Case 1:15-cv-00419-WES-PAS Document 240 Filed 01/25/19 Page 1 of 25 PageID #: 8325
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`C.A. No. 15-419 WES
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF RHODE ISLAND
`_______________________________________
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`MARKHAM CONCEPTS, INC.; SUSAN GARRETSON;)
`and LORRAINE MARKHAM, individually and )
`in her capacity as trustee of the Bill )
`and Lorraine Markham Exemption Trust )
`and the Lorraine Markham Family Trust, )
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`Plaintiffs,
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`v.
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`HASBRO, INC.; REUBEN KLAMER; DAWN
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`LINKLETTER GRIFFIN; SHARON LINKLETTER; )
`MICHAEL LINKLETTER; LAURA LINKLETTER )
`RICH; DENNIS LINKLETTER; THOMAS FEIMAN, )
`in his capacity as co-trustee of the )
`Irvin S. and Ida Mae Atkins Family
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`Trust; ROBERT MILLER, in his capacity )
`as co-trustee of the Irvin S. and Ida )
`Mae Atkins Family Trust; and MAX
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`CANDIOTTY, in his capacity as
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`co-trustee of the Irvin S. and Ida Mae )
`Atkins Family Trust,
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`Defendants.
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`_______________________________________ )
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`FINDINGS OF FACT AND CONCLUSIONS OF LAW
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`WILLIAM E. SMITH, Chief Judge.
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`To people of a certain age, who grew up in the America of the
`1960s and 70s — where television meant three channels and shows
`like Bonanza, Star Trek, and The Art Linkletter Show (more on that
`to come); where cars were made in America, period; and where phones
`were connected to wires, not cell towers — the Game of Life was a
`gangbuster hit found (it seemed) in every household in the country,
`alongside Twister, Clue, and Monopoly. In the Game of Life, the
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`C.A. No. 15-419 WES
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF RHODE ISLAND
`_______________________________________
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`MARKHAM CONCEPTS, INC.; SUSAN GARRETSON;)
`and LORRAINE MARKHAM, individually and )
`in her capacity as trustee of the Bill )
`and Lorraine Markham Exemption Trust )
`and the Lorraine Markham Family Trust, )
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`Plaintiffs,
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`v.
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`HASBRO, INC.; REUBEN KLAMER; DAWN
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`LINKLETTER GRIFFIN; SHARON LINKLETTER; )
`MICHAEL LINKLETTER; LAURA LINKLETTER )
`RICH; DENNIS LINKLETTER; THOMAS FEIMAN, )
`in his capacity as co-trustee of the )
`Irvin S. and Ida Mae Atkins Family
`)
`Trust; ROBERT MILLER, in his capacity )
`as co-trustee of the Irvin S. and Ida )
`Mae Atkins Family Trust; and MAX
`)
`CANDIOTTY, in his capacity as
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`co-trustee of the Irvin S. and Ida Mae )
`Atkins Family Trust,
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`Defendants.
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`_______________________________________ )
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`FINDINGS OF FACT AND CONCLUSIONS OF LAW
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`WILLIAM E. SMITH, Chief Judge.
`
`To people of a certain age, who grew up in the America of the
`1960s and 70s — where television meant three channels and shows
`like Bonanza, Star Trek, and The Art Linkletter Show (more on that
`to come); where cars were made in America, period; and where phones
`were connected to wires, not cell towers — the Game of Life was a
`gangbuster hit found (it seemed) in every household in the country,
`alongside Twister, Clue, and Monopoly. In the Game of Life, the
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`Case 1:15-cv-00419-WES-PAS Document 240 Filed 01/25/19 Page 2 of 25 PageID #: 8326
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`winner retires to “Millionaire Acres.” In this suit, life imitates
`art as the heirs of toy developer Bill Markham have sued over what
`they see as proceeds from the exploitation of the Game that they
`have been wrongfully denied.
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`The Game of Life was inspired by the first boardgame invented
`by Milton Bradley himself, in 1860, called the Checkered Game of
`Life. It sold millions of copies after hitting the market in 1960,
`and continues to sell to this day. Based on the idea that “life’s
`a game that can be played well, or badly,” historian Jill Lepore
`writes in The New Yorker, “[o]nly a handful of games have had as
`long a shelf life.” Jill Lepore, The Meaning of Life, The New
`Yorker, May 21, 2007, at 38, 39. This case, filed in 2015, has
`had a shelf life of its own. But after two amendments to the
`complaint and considerable motion practice, the parties tried to
`the Court (in Los Angeles1 and Rhode Island) Plaintiffs’ third
`claim for relief, which asks for a declaratory judgment that
`Markham’s heirs control the Game’s intellectual property.
`Specifically, Plaintiffs ask the Court to find that they have
`termination rights under section 304 of the Copyright Act of 1976.
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`With these, Plaintiffs would be able to acquire the copyrights
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`1 Through the courtesy of the United States District Court
`for the Central District of California, this Court was able to
`hear live testimony from critical witnesses who, because of their
`age, could not travel to Rhode Island. The Court is most grateful
`to those who worked to make this possible.
`2
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`to the Game that were long ago transferred to Defendant Hasbro,
`Inc.,’s predecessor-in-interest, the Milton Bradley Company.
`Plaintiffs lose this turn, however: the facts found below show
`that the physical creation of the Game’s prototype was done by
`Markham’s erstwhile employees — Grace Chambers and Leonard Israel
`— as well as Markham’s wife, Sue, and unnamed parties hired by
`Markham to furnish finishing touches. They also show that this
`work was done at the instance and expense of Defendant and toy
`developer Reuben Klamer.
`I. Findings of Fact
`The series of events leading to the Game2 hitting the market
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`in 1960 began a year earlier. See, e.g., Exs. JTX 9, JTX 11, JTX
`12. In 1959, a Reuben Klamer traveled from his home in Beverly
`Hills, California, to Milton Bradley’s headquarters in
`Springfield, Massachusetts. Ex. JTX 9; Nov. 16, 2017, Trial Tr.
`(“Trial Tr. I”) 23–26. Klamer was a toy developer with myriad
`contacts in the industry, and had come to pitch Milton Bradley
`executives a concept for a new toy. See Trial Tr. I 18–26.
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`Milton Bradley passed on the pitch. Id. at 25. But the
`company’s president at the time, Jim Shay, asked Klamer to develop
`a product idea to commemorate Milton Bradley’s 1960 centennial.
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`2 When the Court refers to the “Game” or the “prototype”
`without specifying any of their composite parts (the box cover,
`board, rules, etc.), it means to refer to these in their entirety.
`3
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`Id. at 23; Ex. JTX 9. Intrigued, Klamer agreed to do so and went
`searching for inspiration in Milton Bradley’s archive, where he
`stumbled upon an old copy of the Checkered Game of Life, see Ex.
`JTX 9, Trial Tr. I 23, which had been invented by the company’s
`namesake just before the Civil War to “forcibly impress upon the
`minds of youth the great moral principles of virtue and vice,”
`Lepore, supra, at 41. The concept Klamer developed on the trip
`back home to California was to update the Checkered Game of Life
`to reflect post-World War II American society and values.3 See
`Trial Tr. I 25–27; Exs. JTX 10., PTX 20, PTX 275.
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`But Klamer was mostly an ideas man — he needed help refining
`his concept and, importantly, translating it into a prototype he
`could actually sell to Milton Bradley. See Trial Tr. I 28–31, 64;
`Ex. JTX 10. For this he reached out to one of his toy-industry
`contacts, Bill Markham. Trial Tr. I 28–33. An experienced
`advertiser, Markham was head of a firm set to that purpose named
`California Product Development (“CPD”). See JTX 2; Trial Tr. I
`112; Nov. 17, 2017, Trial Tr. (“Trial Tr. II”) 64. CPD employed
`two artists at the time, Grace Chambers and Leonard Israel, who
`were very good in Klamer’s estimation, and whose presence at CPD
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`3 Klamer testified that he had scribbled some of the thoughts
`he had on the plane ride from Massachusetts to California. These
`notes were admitted into evidence, and reflect many of the
`attributes that eventually found their way into the Game. Ex. JTX
`10; Trial Tr. I 27–31.
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`convinced Klamer to hire Markham’s firm over others he considered.
`Trial Tr. I 28–31. Chambers had received her training from the
`Art Center College of Design in Los Angeles, Trial Tr. II 60;
`Israel his from the Chicago Art Institute, Trial Tr. I 100.
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`Markham agreed to take on the project in the summer of 1959.
`See Trial Tr. I 29–33. With little time to waste — Milton Bradley
`wanted the product ready for market by January 1, 1960, see id. at
`55 — Markham and his team went to work, see id. at 34–35. As to
`who did what during the approximately six weeks it took to produce
`the prototype, the Court credits especially the testimony of
`Chambers and Israel, which the Court heard live in Los Angeles.4
`See generally Trial Tr. II 58–111 (Chambers); Trial Tr. I 99–136
`(Israel). Neither has received a cent in royalties from the Game,
`nor have they any financial interest in the outcome of this suit.
`See Trial Tr. I 108–09; Trial Tr. II 58, 80. The testimony each
`gave was largely consistent with that of the other. See generally
`Trial Tr. II 58–111; Trial Tr. I 99–136. Both, moreover, had only
`good things to say about their time working for Markham at CPD and
`with Klamer on the project. See Trial Tr. I 101; Trial Tr. II 65–
`66.
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`4 Klamer also testified to these events. See Trial Tr. I 36–
`37. And although he, as a successor to the now-defunct Link
`Research Corporation, see Ex. JTX 569, has a financial interest in
`this suit, the Court found his testimony credible, and largely
`corroborative of Chambers’s and Israel’s.
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`They testified that labor was divided: Klamer and Markham
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`combined to provide the big ideas, many ahead of their time. See
`Trial Tr. I 34, 103, 107–08, 127; Trial Tr. II 67–71, 75; see also
`Ex. JTX 25. These included that the Game would be played on a
`circuitous path; the Game’s board would contain three-dimensional
`elements; the Game’s object would be to achieve various life
`milestones; and a spinner would dictate movement of the Game’s
`players. See Trial Tr. I 107, 126–29; Trial Tr. II 68–71; Ex. JTX
`25. Klamer also visited Markham’s firm once or twice a week during
`development to give real-time edits to Chambers and Israel while
`they worked — the former on the game board, the latter on the box
`cover — to produce a physical instantiation of Klamer’s and
`Markham’s ideas. Trial Tr. I 103–04, 106–08, 129, 130–33; Trial
`Tr. II 71–78.
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`Chambers and Israel both testified that they — not Markham or
`Klamer — were the ones at CPD who built the prototype. Trial Tr.
`I 103–04, 106–07, 130–33; Trial Tr. II 71–78. Asked who
`constructed the prototype’s game board, Chambers said that she did
`“most of it.” Trial Tr. II 72. Israel went further, testifying
`that “once it was decided what we wanted to have on the board,
`[Chambers] was the one who put it all together and did the final
`art work on it.” Trial Tr. I 106. Chambers was the one who built
`the houses, the mountains, and the elevated track out of balsa
`wood, cardboard, and colored pantone paper. Trial Tr. II 99–103.
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`Chambers also placed the printing on the track and constructed a
`cardboard spinner. See id. at 101, 132–33. Some of these objects,
`such as the spinner and the mountains, were later converted to the
`plastic replicas used for the prototype by an outside firm Markham
`hired for that purpose. See Trial Tr. I 121–22; Trial Tr. II 103–
`04; Ex. JTX 13. An outside firm also bound the game board and
`printed the play money that was part of the prototype. See Trial
`Tr. II 106–07; Ex. JTX 13.
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`The art for the prototype’s box cover was Israel’s handiwork,
`according to both his and Chambers’s testimony. Trial Tr. I 103–
`04, 110–11; Trial Tr. II 72, 74. Israel created several small-
`scale sketches as possibilities for the box cover, from which
`Markham and Klamer selected the one they preferred. Trial Tr. I
`103. The favored design was then made by Chambers into a box cover
`of proper scale. Id. at 134. As with the board, Markham had
`“nothing to do” with the physical creation of the box cover. Id.
`at 107. Indeed, it was the testimony of both Israel and Chambers
`that Markham was often attending to other matters at CPD during
`the time the prototype was taking physical form. Id. at 116; Trial
`Tr. II 73–74.
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`The third major component to the prototype besides the board
`and the box — the rules — were a collective, iterative effort.
`Trial Tr. I 105–06, 116–18; Trial Tr. II 76–77, 105. Once the
`Game was operational, everyone in and around the CPD offices at
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`the time — Markham, Klamer, Chambers, and Israel — would play it,
`and then throw out suggested rule changes for the group to
`consider. Trial Tr. I 105–06, 118–19, 128; Trial Tr. II 76–77,
`105. Some of these were tried and, because of some unforeseen
`disruptive effect on another rule, discarded. Trial Tr. I 105–
`06. Some, however, were ultimately adopted, then copied by Sue
`Markham (Bill’s wife, and a copywriter by profession) into the
`prototype’s rule book. Trial Tr. I 105–06, 116–18, 128; Trial Tr.
`II 105.
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`Once completed, Markham and Klamer presented the prototype to
`Milton Bradley executives, including its vice president, Mel Taft,
`on or around August 10, 1959, at the famous Chasen’s restaurant in
`Hollywood, California. See Trial Tr. I 38–39, 65–68, 86; Exs. JTX
`25, JTX 29. Also at Chasen’s was radio and television personality
`Art Linkletter. See Trial Tr. I 33, 39; Exs. JTX 25, JTX 29. He
`was there on behalf of Link Research Corporation (“Link”), the
`firm Linkletter had founded with Klamer to develop consumer
`products that could be marketed using Linkletter’s considerable
`celebrity. See Trial Tr. I 20, 33; Exs. JTX 29, JTX 34, JTX 39,
`JTX 42. Part of Klamer’s pitch to Milton Bradley at the Chasen’s
`meeting was that Linkletter could help promote the Game. See Trial
`Tr. I 38–39; Exs. JTX 11, JTX 12. The pitch worked: Taft and
`Shea were impressed by the prototype, and left the restaurant
`thinking that with some tweaks it could be a commercial success.
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`See Exs. JTX 18, JTX 19, JTX 20, JTX 21, JTX 25, JTX 33; Trial Tr.
`I 40–41. Soon thereafter, on August 19, Klamer mailed the
`prototype to Milton Bradley. Ex. JTX 12; Trial Tr. I 96.
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`Two agreements regarding rights to the Game followed. See
`Exs. JTX 1, JTX 2. The first, entered on September 21, 1959, was
`a License Agreement between Link and Milton Bradley. Ex. JTX 1.
`This agreement gave Milton Bradley the exclusive right to
`manufacture and market the Game, which Link “had . . . designed
`and constructed.” Id. The License Agreement also allowed Milton
`Bradley to use Linkletter’s name and image in its advertising of
`the Game, and required Linkletter to plug the Game fifty-two times
`on his nationally televised show. Id. In return, Link received
`a six percent royalty on sales of the Game and an immediate, non-
`refundable $5,000 advance against these royalties. Id. Absent
`termination or breach, the Agreement was to last as long as Milton
`Bradley marketed the Game. Id.
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`The second agreement, the Assignment Agreement, was one
`between Link and Markham. Ex. JTX 2. Executed October 20, 1959,
`this agreement assigned “all of [Markham’s] right, title, and
`interest in and to the Game[] to Link.” Id. Markham received the
`right to a royalty stream amounting to thirty percent of the six
`percent royalty Link had negotiated with Milton Bradley in their
`License Agreement. Id. Along with a nonrefundable $773.05 advance
`on Markham’s thirty percent, Link agreed to pay Markham the
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`$2,423.16 he spent producing the prototype, id., for which he had
`billed Link, and which included Chambers’s and Israel’s salary,
`see Ex. JTX 13. Klamer paid Markham’s bill — a bill he had promised
`would be his responsibility at the outset of the project, Trial
`Tr. I 41–42, 57–58; Trial Tr. II 49 — out of the aforementioned
`$5,000 royalty advance Link secured from Milton Bradley. Ex. JTX
`2. The Assignment Agreement stated that Markham had “invented,
`designed[,] and developed” the Game. Id. It also provided that
`Milton Bradley would communicate to Markham any contemplated
`changes to the Game, allowing Markham to share his thoughts on
`these with Milton Bradley. Id. “[T]he final decision regarding
`such changes,” however, was to “rest with either LINK or [Milton
`Bradley].” Id.
`contractual
`these
`out
`hammered
`parties
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`While
`the
`arrangements, Milton Bradley was at work turning the prototype
`into a commercially viable boardgame. Trial Tr. I 45–50; see also
`Exs. JTX 18, JTX 20, JTX 21, JTX 25, JTX 26, JTX 33, JTX 40, JTX
`43. Both Markham and Klamer helped advise the company as to how
`best to carry out this transformation. See Exs. JTX 26, JTX 27,
`JTX, 28, JTX 33, JTX 35, JTX 36. Comparing early versions of the
`Game with the prototype shows a host of changes made — many with
`a view toward making the Game less expensive to manufacture, but
`that nevertheless altered its aesthetics. Compare Ex. JTX 509,
`with Ex. HTX 14; see also Trial Tr. I 45–50. For instance, the
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`early versions had the raised mountains directly on the Game’s
`circuitous track, whereas the prototype had them as background
`scenery surrounding the track. Compare Ex. JTX 509, with Ex. HTX
`14; see also Trial Tr. I 45–50. Moreover, the board in the early
`versions had fewer, and smaller, three-dimensional elements than
`the prototype. Compare Ex. JTX 509, with Ex. HTX 14; see also
`Trial Tr. I 45–50. Milton Bradley also changed the font on the
`Game’s box cover to make it more visually appealing, and varied
`the wording and order of certain of the Game’s rules to make them
`more intelligible. Compare Ex. JTX 509, with Ex. HTX 14.
`
`Milton Bradley first published the Game on March 12, 1960.
`Exs. JTX 3, JTX 4, JTX 5; Trial Tr. I 58. Later that year, on
`December 19, 1960, Milton Bradley applied to register copyrights
`in the Game’s board and rules. Exs. JTX 4, JTX 5. These identified
`the company as the author. Exs. JTX 4, JTX 5. Milton Bradley was
`also noted as the author of the Game’s box in a copyright
`application submitted the same day by Link. Ex. JTX 3. The Game,
`an instant classic, sold like crazy, and is still a source of
`revenue for Milton Bradley’s successor-in-interest Hasbro, as the
`latter continues to market the original version of the Game, Ex.
`JTX 520, as well as updated versions incorporating various themes
`and characters, such as one recent rendition introduced at trial
`that included intellectual property from the popular Despicable Me
`children’s movie franchise, Ex. JTX 511.
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`The ensuing “Pay Day!” has sometimes been the cause of
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`consternation, however. Even before the Game hit stores, there
`was a struggle, mostly on Markham’s part, to take credit for its
`genius. Trial Tr. I 54–56; see Exs. JTX 2, JTX 16, JTX 32. A
`provision in the Assignment Agreement, for example, required Link
`to ask Milton Bradley if Markham’s name could appear on the Game’s
`box cover. Ex. JTX 2. Klamer fulfilled this requirement on behalf
`of Link. Ex. JTX 16. But Milton Bradley kindly declined the
`request. Ex. JTX 32.
`
`Then, in 1965, Markham came upon what he considered a false
`statement in the trade publication Toy & Hobby World, identifying
`Klamer as the designer of the Game. Exs. PTX 20, PTX 87. He
`responded with a brusque letter to Klamer. Ex. PTX 20. “I am
`sure you are not so in need of recognition that you take credit
`for something in which your only connection was to sell it to
`Milton Bradley,” he wrote. Id. Markham sought to correct the
`alleged misattribution — which he found “very damaging to [his]
`reputation” — by asking Klamer that he prepare a letter recognizing
`Markham as the “sole inventor, designer and developer” of the Game.
`Id. Markham would append this letter to the press release
`correcting the error that he was preparing for publication. Id.
`
`Klamer responded that he was “puzzled” by Markham’s letter,
`and pushed back on Markham’s suggestion that Klamer’s only role in
`what had already become a “great success” was selling the Game to
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`Milton Bradley. Id. Disinclined to upset the applecart, however,
`Klamer grudgingly acceded to Markham’s demand for recognition,
`writing that the Assignment Agreement obligated Klamer to agree
`that Markham invented the Game. Id. Going forward, Klamer went
`out of his way to prevent any publicity that would similarly offend
`Markham. See, e.g., Ex. PTX 20. For instance, Klamer preemptively
`wrote a publication called The Westerner to warn that they not
`associate him with the Game in a forthcoming article. Id.
`“Although I know what my contribution was in the project,” Klamer
`wrote, “I want to eliminate any hassle with this particular
`individual . . . .” Id.
`
`Markham and Klamer fought not just over the limelight, but
`over money too. In a letter to Klamer dated August 15, 1963,
`Markham complained that the Assignment Agreement had been a raw
`deal, grumbling that his share of the royalties was “ridiculously
`low” and that Art Linkletter had done little to promote the Game
`on television. Ex. PTX 21. Markham, feeling slighted, asked that
`he receive fifty percent of the three percent royalty Milton
`Bradley was then offering Link on sales of the Game overseas,
`instead of the thirty percent of Link’s share he had been receiving
`under the Assignment Agreement. Id.
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`Klamer waited until October 3, 1963, to respond, explaining
`his delay as follows: “Someone whom I respected very much told me
`to count to twenty-five, not just to ten, when I got annoyed about
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`a situation.” Id. Setting the pattern he would follow in his
`later skirmishes with Markham over public recognition, Klamer
`noted his disagreement with Markham’s version of history, before
`caving to Markham’s demands. Id. That is to say, Klamer agreed
`to hand over fifty percent of the royalty Link received on foreign
`sales, but stated his belief that this was more than Markham was
`due under the Assignment Agreement, which, contrary to Markham’s
`laments, “was and is a fair one.” Id. Klamer also came to
`Linkletter’s defense, asserting that Milton Bradley was more than
`satisfied with Linkletter’s promotion of the Game, and indeed “was
`highly impressed with the TV commercial which Art did on the Game.”
`Id.
`
`An exchange of passive-aggressive letters was not enough to
`settle the next royalty dispute. Again having to do with Markham’s
`share of foreign royalties, this skirmish led to Markham and Klamer
`suing each other in California state court in the late 1980s. See
`Ex. HTX 111. The litigation ended on July 9, 1989, when the
`parties signed a handwritten settlement agreement. Ex. JTX 58.
`Among other things, the agreement set Markham’s share of overseas
`sales at 36.66 percent of Link’s foreign royalties, while keeping
`his share of U.S. sales at thirty percent of Link’s domestic
`royalties, as stipulated in the Assignment Agreement. Id. The
`parties styled the Settlement Agreement as an amendment to the
`Assignment Agreement, which they agreed in 1989 they “continue[d]
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`Case 1:15-cv-00419-WES-PAS Document 240 Filed 01/25/19 Page 15 of 25 PageID #: 8339
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`to be governed by.” Id.
`
`The present litigation is an attempt by Markham’s successors
`in interest — Markham passed away in 1993, see Ex. PTX 218 — to
`put an end to government by Assignment Agreement. See Third Am.
`Compl. ¶¶ 77–82. These Plaintiffs insist that their right to do
`so lies in section 304 of the Copyright Act of 1976.
`II. Conclusions of Law
`
`Plaintiffs are, however, mistaken in their insistence: the
`facts as found above show that this case fits squarely within the
`work-for-hire exception to the termination right granted authors
`in section 304.
`
`The Copyright Act of 1976 provides a work’s author the right
`to terminate a previously bestowed grant of copyright in that work.
`17 U.S.C. § 304(c). The idea behind this right is to give an
`author a second chance to negotiate the rights to her work when —
`after it has been exploited during the term of an initial grant —
`she can better gauge the work’s value. Mills Music, Inc. v.
`Snyder, 469 U.S. 153, 172–73 (1985). Termination rights are
`especially important when hindsight shows the author made a bad
`deal the first time around. Id.; see 3 Melville B. Nimmer & David
`
`Nimmer, Nimmer on Copyright § 11.01[A] (Matthew Bender rev. ed.).
`
`these
`in
`fairness
`achieve
`to
`necessary
`Although
`
`circumstances, termination rights are not without various
`qualifications, Nimmer & Nimmer, supra, § 11.02, one of which —
`15
`
`
`
`
`
`Case 1:15-cv-00419-WES-PAS Document 240 Filed 01/25/19 Page 16 of 25 PageID #: 8340
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`that excepting works for hire, 17 U.S.C. § 304(c) — determines
`this case. Section 304(c) states, in relevant part, that “[i]n
`the case of any copyright subsisting in either its first or renewal
`term on January 1, 1978, other than a work made for hire, the
`. . . grant of a transfer . . . of the renewal copyright, executed
`before January 1, 1978, . . . is subject to termination . . . .”
`17 U.S.C. § 304(c) (emphasis added). The rule, then, is that
`copyrights granted prior to January 1, 1978, are subject to
`termination, but not if the copyright is one in a work for hire.
`See Nimmer & Nimmer, supra, § 11.02 (“[The 1976 Act] moves in
`categorical fashion, disallowing all works for hire from
`termination.”).
`
`What counts as a work for hire depends on when the work was
`created. See Martha Graham Sch. & Dance Found., Inc. v. Martha
`Graham Ctr. of Contemporary Dance, Inc., 380 F.3d 624, 633–34 (2d
`Cir. 2004); Forward v. Thorogood, 985 F.2d 604, 606 n.2 (1st Cir.
`1993). Works created on or after the effective date of the 1976
`Act (January 1, 1978) have their work-for-hire status determined
`according to the statutory definition given in the 1976 Act. See
`17 U.S.C. § 101. However, for works created before that date,
`this status is determined under the Copyright Act of 1909,
`predecessor to the 1976 Act, which contained the concept, but
`lacked a statutory definition, of a work for hire See 17 U.S.C.
`§ 26 (repealed 1978) (“[T]he word ‘author’ shall include an
`
`
`
`16
`
`
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`Case 1:15-cv-00419-WES-PAS Document 240 Filed 01/25/19 Page 17 of 25 PageID #: 8341
`
`employer in the case of works made for hire.”); Forward, 985 F.2d
`at 606 n.2. Without definitional guidance from the statute, courts
`have had the task of tracing the term’s 1909 Act contours. Cmty.
`for Creative Non-Violence v. Reid, 490 U.S. 730, 744 (1989).
`
`The First Circuit’s efforts in this regard led it to adopt a
`definition of the term that tracks the instance-and-expense test.
`Forward, 985 F.2d at 606 & n.2. Borrowed from the Second and Ninth
`Circuits, this test has it that the presumptive “‘author’ and
`copyright holder of . . . [a] commissioned work[] created by
`independent contractors” is “the commissioning party at whose
`‘instance and expense’ the work was done.” Id. at 606 (citing
`Brattleboro Publ’g Co. v. Winmill Publ’g Corp., 369 F.2d 565, 567–
`68 (2d Cir. 1966)); see also Lin–Brook Builders Hardware v.
`Gertler, 352 F.2d 298, 300 (9th Cir. 1965) (adopting instance-and-
`expense test).
`
`In Forward, the First Circuit held that demo tapes with music
`from the blues band George Thorogood and the Destroyers were not
`works for hire where there was no evidence they were “prepared for
`the use and benefit of” plaintiff music aficionado, who had
`arranged for the band to record the tapes. Forward, 985 F.2d at
`604–06. Instead, the tapes had been recorded for the purpose of
`enticing a record company to sign the band to a record deal. Id.
`at 606. Moreover, the aficionado, as the alleged commissioning
`party, “neither employed nor commissioned the band members nor did
`
`
`
`17
`
`
`
`Case 1:15-cv-00419-WES-PAS Document 240 Filed 01/25/19 Page 18 of 25 PageID #: 8342
`
`he compensate or agree to compensate them.” Id. Because the tapes
`were not produced at plaintiff’s instance and expense, the First
`Circuit ruled, he was not their author under the 1909 Act. Id.
`
`In this case, though, the work at issue was “prepared for the
`use and benefit” of, and paid for by, a commissioning party, namely
`Reuben Klamer. See id. That is to say, the Game’s prototype was
`produced at his instance and expense. Instance here “refers to
`the extent to which the hiring party provided the impetus for,
`participated in, or had the power to supervise the creation of the
`work.” Marvel Characters, Inc. v. Kirby, 726 F.3d 119, 139 (2d
`Cir. 2013). And it was Klamer who provided the impetus for the
`prototype’s creation when, after visiting the archives at Milton
`Bradley, he selected Markham’s company to help him make the
`prototype. Ex. JTX 9; Trial Tr. I 23–26, 28–33; see Twentieth
`Century Fox Film Corp. v. Entertainment Distrib., 429 F.3d 869,
`879 (9th Cir. 2005) (describing “the ‘instance’ test as an inquiry
`into whether the motivating factor in producing the work was the
`employer who induced the creation” (quotation marks omitted)).
`This selection is the sole reason for Markham’s involvement, and
`spurred everything that came after: the fast work of everyone at
`CPD to bring the prototype into existence, Trial Tr. I 99–136;
`Trial Tr. II 58–111; the presentation of the prototype to Milton
`Bradley executives at Chasen’s restaurant, Trial Tr. I 38–39; Exs.
`JTX 25, JTX 29; and ultimately the manufacture and sale of the
`
`
`
`18
`
`
`
`Case 1:15-cv-00419-WES-PAS Document 240 Filed 01/25/19 Page 19 of 25 PageID #: 8343
`
`Game, Exs. JTX 12, JTX 18, JTX 19, JTX 20, JTX 21, JTX 25, JTX 33.
`
`Klamer had the power to supervise the prototype’s creation.
`See Twentieth Century Fox, 429 F.3d at 879 (“The ‘instance’ test
`is shaped in part by the degree to which the hiring party had the
`right to control or supervise the artist’s work.” (quotation marks
`omitted)); Martha Graham, 380 F.3d at 635. Both Chambers and
`Israel testified to Klamer’s frequent presence at CPD while they
`worked on the prototype. Trial Tr. I 106–08; Trial Tr. II 73.
`They considered Klamer the client for the project, and one whose
`suggestions for changes they were expected to, and did, implement.
`Trial Tr. I 103–04, 106–07, 130–33; Trial Tr. II 71–78; see Marvel,
`726 F.3d at 139 (“Actual creative contributions or direction
`strongly suggest that the work is made at the hiring party’s
`instance.”). They also considered Klamer the final arbiter of the
`prototype’s look and feel. Trial Tr. I 103–04, 106–07, 130–33;
`Trial Tr. II 71–78.
`
`The preeminence of Klamer’s predilections is further
`evidenced in the Assignment Agreement. See Ex. JTX 2. There,
`Markham recognized that while he had a right to learn of any
`contemplated changes to the prototype’s design, he “understood
`that the final decision regarding such changes shall rest with
`either LINK or [Milton Bradley].” Id.; see Picture Music, Inc. v.
`Bourne, Inc., 457 F.2d 1213, 1217 (2d Cir. 1972) (finding the song
`“Who’s Afraid of the Big Bad Wolf” a work-for-hire because
`
`
`
`19
`
`
`
`Case 1:15-cv-00419-WES-PAS Document 240 Filed 01/25/19 Page 20 of 25 PageID #: 8344
`
`commissioning parties had “the power to accept, reject, or modify
`[the composer’s] work”).
`
`Because Klamer “provided the impetus for, participated in,
`[and] had the power to supervise the creation of [the prototype],”
`the Court concludes it was made at his instance. Marvel, 726 F.3d
`at 139, 141 (“Marvel’s inducement, right to supervise, exercise of
`that right, and creative contribution with respect to [comic-book
`artist Jack] Kirby’s work during the relevant time period is more
`than enough to establish that the works were created at Marvel’s
`instance.”).
`
`The prototype was also created at Klamer’s expense.5 In
`determining who bore the expense of creation, the lodestar is
`financial risk; the question being who took it, or most of it.
`See, e.g., id. at 140 (noting that the law here is ultimately
`interested in who took the “risk with respect to the work’s
`success”); Twentieth Century Fox, 429 F.3d at 881 (affirming that
`General Dwight D. Eisenhower’s World War II memoir was produced at
`
`
`
`5 An argument could have been made (but was not) that the Game
`was created at the instance and expense of Milton Bradley. After
`all, it was Milton Bradley that solicited Klamer to come up with
`something for the company’s anniversary, and it was Milton Bradley
`that, once it accepted the Game, paid Klamer $5,000 and bore the
`risk of its failure to sell to the public. There are problems
`with this theory. For example
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