Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 1 of 89
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MARYLAND
`
`
`ALEXANDRA CLANCY,
`Plaintiff
`
`
`v.
`
`
`
`JACK RYAN ENTERPRISES, LTD., et al,
`Defendants.
`
`
`Civil Action No. ELH-17-3371
`
`MEMORANDUM OPINION
`
`In this intellectual property case, the Court has been asked to resolve competing claims
`
`for ownership of the novels and fictional characters created by the late Thomas L. Clancy, Jr., a
`
`renowned author, better known as Tom Clancy (“Clancy” or “Decedent”). The dispute includes
`
`opposing claims of ownership of the iconic character Jack Ryan, who is featured in many of
`
`Clancy’s best-selling novels. Although Clancy witnessed Jack Ryan leaping from the pages of
`
`his books to the big screen, Clancy probably never imagined a non-fictional chapter featuring
`
`Jack Ryan in a bitter familial dispute with respect to Clancy’s estate.
`
`Plaintiff Alexandra Clancy and the Decedent were married from 1999 until Clancy’s
`
`death in October 2013. Together, they had one daughter. Ms. Clancy and her daughter have a
`
`combined interest of 60% in Clancy’s estate. From 1969 until 1999, Clancy was married to
`
`Wanda King, with whom he had four children, and from whom he separated in or around 1996.
`
`See ECF 135-1 at 191; ECF 136-18; infra note 11. Clancy’s children born to Ms. King hold a
`
`combined 40% interest in the estate.
`
`
`1 In the Memorandum Opinion, the Court cites to the electronic pagination, which does
`not always correspond to the page number imprinted on the particular submission.
`
`
`
`
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 2 of 89
`
`On August 25, 2017, Ms. Clancy, as surviving spouse of the Decedent, filed a declaratory
`
`judgment action in the Circuit Court for Baltimore City against defendants J.W. Thompson
`
`Webb (“Topper”), as personal representative of the Estate of Thomas L. Clancy, Jr. (the
`
`“Estate”), and three separate business entities formed by Clancy: Jack Ryan Enterprises, Ltd.
`
`(“JREL” or “JRE”); Jack Ryan Limited Partnership (“JRLP”); and Rubicon, Inc. (“Rubicon”).
`
`ECF 2 (the “Complaint”).2 She sought, inter alia, to resolve issues as to ownership of various
`
`fictional characters created by Clancy. Id. JREL and JRLP (collectively, the “JR Entities”) filed
`
`a counterclaim. ECF 9 (the “Counterclaim”).
`
`The JR Entities timely removed the case to this Court, pursuant to 28 U.S.C. §§ 1338 and
`
`1454. ECF 1 (Notice of Removal). The Court has jurisdiction because some of the claims arise
`
`under the Copyright Act of 1976, 17 U.S.C. § 101 et seq. (the “Act” or the “Copyright Act”).
`
`And, the Court may exercise supplemental jurisdiction over the remaining claims. See 28 U.S.C.
`
`§ 1367; see also ECF 34 (Order of February 5, 2018).
`
`On February 22, 2019, Ms. Clancy filed an Amended Complaint (ECF 60), seeking a
`
`declaration of ownership of Clancy’s “literary legacy,” pursuant to the Copyright Act, 17 U.S.C.
`
`§ 101 et seq., and the Declaratory Judgment Act, 28 U.S.C. § 2201 et seq. ECF 139-1 at 10. In
`
`particular, plaintiff seeks a declaration that the Estate is the owner of Jack Ryan (Count I); John
`
`Clark (Count II); and “The Campus characters” (Count V). Ms. Clancy also seeks a declaration
`
`that the Estate owns the rights to the “JREL Books” (Count III) and the “JRLP Books” (Count
`
`IV), on the ground that they were not created as works made for hire within the meaning of 17
`
`U.S.C. § 101, and were not validly assigned either to JREL or JRLP. In Counts III and IV,
`
`plaintiff also seeks a declaration that, to the extent the JREL Books and JRLP Books were
`
`
`2 As discussed, infra, both Webb and Rubicon are nominal parties in this case.
`
`
`
`2
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 3 of 89
`
`validly assigned to JREL or JRLP, the assignments are terminable by the majority of Clancy’s
`
`heirs, pursuant to 17 U.S.C. § 203.
`
`The JREL Books include The Patriot Games (1987); The Cardinal of the Kremlin (1988);
`
`Clear and Present Danger (1989); The Sum of All Fears (1991); and a co-authored book, Red
`
`Storm Rising (1986). The JRLP Books include Without Remorse (1993); Debt of Honor (1994);
`
`and Executive Orders (1996). I shall sometimes refer to the JREL Books and JRLP Books
`
`collectively as the “JR Books.”
`
`The JR Entities’ ownership of other books, such as The Hunt for Red October (1984)
`
`(“Hunt”), is not in dispute. And, it was in Hunt that Jack Ryan made his debut.
`
`The Counterclaim asserts three claims for declaratory relief. ECF 9. In particular,
`
`defendants seek a declaration that the JR Entities “have rights in the characters [including Jack
`
`Ryan] as introduced and/or further developed in the books to which they hold the registered
`
`United States Copyright” by “reason of the agreements entered into by” Clancy (Count I) and as
`
`a matter of federal copyright law (Count II). ECF 9 at 5-9. Thus, Counts I and II of the
`
`Counterclaim are essentially the converse of Counts I through IV of the Amended Complaint. In
`
`addition, in Count III, defendants seek a declaration that “the Termination Notice” dated March
`
`4, 2016, executed by plaintiff to terminate the transfer of the copyright ownership of The Hunt to
`
`the United States Naval Institute (“USNI” or the “Institute”), is “overbroad and ineffective at
`
`least to the extent that it seeks to affect the ‘copyright to the characters described in Hunt.’” Id.
`
`at 11.
`
` The JR Entities have moved for summary judgment on all counts of plaintiff’s Amended
`
`Complaint and the Counterclaim. ECF 135. The motion is supported by a memorandum of law
`
`(ECF 135-1) (collectively, the “JR Entities’ Motion”) and 62 exhibits (ECF 135-3 to ECF 135-
`
`
`
`3
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 4 of 89
`
`64), of which 29 were filed under seal. ECF 136-1 to ECF 136-29 (sealed exhibits). They
`
`contend that plaintiff’s claims in the Amended Complaint are barred by the statute of limitations
`
`under the Copyright Act, 17 U.S.C. § 507(b). ECF 135-1 at 29. Further, they posit that they
`
`have ownership rights as to the JR Books and the characters, including John Clark, because they
`
`were works for hire or validly assigned to the JR Entities. Id. at 31-45. Moreover, they claim
`
`that they have ownership rights as to the Jack Ryan character as delineated in Hunt. Id. at 45-55.
`
`In addition, the JR Entities maintain that plaintiff’s Termination Notice is overbroad and
`
`ineffective. Id. at 56-58.
`
`Ms. Clancy has filed a combined cross-motion for summary judgment with respect to
`
`Counts I through IV of the Amended Complaint and opposition to the JR Entities’ Motion. ECF
`
`139.3 The motion is supported by a memorandum of law (ECF 139-1) (collectively, “Plaintiff’s
`
`Motion”) and 33 exhibits (ECF 139-3 to ECF 139-35), of which eleven were filed under seal.
`
`ECF 140-1 to ECF 140-11 (sealed exhibits).
`
`Plaintiff characterizes Clancy’s Estate as “sprawling and complex,” with several business
`
`entities that were created to “minimize taxes” and “to shield” Clancy from liability. ECF 139-1
`
`at 9. However, she insists that these “tools” were not intended to deprive Clancy of his
`
`“lucrative literary enterprise.” Id. In her view, Ms. King seeks “to relitigate her divorce and to
`
`score a larger share of the literary enterprise than was provided under the divorce settlement.”
`
`Id. at 10.
`
`Ms. Clancy insists that her claims are not barred by limitations. Id. at 23. Further, she
`
`claims that the Estate owns the Jack Ryan character as presented in Hunt because a character is a
`
`3 ECF 139 is titled only as a motion for summary judgment. But, ECF 139-1 reflects that
`the submission is both a cross-motion for summary judgment and an opposition to the JR
`Entities’ Motion. Moreover, plaintiff asserts in the text that she is entitled to summary judgment
`with respect to the Counterclaim. See ECF 139-1 at 11.
`
`
`
`4
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 5 of 89
`
`protected element of a copyright and it was never assigned to the JR Entities. Id. at 31-43. And,
`
`she asserts that the JR Books were not works for hire for JREL or JRLP, so the JR Books and the
`
`characters therein, including John Clark, remained Clancy’s property at his death. Id. at 43-54.
`
`Finally, she contends that her Termination Notice is valid. Id. at 56-57.
`
`The JR Entities filed a combined opposition to Plaintiff’s Motion and a reply in support
`
`of their own motion. ECF 145. Plaintiff has replied (ECF 149) and she has submitted additional
`
`exhibits. ECF 149-2 to ECF 149-7; ECF 150 (sealed exhibit).
`
`In addition, the JR Entities filed a “Motion For Leave to File a Five-Page Surreply” (ECF
`
`153), along with the proposed surreply. ECF 153-1 (collectively, the “Motion for Surreply”).
`
`Plaintiff opposes the Motion for Surreply. ECF 154. Defendants did not reply, and the time to
`
`do so has expired. See Docket.
`
`The motions are fully briefed and no hearing is necessary to resolve them. See Local
`
`Rule 105.6. For the reasons that follow, I shall grant the Motion for Surreply (ECF 153). I shall
`
`also grant the JR Entities’ Motion (ECF 135) in part and deny it in part. In particular, I shall
`
`grant the JR Entities’ Motion as to claims that the JR Books, including the characters therein,
`
`were validly assigned to the JR Entities. Counts II, III, and IV of the Amended Complaint and
`
`Counts I and II of the Counterclaim all include multiple claims, including as to the assignment of
`
`the JR Books and the characters therein. Therefore, I shall grant the defense motion as to Counts
`
`II, III, and IV of the Amended Complaint and Counts I and II of the Counterclaim, but only as to
`
`the claims regarding assignment. I shall otherwise deny the JR Entities’ Motion. I shall also deny
`
`Plaintiff’s Motion. In addition, I shall dismiss Count V of the Amended Complaint.
`
`
`
`
`
`5
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 6 of 89
`
`I. Factual and Procedural Background4
`
`The Hunt For Red October
`Tom Clancy, a best-selling author known for his espionage thrillers, began his prolific
`
`literary career with the publication of The Hunt for Red October in October 1984. ECF 135-5
`
`(Certificate of Copyright Registration). In Hunt, Clancy introduced the Jack Ryan character, an
`
`analyst working for the Central Intelligence Agency. Jack Ryan has been featured prominently in
`
`many of Clancy’s subsequent novels and the Hollywood adaptations of Clancy’s work.5 Plaintiff
`
`characterizes Jack Ryan as a “sustainable” character and the “most iconic” one that Clancy
`
`created. ECF 139-1 at 9.
`
`In 1983, Clancy submitted Hunt to the USNI, the Navy’s publishing office, for potential
`
`publication. ECF 135-3 at 2. USNI and Clancy entered into a publishing agreement in
`
`Annapolis, Maryland on November 21, 1983. ECF 136-1 (the “1983 USNI Agreement”). The
`
`1983 USNI Agreement provided, in relevant part, id. at 2: “Author [Tom Clancy] grants and
`
`assigns to the Publisher [USNI] the exclusive worldwide rights and any subsisting copyright,
`
`including the right to secure copyrights and any renewals or extensions thereof, in connection
`
`with a certain unpublished work provisionally entitled THE HUNT FOR RED OCTOBER….”
`
`
`4 The parties submitted many of the same documents as exhibits to their motions. Unless
`the versions differed, the Court generally cites to the JR Entities’ version of the exhibit.
`
`The parties’ factual submissions were extensive. In general, I have organized the facts by
`
`topic and then by chronology.
`
`5 Some of the novels involving Jack Ryan include Patriot Games (1987); The Cardinal of
`the Kremlin (1987); Clear and Present Danger (1989); The Sum of All Fears (1984); Debt of
`Honor (1994); Executive Orders (1996); The Bear and the Dragon (2000); Red Rabbit (2002);
`The Teeth of the Tiger (2003); Dead or Alive (2010); Locked On (2011); Threat Vector (2012);
`and Command Authority. Since Clancy’s death, his Estate has published additional Jack Ryan
`novels: Full Force and Effect (2014); Commander in Chief (2015); Power and Empire (2017);
`and Oath of Office (2018). ECF 139-1 at 16 n.6.
`
`
`
`6
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 7 of 89
`
`Further, the 1983 USNI Agreement included, id. at 3: “The Author agrees that he will not,
`
`without the written permission of the publisher, publish or permit to be published any material
`
`based on, or derived from, or directly competitive with the Work [i.e., Hunt], so long as this
`
`agreement shall remain in force.”
`
`Thereafter, on October 29, 1984, USNI received a certificate of copyright registration for
`
`Hunt. See ECF 135-5. The certificate identifies Clancy as the author and USNI as the copyright
`
`claimant. Id.
`
` Because of Hunt’s success, production companies sought to license rights to Hunt to
`
`create movies and television series based on the novel and its characters. On May 7, 1985,
`
`USNI, as owner of the exclusive rights, entered into an agreement with “The Red October
`
`Company,” a production company, to license the motion picture and television rights to Hunt.
`
`ECF 136-2 (Short Form Option/Purchase Agreement). In this agreement, USNI represented that
`
`it was “the sole author of the Property [Hunt]…as well as the sole and exclusive owner and
`
`proprietor throughout the world of the Property and any and all rights therein…” Id. at 6. The
`
`same rights were subsequently assigned to Paramount Pictures Corporation (“Paramount”) on
`
`July 31, 1986, after Paramount acquired all the rights of the “October Company.” ECF 136-10.
`
`JREL
`JREL, a Maryland corporation, was formed on May 28, 1985. ECF 135-8 (Articles of
`
`Incorporation). According to the Articles of Incorporation for JREL, the stated purpose of JREL
`
`was to “write, publish and sell books.” Id. at 2. At the time, Clancy was married to King. As
`
`noted, together they had four children (the “Older Children”).
`
`Clancy was President of JREL and King was Vice-President, Treasurer, and Secretary.
`
`ECF 136-18 at 11. King, Clancy, and one daughter were the board members of the company. Id.
`
`at 3; ECF 136-18 at 11. Clancy had a 40% interest in JREL; King had a 40% interest; and the
`
`
`
`7
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 8 of 89
`
`Older Children each held a 5% interest. ECF 136-18 at 11; ECF 139-31 (King Deposition
`
`Transcript, Dec. 11, 2018) at 21, Tr. 81:4-6; ECF 139-26 at 2 n.1. Clancy’s 40% interest is now
`
`owned by his Estate. ECF 60, ¶ 4; ECF 135-1 at 12 n.3.
`
`According to King, money would come to JREL through checks or direct deposits for
`
`Clancy’s work, and then about “once or twice a year” King would “get the account down to just
`
`what would barely keep it open with distributions” and transfer the money to the joint bank
`
`account she shared with Clancy. ECF 139-31 at 26-28, Tr. 100:11-101:8, 102:15-103:4, 109:5-
`
`20. In particular, “[i]f the account got over a hundred thousand [dollars],” King would “bring it
`
`down” and transfer the money to their joint bank account. Id. at 26, Tr. 101:12-13.
`
`The office for JREL was located “wherever” King and Clancy were living at the time. Id.
`
`at 27, Tr. 103:16-20. The only assets of the corporation were the computers that Clancy used to
`
`write his books. Id. at 28, 106:11-18. Other than Clancy, the corporation’s two employees
`
`included a secretary for Clancy and an accountant. Id. at 29, 108:11-18. King also noted that
`
`JREL did not provide benefits for its employees. Id. at 29, 111:10-12.
`
` On August 29, 1985, shortly after JREL was formed, JREL entered into an agreement
`
`with the William Morris Agency, Inc. (“WMA”), a talent and literary agency. ECF 136-4 (Letter
`
`from Clancy confirming the terms of the agreement, dated Aug. 29, 1985). The letter provided
`
`that WMA would be the “exclusive agent and representative throughout the world” for “all
`
`literary works and properties…created by [Tom Clancy] or owned and/or controlled by [Clancy]
`
`or any firm or corporation owned and/or controlled by [Clancy].” Id. at 2. Clancy signed this
`
`agreement on behalf of himself and JREL. Id. at 4.
`
`
`
`Thereafter, JREL entered into a series of publishing agreements with G.P. Putnam’s
`
`Sons, an imprint of Penguin Publishing Group, and The Berkley Publishing Group (collectively,
`
`
`
`8
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 9 of 89
`
`“Putnam”), to publish novels written by Clancy. See ECF 136-5 (Red Storm Rising, 1985); ECF
`
`136-6 (Patriot Games and Cardinal of the Kremlin, 1985); ECF 136-7 (Clear and Present
`
`Danger, 1987); ECF 136-11 (The Sum of All Fears, 1990).6 These agreements provided that
`
`JREL was the “Author” of the books at issue and Putnam was the “Publisher.” Id. In addition,
`
`Clancy signed most of the agreements on behalf of JREL, as “President of JREL.” ECF 136-5 at
`
`13; ECF 136-6 at 14.7 And, each of the agreements provided: “The Author [i.e., JREL] hereby
`
`represents and warrants to the Publisher…that Tom Clancy is the sole author of the Work; that
`
`the Work is or will be Tom Clancy’s next book length work…that the Author is the sole and
`
`exclusive owner of all rights granted to the Publisher in this Agreement and has not assigned
`
`pledged or otherwise encumbered the same….” ECF 136-5 at 3; ECF 136-6 at 3; ECF 136-7 at 3;
`
`ECF 136-11 at 3.
`
`Further, in an attachment to each of the agreements, Clancy executed a letter addressed to
`
`Putnam that stated, ECF 136-5 at 15; ECF 136-6 at 12; ECF 136-7 at 13; ECF 136-11 at 15
`
`(“Guaranty Letter” or “Guaranty”):
`
`the proposed agreement…(“Agreement”)…between Jack Ryan
`to
`I refer
`Enterprises, Ltd. described in the Agreement and herein as the “Author” and G.P.
`Putnam’s Sons described in the Agreement and herein as “the Publisher”, for the
`publication of a certain Work….
`
` I
`
` have an interest in the Author and in having the Work published by the
`Publisher, and as an inducement to the Publisher to enter into the Agreement, I
`hereby unconditionally guarantee, promise and agree with the Publisher, its
`successors and assigns that the Author will, in all respects, faithfully perform…. I
`
`6 Clancy wrote Red Storm Rising with a co-author, Larry Bond. Therefore, the agreement
`for Red Storm Rising was executed between JREL, Larry Bond, and Putnam. See ECF 136-5.
`
`7 The agreements for Clear and Present Danger (ECF 136-7) and The Sum of All Fears
`(ECF 136-11) did not identify Clancy as “President of JREL” under his signature. Nor did the
`Clear and Present Danger agreement indicate whether Clancy was signing on behalf of the
`entity. ECF 136-7 at 12. But, the signature page of the agreement for The Sum of All Fears
`indicates that it was signed by Clancy on behalf of JREL. ECF 136-11 at 12.
`
`
`
`9
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 10 of 89
`
`also unconditionally guarantee that the Work is a work made for hire within the
`meaning of the United States Copyright Law and that the Author is the owner of
`copyright in the Work and has full power and authority to enter into the
`Agreement.
`
`Unlike the agreements, these letters were signed by Clancy in his personal capacity. Id.
`
`The certificate of copyright registration for each book identifies JREL as the author and
`
`“copyright claimant” and the “employer-for-hire of Tom Clancy” or that it was a “work made for
`
`hire.” ECF 135-12 (Red Storm Rising, 1986); ECF 135-14 at 3 (Patriot Games, 1987); ECF 135-
`
`15 at 4 (Cardinal of the Kremlin, 1988); ECF 135-17 at 3 (Clear and Present Danger, 1989);
`
`ECF 135-27 at 3 (The Sum of All Fears, 1991).
`
`
`
`In addition, on May 21, 1990, JREL and Paramount entered into an agreement that gave
`
`Paramount exclusive worldwide motion picture and television rights to Clear and Present
`
`Danger and Patriot Games. ECF 136-12. This agreement represented that JREL was “sole and
`
`exclusive owner of and proprietor throughout the world of [those works] and any and all rights
`
`therein.” Id. at 9. Further, JREL represented that it “ha[d] not in any way assigned or licensed to
`
`any person or entity… any of the rights in and to the Property…including…any of the characters
`
`therein contained.” Id. at 10. JREL reserved certain rights to itself, including the publishing
`
`rights to subsequently published literary works “using the character Jack Ryan (or any other
`
`principal character in the novel Clear and Present Danger and/or Patriot Games)[.]” Id. at 21; see
`
`also ECF 136-13. Clancy signed this agreement twice: once on behalf of JREL and a second
`
`time in his individual capacity, to “confirm[] all grants and representations made by” JREL in the
`
`agreement. Id. at 15.
`
`Clancy’s Dispute with USNI
`In late 1987, an issue arose between Clancy and USNI regarding ownership of the Jack
`
`Ryan character. In particular, Clancy was trying to negotiate with Viacom for a television series
`
`
`
`10
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 11 of 89
`
`based on Patriot Games, but questions arose as to whether such a production would interfere
`
`with the rights granted to Paramount in its agreement with USNI. ECF 135-1 at 14; ECF 139-1 at
`
`17. Clancy wrote to USNI on October 27, 1987, about “an unexpected problem” based on “some
`
`old contracts.” ECF 135-18 at 2. He acknowledged that, “as the contracts [were] written,” he
`
`could not “negotiate a dramatic contract for subsequent Jack Ryan . . . books.” Id.
`
`Thereafter, by letter of December 3, 1987, Clancy asked USNI to transfer the copyright
`
`registration for Hunt back to him. ECF 135-19. He claimed that this was necessary in order for
`
`him to move forward with his negotiations with Viacom.
`
` On January 7, 1988, USNI’s counsel, Fulton Brylawski, wrote a letter to Robert
`
`Youdelman, Clancy’s counsel, in response to questions about ownership rights that Clancy had
`
`raised as a result of his ongoing negotiations with Viacom. ECF 135-20.8 Upon review of the
`
`relevant agreements concerning Hunt, Brylawski concluded that “the Institute acquired a grant
`
`and assignment of ‘the exclusive worldwide rights and any subsisting copyright’… in the book
`
`THE HUNT FOR RED OCTOBER and all that Clancy reserved or retained in the book was the
`
`right to receive royalties.” Id. at 2. Moreover, Brylawski noted that “the book contains a number
`
`of components or elements including the storyline, setting, characters, etc. All of these are
`
`important literary elements of the book and ownership of all of these elements including the
`
`composite whole of the book itself are the exclusive property of the Institute under [the 1983
`
`USNI Agreement].” Id.
`
`
`
`Thereafter, on January 29, 1988, Youdelman provided Clancy with his analysis of the
`
`1983 USNI Agreement. ECF 135-21 (Letter from Youdelman to Clancy, dated Jan. 29, 1988).
`
`8 Youdelman, together with Frank R. Curtis, represented Clancy for intellectual property
`matters until Clancy’s death. Mr. Youdelman passed away on December 23, 2017. NY TIMES
`(Dec.
`25,
`2017),
`https://www.legacy.com/obituaries/nytimes/obituary.aspx?n=robert-
`youdelman&pid=187626496&fhid=2248.
`
`
`
`11
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 12 of 89
`
`Youdelman concluded that the USNI Agreement constituted “a radical departure from industry
`
`practice for a first novel[.]” Id. at 2. In his view, USNI “acquired the copyright in [Hunt],”
`
`which gave it a continuing “interest in new books using the same characters.” Id. But, “[t]he
`
`author of a novel usually retains the copyrights….The publisher customarily has no interest in
`
`new books using the same characters.” Id. He also noted that USNI had acquired “world-wide
`
`publishing rights” and “all motion picture, television and other rights.” Id.
`
`
`
`Further, Youdelman stated that because the “contract entitles the Naval Institute Press to
`
`50% of all you make from any book in which ‘Jack Ryan’ or other characters from Red October
`
`appear, it is our view that this alone departs so far from industry practice as to make the entire
`
`contract unconscionable.” Id. at 3. He advised that “a satisfactory resolution” with USNI would
`
`permit USNI to retain “world-wide publishing rights in Red October” with “[a]ll other rights and
`
`the copyright” returned to Clancy. Id.
`
`
`
`Thereafter, in 1988, Clancy, through counsel, filed for arbitration with the American
`
`Arbitration Association, seeking a finding that Clancy, not USNI, owned the Jack Ryan
`
`character. See ECF 140-1 (Claimant’s Memorandum for the Mediator, filed September 27,
`
`1988). He argued that the history of the relationship between USNI and Clancy showed that
`
`Clancy never relinquished his ownership of Jack Ryan. Id. at 8-18. Clancy also asserted that he
`
`first developed the Jack Ryan character in Patriot Games, rather than in Hunt. Id. at 17.
`
`The dispute with Clancy and a separate dispute with another author were settled through
`
`mediation, embodied in a handwritten document titled “Points of Agreement,” dated September
`
`28, 1988, as well as a supplement dated December 15, 1988. ECF 136-8; ECF 136-9
`
`
`
`12
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 13 of 89
`
`(collectively, the “Settlement Agreement”).9 According to the Settlement Agreement, Clancy
`
`agreed to pay USNI $125,000 and, in exchange, USNI agreed to reassign the copyright in Hunt
`
`to Clancy. ECF 136-8 at 9. The Settlement Agreement provided, in part, id.:
`
`The Institute will reassign the copyrights in THE HUNT FOR RED OCTOBER
`and THE FLIGHT OF THE INTRUDER including without limitation all rights in
`and to the books, to Tom Clancy and Stephen Coonts, respectively, or their
`respective designees, exclusive of book publishing rights. Without limiting the
`foregoing, the parties acknowledge that all rights in and to the characters are the
`sole property of the authors. The use of the characters in connection with RED
`OCTOBER is subject to the other terms of this agreement.
`
`Further, in the supplement of December 15, 1988 (ECF 136-9), the parties agreed that
`
`“the settlement amount of $125,000, with respect to The Hunt For Red October, shall be paid to
`
`the Press by Jack Ryan Enterprises, Ltd.” Id. at 2. And, it noted: “All new printings of The Hunt
`
`For Red October shall bear copyright notice in the name of Jack Ryan Enterprises, Ltd.” Id. at 3.
`
`
`
`Thereafter, USNI assigned the rights in Hunt to JREL through a “Transfer of Ownership
`
`of Copyright and Assignment,” executed between USNI and JREL on December 19, 1988. ECF
`
`135-24 (“Transfer Agreement”). The Transfer Agreement provided, id. at 2:
`
`For and in consideration of the sum of Ten ($10.00) Dollars and other
`
`good and valuable consideration paid to The United States Naval Institute
`(hereinafter referred to as “Assignor”) by Jack Ryan Enterprises, Ltd. (hereinafter
`referred to as “Assignee”) receipt of which is hereby duly acknowledged,
`Assignor [i.e., USNI] hereby grants, sells, assigns, transfers and sets over to
`Assignee [i.e., JREL], its successors and assigns, absolutely and forever:
`
`
`(1) The exclusive worldwide rights of every kind and nature (now or
`hereafter known), any subsisting copyright, (including the right to
`secure copyright and any renewals or extensions thereof); and
`
`(2) Except with respect to “book publishing rights” as defined below, all
`agreements with third parties authorizing the exercise of any rights;
`
`
`
`
`9 The USNI Settlement Agreement also resolved a dispute between USNI and Stephen
`Coonts, another author who was represented by Youdelman at the time. ECF 136-8 at 2. Coonts’
`book was called The Flight of the Intruder.
`
`
`
`13
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 14 of 89
`
`in and to the work called The Hunt For Red October[.]
`
`The Transfer Agreement also provided that USNI’s assignment was “subject, in all
`
`
`
`events, to the Assignor’s continuing exclusive license to exercise and authorize the exercise of
`
`book publishing rights in the Work [i.e., Hunt]… and the Assignor’s continuing right to receive
`
`its contractual share of income from the exercise of non-book publishing rights in the Work [i.e.,
`
`Hunt], in accordance with the terms of the Agreements between Assignor and Thomas L.
`
`Clancy, Jr. dated November 21, 1983 and September 28, 1988.” Id.
`
`
`
`After the transfer, JREL and Paramount entered an agreement dated May 2, 1989,
`
`clarifying the ownership rights to the motion picture, television, and literary rights in Hunt. ECF
`
`136-10. The letter agreement, which Clancy signed on behalf of JREL, confirmed that USNI had
`
`assigned its interest in the 1985 agreement with Red October Company to JREL, and the Red
`
`October Company assigned its equivalent interest to Paramount. Id. at 2. An attachment to the
`
`agreement, titled “Reserved Rights,” set forth the rights “reserved to Owner [i.e., JREL] for
`
`Owner’s use and disposition[.]” Id. at 5. Notably, the “Reserved Rights” included “[a]ll literary
`
`property…using the character ‘Jack Ryan’(or any other principal character in The Hunt For Red
`
`October)….” Id.
`
`
`
`JREL subsequently entered into other contracts for novels and movies featuring Jack
`
`Ryan. For example, on April 30, 1990, JREL and Putnam entered into a contract for the novel,
`
`The Sum of All Fears. See ECF 136-1.10 The work featured Jack Ryan, John Clark, and Ding
`
`Chavez. JREL was identified as the author and owner of the work made for hire in the certificate
`
`of copyright registration for the book. See ECF 135-27 at 3. And, on May 21, 1990, JREL and
`
`Paramount entered into an agreement that gave Paramount exclusive worldwide motion picture
`
`
`10 The book initially had a different title.
`
`14
`
`
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 15 of 89
`
`and television rights to Clear and Present Danger as well as Patriot Games. ECF 136-12.
`
`JRLP
`Clancy formed JRLP, a Maryland limited partnership, on February 26, 1992. ECF 135-
`
`
`
`30 (“JRLP Partnership Agreement”). According to the JRLP Partnership Agreement, the
`
`purpose of the partnership was “to write, publish and sell books” and “also to do all things
`
`necessary, convenient or incidental to the achievement of the foregoing.” Id. at 10. Both Clancy
`
`and King signed the agreement. Id. at 34. And, the agreement represented that Clancy and King
`
`each held a 1% general partner interest and a 49% limited partner interest in the partnership. Id.
`
`at 35; see ECF 136-18 at 13. Clancy’s 50% interest is now owned by the Estate. ECF 60, ¶ 5;
`
`ECF 135-1 at 18 n.5.
`
`
`
`King testified that the office location of JRLP was always “wherever” Clancy and King
`
`were living at the time. ECF 139-31 at 32, Tr. 122:15-17. According to the parties’ marital
`
`Separation Agreement (ECF 136-18), discussed infra, both Clancy and King were to “remain
`
`employed by JRLP at an annual salary of $25,000, or such other equal amount as may be agreed
`
`by the parties.” Id. at 14.
`
`Soon after JRLP was formed, on July 27, 1992, JRLP entered into a publishing contract
`
`with Putnam for the novel titled “WITHOUT REMORSE.” ECF 136-14. Without Remorse is
`
`well known for providing the back story to Clancy’s character, John Clark, who appears in
`
`Patriot Games, Clear and Present Danger, Cardinal of the Kremlin, and The Sum of All Fears.
`
`ECF 139-1 at 18-19.
`
`Like the agreements between JREL and Putnam, the contract identified JRLP as the
`
`author and exclusive owner of all rights in the work. Id. at 3. And, it was signed by Clancy on
`
`behalf of JRLP. Id. at 3, 11. The agreement also included an attached letter with the same
`
`guarantees that Clancy had previously provided in the Guaranty Letters attached to the
`
`
`
`15
`
`

`

`Case 1:17-cv-03371-ELH Document 157 Filed 02/10/21 Page 16 of 89
`
`agreements with JREL, stating that he acknowledged that the work was made for hire and that
`
`JRLP was the owner of the copyright for the work. Id. at 15.
`
`
`
`JRLP entered into another publishing agreement with Putnam on October 5, 1993, for the
`
`publication of two additional thriller novels. ECF 136-15. The agreement provided that one of
`
`the works, tentatively titled “DEBT OF HONOR,” “shall be a new thriller featuring Jack Ryan,”
`
`and the other “shall be a new thriller featuring John Clark.” Id. The second book was ultimately
`
`called Executive Orders.
`
`This agreement con