A federal district court recently declared screenwriter Victor Miller the sole owner of the copyright in the screenplay to the original “Friday the 13th” film. The original “Friday the 13th” film, released in 1980, was a huge box office success, and led to a long-running film franchise comprised of 12 films to date that have grossed an estimated $464 million worldwide. The case provides a lesson in works made for hire under the Copyright Act.
In Horror Inc., et al. v. Victor Miller, 3:16-cv-01442 (D.Conn. Sept. 28, 2018), the court granted Miller’s motion for summary judgment against Manny Company, the entity that hired Miller. As explained by the court, “[t]he Copyright Act, which went into effect in 1978, only a year before the [subject] screenplay was written, provided authors with … the ability to terminate grants of their copyright interests and reclaim their copyrights, beginning thirty-five years after they first transferred their rights.” See 17 U.S.C. Section 203(a). However, an “exception to the Copyright Act’s termination right is that the copyright in ‘works made for hire’ by an employee, and, in limited circumstances, an independent contractor, cannot be clawed back.”
Manny had argued that Miller prepared the “Friday the13th” screenplay as a work for hire, and thus never held authorship rights in the work. The court explained how under the Copyright Act there are “two mutually exclusive means” through which a work for hire might arise: “(1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as part of a motion picture or other audiovisual work … if the parties expressly agree in a written instrument signed by them that the work shall be considered a work for hire.” See 17 U.S.C. Section 101(1) and (2). (emphasis added). Notably, Section 101 “confers work-for-hire status on even those works prepared by independent contractors, but only if the work was specially commissioned for use in one of the nine types of specifically enumerated works set out in section 101(2), and only if the parties expressly agreed to the work-for-hire status in a signed writing.” See Community for Creative Non-Violence v. Reid, 490 U.S. 730, 738 (1989) (CCNV).
Although an appeal is pending, it is worth noting that the court rejected the plaintiffs’ creative attempts to use labor law to establish that Miller was an employee at the time he wrote the screenplay, and thus could not terminate is copyright transfer.
Due to the fact that the parties’ agreement “did not contain any express agreement regarding work-for-hire status, or any other express arrangement regarding copyright,” the plaintiffs made, “no argument that the screenplay was specially commissioned as a work for hire pursuant to an express agreement in a signed written instrument.” Instead, they argued under labor law grounds that Miller “was necessarily an employee of Manny, and not an independent contractor, because Miller, a WGA member, was hired by Manny, a WGA collective bargaining agreement signatory company, pursuant to a contract controlled by the WGA’s collective bargaining agreement with signatory companies.”
The court said this argument is “not the traditional test mandated by the Supreme Court in CCNV for determining whether a hired party is an employee or independent contractor according to the definition of ‘work made for hire’ contained in section 101(1) of the Copyright Act.” “The established CCNV test relies on the general common law of agency, and not labor law, and sets out a series of non-exhaustive factors to be used in determining whether a work was prepared by an employee agent.” See CCNV, 490 U.S. at 751-52. (Emphasis added). But the plaintiffs argued that, “because the Copyright Act’s definition of ‘employee’ is identical to the definition used in the National Labor Relations Act  and because labor law requires that Miller be considered Manny’s employee, Miller must also be considered Manny’s employee for the purposes of the Copyright Act.” They further asserted that “[t]he multi-factor test set out in CCNV … is only designed to be used when an individual’s employment status is otherwise ‘unclear.’”
The court rejected this “attempt to circumvent the CCNV analysis,” and held that “under the CCNV analysis, there is no reasonable dispute that Miller wrote the screenplay as an independent contractor, [and] … that Miller did not prepare the screenplay as a work for hire under section 101(1) of the Copyright Act.” The court noted that “in holding that an individual’s potential ‘employee’ status for the purposes of the Copyright Act should be determined pursuant to agency law, the [CCNV] Court expressly distinguished the use of agency law under the Copyright Act from the broader definition of ‘employee’ once used under labor law. … [and] that in no way did the CCNV Court indicate an intent to subordinate its agency law analysis to any other standard.”
The court also rejected plaintiffs’ argument that union members, such as Miller, “are necessarily employees when hired pursuant to a collective bargaining agreement … [because] any engagement to provide services pursuant to the terms of a collective bargaining agreement ‘is the antithesis of independent contractor status.’” This assertion was made “without any citations” and “amounts to no more than an unsupported bit of wordplay that is both circular and generally unconvincing.”
Following its decision “that labor law provides no authority for skirting the analysis mandated by the Supreme Court in CCNV for determining a hired party’s status as employee or independent contractor under the Copyright Act,” the court provided an exhaustive analysis of the application of the CCNV factors to this case. Under the CCNV factors, “Miller performed skilled work, received no employee benefits, was not treated as an employee for tax purposes, and his engagement did not provide Manny the right to assign additional projects.” Further, “Miller was paid in lump sums based on his completion of the screenplay, and worked on the screenplay for Manny for only a short period of time,” and he “mainly used his own tools, and frequently worked from home at his own pace.” Accordingly, the court concluded that Miller was an independent contractor, and that “[b]ecause Miller was an independent contractor, the screenplay cannot qualify as a work for hire under section 101(1). Nor does the screenplay qualify as a work for hire under section 101(2). … and Miller must be considered the author of his work on the screenplay in whom initial ownership of the copyright in the screenplay vested.” See 17 U.S.C. Section 201.
Manny also “attacked the effectiveness of Miller’s termination notices for failing to identify any express grant of rights sought to be terminated, failing to be properly served on current rights holders, and for failing to seek the termination of rights in the initial treatment.” The court rejected the argument “that Miller’s inability to identify any express language through which he conveyed his initial copyright precludes his termination of such conveyance pursuant to section 203.” The court reasoned that “[t]o the extent Miller authored the screenplay, he was the initial owner of its copyright. … [and] [i]f Manny (and then Horror) held any rights in the copyright, they must therefore have derived from Miller.” The court also noted that “although ‘transfers’ of copyright ownership must be in writing, and perhaps more express than anything that could be perceived in the language of Miller’s Contract with Manny, 17 U.S.C. § 204, non-exclusive licenses, which are excluded from the definition of ‘transfers’, 17 U.S.C. § 101, but which are still subject to the termination provisions of section 203, may be implied from conduct. … [and] to the extent no more express grant of rights could be identified, the conditions of this case satisfy the requirements of a nonexclusive implied license” See Graham v. James, 144 F.3d 229, 235; 3 Nimmer on Copyright Section 10.03[A] (2018). The court concluded that whether via transfer or from a nonexclusive license from Miller, “the circumstances of Miller’s grant are covered by section 203, and Miller’s Contract [with Manny] is the appropriate locus of such conveyance and accordingly the appropriate document for Miller to point to in terminating his grant.”
In regards to any defect asserted in Miller’s second termination notice because of any incorrect addresses, the court held “that error does not rise to the level of invalidating” such notice, and because the termination was to “each and every prior draft or iteration of the Work,” such termination reasonably included the treatment, which was subsumed within the screenplay. Accordingly, the court held that Miller’s second termination notice validly terminated Horror’s rights to the copyright in the screenplay to “Friday the 13th.”
Although an appeal is pending, it is worth noting that the court rejected the plaintiffs’ creative attempts to use labor law to establish that Miller was an employee at the time he wrote the screenplay, and thus could not terminate his copyright transfer. In fact, the court adamantly rejected what it characterized as an “attempt to circumvent” the agency law analysis mandated by the Supreme Court in CCNV. Moreover, the court reinforced and confirmed the ongoing applicability of the CCNV case by exhaustively walking through the CCNV factors to determine and hold that Miller was an “independent contractor,” and that his screenplay did not qualify as a work-for-hire.
Also notable was the court’s holding that “section 203 does not require any express language of transfer” and that “the conditions of this case satisfy the requirements of a nonexclusive implied license,” as well as holding that any defect based on incorrect addresses was not an error that rose to the level of invalidating Miller’s second termination notice.
For attorneys or authors (or heirs of authors) considering future copyright terminations, but concerned about lost or lack of information needed to include in their termination notices to avoid possible defects, this decision gives reason for optimism. The court’s refusal to invalidate the termination notices for minor errors is in line with Congress’ intent in enacting the Copyright Act to give authors a second opportunity to share in the economic success of their works. As explained in the House report accompanying the Copyright Act, the provisions were “needed because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited.” See Korman v. HBC Fla., Inc., 182 F.3d 1291, 1296 (11th Cir. 1999); H.R. Rep. No. 94-1476, at 124 (1976). Certainly, it would have been a complete stab in the dark for Miller to predict the multi-million dollar box office success and longevity of the “Friday the 13th” film franchise that would stem from his original screenplay.