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Preview: Comments on The Patry Copyright Blog: The Second Circuit Goes to the Dark Side

Comments on The Patry Copyright Blog: The Second Circuit Goes to the Dark Side





Updated: 2017-10-30T20:11:30.127-04:00

 



What I'm having a problem with here is that you se...

2008-07-02T15:44:00.000-04:00

What I'm having a problem with here is that you seem to be saying that every time a co-author issues an exclusive license of a portion of his rights to another, that exclusive license should be treated as a transfer of that owner's share to the licensee, and the exclusive licensee is therefore a copyright owner.

I do not understand why this alternative reading is not just as likely -- the co-author's issuance of an exclusive license encompasses the whole of that right within the work, meaning that the co-author has also transferred his other co-author's rights. Obviously, the exclusive licensee, who may have no knowledge of the other co-author, believes he is obtaining an exclusive license as to the whole interest -- not that he is sharing that interest with another co-author/co-owner.

Why must we leap to the conclusion that the co-author is only transferring his rights (and is therefore no longer a copyright owner with respect thereto), rather than concluding that he simply exceeded the permissible bounds, and issued a license which is not limited to his own rights, and impinges upon the rights of his co-author/co-owner?

This has crucial implications for accountings between co-authors. If one co-author issues an exclusive license to someone and gets royalties for that, must he divide those royalties with his co-author? Under your theory, the answer would be no, right -- because the first author has transferred his rights, the exclusive licensee would be a copyright owner and would have a duty to account to the other co-author, but the co-author who issued the exclusive license (and is being paid therefor) would not have to account to his co-author because the income he is receiving is income attributable to a transfer of his own rights, rather than a royalty stream subject to division. The co-author who is left out would then be limited in his recovery to a share of profits (and an accounting) from the exclusive licensee, who doesn't even know he or she exists.

This outcome to me does not seem right. The better view would be that the co-author had no right to issue an exclusive license, and therefore the license is void; the licensor would have to account to his co-author for any profits received, and the other co-author could then sue the "exclusive licensee" for infringement, since the license was void ab initio.



Jane, an agreement to alter the default proportion...

2008-03-11T17:42:00.000-04:00

Jane, an agreement to alter the default proportional share is an agreement to transfer rights, so it has to comply with the ordinary rules for transfers of rights. Such an agreement may be recorded in the Copyright Office. I don't give advice, but speaking personally, I don't see why one would want to reflect any share on a copyright notice, and I have never seen one reflected in a registration.



I left a question about "proportional share" of ow...

2008-03-11T00:01:00.000-04:00

I left a question about "proportional share" of ownership of a joint copyright a while ago. I've read and reread your answer but I still don't understand. I am a publisher so I know what an instrument for the purpose of licensing a copyright looks like. What does same look like for changing the proportional ownership of a three proprietor joint work from 1/3-1/3-1/3 as you describe, to, say, a 40-40-20 split. Is it the same?

In William Strong's excellent tome, "Copyright Book", he writes, "Where joint authorship exits...each of them owns an undivided share in the entire work...This share is not necessarily equal, for the authors can slice the pie unevenly if they so choose." So how does the unequal arrangement appear on the copyright notice on a book or on the copyright registration with the Library of Congress?



Dear Anon, you are, I think, confusing sharing of ...

2008-02-06T17:58:00.000-05:00

Dear Anon, you are, I think, confusing sharing of royalties under a contract with ownership of a copyright interest in the work. Two joint authors automatically share an undivided 50% interest in the whole, three authors a third, etc. They can change this, but to do so will represent a transfer of ownership, and thus has to comply with 17 USC 204. By contrast, a decision how to share royalties is distinct from ownership: two authors could for example leave intact 50-50 ownership but permit one to get 60% of the royalties. In short, the two concepts are different, with a split on royalties being a contract, not a copyright matter.



I'm confused by your use of the term "proportional...

2008-02-06T16:37:00.000-05:00

I'm confused by your use of the term "proportional share." Do not joint holders of a copyright have an undivided interest in the whole? Whatever "proportions" exist would be not be 1/2 and 1/2 for two authors, 1/3-1/3-1/3 for three authors, etc. The proportional split would be spelled out in some kind of agreement between the joint authors or between them and their publisher as to how to split up the earnings of the joint copyright, not how to split the copyright itself. Two joint authors might decide to split the earnings 90-10.



How many 'criminal' works of art, I wonder, have i...

2007-10-23T14:59:00.000-04:00

How many 'criminal' works of art, I wonder, have involved copyright infringement in their production, that are subsequently legitimised by retroactive license obtained via 'clearance'?

Should their authors be prosecuted irrespective of the 'forgiveness' by other authors whose permission was only sought after the act of infringement?

After all, it is not for authors to be lenient on the public's behalf. The public's selfless grant of copyright must be protected, and perpetrators of its infringement must be punished.

No member of the public should enjoy a liberty properly suspended for the privilege of publishers - unless the publisher gives them permission BEFOREHAND!

The public is a beneficiary of copyright and yet hoist by the very same petard.



My apologies for being vague. We learn early and ...

2007-10-23T12:38:00.000-04:00

My apologies for being vague.

We learn early and often that the beneficiary of the patent and copyright systems is the public. This line of thinking seems to stem from the express wording of the IP clause.

The beneficiary of criminal law, too, is the public. In criminal law, the state prosecutes violations on behalf of all. While a decision to prosecute may often come down to whether a private citizen desires to "press charges," this is not necessary.

In copyright, we allow copyright owners to prosecute civil actions to protect the integrity of the system for the benefit of the public. The copyright owners are in a better position to notice infringement, and have a larger incentive to vigorously enforce and protect their copyrights.

The answer to my hypothetical question is "no." The infringer could not get his conviction thrown out because he committed the crime. A grant of forgiveness by the copyright holder will not extinguish the infringer's criminal culpability. In this context, the astounding fictional nature of the "retroactive license" is on full display. Saying a license is retroactive is just a tidy way to say that claims for past infringement are released, and a prospective license is being granted as well. It does not change the fact that the infringer committed a willful and bad act.

Letting a willful infringer off the hook simply because one co-owner is willing to grant a retroactive license flies in the face of these concepts. Statutory damages are provided for in copyright law for two reasons. One is that actual damages may be hard to calculate. The other is that limiting actions to actual damages would make the lawsuits not worth filing in many instances, and so would insufficiently deter infringement. The legislative history of the amendments increasing the statutory damages talk repeatedly about deterrence and punishment. "As the court considers just" is a clear instruction to weigh culpability, and 504(c)(2) reads like a sentencing guideline. Statutory damages clearly have a punitive element intended to punish the infringer's bad acts against society, not simply the copyright owner.

As long as one co-owner is willing to maintain a suit against a willful infringer, and seek punishment against that infringer on behalf of all of us, it is unconscionable to let the unilateral actions of another co-owner defeat the claim. The legal fiction of a "retroactive license" does not erase from history the willful and bad acts which our society seeks to punish and deter.



Bruce, I don't understand the punitive part of you...

2007-10-22T20:17:00.000-04:00

Bruce, I don't understand the punitive part of your comment. As to the retroactive license and its effect on the criminal sentence, I would have to defer to a specialist in criminal law, but it sounds like a great hypo.



Hypothetical:Infringer is criminally convicted und...

2007-10-22T19:41:00.000-04:00

Hypothetical:

Infringer is criminally convicted under 18 U.S.C. 2319. Improbably, he's sentenced to a year in prison.

The copyright owner then grants the infringer a "retroactive license." Does the infringer still have to serve his prison sentence, or can he get his conviction tossed out? After all, he didn't do anything wrong!

Now think about whether the statutory range of damages has a punitive component...




2007-10-17T12:29:00.000-04:00

This comment has been removed by the author.



Lawrun, the difference is this. There is no differ...

2007-10-10T14:34:00.000-04:00

Lawrun, the difference is this.

There is no difference between an exclusive license and an assignment of an exclusive right, or a transfer of copyright. The court held, I think, that one cannot exclusively license, a/k/a assign, a/k/a assign your proportional share of the copyright in the work although it is hard to tell how far the court meant to go because it is so poorly written and organized.

What I was saying in the earlier post you quote is that while you can exclusively license, a/k/a assign, a/k/a assign your proportional share, you cannot exclusively license, a/k/a assign, a/k/a assign the whole of the work because that would involve an impermissible effort to sell others' shares too.



Ignoring the whole mess regarding retroactive tran...

2007-10-10T14:11:00.000-04:00

Ignoring the whole mess regarding retroactive transfers for a moment, I'd like to touch on what you said regarding the grant of exclusive licenses by co-owners.


The italicized section expressly contemplates that there will be multiple owners of exclusive rights, and is not limited to copyright in works authored by a single author. A co-author who transfers his or her proportional interest is merely transferring his or right “to the extent of that right.” ...

The court’s failure is to understand the statute is profound and will have profoundly negative consequences: no business can now purchase rights to a work unless it gets an assignment from all authors ...


How is the court's opinion any different than what's already recognized? In this case, the co-owner (Chambliss) assigned an exclusive license to the defendant , and that's precisely what the court said was a no-no. Unless I'm fundamentally misreading the case, how is this any different than what you said here (http://williampatry.blogspot.com/2006/03/joint-authorship-problems.html):

"A joint author may sell its proportional interest without the permission of the others, but cannot engage, solo, in exclusive licensing (which is the same thing as an assignment of the right licensed)."

How is that any different than what the court concluded?



I'll have to sleep on that one.

2007-10-09T20:49:00.000-04:00

I'll have to sleep on that one.



The profit accounting bit raises some interesting ...

2007-10-09T20:43:00.000-04:00

The profit accounting bit raises some interesting possibilities.

Suppose I am a joint author in a work and the other author grants a license for 'free' in return for the beautiful women who is the licensee sleeping with him. Further suppose there is ample evidence that she only slept with him to get the license and that he was unwilling to transfer the license without the lure of sexual services.

Would the accounting of profits issue force the courts to put a monetary value on sleeping with the woman in question? Would experts on the woman's beauty and the going market rate for prostitution end up being called?

Anyway I suppose this consideration applies to a lot more than copyright law but I'm just wondering if these non-monetary compensations would have to be monetized by the court.



Thanks for the analysis. I had the opinion queued...

2007-10-08T16:53:00.000-04:00

Thanks for the analysis. I had the opinion queued up for later examination; it looked quite odd on a first read. The signed writing/exclusivity part is quite interesting; I hadn't considered this before, but it seems under the proper reading of the statute the first coauthor to jump can, in an industry that requires exclusive licensing, disable other coauthors from licensing to someone else ... except that if the industry really did require exclusive licensing, then the consent of one coauthor wouldn't be sufficient in the first place; this is only useful if there has been some mistake (or wrongdoing) and the agreement is by way of settlement. The first-acting coauthor can constrain the other coauthors with exclusive licensing of her share of the rights; but it was always true that the first-acting coauthor could constrain the other coauthors.

The question of whether a coauthor has a duty not to waste the copyright often comes up in my classes. (See Wilchcombe v. Teevee Toons, Inc., 2007 U.S. Dist. LEXIS 6205 (N.D. Ga. Jan. 26, 2007) for a potential example.) I can see reasons to imply such a duty, but it need not restrain the coauthor from making a good exclusive deal.



Vincent, amen!

2007-10-08T15:23:00.000-04:00

Vincent, amen!



I nominate the Blige decision for the Copyright Ha...

2007-10-08T15:19:00.000-04:00

I nominate the Blige decision for the Copyright Hall of Shame where it can lounge about with:

Rano v. Sipa Press, 987 F.2d 580 (9th Cir. 1993);

Gardner v. Nike, 279 F.3d 774 (9th Cir. 2002).

Other nominations are welcome.

Seriously, if the Blige decision isn't withdrawn or modified, its mischief will be far-reaching. Co-authors (and successors of co-authors) often have different attitudes toward exploitation of the work. If unanimity is now required, and prospectivity is mandatory, the universe of works that can be licensed has just contracted. This is the antithesis of the goal of copyright law.



One thing that bothers me about the 2d Circuit opi...

2007-10-08T13:59:00.000-04:00

One thing that bothers me about the 2d Circuit opinion is its poor organization, reflective of the low standard of writing in the law. Bluntly, the opinion would have been much better grounded had it inverted its argument:

(1) "Retroactive" (and the quotes are there for a reason: they reflect the reality that these are not arms-length bargains between parties with relatively equal power and information) transfers under the Copyright Act — even when purportedly confirming a prior oral transfer — are disfavored, particularly in the face of a claim, as an improper means of evading the "signed writing" requirement.

(2) Even if retroactive transfers did not implicate critical Copyright Act concerns, general principles of tort and contract law would disfavor this particular transfer's validity.

I'm not saying that I entirely agree with point 1 above, but if it had been point 1 of the opinion instead of the alternate ground, I think the actual issues involved could have been both more readily understood and accepted... and any exploration of them could have been better subjected to second-guessing from those of us who have not seen all of the discovery in the matter.

All of that said, I think the real problem is that the court reached a possibly defensible result in this matter (again, depending upon what was actually in the discovery) that was not properly considered when the 1976 Act was drafted... an analog of the Morris problem. (I still disagree that a certificate of registration is a jurisdictional element: It is better treated as an element of the plaintiff's case, based on recent SCt jurisprudence on the reach of "jurisdictional element." That's for another time, though.) The reality is that the statute was written without much, if any, persuasive input from the actual creators of copyrightable material; instead, the middlemen got to speak, and that has resulted in lacunae like this one.

Bad writing trumps bad law most of the time, and this is just another example.



Hi Peter H. My view is no, there is no duty to max...

2007-10-08T13:31:00.000-04:00

Hi Peter H. My view is no, there is no duty to maximize profits or conversely to avoid waste. This opinion doesn't reach these issues but I think it comes very close to providing arguments there are such obligations.



I can't argue with your legal reasoning about this...

2007-10-08T13:16:00.000-04:00

I can't argue with your legal reasoning about this case, and am at a loss as to understanding how the court could have so badly misread the statute.

There is one thing about joint authors I have never understood, however. You write, "Plaintiff was not left out in the cold, however, because she still had a right to an accounting of the profits from the licenses Miller entered into." But what if Miller had granted non-exclusive licenses for free? No profits, nothing to account for - and the other co-owners are left out in the cold.

Does the responsibility to account for profits also entail a responsibility to maximize profits for the other co-owners?