, 908 F.2d 555,

558 (9th Cir.1990) (quoting 3 M. Nimmer & D. Nimmer,                Nimmer on

Copyright § 10.03[A], at 10-36 (1989)), cert. denied sub nom.

Danforth v. Cohen, 498 U.S. 1103, 111 S. Ct. 1003, 112 L. Ed. 2d 1086

(1991).      This is true because 17 U.S.C. § 101 excludes the

assignment    of   nonexclusive   licenses       from   the   definition    of

"transfer of copyright ownership."

     The district court, relying on the Ninth Circuit's decision in

Effects Associates, determined that Albion had impliedly granted

the Miracle a nonexclusive license by initially giving permission

to play the song at games and by failing to object despite his

knowledge that the team was continuing to play the song publicly.

In Effects Associates, the Ninth Circuit held that a special

effects    company   had   granted   a     movie    producer    an     implied

nonexclusive license to use the special effects footage it had
created.       The court reasoned that because the special effects

company had "created a work at defendant's request and handed it

over, intending that defendant copy and distribute it," it had

impliedly granted the defendant a nonexclusive license.                     Id.

      Similarly,     in   this    case   Albion     created    the   song    at   the

Miracle's request and handed a master tape over, intending that the

Miracle play the song at its games.                But, JMI sees an important

distinction between this case and Effects Associates.                  There, "no

one   said    anything    about   who    would     own   the   copyright     in   the

footage," id. at 556, but here the plaintiff orally indicated an

intention to grant to the defendant an exclusive license.

          JMI argues that under Florida contract law,2 it was error for

the court to infer the creation of a nonexclusive license from the

parties' conduct when they had explicitly agreed, albeit in an

unenforceable      oral   exchange,      to   an    exclusive    license.         See

Excelsior Insurance Company v. Pomona Park Bar & Package Store, 369
So. 2d 938, 942 (Fla.1979) (holding that courts may not "rewrite

contracts, add meaning that is not present, or otherwise reach

results contrary to the intentions of the parties");                        Rigel v.

National Casualty Company, 76 So. 2d 285, 286 (Fla.1954) (holding

that courts should not add a meaning to clear contract language);

Indian Harbor Citrus, Inc. v. Poppell, 658 So. 2d 605, 606 (Fla. 4th

Dist.Ct.App.) (holding that custom or usage cannot be used to

      2
      As a general rule, state law governs the interpretation of
copyright contracts, unless a particular state rule of
construction would "so alter rights granted by the copyright
statutes as to invade the scope of copyright law or violate its
policies." Fantastic Fakes, Inc. v. Pickwick International,
Inc., 661 F.2d 479, 483 (5th Cir.1981). See also 3 M. Nimmer &
D. Nimmer, Nimmer on Copyright § 12.01[A], at 12-8 n. 19 (1996).
contradict an express contract), review denied, 666 So. 2d 144

(Fla.1995);      Flagship National Bank v. Gray Distribution Systems,

Inc., 485 So. 2d 1336, 1340 (Fla. 3d Dist.Ct.App.1986) (holding that

when the express terms of a contract conflict with the practice of

the parties, the express terms of the contract control),               review

denied, 497 So. 2d 1217 (Fla.1986).

        We do not find these cases controlling here.             They either

involve situations where parties seek to modify fully enforceable

contracts by reference to the rule of interpretation which holds

that an ambiguity in a contract is to be construed against the

drafter or deal with attempts by a party to modify a clear contract

term by reference to the parties' course of dealings or other

extrinsic    matters.     This   case   does   not   present    an   analogous

situation.     Here federal copyright law renders the parties' oral

agreement unenforceable insofar as it provided for the transfer of

an exclusive copyright.       In these circumstances, a court has no

choice but to look at alternatives beyond the parties' intended

arrangement.

       Like the district court, we conclude that while it may well be

that the parties in their initial negotiations contemplated an

exclusive license, JMI cannot reasonably deny, given its subsequent

conduct here, that it granted to the Miracle the sort of lesser,

nonexclusive license to play the piece during the summer of 1993

that   federal    law   recognizes   may   result    from   a   purely   oral

transaction.

       Albion's approving conduct—his granting of permission to the

Miracle on July 2, 1993 to play his song at the next day's game
even though he had not yet been paid, his attendance without demur

at subsequent games at which the song was played, his letter to

Kuhn urging the Miracle to continue to play the song at games, and

his failure to withdraw permission until October—clearly expressed

Albion's permission for the Miracle to play the song when it did.

Implicit in that permission was a promise not to sue for copyright

infringement—a promise that at least one court has found to be the

essence of a nonexclusive license.     See In re CFLC, Inc., 89 F.3d
673, 677 (9th Cir.1996) ("[A] nonexclusive patent license is, in

essence, "a mere waiver of the right to sue' the licensee for

infringement.") (quoting De Forest Radio Telephone & Telegraph Co.

v. United States, 273 U.S. 236, 242, 47 S. Ct. 366, 368, 71 L. Ed.
625 (1927)).    We think it follows that until permission was

withdrawn in October, JMI granted to the Miracle a nonexclusive

license to play the song at games.

     In so saying, we do not suggest that Albion and JMI waived

their rights to be compensated by the Miracle in accordance with

their oral understanding.    What they waived was any right to sue

for breach of copyright on account of the playing of the song while

the license was in effect.   As discussed in the following section,

the Miracle's failure to provide the agreed quid pro quo could not,

on the facts of this case, invalidate the legal effect of Albion's

permission to play.

                                III.

      JMI argues that even assuming it gave the Miracle an oral,

nonexclusive license to play the song, that right should be treated

as having been cancelled in its entirety by the Miracle's material
breach of their oral understanding when it failed both to reimburse

JMI's costs and publicly to acknowledge Albion at games as the

song's creator.          But even assuming arguendo that the Miracle's

conduct   constituted          a   material      breach    of   the   parties'    oral

understanding, this fact alone would not render the Miracle's

playing of the song pursuant to JMI's permission a violation of

JMI's copyright.         Such a breach would do no more than entitle JMI

to rescind the agreement and revoke its permission to play the song

in the future, actions it did not take during the relevant period.

One party's breach does not automatically cause recision of a

bilateral contract.            See Fosson v. Palace (Waterland), Ltd., 78
F.3d 1448, 1455 (9th Cir.1996) (recognizing "the rule applied in

other circuits that once a non-breaching party to an express

copyright license obtains and exercises a right of rescission by

virtue    of   a    material       breach   of    the     agreement,      any   further

distribution        of   the       copyrighted     material       would    constitute

infringement") (emphasis added); Hyman v. Cohen, 73 So. 2d 393, 397

(Fla.1954) (" "A material breach, as where the breach goes to the

whole consideration of the contract, gives to the injured party the

right to rescind the contract or to treat it as a breach of the

entire contract....' ") (quoting 12 Am.Jur. Contracts § 389)

(emphasis added);         3 M. Nimmer & D. Nimmer, Nimmer on Copyright §

10.15[A],      at   10-125-126        (1996)     ("Upon    such    rescission,     the

assignment or license is terminated and the copyright proprietor

may hold his former grantee liable as an infringer for subsequent

use of the work.") (emphasis added).

     Since Albion on July 2, 1993 expressly gave his permission to
the Miracle to play his song at the next game, renewed this

permission by letter that same month, and did not thereafter

withdraw permission until some time after the Miracle had last

played the song publicly, the Miracle never played the song without

permission and is not liable for copyright infringement.

      This is not a case where payment of JMI's costs and public

recognition of authorship were made conditions precedent to the

granted right to play. See Restatement (Second) of Contracts § 225

(1981).   In such a case, absent performance of the conditions, the

"license"   would   not   have   issued    and   the   Miracle's   public

performances of the song would have violated JMI's copyright.          See

Fantastic Fakes, 661 F.2d at 483;     3 M. Nimmer & D. Nimmer, Nimmer

on Copyright § 10.15[A], at 10-121 (1996).

     But Albion did not make payment and recognition conditions

precedent to the permission he gave to play the song.       "A condition

is an event, not certain to occur, which must occur, unless its

non-occurrence is excused, before performance under a contract

becomes due."    Restatement (Second) of Contracts § 224 (1981).

"Conditions precedent are disfavored and will not be read into a

contract unless required by plain, unambiguous language."          Effects

Associates, 908 F.2d at 559 n. 7.         On July 2, 1993, JMI, through

its president, Albion, expressly granted the Miracle permission to

play the song before payment was tendered or recognition received.

Thereafter, Albion did not withdraw permission although he attended

many games and heard the song played, still without payment or

recognition, on various occasions.           Indeed, he wrote to Kuhn

encouraging the Miracle to continue to play the song.        Under these
circumstances, we cannot say that JMI's permission to play was

conditioned on prior payment and public recognition.

                                     IV.

        While for the above reasons, JMI cannot recover breach of

copyright damages from the Miracle for the latter's playing of the

song, this does not end the matter.

        JMI asserts that the Miracle made and broke its promise to pay

JMI's expenses and to give public recognition and credit to the

song's composer. While payment and recognition were not conditions

precedent to playing the song, the district court recognized that

JMI may be entitled to recover in a state action its damages from

the Miracle's failure to perform these promises. Nothing herein is

intended to suggest that the Miracle's treatment of JMI and Albion

was either legally correct or such as to shield them from liability

for their conduct.        The only issue before the district court was

JMI's     right   to    recover   under    federal   law   for   copyright

infringement.

                                     V.

     In its cross-appeal, the Miracle contends that the district

court abused its discretion in declining to award it attorney's

fees under 17 U.S.C. § 505.       That section states, in relevant part,

"Except as otherwise provided by this title, the court may also

award a reasonable attorney's fee to the prevailing party as part

of the costs."         Under this statute, attorney's fees are at the

court's discretion.       Fogerty v. Fantasy, Inc., 510 U.S. 517, 534,

114 S. Ct. 1023, 1033, 127 L. Ed. 2d 455 (1994).

     The Supreme Court has provided a nonexclusive list of factors
which district courts may take into account when determining

whether or not to award a prevailing party attorney's fees under §

505.   "These factors include "frivolousness, motivation, objective

unreasonableness (both in the factual and in the legal components

of the case) and the need in particular circumstances to advance

considerations of compensation and deterrence.' "           Id. (quoting

Lieb    v.   Topstone   Industries,   Inc.,   788 F.2d 151,   156   (3d

Cir.1986)).    After considering these factors, we are unable to say

that the district court abused its discretion in refusing to award

attorney's fees.

       AFFIRMED.