`
`In the
`Supreme Court of the United States
`
`MARKHAM CONCEPTS, INC. ET AL.,
`
`Petitioners,
`
`v.
`
`HASBRO, INC., ET AL.,
`
`Respondents.
`
`
`
`
`
`On Petition for a Writ of Certiorari to the
`United States Court of Appeals for the First Circuit
`
`BRIEF OF AMICUS CURIAE
`CALIFORNIA SOCIETY OF ENTERTAINMENT LAWYERS
`IN SUPPORT OF PETITION FOR WRIT OF CERTIORARI
`
`
`
`
`
`
`
`
`
`
`
`
`STEVEN T. LOWE
` COUNSEL OF RECORD
`LOWE & ASSOCIATES P.C.
`8383 WILSHIRE BLVD.
`SUITE 1038
`BEVERLY HILLS, CA 90211
`(310) 477 5811
`STEVEN@LOWELAW.COM
`
`
`
`
`DECEMBER 15, 2021
`COUNSEL FOR AMICUS CURIAE
`SUPREME COURT PRESS ♦ (888) 958 5705 ♦ BOSTON, MASSACHUSETTS
`
`
`
`i
`
`TABLE OF CONTENTS
`
`Page
`
`TABLE OF AUTHORITIES ....................................... ii
`
`INTEREST OF THE AMICUS CURIAE ................... 1
`
`SUMMARY OF ARGUMENT .................................... 3
`
`ARGUMENT ............................................................... 4
`
`I. THE FIRST CIRCUIT HAS A SINGULAR CASE
`OF PRECEDENT APPLYING THE “INSTANCE
`AND EXPENSE” TEST WHICH
`IS NOT
`SUPPORTED BY THE TEXT OF THE COPYRIGHT
`ACT OR THE HOLDING OF THIS COURT ............... 4
`
`II. THE FIRST CIRCUIT’S EMPLOYMENT OF THE
`“INSTANCE AND EXPENSE” TEST CREATES
`UNNECESSARY UNCERTAINTY IN COPYRIGHT
`LAW, CHILLING CREATORS’ RIGHTS ................... 7
`
`CONCLUSION .......................................................... 10
`
`
`
`
`
`
`
`
`
`ii
`
`TABLE OF AUTHORITIES
`
`Page
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Brattleboro Publishing Co. v. Winmill Publishing
`Corp., 369 F.2d 565 (2nd Cir. 1996) ....................... 5
`
`Brumley v. Albert E. Brumley & Sons, Inc.,
`822 F.3d 926 (6th Cir. 2016) ............................... 4
`
`Community for Creative Non Violence v. Reid,
`490 U.S. 730 (1989) .................................. 5, 6, 7, 8
`
`Fogerty v. Fantasy, Inc.,
`510 U.S. 517 (1994) ............................................. 7
`
`Forward v. Thorogood,
`985 F.2d 604 (1st Cir. 1993) ............................ 6, 8
`
`Helvering v. Hallock,
`309 U.S. 106 (1940) .............................................. 6
`
`Horror Inc. v. Miller,
`15 F.4th 232 (2d Cir. 2021) .................................. 2
`
`Kelley v. Southern Pacific Co.,
`419 U.S. 318 (1974) ............................................ 5
`
`Lin Brook Builders Hardware v. Gertler,
`352 F.2d 298 (9th Cir. 1965) ............................... 5
`
`Marvel Characters, Inc. v. Kirby,
`726 F.3d 119 (2d Cir. 2013) ................................. 8
`
`Michael Found. v. Urantia Found.,
`61 F. App’x 538 (10th Cir. 2003) ......................... 3
`
`Mills Music, Inc. v. Snyder,
`469 U.S. 153 (1985) .............................................. 4
`
`NLRB v. Amax Coal Co.,
`453 U.S. 322 (1981) ............................................. 5
`
`
`
`iii
`
`TABLE OF AUTHORITIES – Continued
`Page
`
`Payne v. Tennessee,
`501 U.S. 808 (1991) .............................................. 6
`
`Penguin Grp. (USA) Inc. v. Steinbeck,
`537 F.3d 193 (2d Cir. 2008) ............................. 8, 9
`
`Perrin v. United States,
`444 U.S. 37 (1979) ............................................... 5
`
`Playboy Enters., Inc. v. Dumas,
`53 F.3d 549 (2d Cir. 1995) ................................... 3
`
`Robinson v. Baltimore & Ohio R. Co.,
`237 U.S. 84 (1915) ............................................... 5
`
`Stewart v. Abend,
`495 U.S. 207 (1990) ............................................... 4
`
`CONSTITUTIONAL PROVISIONS
`
`U.S. Const. art. I, § 8, cl. 8 .......................................... 4
`
`STATUTES
`
`17 U.S.C. § 26 .............................................................. 5
`
`17 U.S.C. § 203 ............................................................. 4
`
`17 U.S.C. § 304(c) ..................................................... 4, 9
`
`1909 Copyright Act ............................................ passim
`
`1976 Copyright Act ............................................ passim
`
`JUDICIAL RULES
`
`Sup. Ct. R. 37.6 ............................................................ 1
`
`
`
`iv
`
`TABLE OF AUTHORITIES – Continued
`Page
`
`OTHER AUTHORITIES
`
`Steven T. Lowe,
`Death of Copyright 3 The Awakening,
`2018 L.A. LAWYER 28 ........................................... 1
`
`Steven T. Lowe,
`Death of Copyright, 2010 L.A. LAWYER 32 ......... 1
`
`Thomas M. Deahl II,
`The Consistently Inconsistent ”Instance
`and Expense” Test An Injustice to Comic
`Books, 14 J. MARSHALL REV. INTELL. PROP.
`L. 91 (2014) .......................................................... 8
`
`
`
`
`
`
`
`1
`
`
`
`INTEREST OF THE AMICUS CURIAE1
`
`Amicus curiae the CALIFORNIA SOCIETY OF
`ENTERTAINMENT LAWYERS (CSEL) is a non profit, non
`partisan, professional organization made up of attor
`neys working to represent creative professionals such
`as authors, screenwriters, songwriters, and other
`creators of intellectual property in the entertainment
`industry. CSEL seeks to balance the influence of
`international conglomerates within the television, film,
`and music industries through education, public policy
`advocacy, legislation, and litigation, seen here as
`amicus curiae.
`
`Creators, especially those small and individual,
`face an uphill battle in the entertainment industry
`against corporations who have greater resources and
`better access to legal assistance when it comes to
`copyright protection. Thus, when creative professionals
`face these businesses in litigation in an attempt to
`protect or enforce creators’ copyright protections, the
`limitations creators face often give court victories to
`the defendants.2 CSEL’s mission is to aid creators in
`
`1 Pursuant to Supreme Court Rule 37.6, counsel for amicus certify
`that no counsel for a party authored this brief in whole or in
`part, and no counsel or party made a monetary contribution
`intended to fund the preparation or submission of this brief. No
`person other than amicus made such a monetary contribution.
`The parties have been given at least ten days’ notice of amicus
`curiae’s intention to file this brief and all parties have consented
`to the filing of this amicus brief.
`
`2 See Steven T. Lowe, Death of Copyright, 2010 L.A. LAWYER
`32, 34 35 see also Steven T. Lowe, Death of Copyright 3 The
`Awakening, 2018 L.A. LAWYER 28 (identifying numerous cases
`
`
`
`2
`
`such situations through informative counseling and
`advice to creator litigants as to the best practices for
`protecting and enforcing their rights, as well as advo
`cating their interests to those in a position to correct
`perceived deficiencies in their legal protections.
`
`Termination rights under copyright has become an
`increasingly pressing area of copyright law as of late.
`See e.g., Horror Inc. v. Miller, 15 F.4th 232 (2d Cir.
`2021). Such rights depend on the copyright ownership
`status of the creator and whether creators are precluded
`from establishing those rights under the federal work
`for hire doctrine. Id. at 242 (citing that termination is
`available for all works “executed by the author,” other
`than those “made for hire”). In their petition for certio
`rari, Petitioners have demonstrated the lack of validity
`of First Circuit precedent regarding the “instance and
`expense” test for materials deemed under the 1909
`Copyright Act to be “work for hire” when compared
`to the legal standards set by this Court in connection
`with materials deemed “work for hire” under the 1976
`Copyright Act. Petitioner also establishes the incons
`istencies across the circuits that warrant intervention
`by this Court. CSEL agrees with Petitioner that the
`use of the “instance and expense” test to ensnare
`copyrightable works of independent contractors into
`the work for hire doctrine under the 1909 Copyright
`Act undermines the language of the statute and creates
`a clear, unresolved conflict in the application of a feder
`al body of law a conflict that has often been used to
`deprive independent contractor authors of their
`fundamental rights under copyright law to “termin
`ate” their “transfer” (to the extent there was such
`
`decided between 1991 and 2018 in which the studio or network
`defendants prevailed with a 95% win loss record).
`
`
`
`3
`
`a “transfer” at all). This case provides this Court a clear
`opportunity to resolve these tensions in the law and
`between the circuits, as the issue of whether the
`materials at issue are, in fact, works for hire under
`the 1909 Act.
`
`
`
`SUMMARY OF ARGUMENT
`
`The First Circuit Court of Appeals in this case
`rendered a decision to uphold a singular case of circuit
`precedent, against a mountain of contradictory law
`from other circuits and this Court. Despite an
`essential decision of this Court and the plain lan
`guage of the Copyright Act, the ambiguities and
`misapplication of the “instance and expense” test
`continue to be embedded in the decisions of some circuit
`courts. See e.g., Playboy Enters., Inc. v. Dumas, 53 F.3d
`549, 559 (2d Cir. 1995) Michael Found. v. Urantia
`Found., 61 F. App’x 538, 549 (10th Cir. 2003). This
`“test” comes at the expense of creators seeking to
`enforce their copyright rights, only to end up as
`casualties of a distortion of clear, unambiguous prec
`edent to the contrary.
`
`This Court should use the plain language and
`clear intent of Congress in its enactment of both the
`1909 and 1976 Copyright Acts, as well as this Court’s
`own decisions regarding independent contractors and
`the work for hire doctrine, to create a well reasoned
`legal standard applicable across all the circuits. Spe
`cifically, this Court should permanently retire the
`“instance and expense” test developed by the Ninth
`Circuit and adopted by a couple other circuits, in recog
`
`
`
`4
`
`nizing that this test significantly constrains federal
`copyright law and prejudices those seeking its protec
`tions, including the fundamental non waivable rights
`of authors to terminate their grants of copyrights. 17
`U.S.C. § 203 17 U.S.C. § 304(c) Brumley v. Albert E.
`Brumley & Sons, Inc., 822 F.3d 926, 927 (6th Cir. 2016)
`(explaining the right of creators or their descendants
`to terminate their assignment of a copyright to another
`party in declining to apply the “instance and expense”
`test).
`
`
`
`ARGUMENT
`
`I. THE FIRST CIRCUIT HAS A SINGULAR CASE OF
`PRECEDENT APPLYING THE “INSTANCE AND
`EXPENSE” TEST WHICH IS NOT SUPPORTED BY
`THE TEXT OF THE COPYRIGHT ACT OR THE
`HOLDING OF THIS COURT.
`
`Copyright protection for the product of a creator’s
`services is a fundamental constitutional right. U.S.
`Const. art. I, § 8, cl. 8 (Congress has the power “to
`promote the progress of science and useful arts by
`securing for limited times to authors and inventors the
`exclusive right to their respective writings and discov
`eries”). Congress used such power in 1909 and 1976
`to expand the rights of creators under the Copyright
`Acts of 1909 and 1976. Stewart v. Abend, 495 U.S. 207,
`208 (1990) (citing provisions of the 1909 Copyright
`Act were meant to grant more rights to creators)
`Mills Music, Inc. v. Snyder, 469 U.S. 153, 171 (1985)
`(“The principal purpose of the amendments in § 304
`[of the 1976 Act] was to provide added benefits to
`
`
`
`5
`
`authors”). It is well established that “[w]here Congress
`uses terms that have accumulated settled meaning
`under . . . the common law, a court must infer, unless
`the statute otherwise dictates, that Congress means to
`incorporate the established meaning of these terms.”
`NLRB v. Amax Coal Co., 453 U.S. 322, 329 (1981)
`Perrin v. United States, 444 U.S. 37, 42 (1979).
`
`Section 26 of the 1909 Copyright Act, 17 U.S.C.
`§ 26 (1976 ed.) (“Section 26”), laid out the work for
`hire provision, stating only that “the word ‘author’
`shall include an employer in the case of works made
`for hire.” Neither ‘employer’ nor ‘works made for hire’
`were defined in the 1909 Act. However, under common
`law, ‘employer’ is understood as “the conventional
`master servant relationship understood by common law
`agency doctrine.” Community for Creative Non Violence
`v. Reid, 490 U.S. 730, 739 40 (1989) (“Nothing in the
`text of the work for hire provisions indicates that Con
`gress used the words “employee” and “employment”
`to describe anything other than ‘the conventional rela
`tion of employer and employ[ee].’”) Kelley v. Southern
`Pacific Co., 419 U.S. 318, 323 (1974) Robinson v.
`Baltimore & Ohio R. Co., 237 U.S. 84, 94 (1915).
`Thus, until 1965, Section 26 was only interpreted by
`the courts to mean traditional employer employee
`relationships.
`
`However, in 1965 when addressing the issue of
`commissioned work, the Ninth Circuit adopted the
`“instance and expense” test to determine copyright
`ownership under the work for hire provision in the
`1909 Act, later adopted by the Second Circuit. See,
`e.g., Brattleboro Publishing Co. v. Winmill Publishing
`Corp., 369 F.2d 565 (2nd Cir. 1996) Lin Brook Builders
`Hardware v. Gertler, 352 F.2d 298 (9th Cir. 1965).
`
`
`
`6
`
`There is no question that the “instance and expense”
`test is a judicially created doctrine which runs afoul
`of black letter law regarding the interpretation of
`terms in the Copyright Act. The First Circuit has also
`adopted the “instance and expense” test to materials
`protected under the 1909 Copyright Act, based upon
`the case of Forward v. Thorogood, (“Forward”), 985 F.2d
`604 (1st Cir. 1993). Forward addresses the claim of
`whether an individual who arranged and paid for a
`band to record in a studio was entitled to own the
`products of the band’s services, and the court applied
`the “instances and expense” test. Id. In that case, the
`court concluded that the “instance and expense” test
`did not apply, as the claim lacked the ‘uses and benefits
`to the commissioner’ for the test to apply. Id. at 606.
`Such application came four years after this Court’s
`decision in Community for Creative Non Violence
`(“CCNV”), supra, in which this Court declined to
`include independent contractors into the work for hire
`doctrine, albeit under the 1976 Copyright Act. CCNV,
`supra, 490 U.S. at 730. While there are many factual
`distinctions between Markham and Forward, the
`Court nevertheless applied the “instance and expense”
`test in the present case. Pet.App.11a 12a.
`
`Stare decisis may promote judicial predictability
`and consistency, but “[it] is not an inexorable command
`‘rather, it is a principle of policy and not a mechanical
`formula of adherence to the latest decision.’” Payne v.
`Tennessee, 501 U.S. 808, 828 (1991) (quoting Helvering
`v. Hallock, 309 U.S. 106, 119 (1940)). In its dedication
`to a singular case of precedent, the First Circuit puts
`form over substance and requires a favorable outcome
`for corporations, studios, and media conglomerates but
`does not correctly interpret the 1909 Act. A correct and
`
`
`
`7
`
`consistent interpretation requires this Court to apply
`the clear holding of CCNV to the 1909 Act any other
`result leads to inexplicable inconsistencies in the
`law.
`
`II. THE FIRST CIRCUIT’S EMPLOYMENT OF THE
`“INSTANCE AND EXPENSE” TEST CREATES
`UNNECESSARY UNCERTAINTY IN COPYRIGHT LAW,
`CHILLING CREATORS’ RIGHTS.
`
`The First Circuit’s adoption of law which conflates
`independent contractors with standard employer
`employee relations is problematic in its practical appli
`cation, but also in its underlying policy. Copyright
`law, particularly under the 1909 Copyright Act, is a
`complicated matter, and the “instance and expense” test
`not only unfairly penalizes independent contractors
`who typically receive little to no money for their work,
`but also creates ambiguity and conflict in the law.
`
`In Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994),
`this Court noted that “it is peculiarly important that the
`boundaries of copyright law be demarcated as clearly
`as possible.” Fogerty, 510 U.S. at 526 27. The same is
`true of ensuring that the word “employer” is understood
`the same way from statute to statute in order to
`“enhanc[e] predictability and certainty of copyright
`ownership.” CCNV, 490 U.S. at 740, 749. Yet, in dis
`missing this Court’s approach in CCNV, the First
`Circuit chose to perpetuate fundamental uncertainty
`of ownership within the broader context of copyright
`law.
`
`The prongs of the “instance and expense” test
`are vague and unpredictable themselves. See Thomas
`M. Deahl II, The Consistently Inconsistent “Instance
`and Expense” Test An Injustice to Comic Books, 14 J.
`
`
`
`8
`
`MARSHALL REV. INTELL. PROP. L. 91, 104 (2014). This
`Court criticized the broad application of what it means
`for a work to be created at “the instance of another,”
`as contributions to most kinds of copyrightable material
`are “usually prepared at the ‘instance’ of another,
`direction, and risk of a publisher or producer.” CCNV,
`490 U.S. at 741. With respect to the ‘expense’ prong, the
`focus is likewise unduly complex and unpredictable,
`evaluating “the resources of the hiring party” to the
`“nature of the payment,” all turning on the “creative
`and financial arrangement[s] as revealed by the record
`in each case.” Marvel Characters, Inc. v. Kirby, 726 F.3d
`119, 140 (2d Cir. 2013).
`
`For example, in this case, as a result of Markham’s
`active participation in all aspects of the “power of
`creation,” as well as the minimal expenses paid to
`Markham after the creation of the game, the First
`Circuit’s holding calls for an entirely different appli
`cation of the “instance and expense” test than the
`Court used in Forward. This defeats the purpose of
`predictability of copyright ownership.
`
`Moreover, there is not a consistent holding across
`the circuits. The Eleventh Circuit has adopted an
`approach similar to the holding of CCNV, while the
`First, Second, and Ninth Circuits continue to employ
`the “instance and expense” test which lumps inde
`pendent contractors and actual employees into the
`same category for all intents and purposes.
`
`Termination rights are granted through “the Copy
`right Act, giv[ing] to authors and certain enumerated
`family members the power to terminate prior copyright
`grants or transfers or licenses of copyright.” Penguin
`Grp. (USA) Inc. v. Steinbeck, 537 F.3d 193, 197 (2d Cir.
`2008). The purpose was to grant creative professionals
`
`
`
`9
`
`these rights with the recognition that creators enter
`into long term agreements with publishers, studios, or
`other conglomerates before their work has shown any
`prospect of success, and “discover increased leverage
`only when they later achieve commercial success.” Id.
`These rights cannot be waived or transferred to anyone
`other than the creator’s heirs. Id. The Copyright Act
`of 1976, “created for authors or their statutory heirs,
`with respect to transfers or licenses of copyright effected
`prior to 1978, an inalienable right to terminate the
`grant of a transfer or license.” Id. 17 U.S.C. § 304(c).
`Courts’ broad and unpredictable application of the
`“instance and expense” test effectively eviscerates the
`creator’s termination rights because creators oftentimes
`get paid something for their work, just nothing close
`to its actual value.
`
`Litigation is expensive, especially for creators who
`will inevitably lack the wherewithal to pursue their
`claims creators will hesitate to bring forth actions to
`enforce their rights if they fear they will end up with
`nothing from the lawsuit based upon basic flaws and
`ambiguities in the law. This chilling effect runs directly
`afoul of the intentions to provide protection for creators
`through the Copyright Act in the first place. It also
`means that independent contractor creators seeking
`enforcement of their rights under the 1909 Copyright
`Act may have less rights in jurisdictions employing the
`“instance and expense” test in comparison to juris
`dictions who have adopted the test from CCNV.
`These critical problems necessitate review by this
`Court. This Court should expand its holding in CCNV
`with respect to work for hire clarifications under
`the 1976 Copyright Act and extend it to give protec
`
`
`
`10
`
`tions for works protected under the 1909 Copyright
`Act as well.
`
`
`
`CONCLUSION
`
`For the foregoing reasons, as well as for the
`reasons stated in the Cert Petition, the petition for
`writ of certiorari should be granted.
`
`
`
`Respectfully submitted,
`
`STEVEN T. LOWE
` COUNSEL OF RECORD
`LOWE & ASSOCIATES P.C.
`8383 WILSHIRE BLVD. SUITE 1038
`BEVERLY HILLS, CA 90211
`(310) 477 5811
`STEVEN@LOWELAW.COM
`
`COUNSEL FOR AMICUS CURIAE
`CALIFORNIA SOCIETY OF
`ENTERTAINMENT LAWYERS
`
`
`
`DECEMBER 15, 2021
`
`