`
`In the
`Supreme Court of the United States
`
`THE ESTATE OF THOMAS STEINBECK,
`GAIL KNIGHT STEINBECK, AND
`THE PALLADIN GROUP, INC.,
`
`
`
`Petitioners,
`
`v.
`
`WAVERLY SCOTT KAFFAGA,
`AS EXECUTOR OF THE ESTATE OF ELAINE ANDERSON STEINBECK,
`
`
`
`Respondents.
`
`On Petition for a Writ of Certiorari to the
`United States Court of Appeals for the Ninth Circuit
`
`BRIEF OF AMICUS CURIAE
`CALIFORNIA SOCIETY OF ENTERTAINMENT LAWYERS
`IN SUPPORT OF PETITIONERS
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`DAVID ALBERT PIERCE
` COUNSEL OF RECORD
`JOHN R. BALDIVIA
`PIERCE LAW GROUP LLP
`9100 WILSHIRE BLVD.,
`SUITE 225 EAST TOWER
`BEVERLY HILLS, CA 90212
`(310) 274 9191
`DAVID@PIERCELLP.COM
`
`
`APRIL 29, 2020
`
`COUNSEL FOR AMICUS CURIAE
`
`SUPREME COURT PRESS ♦ (888) 958 5705 ♦ BOSTON, MASSACHUSETTS
`
`
`
`i
`
`TABLE OF CONTENTS
`
`Page
`
`TABLE OF AUTHORITIES ...................................... iii
`
`IDENTITY AND INTEREST OF
` AMICUS CURIAE ................................................ 1
`
`SUMMARY OF THE ARGUMENT ........................... 3
`
`ARGUMENT ............................................................... 5
`
`A. THE SECOND CIRCUIT DID NOT RESOLVE
`ISSUE OF WHETHER THE 1983
`THE
`SETTLEMENT AGREEMENT WAS AN “AGREE
`MENT TO THE CONTRARY.” ................................. 5
`
`B. THE 1983 AGREEMENT IS AN “AGREEMENT
`TO THE CONTRARY,” AND THEREFORE VOID
`AT ITS INCEPTION UNDER THE PLAIN
`LANGUAGE OF 17 U.S.C. § 304(C)(5) ................. 9
`
`C. THE SECOND AND NINTH CIRCUIT RULINGS
`FRUSTRATE THE PURPOSE OF 17 U.S.C.
`§ 304(C)(5) AND CONGRESS’ INTENT BY
`AFFIRMING THAT A COPYRIGHT HOLDER CAN
`RELINQUISH HIS OR HER TERMINATION
`RIGHT BY WAY OF A WRITTEN DOCUMENT ....... 11
`
`D. KAFFAGA OPENS THE FLOODGATES FOR
`ENTERTAINMENT COMPANIES TO EXTINGUISH
`THE TERMINATION RIGHTS OF CREATIVE
`PROFESSIONALS, WHICH IS EXPRESSLY WHAT
`CONGRESS SOUGHT TO PREVENT UNDER THE
`1976 ACT ......................................................... 14
`
`
`
`ii
`
`TABLE OF CONTENTS – Continued
`
`Page
`
`E. AT BEST, THOM’S CONVEYANCE OF HIS
`RIGHTS IN PARAGRAPH 5 AND EXHIBIT A OF
`THE 1983 AGREEMENT ARE GRANTS OF HIS
`SEPARATE RIGHTS, WHICH ARE SUBJECT TO
`TERMINATION UNDER 17 U.S.C. § 203 ............ 18
`
`CONCLUSION .......................................................... 20
`
`
`
`
`
`iii
`
`TABLE OF AUTHORITIES
`
`Page
`
`
`
`
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Fred Fisher Music Co. v. M. Witmark & Sons,
`318 U.S. 643 (1943) .................................... 2, 3, 11
`
`Horror Inc. v. Miller,
`335 F.Supp.3d 273 (D. Conn. 2018) .................. 15
`
`Kaffaga v. Estate of Steinbeck,
`938 F.3d 1006 (9th Cir. 2019) ................... passim
`
`Koenig v. Warner Unified Sch. Dist.,
`41 Cal. App.5th 43 (Cal. Ct. App. 2019) ............. 9
`
`Marvel Characters, Inc. v. Simon,
`310 F.3d 280 (2d Cir. 2002) ......................... 13, 15
`
`McIntosh v. Mills,
`121 Cal.App.4th 333 (2004) ................................... 9
`
`Mills Music, Inc. v. Snyder,
`469 U.S. 153 (1995) ........................................... 12
`
`Milne v. Stephen Slesinger, Inc.,
`430 F.3d 1036 (9th Cir. 2005) ........................ 3, 12
`
`Penguin Group (USA) Inc. v. Steinbeck et al,
`No. 1 06 cv 02438 (Entered 09/18/2009)........ 5, 6
`
`Penguin Grp. (USA) Inc. v. Steinbeck,
`537 F.3d 193 (2nd Cir. 2008) ..................... passim
`
`Steinbeck v. McIntosh & Otis,
`433 F. Supp.2d 395 (S.D.N.Y. 2006) ............ passim
`
`Steinbeck v. Steinbeck Heritage Found.,
`400 F. App’x 572 (2d Cir. 2010) ................ 7, 8, 13
`
`Sybersound Records, Inc. v. UAV Corp.,
`517 F.3d 1137 (9th Cir. 2008) ........................... 19
`
`
`
`iv
`
`TABLE OF AUTHORITIES – Continued
`
`Page
`
`FEDERAL STATUTES
`
`11 U.S.C. § 541(c)(1)(B) .............................................. 9
`
`17 U.S.C. § 106 ........................................................... 19
`
`17 U.S.C. § 201 .......................................................... 19
`
`17 U.S.C. § 201(d)(1) .................................................. 18
`
`17 U.S.C. § 201(d)(2) ................................................. 18
`
`17 U.S.C. § 203 ................................................... passim
`
`17 U.S.C. § 203(a)(2) ................................................. 12
`
`17 U.S.C. § 203(a)(3) ................................................. 19
`
`17 U.S.C. § 203(a)(5) .................................................. 10
`
`17 U.S.C. § 304 ................................................... passim
`
`17 U.S.C. § 304(c)(2) ................................................. 12
`
`17 U.S.C. § 304(c)(5) ......................................... passim
`
`17 U.S.C. § 304(d)(1) ..................................................... 6
`
`Copyright Act of 1909 ........................................... 2, 11
`
`Copyright Act of 1976 ....................................... passim
`
`STATE STATUTES
`
`Cal. Bus. & Prof. Code § 16600 .................................... 9
`
`Cal. Civ. Code § 711 ...................................................... 9
`
`Cal. Civ. Code § 1596................................................... 9
`
`Cal. Civ. Code § 1598 ................................................... 9
`
`Cal. Civ. Code § 1608 ................................................... 9
`
`
`
`v
`
`TABLE OF AUTHORITIES – Continued
`
`Cal. Civ. Code § 1667 .................................................. 9
`
`Page
`
`JUDICIAL RULES
`
`Sup. Ct. R. 37 .............................................................. 1
`
`OTHER AUTHORITIES
`
`28 N.Y. Prac., Contract Law § 7 16 .............................. 9
`
`28 N.Y. Prac., Contract Law § 7 2 .............................. 9
`
`Ed Christman, Reversion Rights Will 2013 Be
`A GameChanger?, BILLBOARD, Dec. 27,
`2012, https //www.billboard.com/bbiz/
`articles/news/1483926/ reversion rights
`will 2013 be a game changer
`[https //perma.cc/ DN9E 9JF5] ......................... 18
`
`Matthew Belloni and Eriq Gardner, Tom
`Petty, Bob Dylan Vs. Music Labels The
`Industry’s New Copyright War, THE
`HOLLYWOOD REPORTER, Feb. 10, 2012,
`https //www.hollywoodreporter.com/news/
`tom petty bob dylan copyright law music
`rights 289295 ..................................................... 18
`
`Peter S. Menell & David Nimmer, Pooh
`Poohing Copyright Law’s Inalienable
`Termination Rights, 57 J. COPYRIGHT
`SOC’Y U.S.A. 799 (2009) .................................... 12
`
`Report of the Register of Copyrights on the
`General Revision of the U.S. Copyright Law
`(Comm. Print 1961) ............................................ 11
`
`
`
`1
`
`
`
`IDENTITY AND INTEREST OF AMICUS CURIAE
`
`Pursuant to Supreme Court Rule 37 the California
`Society of Entertainment Lawyers (“CSEL”) respectfully
`submits this brief as amicus curiae in support of
`Petitioners Estate of Steinbeck et al.1
`
`The California Society of Entertainment Lawyers
`(“CSEL”) is a non profit and non partisan organization
`of attorneys representing authors, screenwriters,
`songwriters, and other creative professionals in the
`entertainment industry. CSEL was founded in 2013
`in response to the notable lack of artist friendly
`professional societies in the Los Angeles entertainment
`law community. Located in Beverly Hills, California,
`CSEL consists of litigators and transactional lawyers
`who network, strategize, and collaborate on issues of
`common interest on behalf of our clients, many of
`whom are content creators.
`
`Because a significant portion of CSEL members
`consist of plaintiffs attorneys, many of its members
`are involved in litigating the rights of creative profess
`ionals against major motion picture studios. Since the
`enactment of the Copyright Act of 1976 (“1976 Act”),
`
`1 Pursuant to Rule 37.2, amicus curiae notified counsel of
`record for all parties of their intent to file an amicus brief at
`least ten days prior to the due date for the brief. Pursuant to
`Rule 37.6, amicus curiae affirms that no counsel for a party
`authored this brief in whole or in part, and no person other than
`amicus curiae and their counsel made a monetary contribution
`to its preparation or submission. Pursuant to Supreme Court
`Rule 37.3, each party has consented to the filing of this brief.
`Letters evidencing consent have been filed with the Clerk of the
`Court.
`
`
`
`2
`
`creative professionals have possessed an inalienable
`power of termination, which is codified under 17 U.S.C.
`§§ 203 and 304. Congress passed this legislation to
`counteract the effects of Fred Fisher Music Co. v. M.
`Witmark & Sons, 318 U.S. 643 (1943), which thwarted
`authors’ and their families’ rights to future copyright
`interests under the preceding Copyright Act of 1909
`(“1909 Act”).
`
`Despite Congress’s intent to make termination
`rights inalienable under the 1976 Act, the recent
`Ninth Circuit ruling in Kaffaga v. Estate of Steinbeck
`(Kaffaga), 938 F.3d 1006 (9th Cir. 2019), as well as
`several prior Second Circuit rulings relating to John
`Steinbeck’s works, have run afoul of the congressional
`intent to protect an author’s future interest, in the
`same way that Fisher did under the 1909 Act. 938
`F.3d 1006 (9th Cir. 2019).
`
`CSEL’s fear is that Kaffaga will cause a ripple
`effect in the entertainment industry by opening the
`door for major studios, publishers, and distributors
`of artistic works to take explicit control over the
`termination rights of creative professionals by way of
`a written agreement. CSEL therefore has an interest
`in having this matter heard by the Court so that the
`Court can decide whether creative professionals can
`in fact convey their termination rights under the
`1976 Act, or whether termination rights are truly
`inalienable as Congress had originally intended.
`
`
`
`3
`
`
`
`SUMMARY OF THE ARGUMENT
`
`Over the past decades, lower courts in the Second
`and Ninth Circuit have rendered decisions that under
`mine the very purpose of the termination provisions
`under the 1976 Act. Reviews of such decisions have
`revived a climate under Fisher wherein major studios,
`publishers, and distributors can contractually prevent
`authors and their families from exercising termination
`rights. See generally Kaffaga, 938 F.3d 1006 (affirming
`the proposition that an author may relinquish his or
`her termination right by granting power of attorney
`over the termination right or by assignment of the
`termination right altogether) see also Penguin Grp.
`(USA) Inc. v. Steinbeck (Steinbeck 2008), 537 F.3d 193
`(2nd Cir. 2008) Milne v. Stephen Slesinger, Inc., 430
`F.3d 1036 (9th Cir. 2005), cert. denied, 548 U.S. 904
`(2006).
`
`Major studios, publishers, and distributors already
`flex their disparate bargaining power to obtain copy
`rights via contractual provisions that either i) deem
`the works to be “works made for hire” even when they
`are not or ii) grant the Studios power of attorney to
`enter into contracts that are necessary to effectuate
`the copyright transfer in furtherance of the contract
`for acquisition.
`
`Kaffaga is disastrous for creative professionals
`in the entertainment industry because it opens the
`door for major studios, publishers, and distributors to
`exert even greater control over copyrights, particularly
`by requiring copyright holders to either grant an
`assignment of their termination rights, or grant power
`
`
`
`4
`
`of attorney over their termination rights. It further
`enables coauthors with superior bargaining power to
`obtain control over the termination rights using the
`same contractual mechanisms that both the Ninth
`Circuit under Kaffaga, and the Second Circuit decisions
`upon which Kaffaga relies, have held were valid and
`enforceable, and not an “agreement to the contrary.”
`
`Therefore, this Court should grant the petition for
`writ of certiorari to determine whether the settlement
`agreement at issue (which deliberately conveys Peti
`tioner’s termination rights) is an “agreement to the
`contrary” to the express inalienable right to term
`inate the grant of a copyright—a right that Congress
`specifically intended to protect under the 1976 Act.
`In the event that the Court is inclined to hold that
`the agreement is valid and enforceable, then the Court
`should address the issue of whether the settlement
`agreement is itself subject to termination.
`
`By simply allowing Kaffaga to go unmitigated,
`the Ninth Circuit ruling will forever hold that an agree
`ment that expressly conveys an author’s termination
`right is exempt from the rules and restrictions of 17
`U.S.C §§ 203 and 304.
`
`
`
`5
`
`
`
`ARGUMENT
`
`A. THE SECOND CIRCUIT DID NOT RESOLVE THE ISSUE
`OF WHETHER THE 1983 SETTLEMENT AGREEMENT
`WAS AN “AGREEMENT TO THE CONTRARY.”
`
`In 1983, Elaine Steinbeck, together with Thom
`Steinbeck and Jonathan Steinbeck IV, entered into
`a settlement agreement regarding their respective
`copyright interests in the works of John Steinbeck
`(“1983 Agreement”). The 1983 Agreement contains
`two provisions that specifically purport to convey
`Thom’s termination rights to Elaine.
`
`First, Paragraph 5 of the 1983 Agreement states
`the following
`
`Elaine Steinbeck and/or [McIntosh and Otis,
`Inc.] shall have the complete power and
`authority to negotiate, authorize and take
`action with respect to the exploitation and/or
`termination of rights. . . . Thom shall . . .
`execute . . . an irrevocable power of attorney
`in favor of Elaine Steinbeck. . . .
`
`Decl. in Opp’n re Cross Mot. to Stay or to Den. Pl.’s
`Mot. for Summ. J. Ex. A, at 5, Penguin Group (USA)
`Inc. v. Steinbeck et al, No. 1 06 cv 02438 (Entered
`09/18/2009).
`
`Second, Exhibit A of the 1983 Agreement, entitled
`“Power of Attorney,” contains the following language
`
`I, Thom Steinbeck, hereby irrevocably appoint
`Elaine Steinbeck my attorney in fact to act
`in my place, to the extent I am permitted by
`
`
`
`6
`
`law to act through an agent or attorney in
`fact, as follows to exercise my rights of
`renewal and rights to terminate grants to
`third parties . . . directly or through such
`agents or attorneys in fact as she . . . may
`appoint, all solely with respect to the works
`of John Steinbeck in which I now have or
`will have renewal or termination rights
`under the U.S. Copyright Law.
`
`Decl. in Opp’n re Cross Mot. to Stay or to Den. Pl.’s
`Mot. for Summ. J. Ex. C, at 2, Penguin Group (USA)
`Inc. v. Steinbeck et al, No. 1 06 cv 02438 (Entered
`09/18/2009).
`
`Both provisions of the 1983 Agreement are delib
`erate attempts to relinquish Thom’s inalienable term
`ination rights, See Steinbeck v. McIntosh & Otis
`(Steinbeck 2006), 433 F. Supp.2d 395, 404 n.30 (S.D.
`N.Y. 2006), rev’d sub nom. Penguin Grp. (USA) Inc.
`v. Steinbeck (Steinbeck 2008), 537 F.3d 193 (2nd Cir.
`2008), which this brief urges should contribute to why—
`through its reasoning below—the 1983 Agreement is
`an “agreements to the contrary” under the plain
`language of 17 U.S.C. § 304(c)(5). The issue was first
`litigated in Steinbeck 2006, where a footnote in support
`of this proposition provided
`
`If this theory is meant to suggest that the
`terms of the 1983 Settlement Agreement void
`all of Thom’s and Blake’s [heir to Jonathan
`IV] termination rights—that Elaine success
`fully contracted away the rights of these
`statutory heirs when she settled litigation
`with them—it is barred by the plain language
`of 17 U.S.C. § 304(c)(5) and (d)(1). Any portion
`of the settlement agreement which limits or
`
`
`
`7
`
`extinguishes Thom’s and Blake’s statutory
`termination rights is invalidated as a statu
`torily prohibited “agreement to the contrary.”
`
`In reversing Steinbeck 2006 on grounds that the
`1983 Agreement was valid, the Second Circuit specif
`ically dodged the issue of whether the 1983 Agreement
`could be enforced under 17 U.S.C. § 304(c)(5). See
`Steinbeck 2008, 537 F.3d at 203 n.5 (“Although [Elaine]
`possessed a power of attorney to exercise the Steinbeck
`Descendants’ termination rights as a result of a 1983
`settlement, it is unclear that her exercise of those
`rights would have been valid. But the resolution of
`these speculations is immaterial to the resolution of
`this appeal.”) Instead, the central issue in Steinbeck
`2008 was whether a separate license agreement in
`1994 was an “agreement to the contrary.”
`
`Notwithstanding the post Steinbeck 2008 litigation
`over issues concerning John Steinbeck’s works, not a
`single case addressed the issue of whether the 1983
`Agreement was an “agreement to the contrary” under
`17 U.S.C. § 304(c)(5). See Steinbeck v. McIntosh & Otis,
`Inc. (Steinbeck 2009), No. 04 CV 5497 (GBD), 2009
`WL 928189 (S.D.N.Y. Mar. 31, 2009), aff’d sub nom.
`Steinbeck v. Steinbeck Heritage Found. (Steinbeck
`2010 ), 400 F. App’x 572 (2d Cir. 2010), cert. denied,
`564 U.S. 1012 (2011). Moreover, only Steinbeck 2010
`analyzed the subsequent impact of the 1983 Agreement
`on the parties after making the assumption that the
`1983 Agreement was valid.2
`
`2 The Second Circuit understood the 1983 Agreement to be a
`valid agreement, while limiting its review of the 1983 Agreement
`on appeal to four issues i) whether the 1983 Agreement imposed
`fiduciary duties upon Elaine and/or McIntosh and Otis, Inc.
`
`
`
`8
`
`Here, Kaffaga has promulgated the Second Circuit
`determination that the 1983 Agreement is a valid
`conveyance of Thom’s termination rights. In its opinion,
`the Ninth Circuit states, “the Second Circuit concluded
`that the 1983 Agreement was a valid and enforceable
`agreement, which ‘forecloses any argument that the
`parties intended [Thom and Jonathan IV] to retain
`control over [Elaine’s] exercise of the authority
`conferred upon her.’” Kaffaga, 938 F.3d at 1011.
`However, the record is clear that Steinbeck 2008
`deliberately avoided the finding in Steinbeck 2006
`that the 1983 Agreement was an “agreement to the
`contrary,” and Steinbeck 2010 deemed it to be a valid
`and enforceable conveyance without any consideration
`for 17 U.S.C. § 304(c)(5).
`
`Thus, Kaffaga does not rely on any finding that the
`1983 Agreement was not an “agreement to the contra
`ry.” Rather, Kaffaga simply relies on the assumptions
`that the Second Circuit was correct in determining
`that the 1983 Agreement is a valid and enforceable
`agreement regardless of whether it explicitly alienates
`Thom’s termination rights by way of a conveyance and
`a grant of a power of attorney.
`
`(“M&O”) ii) whether the 1983 Agreement created any issues of
`promissory estoppel iii) whether Elaine and/or M&O were
`unjustly enriched by the 1983 Agreement and iv) and whether
`Elaine’s powers under the 1983 Agreement were descendible to
`her heirs. Steinbeck 2010, 400 Fed.App’x. at 575 79.
`
`
`
`9
`
`B. THE 1983 AGREEMENT IS AN “AGREEMENT TO THE
`CONTRARY,” AND THEREFORE VOID AT ITS INCEPTION
`UNDER THE PLAIN LANGUAGE OF 17 U.S.C.
`§ 304(C)(5).
`
`Where a portion of the consideration promised
`for a single contractual object is unlawful, the entire
`contract is void. Koenig v. Warner Unified Sch. Dist.,
`41 Cal. App. 5th 43, 55 (Cal. Ct. App. 2019) (citing
`Cal. Civ. Code § 1608)). See also McIntosh v. Mills, 121
`Cal.App.4th 333 (2004) (“where the illegal consideration
`goes to the ‘whole of the promise,’ the entire contract is
`illegal.”). Indeed, California law is rife with statutes
`that invalidate contracts containing unlawful provi
`sions.3 We also see this happen in other jurisdictions
`as well as other areas of law. See generally, 28 N.Y.
`Prac., Contract Law § 7 2 (contracts that require a party
`to violate New York statutory law are unenforceable)
`28 N.Y. Prac., Contract Law § 7 16 (“contracts that are
`contrary to public policy are void and unenforceable”),
`11 U.S.C. § 541(c)(1)(B) (ipso facto clauses are unen
`forceable) Cal. Civ. Code § 711 (conditions that restrain
`alienation of real property are void) Cal. Bus. & Prof.
`Code § 16600 (non compete provisions in employment
`contracts are void).
`
`3 See generally Cal. Civ. Code § 1596 (a contract “must be lawful
`when the contract is made”) Cal. Civ. Code § 1598 (“Where a
`contract has but a single object, and such object is unlawful,
`whether in whole or in part, or wholly impossible of performance,
`or so vaguely expressed as to be wholly unascertainable, the entire
`contract is void”) Cal. Civ. Code § 1608 (“If any part of a single
`consideration for one or more objects, or of several considerations
`for a single object, is unlawful, the entire contract is void”) Cal. Civ.
`Code § 1667 (“That is not lawful which is 1. Contrary to an express
`provision of law 2. Contrary to the policy of express law, though
`not expressly prohibited or, 3. Otherwise contrary to good morals”).
`
`
`
`10
`
`It is without question that a contract containing
`a provision that runs afoul of federal or state law will
`be deemed void. In a similar manner, the 1983 Agree
`ment runs afoul of 17 U.S.C. § 304(c)(5) by creating a
`contract that alienates Thom’s future interest in
`the works of John Steinbeck. Both Paragraph 5 and
`Exhibit A of the 1983 Agreement are designed to
`convey Thom’s termination rights and future copyright
`interests to Elaine. This was indeed the primary
`consideration for Elaine to enter into the agreement.
`
`The 1976 Act explicitly states that “[t]ermination
`of the grant may be effected notwithstanding any
`agreement to the contrary, including an agreement
`to make a will or to make any future grant.” 17 U.S.C.
`§§ 203(a)(5), 304(c)(5). Based on this language, the
`provisions of Paragraph 5 and Exhibit A are wholly
`impossible of performance. Additionally, nowhere in
`the 1983 Agreement is there a provision that separates
`Paragraph 5 or Exhibit A from the rest of the agree
`ment, and for good reason. If either Paragraph 5 or
`Exhibit A were excluded from the agreement, then
`Elaine would have lost the very consideration that
`she had bargained for when she granted Thom a
`larger copyright interest in John Steinbeck’s works.
`
`Thus, the inseverable provisions within the 1983
`Agreement render the entire agreement to be an
`“agreement to the contrary.” Because performance of
`Paragraph 5 and Exhibit A is impossible under the
`1976 Act, the 1983 Agreement should have been ruled
`void at its inception.
`
`
`
`11
`
`C. THE SECOND AND NINTH CIRCUIT RULINGS
`FRUSTRATE THE PURPOSE OF 17 U.S.C. § 304(C)(5)
`AND CONGRESS INTENT BY AFFIRMING THAT A
`COPYRIGHT HOLDER CAN RELINQUISH HIS OR
`HER TERMINATION RIGHT BY WAY OF A
`WRITTEN DOCUMENT.
`
`Despite the lower court in Steinbeck 2006 finding
`that the 1983 Agreement was invalid pursuant to 17
`U.S.C. § 304(c)(5), both the Second and Ninth Circuit
`have repeatedly held the 1983 Agreement to be valid
`and enforceable regardless of whether it was an
`“agreement to the contrary.”
`
`Previously under the 1909 Act, authors and their
`heirs could recapture their future interests in a copy
`right by submitting for renewal at the end of the initial
`28 year period. See Report of the Register of Copyrights
`on the General Revision of the U.S. Copyright Law, 53
`(Comm. Print 1961) [hereinafter Register of Copyrights
`Revision] (“the primary purpose of this [reversionary]
`provision was to protect the author and his or her
`family against his or her unprofitable or improvident
`disposition of the copyright”). Then in 1943, the court
`in Fisher held that, because the 1909 Act was silent
`on whether authors were prohibited from assigning
`their renewal rights, authors were free to assign
`them. This idea that an author could freely assign
`his or her renewal term became the most litigated
`issue under the 1909 Act. Register of Copyrights
`Revision, supra, at 53 (“[The renewal system] has
`also been the source of more confusion and litigation
`than any other provision in the copyright law.”).
`
`Sections 203 and 304 of the 1976 Act were created
`to counteract the negative impact of Fisher, and
`allow an author and his or her statutory heirs to
`
`
`
`12
`
`recapture a future interest in the copyright to the
`work once the author has the opportunity to realize
`the actual value of that future interest. See Peter S.
`Menell & David Nimmer, PoohPoohing Copyright
`Law’s Inalienable Termination Rights, 57 J. COPYRIGHT
`SOC’Y U.S.A. 799, 805 (2009) see also Mills Music,
`Inc. v. Snyder, 469 U.S. 153, 172 73 (1995) (“[T]he
`termination right was expressly intended to relieve
`authors of the consequences of ill advised and
`unremunerative grants that had been made before
`the author had a fair opportunity to appreciate the
`true value of his work product. That general purpose
`is plainly defined in the legislative history and,
`indeed, is fairly inferable from the text of § 304
`itself.”)
`
`On its face, the termination provisions in the
`1976 Act serve two purposes i) they give an author
`the right to recapture a future interest in his or her
`copyright after a certain period of time, and ii) they
`prevent an author from alienating that right. This
`purpose is further emboldened by the existence of
`provisions that allow the author’s statutory heirs to
`terminate a grant of a copyright, even if the original
`author is no longer alive. See 17 U.S.C. §§ 203(a)(2),
`304(c)(2).
`
`Following Milne and Steinbeck 2008, the Second
`and Ninth Circuits have opened the door to the notion
`that termination rights can be extinguished by
`renegotiating the terms of the existing grant before
`the termination right is exercised. The recent decision
`in Kaffaga then takes the notion one step further by
`affirming the idea that a termination right can be
`relinquished via conveyance or by granting a power
`
`
`
`13
`
`of attorney over the termination right, as long as it is
`in line with the intention of the parties at the time.
`
`However, the plain language of 17 U.S.C. § 304
`makes it clear that an author cannot relinquish
`termination rights by way of an agreement. Further
`more, the statute pays no attention to the state of
`mind of the parties to any such agreement, thus the
`intent of the parties is immaterial in determining
`whether an author may alienate his or her termination
`rights. The answer is simply that the 1976 Act intended
`termination rights to be inalienable, though the
`Ninth Circuit ruling in Kaffaga and the rulings by the
`Second Circuit in the prior Steinbeck cases clearly
`suggest otherwise.
`
`The reason that the Ninth Circuit ruling in Kaf
`faga is so problematic is because the ruling affirms an
`erroneous assumption by the Second Circuit that the
`1983 Agreement (which deliberately conveys Thom’s
`termination rights to Elaine) is “valid and enforceable.”
`Kaffaga, 938 F.3d at 1011. Prior to Steinbeck 2006,
`the Second Circuit held that a settlement agreement
`that recharacterizes an already existing work to be a
`“work made for hire” (consequently transferring the
`author’s termination right to the employer) is an
`“agreement to the contrary.” Marvel Characters, Inc.
`v. Simon, 310 F.3d 280, 283 (2d Cir. 2002). Years
`later, the Second Circuit would hold that a settlement
`agreement which blatantly transfers termination rights
`by way of granting an assignment and power of
`attorney is a valid conveyance of that right. Steinbeck
`2010, 400 F. App’x 572 at 575.
`
`Thus, the termination provisions of the 1976 Act
`and the case law created by the Ninth Circuit ruling
`in Kaffaga (which affirms the findings by the Second
`
`
`
`14
`
`Circuit in the preceding Steinbeck cases) are inapposite.
`The legislation clearly intended for authors and their
`statutory heirs to be able to reclaim the future value
`of copyrights in a work once their full value has been
`realized. This termination right resides with the author
`and his or her statutory heirs “notwithstanding any
`agreement to the contrary.” It is therefore of utmost
`importance that the Court review the issue of whether
`the 1983 Agreement is an “agreement to the contrary.”
`
`THE FLOODGATES
`D. KAFFAGA OPENS
`FOR
`ENTERTAINMENT COMPANIES TO EXTINGUISH THE
`TERMINATION RIGHTS OF CREATIVE PROFESSIONALS,
`WHICH IS EXPRESSLY WHAT CONGRESS SOUGHT TO
`PREVENT UNDER THE 1976 ACT.
`
`The Ninth Circuit ruling in Kaffaga, as it present
`ly stands, is deeply troubling because of the lasting
`impact that it may have on the entertainment industry
`as a whole. If Kaffaga remains good law, then studios,
`publishers, distributors, and film producers all across
`the United States will seek new and creative ways to
`extinguish creators’ termination rights by way of assign
`ment or power of attorney.
`
`Major studios, publishers, and distributors in the
`entertainment industry have long been using their
`disparate bargaining power to incorporate boilerplate
`standard terms in their contracts that would extinguish
`an author’s future interest in the copyright.4 One
`example is how major studios, publishers, and distrib
`
`4 “Publishers could, and often did, thwart the purpose of this
`statutory scheme . . . by requiring authors to assign both their
`initial and renewal rights to the publisher at the same time and
`before the long term value of an author’s work could be
`ascertained.” Steinbeck 2008, 537 F.3d at 197.
`
`
`
`15
`
`utors will classify the creative professional as a one
`time “employee.” Often, studios who are acquiring an
`already existing screenplay will nevertheless include
`boilerplate “work made for hire” language in the
`standard terms and conditions of a purchase agree
`ment. A typical boilerplate provision in an industry
`contract for the purchase of a screenplay might appear
`as follows
`
`Artist hereby assigns to Company all of
`Artist’s rights in Artist’s services and the
`results and proceeds thereof (including all
`copyrights therein and all renewals and
`extensions thereof, if any), which shall be
`considered a work for hire. In the event that
`any of the work is not deemed to be a “work
`made for hire” for Company, Artist hereby
`irrevocably and exclusively grants and assigns
`to Company (or, if any applicable law pro
`hibits or restricts such assignment, Artist
`hereby grant to Company an irrevocable
`royalty free license of) all right, title and
`interest in and to such work, including,
`without limitation, all rights of every kind
`and nature (whether now known or hereafter
`devised, including all copyrights therein
`and thereto and all renewals and extensions
`thereof), throughout the universe, in perpe
`tuity, in any and all media, whether now
`known or hereafter devised.
`
`Studios will argue that the purchased screenplay
`is deemed a “work made for hire,” and thus the
`individual who wrote the screenplay holds no term
`ination rights in the work. See e.g. Marvel Characters,
`310 F.3d at 283 Horror Inc. v. Miller, 335 F.Supp.3d
`
`
`
`16
`
`273, 284 (D. Conn. 2018). Following Kaffaga, a studio
`now has the means to acquire the termination rights
`from the author outright. Hypothetically, a studio
`could include language that requires a writer to
`assign “all of Artist’s rights (including all copyrights
`therein and all renewals, extensions, and termination
`rights thereof).” Even though this would clearly seem
`to be an “agreement to the contrary,” such language is
`analogous to Paragraph 5 of the 1983 Agreement which
`was deemed valid and enforceable under Kaffaga.
`
`Other common boilerplate standard terms that
`appear in purchase agreements in the entertainment
`industry are provisions where the purchaser is deemed
`the author’s attorney in fact for the purpose trans
`ferring the copyright. The boilerplate provision for
`granting power of attorney over copyright documents
`generally appears as follows
`
`Artist agrees to execute and deliver any
`additional documents consistent with this
`Agreement which Company may require to
`fully effectuate and carry out the intent and
`purposes of this Agreement. If Artist fails to
`execute and deliver to Company any such
`document within X amount of business days
`following Artist’s receipt of request, then
`Company is hereby irrevocably appointed
`attorney in fact with full right, power, and
`authority to execute, acknowledge and deliver
`same in the name of an on behalf of the
`party to whom a request.
`
`If Kaffaga were to stand, the studios, publishers,
`and distributors would be given carte blanche to
`include provisions that would require the author to
`irrevocably appoint the purchaser as attorney in fact
`
`
`
`17
`
`over the author’s termination rights. Doing so will
`arguably “effectuate and carry out the intent and
`purpose” of the agreement. This is precisely what
`occurred in the 1983 Agreement, and Kaffaga held
`this to be a valid and enforceable grant of Thom’s
`termination right.
`
`It is without question that the entertainment
`industry is built on the fruits of collaborative efforts
`among creative professionals. In many instances,
`screenplays are