STEWART v. ABEND
Legal provision: 17 U.S.C. 1
Argument of Louis P. Petrich
Chief Justice Rehnquist: We'll hear argument now in Stewart v. Abend.
Mr. Petrich: Mr. Chief Justice, and may it please the Court:
This case for copyright infringement requires the Court to reconcile a conflict between two competing copyrights conferred under the same section, Section 24, of the 1909 Copyright Act.
On the same essential facts of this case, both the Second and the Ninth Circuits have reached very different accommodations of these interests.
In this case, in 1942, a short story named, or entitled Rear Window, was first written and copyrighted by Cornell Woolrich in 1942.
In 1953, the actor Jimmy Stewart and the director, Alfred Hitchcock, teamed up to form a production company to make a motion picture based in part on that short story.
They obtained a prior assignment from the author of the short story, which gave them the right to make all motion picture versions of the short story, and to continue to exhibit those motion picture versions throughout the life of the original or initial term of copyright obtained by the short story author, as well as any renewal term of that author.
Unknown Speaker: That was an express assignment of the right to renew?
Mr. Petrich: Yes, Your Honor.
It's reproduced in the--
Unknown Speaker: And if the author hadn't died, could the assignee have exercised that right or would the author have had to do so?
Mr. Petrich: --It has always been the law that only the statutory successor named in the statute may exercise the right.
Unknown Speaker: So this case would be the same, in your view, if he had... never had assigned the renewal right?
Mr. Petrich: No.
If he had not assigned the renewal right, we would not claim that we had a right to use the work during his renewal term.
Unknown Speaker: Well, even if he had assigned it, you couldn't exercise it.
Mr. Petrich: We could not renew.
The law provides that only the people named in the statute may actually renew it.
Unknown Speaker: Well, what if he didn't renew it?
Mr. Petrich: Well, I misunderstood your question.
If he did not renew it, the underlying story would have gone into the public domain and anyone could use the story.
In 1954, the film company created a motion picture based on the story, adding new characters, new incidents and new dialogue.
That motion picture was separately copyrighted under Section 7 of the 1909 act.
In 1968, the author of the short story died and his copyright was renewed the following year by his executor and became effective in 1970.
In 1982, the owners of the film copyright renewed their copyright under section... the same Section 24.
And now Jimmy Stewart and Alfred Hitchcock's estate own 90 percent of the film copyright.
In 1983, relying on a decision of the Second Circuit, the film was re-released as a part of a five-film retrospective of Alfred Hitchcock films, many of which included the talents of Jimmy Stewart.
Mr. Abend, the respondent here, in the meantime, had acquired rights from the executor of the short story author and he brought this claim, contending that the death of the author before renewal, as well as the renewal by the executor, operated as a matter of copyright law and policy to terminate any rights that the films owners had to continue using their film.
Unknown Speaker: Mr. Abend is an agent?
Mr. Petrich: Well, he's listed as a literary researcher.
He has testified that he buys these rights for himself and for clients.
The district court, in this case, granted summary judgment for the defendants, relying upon the 1977 decision of Judge Friendly in the Rohauer case, which Judge Friendly described as a case of first impression on this issue.
A Ninth Circuit panel, by a split decision, reversed the district court's summary judgment in this case, and so we are here.
Both circuits, however, it's important to note, acknowledge that a reconciliation of these competing copyrights was required.
I will plan to explain why the Second Circuit's accommodation of these competing interests best resolves the competing copyright interests and policies, and why the Ninth Circuit's accommodation in this case was flawed and will result in a defeating of the policies and purposes of the Copyright Act.
Under the Second Circuit's approach as to the prior work... when the prior author dies and his statutory successor renews the copyright, the court would effect the second-chance policy of Section 24 in favor of authors by providing that all of the rights given to the derivative work owner lapse or revert and go back to the statutory successor of the prior work, with one important exception.
The owner of the derivative work would continue to have the right to exploit that derivative work which was made under license during the first term and authorized by Section 7 and would only be able to continue to exploit that work according to the limits placed on him or her by that original assignment.
This effecting of the policy actually gives the statutory successor even more than what the author would have had had he survived and renewed because, under the decision of this Court in Fred Fisher, if the author had lived three more months and had renewed the copyright in this case, as the assignment that he previously had given, would have given the movie owners the rights to continue to distribute the movie but, more importantly, to make additional motion pictures.
Unknown Speaker: xxx even if he assigned... even though he had assigned, if he had lived, could you have forced him to renew?
Mr. Petrich: We could not force him to renew.
Unknown Speaker: And you couldn't force his statutory successor to renew... I mean, his executor?
Mr. Petrich: No.
But there was a policy under the copyright that the Copyright Office had: that others could go in and renew in the name of the statutory successor.
But you had to be careful to be sure that you renewed in the name of the author if he was alive.
Unknown Speaker: Well, you couldn't do it, could you?
Mr. Petrich: I think we could.
Unknown Speaker: An assignee could have gone in and--
Mr. Petrich: Yes, we could.
We would have had a power of attorney to do so.
In fact, some courts went so far as to say that the power of attorney was even implied by the prior assignment.
But the renewal had to be in the name of that statutory successor or the author if--
Unknown Speaker: --So even if... so he could not have even... if he'd of lived he couldn't have prevented you from renewing it in his name?
Mr. Petrich: --No.
No, Your Honor, and--
Unknown Speaker: What do you mean no?
Mr. Petrich: --Oh, I'm sorry.
He could not have prevented us from renewing.
And of course, why would he because he would lose all of the other rights he would have under the contract.
Unknown Speaker: Well, he's just contrary.
Mr. Petrich: Well, that could happen.
Now, as to derivative work, the Second Circuit came to a conclusion that the court would effect the Section 7 and 24 rights granted to the derivative works authors by allowing them simply to continue to use that work which they had created under license during the first term.
But it's important to note that there were limitations.
This was only applicable in a case where the derivative work had been made under license and had been made during the first term of the prior work's author.
Secondly, they would lose the right to exercise any other rights under the assignment, such as rights of exclusivity to prevent others from making motion pictures, and they would also lose the right to make additional motion pictures of their own into the second term.
And finally, they would remain subject to all of the specific limitations that were placed upon them in the original assignment.
Unknown Speaker: Under the Second Circuit's view, the owner of the Woolrich copyright could make another movie based on it, could it not?
Mr. Petrich: I'm sorry, Your Honor, could I have that again?
Unknown Speaker: Yes.
Under the Second Circuit's view... supposing Mr. Abend, who I understand owns the Woolrich short story--
Mr. Petrich: Right.
Unknown Speaker: --could he not now make another movie based on that short story?
Mr. Petrich: Absolutely.
He's the only one in the world who could make new movies based on that short story now.
He has all of those rights.
Unknown Speaker: But he could use any of the new matter that was incorporated in the Hitchcock movie?
Mr. Petrich: No, Your Honor.
Because that is still subject to copyright--
Unknown Speaker: No.
He'd have to make an entirely new motion picture of that.
Mr. Petrich: --Well, that--
Unknown Speaker: Now, he's the entire owner.
Mr. Petrich: --The problem is that only a part of the short story was used in the film.
Unknown Speaker: Right.
Mr. Petrich: He could make a literal version of the short story and have no problem from us.
There's nothing we could do about it.
Our short... our film is a revision or an augmentation of his short story.
We've added the Grace Kelly character and the Thelma Ritter character in the film--
Unknown Speaker: And he couldn't infringe those additions to the story?
Mr. Petrich: --He could not use the new matter that was added by us.
That's under Rohauer, which is the Second Circuit decision.
Any payments that might be due under the assignment, any screen credits that might be due under the assignment would all still have to be made to the statutory successor.
And as I have said, any limitations, such as limitations on the territories or the time in which the film can be shown... they would still be binding.
And in fact this would be the same... the derivative work owner in that case would be in the same place as a derivative work owner would be today under the 1976 act, if someone had exercised the statutory termination right and the statutory exception would come into play.
Unknown Speaker: Well, Mr. Petrich, I gather that the Rohauer decision has certainly not been unanimously acclaimed in the scholarly community, one might say.
Mr. Petrich: Well, Professor Nimmer hasn't liked it, but he also was counsel for the Writers Guild at one time.
Unknown Speaker: And the Registrar of Copyrights, I guess, has filed something indicating--
Mr. Petrich: Correct.
That the Writers Guild had... I'm sorry.
The Copyright Registrar has, although the Registrar has also said that this is a matter which is confusing and needs some clarification, which is our position.
Unknown Speaker: --Well, perhaps that's up to Congress.
But Congress created this unusual scheme, and apparently with the idea of letting the original artists or author benefit from whatever enhancement has developed by virtue of use of the derivative works in the interim.
Mr. Petrich: That's not altogether clear, Your Honor, because there's nothing in the record to show that... or the legislative history, that show that the 1909 act intended to discriminate in favor of one set of authors against another set of authors.
In fact, the record only shows that there was a debate about whether derivative works ought to be... ought to have a shorter term and expire at the time of the underlying author's term.
And that was given up, and instead, all the copyrights, derivative or otherwise, were given the same term.
And their rights all derive under Section 24.
They both are given two terms of 28 years.
Unknown Speaker: If the copyright holder who made the assignment had renewed, you say that he could not interfere with your plan, if he had lived?
Mr. Petrich: If he had lived, he would have or we would have had the assignment he had given us, which would give us the assigned right to make--
Unknown Speaker: Is that... do you derive that directly from the act or is that a judicial--
Mr. Petrich: --Oh, no.
That was from the assignment itself.
Unknown Speaker: --Well, I know.
But that's just a... the assignment does not expire.
Is that just a judicial decision?
Mr. Petrich: That... that's based on the decision of this Court in 1943, the Fred Fisher case.
Unknown Speaker: And that assignment is an assignment?
Mr. Petrich: So that Congress intended for authors to have the right to assign their interests, including their renewal interest.
Unknown Speaker: Well, what about our later decision... which one is it... Miller?
Mr. Petrich: Miller Music.
Unknown Speaker: And it... what if assignment isn't an assignment; it's just an expectancy?
Mr. Petrich: In Miller Music, where you had a competition between an author on one side and a mere publisher on the other, it said that the clear intent of Congress was that the author's successors... in this case the author is dead... the author's successors ought to get the new renewal and they ought to get the renewal term of the--
Unknown Speaker: What if he assigned to what... in that case, what did he assign?
Mr. Petrich: --Apparently, the entire term, all the copyrights--
Unknown Speaker: Including the renewal?
Mr. Petrich: --Including the renewal.
Unknown Speaker: To the publisher?
Mr. Petrich: That's correct.
Unknown Speaker: But who... all he had was the assignment.
He didn't have a... he didn't have another copyright [inaudible].
Mr. Petrich: That's right.
The difference we say is that, in this case, we don't have author versus user.
We have author versus author.
Congress intended for all of the authors to be able to exercise their rights under Section 24 and gave all authors, equally, two terms.
And gave all authors that same second chance.
And they had to know that if they were going to have overlapping copyrights because there were going to be works that were derivative of other existing work, that there were going to be overlaps.
And they made no provision at all... no specific provision at all to say that they wanted some sort of a reversion that would prevent the copyright holder in the derivative-work situation to have a shorter term of enjoyment of his copyright.
In this case, if Mr. Abend was right, that the copyright and the film would have run from 1954 to 1970, and that he couldn't... then the movie... Hitchcock and Stewart couldn't use it.
And they couldn't use it for another 28 years, and perhaps--
Unknown Speaker: Unless they reached an agreement with the respondents to allow for the use at some compensation.
Mr. Petrich: --Well, the Ninth Circuit expressed the view that, while they understood that there were important policy reasons for reconciling these conflicting interests, they chose not to bring those policy interests into play until the remedies portion of the analysis.
And we think that's where they made the... the very grave mistake.
They started their reconciliation at the... after they decided that they would favor one set of authors over another set of authors and hold that the work was an infringement.
From in 1970... for at least another 28 years they would treat the use of the film copyright as an infringement.
And they said: That won't hurt anybody because people will just make new arrangements.
But there are reasons why they won't.
First of all, in a... in the usual copyright infringement case, an injunction is the usual remedy.
So that gives tremendous leverage to the owner of the original copyright or the underlying copyright.
And there's a great danger we think here that undermines copyright policy because if someone in the position of a short-story owner has too much leverage, he is using the monopoly power Congress gave him in the... for his short story... not to just reap the benefits of his short story.
He's not coming to us and telling us he wants to make a new movie.
He's coming to us and saying: I want what you make on your movie and on the new matter that you have put into your movie.
That's what he wants to do.
That's the game.
And there are reasons to believe that, for example, speculators that get into this field will refuse to give consent.
They have reasons not to give consent.
First of all, they have a comparatively low investment.
The plaintiff, in this case, bought his rights for $650.00.
Well, when he negotiates with somebody who has spent $2 million to make and to release a motion picture, he has considerable leverage in deciding how long he's willing to negotiate.
Secondly, the person who takes over the rights of the underlying copyright has other rights to exploit in the meantime.
He doesn't have to sit around and negotiate with the movie owner or the other derivative work owner.
He can... he gets to go back and exploit all the rights that the author originally had, in the meantime.
Unknown Speaker: May I interrupt with a question here?
Mr. Petrich: Yes, Your Honor.
Unknown Speaker: Supposing... instead of giving a right to just the derivative work of motion pictures there had been an assignment of all rights in the copyright.
Would you make the same argument?
Would you be making the same argument?
Mr. Petrich: Yes.
It wouldn't be any different if he had given us all rights of copyright.
We still, under the Second Circuit view, we'd only be left with those rights we had actually exercised.
If we had made a movie, then we could continue using the movie.
This is the same solution that Congress came up with under the 1976 act.
Unknown Speaker: So you relied primarily on the fact that you did create a new work before the first copyright term expired?
Mr. Petrich: Entirely.
We have no position... we have no position without it.
Unknown Speaker: Well, then, if that's the case, does it make any difference whether you've got a copyright on the derivative work?
Mr. Petrich: Yes.
We couldn't get a copyright without the original owner's consent.
Unknown Speaker: I know you couldn't get it.
But in order to maintain your position today, supposing you had not copyrighted the derivative work.
Would your right to use what was given to you survive?
Mr. Petrich: I don't think so because we rely entirely on the fact that we have a copyright which was... gives us rights under Section 24 of the old law.
Unknown Speaker: But the right the copyright gives you is the right to exclude others from your new matter, and you still have that right.
Mr. Petrich: Well, if we had not gotten a copyright we couldn't exclude others from using our new matter.
Unknown Speaker: But I'm suggesting that normally you can either use it or not use it at your will, as long as nobody can interfere with your right.
But your right to exclude others doesn't necessarily carry with it a right to use it yourself is what I'm saying.
Mr. Petrich: Oh, I understand that.
And what I'm saying is that you... what gives us the problem here is... that Congress apparently was thinking of giving some... giving all copyright owners a so-called second chance.
But they weren't thinking necessarily of this situation.
There's nothing in the legislative history to show that.
And so, if you just think about one copyright and you say, all right, after the person dies it reverts and goes back.
What's the harm?
Well, that's all right.
But you have harm here because there have been other copyrights that have come into existence in the meantime, and Congress specifically intended that they would have the 58 years of enjoyment.
Unknown Speaker: But you still have... I think Justice Stevens was saying you still have the value of that new copyright that's come into existence.
Let's suppose that the original short-story writer or his successors want to do a remake of the movie, Rear Window.
They'd have to come to you and pay you in order to do that remake.
Mr. Petrich: No, Your Honor.
Because they can avoid us by simply not using that which we added to the film.
Unknown Speaker: Oh, no.
But they want to have Grace Kelly and all of that.
They want to do it.
It's essentially the same plot from the movie.
They don't want a new movie; they want a remake of Rear Window.
They'd have to come to you and pay, right?
So that you would have the full value of the renewal copyright... of your copyright, the right to exclude them.
Mr. Petrich: No.
Because we don't have the right to exploit our own work.
What good is the work--
Unknown Speaker: But that's not what a copyright gives you.
Mr. Petrich: --Well, yes.
And... you're right, it doesn't give us the right to exploit our own work.
What I was trying to explain is that, because Congress wanted us to have the right, this copyright, this valuable right, it is implicit in that that the Congress did not want the so-called second-chance policy to operate in a way that would benefit one author at the expense of the other author, wouldn't want to cut off our enjoyment of our copyrights simply because it was going to, in one case, give the second chance to the original author.
We have... we are now in our second term.
We are now in the term where we're supposed to be getting our second chance, and I disagree with you, Justice Scalia.
The right to exclude someone from using a Grace Kelly character is not a very valuable right.
In fact the record shows, in this case, that Mr. Abend went out and made a deal with Home Box Office to make a new film based upon the short story without our characters.
So nothing stops him from going ahead and making new works without us.
Unknown Speaker: To get a copyright on Rear Window, did all you have to do is just make the film and present it for a copyright?
Mr. Petrich: --Yes, Your Honor.
First of all, we have to get the consent of any prior work that we are using: music, story, graphics, whatever.
Unknown Speaker: And do you have to demonstrate that... in getting your copyright that you have those permissions?
Mr. Petrich: No, Your Honor.
Unknown Speaker: The Copyright Office doesn't really care about that at all.
Mr. Petrich: No.
They're just not set up administratively to determine those things.
In any motion picture there could conceivably be dozens of works that are used in the motion picture.
In fact every motion picture today would probably see two or three and maybe as many as ten licensed songs, and they had to get permission.
And all of those songs are like little ticking bombs under this reversion theory.
Any one or two of them can go off, and now you can't use that song in the movie after the death of the composer and the renewal by his statutory successor.
Unknown Speaker: Well, now under the work made-for-hire-arrangement, presumably the motion picture industry can solve some of these problems.
Mr. Petrich: Sure.
But, for example, you can't... if you want to make a picture about the 1960s and you want to use the music that was popular in the 1960s, you don't always have that choice.
And so you use licensed music.
I think we've said in our reply brief that MCA Universal did about 250 hours of television in a couple of year periods and they used 400 licensed songs.
And one of the... as I was going to say earlier, one of the problems with the Ninth Circuit's approach is, if it is followed, is it will mean that the works from 1962 to 1978, which have not yet been renewed and are subject to renewal and are subject to reversion, people will have no interest in wanting to use them because they don't know what will happen at the time of renewal.
Unknown Speaker: Well, they will, depending on the price that they negotiate for them.
I mean I... frankly, my guess is that there isn't... there isn't a way that the author can get a lot of money without negotiating with somebody who's made the derivative work.
Mr. Petrich: But under the Ninth Circuit view, he can't give away the right to use that work in the future.
And, therefore, he's giving you grief.
Unknown Speaker: Not until within a year of--
Mr. Petrich: Correct.
Unknown Speaker: --the renewal.
Mr. Petrich: That's correct.
So you don't know and you don't always have a way to buy around that problem... for example, in this case.
There's no way that Jimmy Stewart and Hitchcock could buy from Mr. Woolrich's executor because they don't know who his executor's going to be until he dies, and until we know what the will says.
Unknown Speaker: Mr. Petrich, let's assume.
Let's stipulate that that's a very bad disposition.
The question remains whether that is the disposition that Congress enacted.
What is the text of the statute that you rely upon to say that it is not?
Mr. Petrich: We rely on the fact that Congress in Section 7 gave derivative works the same standing as copyrights, as all other copyrights.
And in fact, when we use these terms, I think we tend to make too much of the labels.
Mr. Woolrich's work, for all we know, could be a derivative work... derivative in turn of something before it.
This is a relative term.
Unknown Speaker: So that it ultimately gets back to your contention that the same standing, as all other copyrighted works, includes not only the right to exclude people--
Mr. Petrich: But the right to enjoy it.
Unknown Speaker: --but the right to use yourself.
Mr. Petrich: Exactly.
Unknown Speaker: Okay.
Well, I don't why then you even need an assignment of the renewal.
There's still two copyrights and--
Mr. Petrich: We need the right to renewal because the original owner, when he has to give us consent to make the work in the first place, at that time, he can put any restriction on us he wants.
And at that time it's negotiated, as to what restrictions or time limitations or territorial limitations one may give.
Your Honor, I think I see my time is just about up.
I'd like to reserve the rest for rebuttal.
Unknown Speaker: Very well, Mr. Petrich.
Mr. Anderson, we'll hear now from you.
Argument of Peter J. Anderson
Mr. Anderson: Mr. Chief Justice, and may it please the Court:
This action arises under the Copyright Act of 1976, not the Copyright Act of 1909.
Petitioners conceded as much in their opening brief at page 41, where they state that,
"The infringement action here arises from conduct occurring after January 1st, 1978, and is thus governed by the 1976 Copyright Act. "
Mr. Petrich has stated that the renewal copyright in the film Rear Window was created under Section 24.
That copyright was claimed in 1982 by the successors to the creator of the film, Patron, Inc. As a result, that renewal copyright was created under Section 304(a) of the Copyright Act of 1976.
Mr. Petrich has told the Court that what he wants, and what Rohauer does, is to give the same exception that subpart (c) of Section 304 gives to derivative works.
That's the exception that was created under the 1976 act to allow continued use of the underlying basic materials added or elaborated upon in a motion picture.
This is the problem with Mr. Petrich's position: His renewal copyright... his client's renewal copyright was created under Section 304(a), which contains no right to continue distribution of the film.
He nevertheless asks for the Court to imply that the exception provided in subpart (c) also applies in subpart (a).
We believe that since this... the issues arise under the 1976 Copyright Act and since that act reenacts Section 24, that the Court is now bound by its decision in Miller Music.
Below, at the Ninth Circuit, the petitioners asked or suggested to the court that this Court would reconsider Miller Music.
Now they suggest to this Court that the Court should put a gloss on Miller Music.
Unknown Speaker: Decided by a very closely divided Court.
Mr. Anderson: That's true, Your Honor.
But it's been the law of the United States for the last 30 years.
It was also a natural corollary to this Court's decision in 1943 in Fred Fisher.
Unknown Speaker: Yes.
But the fact that it's a statutory decision is based on a decision by a closely divided Court... is not a basis certainly in itself for overruling it.
But it's certainly also a reason perhaps not to extend it beyond its facts.
Mr. Anderson: But it's not actually clear that this would be an extension of Miller Music beyond its facts.
In Miller Music, the Court had a publisher before it, a publisher of music, and it's clearly... it has been the practice, as this Court noted in Mills Music v. Snyder, and as the screen... excuse me, the Songwriters Guild and the Registrar of Copyrights note in their amicus briefs, that it has been the practice for a publisher to authorize derivative works based upon a grant of, for instance, the rights to the words for a song.
Unknown Speaker: There weren't two copyrights involved in Miller, were there?
Mr. Anderson: Implicitly there were.
Unknown Speaker: Well, but there were not expressly.
Mr. Anderson: Yes, Your Honor.
But as the Ninth Circuit noted, if Miller Music holds, as it does, that a grant of the entire renewal term is completely void and unenforceable against the statutory successor of the dead author, then it would be frankly hard to figure out how you could then say that the grant of some rights would be nevertheless enforced against a statutory successor.
Unknown Speaker: Well, that's an extension of Miller.
Mr. Anderson: Your Honor, we think it would actually be a complete undercutting of Miller because of the practical fact that's... publishers of music don't just get the copyrights in a completed song.
They get the copyrights in words; they get the copyrights in lyrics.
They put these things together.
Sometimes they'll commission or employ someone to add the words to existing music or whatever.
But they're always dealing with derivative works.
Unknown Speaker: Do you agree that if the author had lived and refused to renew, that the copyright could have been renewed in his name?
Mr. Anderson: Yes, Your Honor.
The copyright could have been renewed in his name, if he had refused.
Unknown Speaker: And how about if he dies and the executor refuses to renew?
Do you think he could be... then you could renew in the author's name?
Mr. Anderson: If there was privity of contract between the executor and the party compelling--
Unknown Speaker: No.
No privity of contract.
He's just an executor.
Mr. Anderson: --No.
That... and that is this Court's holding in Miller Music.
Unknown Speaker: Because it's already the... the renewal assignment is already a dead letter, is that it?
Mr. Anderson: Well, the renewal assignment is not a dead letter.
It is merely the assignment of an expectancy, as the Court stated in Miller Music.
It's not invalid; it just never came into existence.
The renewal expectancy was... what the author--
Unknown Speaker: Well, at least the executor isn't bound by it.
Mr. Anderson: --No.
The executor is not bound; neither is any of the other statutory successors who don't have a contract with the person who is--
Unknown Speaker: But the renewal is... it just expired.
The renewal assignment just expires, I guess, with the death, is that right?
Mr. Anderson: --It's worthless.
In Miller Music the court specifically said it's not invalid.
It's just a contingency that never came into fruition.
Unknown Speaker: Well, it must not mean anything unless you could go ahead and renew in the author's name unless, if the executor refused.
But you say you couldn't.
Mr. Anderson: Well, I'm not too sure I understand.
But my point is simply this.
As a practical matter, the Register of Copyrights will accept a claim for renewal, even if it is not signed by the author.
If, in this instance, the petitioners' client, or the petitioners rather... excuse me... had taken a renewal in the name of the executor of Mr. Woolrich's estate, and taken that to the Register of Copyrights, we would have filed an action to have that set aside because they had no standing, and because the executor had not in fact agreed to convey the renewal copyright in the story.
Unknown Speaker: Isn't there some tension, as lawyers say, between the Fielding case and the Miller case?
Mr. Anderson: The Fred Fisher case?
Unknown Speaker: I'm sorry.
Mr. Anderson: There is, Your Honor.
And as this Court I'm sure is aware, there has been a fair amount of comment that the Fred Fisher case undercut the policy that the Miller Music case actually gave effect to.
And that policy was that the author or his successors were to have a second chance at controlling the work.
In Fred Fisher what the Court said was that the person who obtained the renewal copyright did not have a copyright right to continue using the work, but they had a contract right.
And since 1943 that's been interpreted to mean that if the author does not live to renew and there's no contract right with the author's statutory successors, then in those instances the policy of a second chance is fulfilled.
Unknown Speaker: But the policy can be defeated by the author assigning the renewal right in advance of its exercise?
Mr. Anderson: Absolutely.
And that is--
Unknown Speaker: So in effect that... you know, if you say the entire policy is to give authors a second chance, Fielding does not carry that out... or rather Fisher.
So there must be some other policy involved in the act.
Mr. Anderson: --Well, there is a second policy that's been recited, and it's interesting the petitioners elevate it to the primary policy.
If you read the legislative history, there was a concern that if a work was not being used, and it didn't matter to the author, then it should go into the public domain.
And so the 28-year term was a lapsing device.
If no one bothered to sign a piece of paper and give it to the Register of Copyrights, the work went into the public domain.
That, I believe, a fair reading of the history will reveal is... was a secondary concern, that the primary concern was giving an author a second chance, which goes back to the statutes enacted in the 19th century.
Unknown Speaker: Certainly one can read the Fielding opinion and not have... I'm sorry, the Fisher opinion, and not get the feeling that that was the primary purpose of the copyright.
There are several comments in the opinion about the fact that we can't import into the law a chance to give impecunious authors a second chance, when Congress hasn't put it there.
Mr. Anderson: --Actually I think, Your Honor, that a careful reading of Fred Fisher, first of all, recites the statements in the House Report 60-2222, that authors were often making unremunerative transfers because of their unability... or the inability, rather, to evaluate when they first created a work its public appeal.
And so they were in the situation where, either because they were just starting out and not established, or they didn't know if the work was going to be a success or not, that they were transferring it for a relatively small amount of money.
That discussion is repeated in Fred Fisher.
The Court does go on to say that since the 1909 act specifically allows for assignment of interest and copyright, that the court should not presume that such interests are unenforceable as a matter of public policy because to do so might prevent an author who finds himself in dire straights from granting rights to the second term.
I would note once again, though, that we are under the 1976 act and enacting... reenacting Section 304... or excuse me, Section 24 as Section 304(a) and in abrogating Fred Fisher, by making the determination right wholly inalienable, the legislature noted or... excuse me, the legislative history indicates that Congress again wanted to focus on giving the author a second chance to control his work.
If that was not the sole purpose under the 1909 act, it is clearly the sole purpose under the 1976 act.
The lapsing and going into the public domain does not apply since an author must affirmatively terminate the rights, and otherwise his copyright would continue for the full term of copyright.
The petitioners say that this is a problem because it's an author versus author instead of author versus user.
And I think that highlights a little bit of confusion that has run throughout Petitioners' briefs... the dissent Abend and in Mr. Engel's article.
The sole authority cited by Petitioners prior to 1976, asserting that the Abend rule was not actually the law.
And this confusion is that... is the confusion between the derivative work on the one hand and the matter protectable by the derivative copyright.
It is easy for Petitioners to throw up their hands and say that they can't use the film.
They are not entitled, necessarily, under the Copyright Act to use the film.
Their protection is in the new matter that they have added.
To the extent that they want protection.
A second chance to use the matter that they took from the story... they're a user.
They didn't create the story.
And although it was never briefed and it was never an issue because we did not move for an injunction, we did not try to show irreparable injury, the fact that the film has its genesis in this story was accepted.
We have not gone through and shown the Court the extent to which the film takes from the story.
Just as one example--
Unknown Speaker: Mr. Anderson, can I interrupt you for a second?
Mr. Anderson: --Absolutely.
Unknown Speaker: You're... it's true, I suppose that... well, let me put it this way.
I'm concerned about the effect of your rule on the author's ability to make a favorable marketing of his creative work when his lifetime is... one doesn't know how long he's going to live.
Say five years before the expiration of the first patent the motion picture company says: we want to spend $100 million making this gigantic epic with your story.
Is there some way you can guarantee that we can have more than five years in which to recoup our investment?
You'd have to say no, wouldn't you?
Mr. Anderson: Yeah.
You would have to say no.
The statute doesn't allow it, but it's not necessarily a practical problem.
Films are made because of the anticipation of getting a revenue... generating a revenue in the short term.
Unknown Speaker: Well, say it's done, you know, just the year before the 27th year.
Mr. Anderson: Films are often also delayed for quite a period of time before they actually are released.
It's not unusual for the negotiations for rights, the negotiations for cast to take nine or ten years.
One interesting example that was raised in petitioners brief was Singing in the Rain.
Singing in the Rain was a 1952 film that employs material, words and music, from the 1929 copyright... 1929 plus 28 means that they were in fact facing five years left in the original term of the song... well, of the words in the lyrics... two copyrights, actually.
They nevertheless made Singing in the Rain.
In our case, interestingly enough, Paramount paid--
Unknown Speaker: Well, of course, they made it at a time when they thought the Rohauer rule was the right rule.
Mr. Anderson: --That's not accurate, Your Honor.
In 1952, when Singing in the Rain was made, that was one year after G. Ricordi was decided.
G. Ricordi, which is a Second Circuit decision, said that a derivative copyright conveys no rights in the underlying work and that once the license was terminated or once there was no license, you couldn't continue to use the Puccini Opera.
It was also after Fitch v. Shubert, another case where an operatic could not be used because there was neither a copyright right or a contract right.
It was after the 1925 statement by Mr. DeWolf in his treatise that... of our exact problem.
That if the author dies before renewal, Mr. DeWolf stated that then the statutory successors could come in and bring an action for infringement, if they continued to distribute the existing work, the existing movie.
And the Motion Picture Association of America, in their brief as amicus curiae in DeSylva, they cite Mr. DeWolf as a preeminent authority of the time.
And by the way, that brief was authored by Mr. Nimmer.
Mr. Nimmer, who, Petitioners' counsel states has represented authors has also represented studios.
That was the view of the law.
In 1955, Mr. Bricker, in-house counsel to Universal Studios, said exactly the same thing.
So it's absolutely clear that this was the view of the studios.
Unknown Speaker: Does that make it binding on the courts, that it was the view of the studios?
Mr. Anderson: --Well, Your Honor, I think to the extent that Petitioners are claiming a lack of fairness in this result, then I think it is something that the Court should consider.
In fact, I believe in Fred Fisher the Court talked about industry practices; in DeSylva they talked about industry practices.
In some instances--
Unknown Speaker: You know, it also goes to show, I would assume, whether the skies will fall if we continue what they have assumed to be the rule.
Mr. Anderson: --And that was my second point, Your Honor.
That the... that movies are made in contemplation of the risk that continued rights to distribute the film are going to evaporate.
Singing in the Rain was five years.
If I could get back to the Paramount example.
Paramount Pictures paid for the production of the Rear--
Unknown Speaker: I suppose the other side of this is that maybe these all did turn out well, but there's also been some motion picture companies that have gone bankrupt over the years.
Mr. Anderson: --I know of no, and there is no indication in the record of a motion picture company that went bankrupt because of this issue.
Unknown Speaker: For this reason.
But you also don't know how many deals might have been turned down because of this concern.
The fact that they made some transactions doesn't mean that there weren't some that were turned down for... because of... because it's certainly an obvious risk of some importance.
Mr. Anderson: I understand the Court's point, and I would again note that Universal, which is the subsidiary of Petitioner MCA, never came up with a single instance of deadlock.
Clearly, if anyone can do it Universal can do it.
The amicus, who are all the other major production companies except Disney, which is not joined in the petition before this Court, no one has been able to come up with any evidence that a film evaporated because of this specter of copyright death.
Unknown Speaker: Well, didn't it even... the dissent in Miller agree that a widow and children would take precedence over the assignee of the renewal term?
Mr. Anderson: Yes, Your Honor.
The point, as I understood it, in the dissent to Miller music was that that rule should not be extended to executors.
Unknown Speaker: And that was the dissent's point?
Mr. Anderson: Yes, Your Honor.
Unknown Speaker: But is that still the case, that widows and children are especially protected?
Mr. Anderson: Yes, Your Honor.
It is still the case under the inalienable termination rights.
And it is, again, extended to authors who survive.
Authors, widows and children can come in and terminate a--
Unknown Speaker: So assignees have always had the risk of being upstaged by a widower or children?
Mr. Anderson: --Yes.
That goes back even before Fred Fisher.
And Fred Fisher, although it has been criticized, was accurately precicted by the majority of the commentators.
The... if I could just make the one point about Paramount.
Paramount Pictures paid for the production of the Rear Window film... never got the copyright in the film, because what it did was it advanced the production costs so that it could be made in the name of Patron.
Patron then got the copyright.
And what Paramount got was the right to distribute the film for eight years.
So here you have a motion picture company that had the absolute--
Unknown Speaker: From who did Paramount get the right to distribute the film for eight years from?
Mr. Anderson: --From Patron.
Unknown Speaker: The Patron?
Mr. Anderson: Yes, Your Honor.
It's a relatively common practice nowadays.
So Paramount when... made this investment through Patron but knowing that it would have no right at all to exploit the film past eight years.
An agreement was reached where that was extended, but initially they were limited to an eight-year term.
So the concept that a derivative work might not be made employing existing materials because of risks that might come up in four or five, eight years, simply is not borne out by the facts or the historical record.
And as Justice O'Connor pointed out, what's more likely to happen, and I believe it will happen with the supposed conflict between pre-'78 and post-'78 works, is that you'll get the works used but the price is going to reflect the risk.
And of course, that's always been the case.
And in fact that's one of the problems with the Rohauer decision.
The price paid to Mr. Woolrich for the renewal rights reflected the risk that they would never vest.
If this Court were to adopt Rohauer, the studios, who have never paid for the rights from the statutory successors and never paid consideration that was equal to a vested right to continue to use, would nevertheless get a vested right.
Unknown Speaker: Well, did the studios pay no attention to Rohauer after it came down, when it was the only court of appeals opinion in the field?
Mr. Anderson: The petitioners and the motion picture studios who filed their amicus brief claimed that they had relied on Rohauer for the 11 years and that that should be a fact that the Court should consider.
Now, the Court did deny cert, in Rohauer, and we think that the Court should have a free hand to rule on the issue on the merits instead of what may have happened over the last 11 years.
But the points I would... the more obvious reasons why they could not have... reasonably... I'm sorry... reasonably relied on the Rohauer decision was that within two years the Ninth Circuit Court of Appeals said that Rohauer was unconvincing and did everything except knock it off the books in the Ninth Circuit.
The... also, furthermore--
Unknown Speaker: Well, all that would do was create a conflict.
I mean... the Ninth Circuit isn't superior, even in California.
Mr. Anderson: --Yes, Your Honor.
But it sure put the studios on notice that if this issue came up in the Ninth Circuit, what happened--
Unknown Speaker: It might go the other way.
Mr. Anderson: --Exactly.
Professor Nimmer immediately called the Rohauer decision plainly wrong and said that he doubted that other courts might follow it.
But on also--
Unknown Speaker: Wait.
How much weight should we give to a professor, admittedly a... respected authority in the field, calling a decision wrong?
Mr. Anderson: --My point is the weight that the studios give Mr. Nimmer.
And that weight was--
Unknown Speaker: To what extent does that bind this Court?
Mr. Anderson: --Your Honor, it's a treatise; it's a commentary.
And I'm not saying that it binds this Court.
Unknown Speaker: Well, I hope you're not.
Mr. Anderson: But I am saying that for the studios to say that they reasonably relied on Rohauer, when the premier authority in the field said that it was plainly wrong, I think that someone should think twice about how much reliance they actually did put on Rohauer.
Furthermore, Rohauer involved the showing of a preexisting print that was made... they made one videotape copy and then showed that preexisting print over a public television station.
What the petitioners have done here is made several thousand new 35-millimeter print versions of the film, and made several hundred thousand new videotape copies.
Each time they made a new copy that was an infringement of a separate and different right than the one that was involved in Rohauer.
So to say that the studios could reasonably rely on Rohauer, which was referred to as unconvincing within two years by the Ninth Circuit... by the way, also in 1977 in the Register's report, it called Rohauer one of the biggest surprises under the 1909 act.
When you have the Register saying it's a surprise; when you have Rohauer carefully noting that only one videotape was made and it was a preexisting print, for the studios then to march out boldly making thousands and thousands of new copies, distributing works in videotape form and otherwise going far beyond Rohauer, then I think that their just... their reliance on Rohauer is clearly not justified.
Unknown Speaker: Does your position differ in any way from that of the Registrar of Copyrights?
Mr. Anderson: No, Your Honor.
I think that the Registrar of Copyrights put it very well.
The only caveat I would add, though, is that there's that one language which Petitioners have tried to find shelter in... that it's a confusing area of the law.
And if I might just explain a little.
There is no doubt that some provisions of the renewal... excuse me... some of the renewal provisions are confusing.
It wasn't until within the last year that a district court squarely dealt with the issue of what happens if an author, at the beginning of the 27th year, renews the copyright and then dies and then someone else comes in... his statutory successor.
So there... it's clear... and that I think was the kind of uncertainty that was left open to construction.
But as far as this issue goes, I think the Registrar hit the nail on the head when, in the brief, they say that this case presents a straightforward interpretation of Fred Fisher and Miller Music.
The petitioners' counsel has attempted to explain Rohauer, or to justify it by saying that what it does is it gives effect to the consent of the author.
And the problem... and it limits the new uses, or the continued use to that consent.
Well, there are several problems with that.
And the first one is that you can read Rohauer and you will never find the Court itself expressing that opinion.
That is the general interpretation of Rohauer because that is all that the defendant wanted.
However, in Petitioners'... at the district court level, Petitioners, in one of their memorandums, which appears as Docket Number 101 at page 19.
Unknown Speaker: xxx the office created by statute?
Mr. Anderson: --Yes, it is, Your Honor.
One of the provisions of the Copyright Act provides that the administrative functions will be exercised by the Registrar of Copyrights.
I believe that section is--
Unknown Speaker: What is he supposed... what is he supposed to know about the substantive meaning of the Copyright Act?
Mr. Anderson: --Your Honor, I think the Registrar is the person... or is the person who is in charge of the administration of the Copyright Act.
For one, has to decide--
Unknown Speaker: He isn't entitled to issue regulations about what the statute means, does he?
Mr. Anderson: --They do issue guidelines or the Registrar's compendium of practice whether that is a "regulation"--
Unknown Speaker: Is the Registrar authorized to appear in court on his own, without appearing through the Solicitor General?
Mr. Anderson: --Since they have, I sure hope they are, but I... frankly, I can't answer that question.
It was not something that was either raised in Petitioners' reply or otherwise.
They have... the Registrar has nevertheless appeared and has nevertheless urged affirmance of the Ninth Circuit's decision.
The point that I was about to make was that in the district court, the petitioners said that there was no limit in Rohauer that prevented the petitioners from making remakes of their... of their film.
When we came back and said that that would... has blown Rohauer completely into... into new abuses, they back-pedaled and said: Well, what Rohauer was really trying to effect was limiting the new uses to the scope of the consent that was given by the author.
And there are some substantial problems with that.
Mr. Woolrich consented to... if Mr. Woolrich consented to remakes, why is it that Petitioners can't make remakes, if the point of Rohauer is that it gives effect to his consent?
If, as Petitioners now state, that it's limited by the extent to which they exercised their rights... well, they never exercised the right to make videotape copies.
But now they've made millions of dollars exploiting videotape copies.
So it's very, very difficult to find out intellectually where Rohauer ends and where you... what effect you give to the consent of the author, assuming that you want to give any effect to it in light of the Court's holding in Miller Music.
The... excuse me.
The other problem with Rohauer is that it gives no compensation at all to the owners of the statutory... the owners of the renewal copyrights and books.
The petitioners have said that my client received the rights to the renewal copyright for $650.00.
The actual transaction was that he was going to share with the trust... excuse me... created by Mr. Woolrich's Will, 10 percent of all monies generated.
This is a transaction that Chase Manhattan Bank handled as the trustee... that they're very happy with.
And there's been no claim of overreaching from them, although Petitioners would like to make that claim here.
The main point that I would like to make, though, is that this is not a case between Jimmy Stewart... although it's a case between Jimmy Stewart and Mr. Abend, it is not an issue solely between them, that this case will have far-reaching effects.
The vast majority of the renewal copyrights are owned by the children and the widows of authors who had films made based upon their books.
And the question is, will they participate in the profits that are generated, directly attributable to the use of the stories and novels in the second term of copyright, what the petitioners claim is an entitlement to a second chance to use their film.
As I've noted, they're confusing the use of the film with the use of the new matter.
What they're really asking for is a second chance to impose the bad bargain that the author made on his statutory successors.
Here is Mr. Abend; in another case it's going to be the next of kin of the woman who wrote Gone With the Wind or the Sound of Music or Dr. Zhivago.
Unknown Speaker: Mr. Anderson, before you get into all those other works, do you agree with the Ninth Circuit's ruling on remedy, that you have no right to an injunction?
Mr. Anderson: Well, Your Honor, the problem that I have with that is... first of all, we didn't ask for an injunction before that appeal went up.
Unknown Speaker: I'm very interested in whether you agree with the Ninth Circuit's view.
Mr. Anderson: Well, I do not agree--
Unknown Speaker: You do not agree.
Mr. Anderson: --as to our case for the simple reason... for instance, the court says that we haven't made a showing of irreparable injury.
We never were required to because we did not move for a preliminary injunction and we did not move for a temporary injunction.
We did not ask for a summary judgment.
In total, we asked only for a summary judgment because--
Unknown Speaker: You don't think the remedy is limited to just some kind of statutory damages or royalties?
You think you could actually enjoin the production to--
Mr. Anderson: --Well, Your Honor, I think that the court properly said... the Ninth Circuit properly said that injunctive relief has always been discretionary.
And I think that the amount of new matter that is included in a derivative work is one of the factors that the court could consider in a proper court... in a proper case, after a full briefing and with all the evidence, that a court might say that an injunction is an improper remedy.
Unknown Speaker: --Thank you, Mr. Anderson.
Mr. Petrich, you have four minutes remaining.
Rebuttal of Louis P. Petrich
Mr. Petrich: Thank you, Your Honor.
I wanted to comment on the fact... answer the question raised by counsel about where Rohauer ends.
It ends precisely where the present statute ends.
If the statutory successor takes over, the derivative work owner may only continue to exploit the existing work to the extent that he was given the right to do so by the original arrangement.
It would... following the Second Circuit--
Unknown Speaker: Well, let me be sure I understand that.
That's how you include the videotapes, because you said he has the right to--
Mr. Petrich: --That's right.
Unknown Speaker: --But what if... what if he hadn't produced anything?
You had the right to produce a lot of things by the original range of things.
Mr. Petrich: If we had not produced the film, we would have nothing.
Unknown Speaker: Well, then, why can you produce videotapes?
Mr. Petrich: Because they're simply a version of the film; they're just a copy.
Unknown Speaker: Well, that's the point.
They are a copy.
Mr. Petrich: But they are just additional copies.
I mean, there is no reason... if you're going to allow us to use the film, there's no reason to make us take one print around from each theater.
We have... it seems to me that it's reasonable that we have a right to make enough copies that they could be marketable in the way that the product is usually marketed.
Unknown Speaker: Well, you don't have to take one book around from one bookstore to another.
Mr. Petrich: I would hope not.
And certainly, that's not the... what Congress thought was a reasonable result in 1976, although I'm not by any means saying that what the Congress did in 1976 has to govern what is done here.
In fact I should point out that counsel is wrong.
In our brief, at page 41, we say that the fair-use issue is determined by the 1976 act because the conduct which gives rise to the fair use all occurred after 1976.
But the renewal issue and the effect of the death of the original author and the renewal by the executor all took place before 1976.
There's no way that the 1976 act could determine the effect of that 1970 renewal.
And it's not reasonable to say that Mr. Woolrich didn't get fairly compensated.
There's no record of that.
All that's in the record is that he sold five short stories to people who were willing to take a chance that they might use some of them in a film someday, and that he got a payment of $9,200, which in 1987 was worth something between $50,000 and $100,000.
It was entirely up to him whether or not he wanted to take that as a lump sum.
And for all we know, he put it in real estate and it came out better for him.
But it... I just... it's not reasonable to look backwards and try to second-guess what made Mr. Woolrich happy in 1945.
As far as the special expertise of the Registrar and Professor Nimmer, I want to point out that in 1960 the Registrar said that the... that she thought it looked like, in the case where a work... or the first term of copyright had expired by agreement, maybe you couldn't use that work any longer.
And she cited it for that... the Ricordi case... not this Court's decision in Miller Music, which had come out earlier in the year, in which she cited Ellsworth throughout her study.
She relied, not at all, on the Miller Music case.
And Professor Nimmer, who wrote the treatise on this, from 1963 to 1977 said not a word about Miller Music as being the guide in this case.
He, too, relied on the Ricordi case, which Judge Friendly pointed out had nothing to do with this case.
And in fact the re-reading of the district court's decision in Ricordi will show that Paramount Pictures, in that case, who was... in the case of Mr. Abend, conceded that the owner of the opera had the right to continue performing the opera... had the right to grant new rights.
Chief Justice Rehnquist: Thank you, Mr. Petrich.
The case is submitted.
Argument of Speaker
Mr. Speaker: The opinion of the Court in No. 88-2102, Stewart against Abend will be announced by Justice O’Connor.
Argument of Justice O'Connor
Mr. O'Connor: This case comes to the Court on writ of certiorari to the United States Court of Appeals for the Ninth Circuit.
It raises an issue of copyright law.
The author of a preexisting work may assign to another the right to use the preexisting work in a derivative work.
In this case, the author of a preexisting work, a story, agreed to the production of a derivative work and agreed to assign the rights and the renewal term of the preexisting work to the petitioner.
The petitioner then incorporated the preexisting work into a derivative work a movie called "Rear Window".
The author of the preexisting work however died before the commencement of the renewal period.
This case requires us to decide whether the owner of the derivative work infringe the rights of the successor owner of the preexisting work by the continued distribution and publication of the derivative work during the renewal term of the preexisting work.
We must also decide whether the derivative work owner’s use of the preexisting work constitutes a fair use as that term is used in the copyright law.
In an opinion filed today, we hold that the owner of the derivative work infringes the rights of the successor owner of the preexisting work by distribution and publication of the work during the renewal term where the successor owner has not granted permission for use of the work during the renewal term.
Our decision follows our previous decision in Miller Music Corporation against Daniels.
We also hold that petitioner’s use of the preexisting work does not constitute a fair use of the work.
The judgment of the Ninth Circuit Court of Appeals is, therefore, affirmed.
Justice White has filed an opinion concurring in the judgment; Justice Stevens has filed a dissenting opinion which Chief Justice Rehnquist and Justice Scalia have joined.