throbber
NO. ______
`
`In the
`Supreme Court of the United States
`________________
`MICHAEL BAISDEN,
`
`PETITIONER,
`
`RESPONDENTS.
`
`v.
`I’M READY PRODUCTIONS, INC.; IMAGE
`ENTERTAINMENT, INC.; A.L.W. ENTERTAINMENT, INC.;
`GARY SHERRELL GUIDRY; JE’CARYOUS FRANKNEQUE
`JOHNSON,
`________________
`On Petition for a Writ of Certiorari to the
`United States Court of Appeals
`for the Fifth Circuit
`________________
`
`PETITION FOR WRIT OF CERTIORARI
`________________
`
`PAUL D. CLEMENT
` Counsel of Record
`KELSI BROWN CORKRAN
`BANCROFT PLLC
`1919 M St., NW, Suite 470
`Washington, DC 20036
`pclement@bancroftpllc.com
`(202) 234-0090
` Counsel for Petitioner
`
`December 26, 2012
`
`AUBREY “NICK” PITTMAN
`THE PITTMAN LAW FIRM, P.C.
`100 Crescent Ct., Suite 700
`Dallas, TX 75201
`(214) 459-3454
`
`

`
`QUESTION PRESENTED
`Petitioner and one of the respondents entered into
`a written exclusive license for the performance of a
`stageplay and distribution of related merchandise
`using petitioner’s copyrighted work. The original
`written exclusive license expired and was never
`renewed through a subsequent written agreement.
`Nonetheless, respondents subsequently performed the
`stageplay and distributed related merchandise. When
`petitioner
`sued
`for
`copyright
`infringement,
`respondents claimed that petitioner orally granted
`them the same exclusive licenses to exploit the work
`that they previously held pursuant to the expired
`written agreement. Petitioner vigorously disputed
`that the alleged oral agreement occurred.
`Although 17 U.S.C. § 204(a) provides that “[a]
`transfer of copyright ownership, other than by
`operation of law, is not valid unless an instrument of
`conveyance, or a note or memorandum of the transfer,
`is in writing,” the Fifth Circuit ruled in respondents’
`favor on the theory that the “totality of the parties’
`conduct” established that respondents had an implied
`nonexclusive license not subject to section 204(a)’s
`writing requirement.
` That decision cannot be
`defended as an effort to divine the parties’ actual
`intent—both the original written agreement and the
`alleged oral agreement were exclusive. Instead, the
`Fifth Circuit’s decision to convert an alleged oral
`exclusive license into a nonexclusive license—rather
`than treat it as a nullity as section 204(a) requires—
`can only be understood as a brazen effort to
`circumvent
`section
`204(a)
`and
`its writing
`requirement.
`
`

`
`ii
`
`its decision, the Fifth Circuit expressly
`In
`acknowledges that “other circuits” would have rejected
`the possibility of an implied nonexclusive license
`under these circumstances, App. 13, and indeed, at
`least four courts of appeals have interpreted the
`Copyright Act to forbid the result reached by the Fifth
`Circuit. The question presented is:
`Whether section 204(a)’s requirement that all
`transfers of copyright ownership, including exclusive
`licenses, be in writing can be evaded by the simple
`expedient of treating alleged oral exclusive licenses as
`implied nonexclusive licenses based on the “totality of
`the parties’ conduct.”
`
`
`
`
`

`
`iii
`
`LIST OF PARTIES
`Petitioner, who was plaintiff-appellant below, is
`Michael Baisden.
` Respondents are I’m Ready
`Productions, Inc.; Image Entertainment, Inc.; A.L.W.
`Entertainment, Inc.; Gary Sherrell Guidry; and
`Je’Caryous Frankneque Johnson.
`
`
`
`

`
`iv
`
`TABLE OF CONTENTS
`QUESTION PRESENTED .......................................... i
`LIST OF PARTIES .................................................... iii
`TABLE OF AUTHORITIES ..................................... vii
`PETITION FOR CERTIORARI ................................. 1
`OPINIONS AND ORDERS BELOW ......................... 3
`BASIS FOR JURISDICTION .................................... 3
`STATUTORY PROVISIONS INVOLVED ................. 3
`STATEMENT OF THE CASE ................................... 3
`I. The District Court Allows Respondents to
`Argue Baisden Orally Granted Them an
`Exclusive License to the Copyrighted Work,
`Contrary
`to Section 204(a)’s Writing
`Requirement for Transfers of Copyright
`Ownership ............................................................ 5
`II. The Fifth Circuit Holds That Although
`Section 204(a) Requires That Exclusive
`Licenses Be Transferred in Writing, An Oral
`Attempt to Transfer an Exclusive License
`May Be Judicially Transformed Into an
`Implied Nonexclusive License Where “the
`Totality of the Parties’ Conduct Support[s]
`Such an Outcome.” .............................................. 6
`REASONS FOR GRANTING THE PETITION ......... 8
`I. The Decision Below is Contrary to the Plain
`Text of Section 204(a) and Congress’
`Purposes
`in
`Imposing
`a Writing
`Requirement on Copyright Transfers ............... 12
`
`

`
`v
`
`II. The Fifth Circuit’s “Totality of the Parties’
`Conduct” Test Directly Conflicts with First,
`Second, Fourth, Sixth and Arguably Seventh
`and Ninth Circuit Decisions Applying the
`Effects Associates Test as
`the Sole
`Mechanism For Establishing an Implied
`Nonexclusive License. ....................................... 20
`III. The Decision Below Presents a Serious and
`Widespread Threat
`to All Copyright
`Ownership and Congress’ Goals in Enacting
`the Copyright Act. ............................................. 25
`CONCLUSION ......................................................... 28
`APPENDIX
`TABLE OF APPENDICES .................................. App-i
`Appendix A
`Opinion of the United States Court of
`Appeals for the Fifth Circuit,
`No. 11-20290
`(August 31, 2012) ......................................... App-1
`Appendix B
`Opinion and Order of the United States
`District Court for the Southern District
`of Texas,
`No. H-08-0451
`(March 25, 2011) ........................................ App-35
`Appendix C
`Final Judgment and Declaratory Relief
`Order of the Southern District of Texas,
`No. H-08-0451
`(March 25, 2011) ........................................ App-50
`
`

`
`vi
`
`Appendix D
`Order of the Fifth Circuit Denying
`Petition for Rehearing En Banc,
`No. 11-20290
`(September 24, 2012) ................................. App-54
`Appendix E
`Relevant Statutes ...................................... App-56
`17 U.S.C. § 101 ................................... App-56
`17 U.S.C. § 204 .................................... App-57
`
`

`
`vii
`
`TABLE OF AUTHORITIES
`
`Cases
`Atkins v. Fischer,
`331 F.3d 988 (D.C. Cir. 2003) ..................... 14, 22
`Bangkok Broad. & T.V. Co., Ltd. v. IPTV
`Corp., 742 F. Supp. 2d 1101
`(C.D. Cal. 2010) ..................................... 14, 19, 21
`Beholder Prods., Inc. v. Catona,
`629 F. Supp. 2d 490 (E.D. Pa. 2009) ................. 14
`Carson v. Dynegy, Inc.,
`344 F.3d 446 (5th Cir. 2003) ............................. 22
`Effects Associates, Inc. v. Cohen,
`908 F.2d 555 (9th Cir. 1990) ...................... passim
`Falcon Enters., Inc. v. Publishers Servs., Inc.,
`438 F. App’x 579 (9th Cir. 2011) ....................... 22
`Fosson v. Palace (Waterland), Ltd.,
`78 F.3d 1448 (9th Cir. 1996) ............................. 14
`Glovaroma, Inc. v. Maljack Prods., Inc.,
`1998 WL 102742 (N.D. Ill. Feb. 26, 1998) ........ 22
`I.A.E., Inc. v. Shaver,
`74 F.3d 768 (7th Cir. 1996) ............................... 14
`Jacob Maxwell, Inc. v. Veeck,
`110 F.3d 749 (11th Cir. 1997) ..................... 14, 22
`John G. Danielson, Inc. v.
`Winchester-Conant Props., Inc.,
`322 F.3d 26 (1st Cir. 2003) .................... 14, 21, 22
`Johnson v. Jones,
`149 F.3d 494 (6th Cir. 1998) ................. 14, 21, 22
`
`

`
`viii
`
`Lulirama Ltd., Inc. v. Axcess Broadcast Services,
`128 F.3d 872 (5th Cir. 1997) ............................. 15
`MacLean Assocs. v. W.M. M.
`Mercer-Meidinger-Hansen, Inc.,
`952 F.2d 769 (3d Cir. 1991) ......................... 14, 23
`McIntosh v. N. Cal. Universal Enters. Co.,
`670 F. Supp. 2d 1069 (E.D. Cal. 2009) ........ 14, 21
`Nelson-Salabes, Inc. v. Morningside Dev.,
`LLC, 284 F.3d 505 (4th Cir. 2002) .............. 14, 21
`Pamfiloff v. Giant Records, Inc.,
`794 F. Supp. 933 (N.D. Cal. 1992) .................... 13
`SCO Grp., Inc. v. Novell, Inc.,
`578 F.3d 1201 (10th Cir. 2009) ......................... 13
`SHL Imaging, Inc. v. Artisan House, Inc.,
`117 F. Supp. 2d 301 (S.D.N.Y. 2000) ................ 21
`SmithKline Beecham Consumer Healthcare,
`L.P. v. Watson Pharms., Inc.,
`211 F.3d 21 (2d Cir. 2000) ........................... 14, 20
`Taylor Corp. v. Four Seasons Greetings, LLC,
`403 F.3d 958 (8th Cir. 2005) ............................. 12
`United States v. Mead Corp.,
`533 U.S. 218 (2001) ........................................... 26
`United States v. Williams,
`504 U.S. 36 (1992) ............................................... 8
`Valdez v. Laffey Assocs.,
`2010 WL 1221404 (E.D.N.Y. Mar. 26, 2010) .... 12
`Weinstein Co. v. Smokewood Entm’t Grp.,
`LLC, 664 F. Supp. 2d 332
`(S.D.N.Y. 2009) ...................................... 14, 19, 21
`
`

`
`ix
`
`Zappa v. Rykodisc, Inc.,
`819 F. Supp. 2d 307 (S.D.N.Y. 2011) .......... 14, 21
`Statutes
`17 U.S.C. § 101 ..................................................... 1, 14
`17 U.S.C. § 102 ......................................................... 20
`17 U.S.C. § 103 ......................................................... 20
`17 U.S.C. § 106 ......................................................... 20
`17 U.S.C. § 201(d)(2) ............................................. 1, 13
`17 U.S.C. § 204(a) .............................................. passim
`Other Authorities
`Ann Bartow,
`The Hegemony of the Copyright Treatise,
`73 U. CIN. L. REV. 581 (2004) ............................ 25
`Melville B. Nimmer & David Nimmer,
`3 NIMMER ON COPYRIGHT (2002) ........................ 26
`William F. Patry,
`2 PATRY ON COPYRIGHT (2011) ..................... 13, 17
`
`
`
`

`
`
`
`PETITION FOR CERTIORARI
`To enhance predictability in copyright ownership
`and to protect copyright holders from mistaken or
`fraudulent claims that they orally conveyed their
`rights to someone else, Congress amended the
`Copyright Act in 1978 to require that all transfers of
`copyright ownership be memorialized in writing.
`Specifically, section 204(a) provides that “[a] transfer
`of copyright ownership, other than by operation of
`law, is not valid unless an instrument of conveyance,
`or a note or memorandum of the transfer, is in writing
`and signed by the owner of the rights conveyed or
`such owner’s duly authorized agent.” 17 U.S.C.
`§ 204(a).
`Section 204(a) applies both to complete transfers
`of copyright ownership and to transfers of particular
`exclusive rights comprised in the copyright (such as
`public performance), with the owner of “any particular
`exclusive right . . . entitled, to the extent of that right,
`to all of the protection and remedies accorded to the
`copyright owner by this title.” Id. § 201(d)(2). While
`section 204(a)’s writing requirement applies to
`exclusive licenses, it does not reach a nonexclusive
`license to exploit the work, which can be oral. Id.
`§ 101. That difference in treatment has led a majority
`of the courts of appeals to recognize a narrow category
`of “implied nonexclusive licenses.” In recognition of
`the tension between “implied nonexclusive licenses”
`and section 204(a)’s writing requirement, these courts
`of appeals have limited such “implied nonexclusive
`licenses” to the narrow circumstance in which the
`copyright owner created the work at the licensee’s
`request and then handed the work over to the licensee
`
`
`
`

`
`2
`
`licensee copy and
`intention that the
`with the
`distribute it. In these circumstances, the licensee is
`the raison d'être of the copyrighted work, and the
`scope for any exception to section 204(a)’s writing
`requirement is strictly defined and limited.
`This case involves the Fifth Circuit’s dramatic
`expansion of this exception to recognize implied
`nonexclusive licenses wherever the court finds “the
`totality of the parties’ conduct support[s] such an
`outcome.” App. 13–14. In so holding, the Fifth Circuit
`expressly acknowledged that its newfound “totality of
`the parties’ conduct” test directly conflicts with
`decisions of “other circuits” limiting the availability of
`implied nonexclusive
`licenses
`to
`the narrow
`circumstance just described. App. 13. Indeed, at least
`four courts of appeals have interpreted the Copyright
`Act to forbid finding a nonexclusive license under the
`facts of this case. The Fifth Circuit’s ruling vastly
`expands the range of implied licenses from the narrow
`category of copyrighted works created at the request
`of the licensee to the entire universe of pre-existing
`copyrighted works. It also provides a mechanism for
`courts
`to
`circumvent
`section 204(a)’s writing
`requirement altogether, as this case dramatically
`illustrates, by
`treating alleged
`“oral exclusive
`licenses”—which are nullities under section 204(a)—
`as a basis for finding an implied nonexclusive license.
`If conduct evincing an intent to transfer exclusive
`rights can be the basis for finding an implied
`nonexclusive license, then the certainty Congress
`attempted to provide in section 204(a) is illusory.
`Review by this Court is thus necessary both to
`resolve the undeniable conflict among the courts of
`
`
`
`

`
`3
`
`appeals regarding the circumstances giving rise to an
`implied nonexclusive license, and to prevent the
`decision below
`from eviscerating
`the writing
`requirement in direct contravention of Congress’
`mandate in enacting section 204(a).
`OPINIONS AND ORDERS BELOW
`The Fifth Circuit’s panel decision is reported at
`693 F.3d 491 and reproduced at App. 1. The Fifth
`Circuit’s order denying rehearing en banc
`is
`unpublished and reproduced at App. 54. The district
`court’s decision is reported at 804 F. Supp. 2d 549 and
`reproduced at App. 35.
`BASIS FOR JURISDICTION
`The Fifth Circuit entered its decision on August
`31, 2012 and denied the petition for rehearing en banc
`on September 24, 2011. This Court’s jurisdiction is
`invoked under 28 U.S.C. § 1254.
`STATUTORY PROVISIONS INVOLVED
`The relevant provisions of the Copyright Act of
`1976, 17 U.S.C. §§ 103 & 204, are reproduced at App.
`56–57. The most relevant provision, 17 U.S.C.
`§ 204(a), provides as follows: “[A] transfer of copyright
`ownership, other than by operation of law, is not valid
`unless an instrument of conveyance, or a note or
`memorandum of the transfer, is in writing.”
`STATEMENT OF THE CASE
`Petitioner Michael Baisden is the host of a
`nationally syndicated radio show and the author of
`two best-selling novels, Men Cry in the Dark (“Men
`Cry”) and The Maintenance Man.
` App. 2.
`Respondents Gary Guidry and Je’Caryous Johnson
`
`
`
`

`
`4
`
`are the founders of respondent I’m Ready Productions
`(“IRP”), a theatrical production company. Id. On
`March 9, 2001, the parties entered a written
`agreement to give IRP the exclusive right to create
`and publicly perform an original screenplay based on
`Men Cry. Id. That agreement (the “2001 written
`agreement”) was of limited duration, giving IRP
`exclusive performance and merchandising rights only
`for the three years following the execution of the
`agreement, with Baisden receiving in exchange a
`portion of the net profits from ticket and merchandise
`sales. App. 2–3. IRP developed the stageplay and it
`toured from January 2002 through November 2002.
`On March 9, 2004, the 2001 agreement expired by its
`own terms. App. 10.
`In late 2005, IRP revived the stageplay for a
`second
`tour and
`then entered a distribution
`agreement with Image Entertainment, Inc. (“Image”)
`under which Image would market and sell DVD
`recordings of the stageplay. App. 5. Image began
`mass distribution of the DVDs in February 2007. Id.
`Baisden was neither informed of nor compensated
`under the Image deal.
`Beginning in May 2007, Baisden sent IRP a series
`of cease-and-desist letters regarding the Image DVD
`sales. Id. In February 2008, Baisden filed suit
`against IRP in the U.S. District Court for the
`Southern District of Texas, alleging, among other
`things, copyright infringement.1 App. 5–6.
`
`1 The proceedings below also involved a dispute relating to
`IRP’s stageplay of The Maintenance Man, but the question
`
`
`
`
`

`
`5
`
`I. The District Court Allows Respondents to
`Argue Baisden Orally Granted Them an
`Exclusive License to the Copyrighted Work,
`Contrary
`to Section 204(a)’s Writing
`Requirement for Transfers of Copyright
`Ownership.
`During trial, respondents contended that they did
`not infringe Baisden’s copyrights because the parties
`entered an oral agreement in the summer of 2005
`giving IRP the identical exclusive rights that had been
`contained in the 2001 written agreement. App. 10.
`Baisden disputed that such an oral renewal or
`exclusive oral agreement ever occurred, and argued
`that in any event, section 204(a) of the Copyright Act
`would forbid such an oral exclusive agreement,
`because that provision expressly requires that
`exclusive copyright licenses be executed in writing.
`See 17 U.S.C. § 204(a); R4462–69, 4491, 4607–26. The
`district court nonetheless allowed respondents, over
`Baisden’s objections, to testify extensively about
`alleged oral statements made by Baisden purportedly
`granting IRP exclusive rights in the copyrighted work,
`including exclusive merchandising rights permitting
`the DVD sales. Baisden vigorously disputed that he
`ever made such statements, and respondents did not
`present any third parties who could corroborate their
`allegations. Nonetheless, the jury entered a verdict in
`IRP’s favor, holding among other things that Baisden
`had transferred the necessary copyright interests to
`
`
`presented by this petition does not implicate that dispute and
`accordingly we do not recount it here.
`
`
`
`

`
`6
`
`IRP via an oral conversation between Baisden and the
`individual respondents. App. 10.
`The district court denied Baisden’s motion for
`judgment as a matter of law or, alternatively, a new
`trial. App. 6.
`II. The Fifth Circuit Holds That Although
`Section 204(a) Requires That Exclusive
`Licenses Be Transferred in Writing, An Oral
`Attempt to Transfer an Exclusive License
`May Be Judicially Transformed Into an
`Implied Nonexclusive License Where “the
`Totality of the Parties’ Conduct Support[s]
`Such an Outcome.”
`Baisden appealed to the Fifth Circuit, again
`explaining that respondents’ testimony regarding an
`alleged oral agreement to grant IRP exclusive
`performance and merchandising rights could not
`provide a defense to Baisden’s infringement claim
`because section 204(a) expressly and specifically
`requires that any “transfer of copyright ownership” be
`“in writing and signed by the owner of the rights
`conveyed.” 17 U.S.C. § 204(a). See Appellant’s Br.
`(docketed by 5th Cir. Sept. 27, 2011) 37–38, 55–56;
`Appellant’s Response and Reply Br. (docketed by 5th
`Cir. Jan. 2, 2012) 16–18, 28–33.
`In its decision, the Fifth Circuit acknowledged
`section 204(a)’s writing requirement as well as IRP’s
`failure to point to any evidence of a written agreement
`memorializing the transfer of exclusive rights alleged
`by IRP. App. 10–11. (“Defendants can point to no
`written
`instrument which conveyed
`[Baisden’s]
`copyrights to IRP.”). The court also acknowledged
`
`
`
`

`
`7
`
`that other courts of appeals have limited the ability of
`alleged copyright infringers to claim an oral or implied
`nonexclusive license to a narrow circumstance not
`implicated here—viz., where the copyright owner
`created the work at the other party’s request and then
`handed it over with the intent that the other party
`copy and distribute it. App. 13.
`The court explained, however, that in contrast to
`“other circuits . . . we have never held that an implied
`license could not arise in other circumstances where
`the totality of the parties’ conduct supported such an
`outcome.” App. 13–14. (emphasis in original). The
`court then affirmed the verdict in respondents’ favor
`on the theory that the jury could have found that IRP
`held an
`implied nonexclusive
`license based on
`respondents’ testimony that the parties orally agreed
`in 2005 to transfer an exclusive license, specifically by
`orally agreeing to reinstate the exclusive licenses
`previously conveyed under the expired 2001 written
`agreement.2 App. 11–12. The court rejected Baisden’s
`argument that both the purported oral agreement
`between Baisden and IRP and the distribution
`agreement between IRP and Image were for exclusive
`performance and merchandising rights and therefore
`could not possibly convey a nonexclusive license. The
`court held that there is “nothing to suggest” that IRP
`would not have accepted a nonexclusive license in the
`absence of a valid exclusive license, and therefore the
`
`2 The court also noted as less important respondents’ testimony
`that Baisden had signed copies of the DVDs prior to the Image
`deal, and later “acted dismissively” when he found out about the
`DVD sales. App. 11.
`
`
`
`

`
`8
`
`unsuccessful attempt to convey an exclusive license
`orally could be treated as a successful attempt to
`convey a nonexclusive license. App. 15.3
`Baisden’s petition for rehearing or rehearing en
`banc was denied. App. 54.
`REASONS FOR GRANTING THE PETITION
`The Fifth Circuit’s “totality of the parties’
`conduct” test is antithetical to section 204(a)’s writing
`requirement and in express and acknowledged conflict
`with the approach of the majority of circuits. Section
`204(a) requires an exclusive license to be in writing,
`and treats an “oral exclusive license” as an oxymoron
`and a nullity. Nonetheless, the Fifth Circuit treated
`such oral exclusive licenses as the basis for an implied
`nonexclusive
`license.
` That decision cannot be
`understood as an effort to discern the parties’ actual
`intent—respondents themselves asserted that the
`alleged oral agreement was for an exclusive license.
`Instead, the decision can only be understood as a
`direct assault on Congress’ judgment in section 204(a)
`that a writing is required. The alleged oral agreement
`was deemed nonexclusive not because that is what the
`
`3 The court observed that it found some of Baisden’s “arguments
`on implied nonexclusive license” waived because they were first
`raised in his reply brief, but did not specifically identify the
`waived arguments. App. 12–13. We thus have provided
`citations to Baisden’s opening brief establishing that the issues
`raised in this petition were properly presented below. In any
`event, this Court will review a question not pressed below “so
`long as it has been passed upon,” United States v. Williams, 504
`U.S. 36, 41 (1992), and it is indisputable that the issues
`presented were fully adjudicated below.
`
`
`
`

`
`9
`
`parties intended, but because that was the only way
`the court of appeals could evade the perceived
`harshness of Congress’ insistence that an exclusive
`license occur in writing or not at all.
`The decision below is not only irreconcilable with
`section 204(a) and its writing requirement, it also is
`directly contrary to the approach of numerous other
`circuits, as the Fifth Circuit acknowledged. At least
`four courts of appeals have recognized
`implied
`nonexclusive
`licenses
`only
`in
`the
`“narrow
`circumstance” first outlined by the Ninth Circuit in
`Effects Associates, Inc. v. Cohen, 908 F.2d 555, 557
`(9th Cir. 1990): (1) a person (the licensee) requests the
`creation of a work; (2) the creator (the licensor) makes
`that particular work and delivers it to the licensee;
`and (3) the licensor intends that the licensee copy and
`distribute the work. Even that limited exception is in
`some tension with section 204(a), but at least the
`Effects Associates test can be justified as an effort to
`discern the parties’ actual intent and affects only a
`narrow class of works that would not exist but for the
`licensee’s initiative. When a party requests that a
`creator make a particular work for them, it is
`reasonable to assume that the parties intended a
`nonexclusive relationship in which the licensee who
`initiated the creation of the work and the licensor both
`have an ability to exploit the work. Moreover, such a
`rule impacts only those works which owe their very
`existence to the licensee’s initiative.
` The vast
`universe of pre-existing works are not implicated by
`the traditional Effects Associates test. But the
`decision below makes clear that the Fifth Circuit is
`not content with the narrowness of the Effects
`Associates test. To the contrary, while the Fifth
`
`
`
`

`
`10
`
`Circuit acknowledged “other circuits” have held that
`the Effects Associates test is exclusive, App. 13, it held
`that within its jurisdiction, an implied license will
`arise wherever “the totality of the parties’ conduct
`support[s] such an outcome.” App. 13–14.
`As the Fifth Circuit acknowledged, the circuit
`conflict created by its decision is undeniable: The
`First, Second, Fourth, and Sixth Circuits have
`expressly rejected the possibility of an
`implied
`nonexclusive
`license outside
`the
`circumstances
`identified in Effects Associates, and district courts in
`the Seventh and Ninth Circuits have also understood
`the Effects Associates test to be the only mechanism
`for establishing an implied nonexclusive license under
`their circuit precedent. This Court’s review thus is
`crucial to restoring uniformity among the courts of
`appeals regarding the proper construction and
`application of section 204(a)’s writing requirement
`and the elements necessary to establish an implied
`nonexclusive license.
`This Court’s review is also necessary to prevent
`the Fifth Circuit’s dramatic expansion of the
`nonexclusive license exception from wholly negating
`Congress’
`“‘paramount
`goal’”
`that
`the 1976
`amendments to the Copyright Act, and in particular
`the writing requirement, restore “predictability and
`certainty” to copyright ownership. Effects Assocs., 908
`F.2d at 557 (quoting Cmty. for Creative Non-Violence
`v. Reid, 490 U.S. 730, 749 (1989)). If allowed to stand,
`the Fifth Circuit’s “totality of the parties’ conduct” test
`will expose copyright owners to exactly the sort of
`mistaken or fraudulent claims to their copyright
`interests
`that Congress
`intended
`the writing
`
`
`
`

`
`11
`
`requirement to prevent. Indeed, this case amply
`demonstrates the danger. The Fifth Circuit upheld
`respondents’ exploitation of Baisden’s work even
`though Baisden testified that there was no licensing
`agreement whatsoever—the precise result Congress
`sought to avoid. The court of appeals made no
`pretense that the parties actually intended to enter a
`nonexclusive license. Respondents testified that there
`was an oral exclusive license, and petitioner countered
`that there was no agreement at all. Finding an oral
`nonexclusive agreement thus does not comport with
`either side’s testimony nor reflect the parties’ intent
`from the alleged oral discussions. Instead, it flouts
`Congress’ direction by making an end run around
`section 204(a).
`Finally, the impact of the Fifth Circuit’s decision
`is widespread. While the approach of the majority of
`circuits affects only copyrighted works created at the
`request of the licensee, the Fifth Circuit approach
`endangers all pre-existing copyrighted works. Any
`failed negotiation for an exclusive license or un-
`renewed agreement for an exclusive license becomes
`fodder for an argument that there was an implicit
`agreement for a nonexclusive license. If allowed to
`stand, the Fifth Circuit’s decision will chill licensing
`discussions and produce that precise uncertainty that
`Congress sought to eliminate by enacting section
`204(a). The Fifth Circuit will also become a haven for
`copyright infringers seeking a favorable forum in
`which to present sham claims of oral license. This
`Court’s review is needed to restore certainty and
`predictability to copyright ownership consistent with
`Congress’ manifest intent.
`
`
`
`

`
`12
`
`I. The Decision Below is Contrary to the Plain
`Text of Section 204(a) and Congress’
`Purposes in Imposing a Writing Requirement
`on Copyright Transfers.
`Section 204(a) of the Copyright Act provides: “A
`transfer of copyright ownership, other than by
`operation of law,4 is not valid unless an instrument of
`conveyance, or a note or memorandum of the transfer,
`is in writing and signed by the owner of the rights
`conveyed or such owner’s duly authorized agent.” 17
`U.S.C. § 204(a). This writing requirement applies
`both to complete transfers of copyright ownership and
`to transfers of particular exclusive rights comprised in
`the copyright, with the owner of “any particular
`exclusive right . . . entitled, to the extent of that right,
`to all of the protection and remedies accorded to the
`copyright owner by this title.” Id. § 201(d)(2).
`Courts have long recognized the importance of the
`writing requirement to “enhance[ing] predictability
`and certainty of copyright ownership—‘Congress’
`paramount goal’ when it revised the [Copyright] Act in
`1976.” Effects Assocs., 908 F.2d at 557 (quoting Cmty.
`for Creative Non-Violence, 490 U.S. at 749). Section
`204 “is intended ‘to protect copyright holders from
`
`4 The few cases addressing the term “operation of law” generally
`concern a transfer by operation of state law, with the transfers
`at issue typically arising from a corporate merger or dissolution,
`bankruptcy, foreclosure, and the like. See Taylor Corp. v. Four
`Seasons Greetings, LLC, 403 F.3d 958, 963–64 (8th Cir. 2005);
`Valdez v. Laffey Assocs., 2010 WL 1221404, at *6 (E.D.N.Y.
`Mar. 26, 2010) (noting scarcity of case law on transfer of
`copyright ownership by operation of law).
`
`
`
`

`
`13
`
`persons mistakenly or fraudulently claiming oral
`licenses.’” SCO Grp., Inc. v. Novell, Inc., 578 F.3d
`1201, 1211 (10th Cir. 2009) (quoting Eden Toys, Inc. v.
`Florelee Undergarment Co., Inc., 697 F.2d 27, 36 (2d
`Cir. 1982)); see also William F. Patry, 2 PATRY ON
`COPYRIGHT 5:106 (2011) (explaining that the purpose
`of the writing requirement is to “protect authors from
`those claiming, contrary to the author’s view of the
`facts, that he or she transferred rights in the work”).
`And “[s]ection 204 ensures that the creator of a work
`will not give away his copyright inadvertently[,] . . .
`forc[ing] a party who wants to use the copyrighted
`work to negotiate with the creator to determine
`precisely what rights are being transferred and at
`what price.” Effects Assocs., 908 F.2d at 557.
`The lower courts have cautiously recognized a
`“narrow exception to the writing requirement,” Effects
`Assocs., 908 F.2d at 558–59, inferred from section
`101’s definition of “copyright ownership” as “not
`including a nonexclusive license,” 17 U.S.C. § 101. See
`Pamfiloff v. Giant Records, Inc., 794 F. Supp. 933, 939
`(N.D. Cal. 1992) (“This conclusion is not contained in
`the language of the statute. Instead, it is inferred
`from the fact that a non-exclusive license is not an
`ownership interest.”). Any recognition of an “implied
`nonexclusive license” must be narrow lest “Congress’
`paramount goal” be thwarted, for if an infringer
`knows he will be able to claim an implied nonexclusive
`license to excuse infringement, he will have little
`incentive “to negotiate with the creator to determine
`precisely what rights are being transferred and at
`what price.” Effects Assocs., 908 F.2d at 557. For over
`twenty years, the vast majority of federal courts to
`address the issue have relied on a three-prong test,
`
`
`
`

`
`14
`
`first articulated by the Ninth Circuit in Effects
`Associates, Inc. v. Cohen, limiting the availability of
`implied nonexclusive
`licenses
`to
`the
`following
`circumstances: (1) the licensee requests the creation of
`a work; (2) the creator makes that particular work
`and delivers it to the licensee; and (3) the creator
`intends that the licensee copy and distribute the work.
`Effects Assocs., 908 F.2d at 557.
`The Effects Associates test has been applied by
`ten of the federal courts of appeals, as well as
`countless federal district courts.
` See John G.
`Danielson, Inc. v. Winchester-Conant Props., Inc., 322
`F.3d 26, 40–41 (1st Cir. 2003); Atkins v. Fischer, 331
`F.3d 988, 991–93 (D.C. Cir. 2003); Nelson-Salabes,
`Inc. v. Morningside Dev., LLC, 284 F.3d 505, 514–15
`(4th Cir. 20

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