United States: Second Circuit Rejects Film Director's Claim Of Copyright Ownership In Film, Holding The Producer Owns The Entire Work

In recently holding that a film director does not own a copyright in his individual creative contribution to a film, the Second Circuit joined the Ninth Circuit in concluding that, generally, only the undivided film as a whole is a work of authorship protectable by copyright. The Second Circuit further held that the film's producer owned the copyright to the film at issue, but left open the possibility that, in other cases, a director may be found to be the sole or joint copyright owner of a film. The ruling is a significant development in limiting the potentially crippling effect of allowing multiple individuals to claim copyright ownership in collaborative works and underscores the need for producers to obtain written agreements addressing copyright ownership in advance of commencing filming.

Factual Background

The producer, Casa Duse, purchased a screenplay entitled Heads Up and informally agreed to pay Alex Merkin $1,500 to direct the film. Each member of the cast and crew, except Merkin, entered into an "Independent Contractor Agreement" with Casa Duse, agreeing that Casa Duse would own all copyrights in the film. Casa Duse emailed Merkin a similar agreement, but Merkin did not sign it. Filming nevertheless started without a signed agreement, and Merkin ultimately completed his direction of the film. "Merkin performed his role as director by advising and instructing the film's cast and crew on matters ranging from camera angles and lighting to wardrobe and makeup to the actors' dialogue and movement."

After Merkin completed direction of the film, Casa Duse and Merkin entered into a "Media Agreement" that allowed Merkin to edit, but not license, sell or copy the film footage without Casa Duse's permission, while the parties continued to negotiate ownership of the film. After negotiations broke down, Merkin registered a copyright in the film and used threats of a cease-and-desist order to force a film festival to cancel a screening of Heads Up, causing Casa Duse to miss the deadlines for four film festivals. Casa Duse then commenced an action asking for a declaration that Merkin did not own a copyright interest in the film, and Merkin counterclaimed for copyright infringement. The district court granted summary judgment to Casa Duse, and the Second Circuit affirmed.

The Second Circuit Holds That a Film Cannot Be Severed Into Multiple Copyrighted Works

At the outset, the Second Circuit noted that it had "never decided whether an individual's non-de minimis creative contributions to a work in which copyright protection subsists, such as a film, fall within the subject matter of copyright, when the contributions are inseparable from the work and the individual is neither the sole nor a joint author of the work and is not a party to a work-for-hire arrangement." The court answered the question in the negative, based on the Copyright Act's terms, structure and history.

The Copyright Act does not define "works of authorship," but Section 102 (17 U.S.C. § 102) lists examples, including literary works, musical works, motion pictures and other audiovisual works, pantomimes and dramatic works. The court noted that many of these types of works normally contain contributions from multiple individuals, but that the Copyright Act does not list the constituent parts of any of these works as separate "works of authorship." Similarly, a "joint work" is defined as a work by multiple authors "with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole," not a series of separate copyrightable works. 17 U.S.C. § 101 (emphasis added). With specific reference to films, the House Report for the Act states that "a motion picture would normally be a joint rather than a collective work with respect to those authors who actually work on the film."

In affirming summary judgment, the court took pains to explain that it was not holding that directors could never achieve copyright protection in their works.

The court further noted the Ninth Circuit's recent en banc ruling in Garcia v. Google, Inc., 786 F.3d 733 (9th Cir. 2015), holding that an actor had no copyright interest in his performance in a motion picture. The Second Circuit agreed with the Ninth Circuit's analysis that a copyright system that allowed each producer, director, screenwriter, actor, designer, cinematographer and camera operator to claim an individual copyright in a small piece in a collaborative work "would result in [a] legal morass[,] . . . [making] Swiss cheese of copyrights." "[W]hile originality and fixation are necessary prerequisites to obtaining copyright protection, see 17 U.S.C. § 102(a), they are not alone sufficient: Authors are not entitled to copyright protection except for the 'works of authorship' they create and fix." The court, therefore, affirmed summary judgment for Casa Duse, holding that Merkin did not own a copyright in his directorial contribution to the Heads Up film.

In affirming summary judgment, the court took pains to explain that it was not holding that directors could never achieve copyright protection in their works. Directors may be considered joint authors of a film as a whole if the director and other authors intend to create a work as joint authors. However, in this case, the parties agreed they did not intend to create a work of joint authorship. Indeed, if Merkin had been a joint author with Casa Duse, he would have had no ability to prevent Casa Duse from exhibiting the film without his permission, as it is well established that one joint author cannot be held liable to another joint author for copyright infringement. Finally, the court also stated a director may in some cases be considered the sole author of a film, quoting the Supreme Court's statement in Community for Creative Non-Violence v. Reid, 490 U.S. 730, 737 (1989), that "[a]s a general rule, the author is the party who actually creates the work, that is, the person who translates an idea into a fixed, tangible expression entitled to copyright protection." The court, however, as discussed below, held that, on the facts here, Casa Duse, not Merkin, was the sole author of Heads Up.

The Second Circuit Holds That the Producer Is the "Dominant Author" of the Film and, Therefore, Owns the Copyright

The parties agreed that the case did not present one of the multiple authorship scenarios expressly contemplated by the Copyright Act, such as joint authorship. The Second Circuit held that "[i]n cases in which none of the multiple-author scenarios specifically identified by the Copyright Act applies, but multiple individuals lay claim to the copyright in a single work, the dispositive inquiry is which of the putative authors is the 'dominant author.'" The court acknowledged that the Second Circuit "has not proffered rules for determining which of multiple authors is 'dominant,'" but "factual indicia of ownership and authorship," such as "decisionmaking authority, billing, and written agreements with third parties," are relevant. Here, Merkin exercised significant control in the form of many creative decisions, such as camera work, lighting, and wardrobe. However, Casa Duse initiated the project, obtained the rights to the screenplay, selected the cast and crew, controlled the production schedule and attempted to coordinate the film's release, which the court found far more significant than Merkin's control. The court found that the "billing" factor was neutral since both parties took some credit, which the court understood would often be the case with films, but that the factor regarding agreements with other parties "points decisively in Casa Duse's favor" because Casa Duse entered into third-party agreements claiming ownership with every cast and crew member, except Merkin.

Potential Impact of the Ruling

In agreeing with the Ninth Circuit's analysis in Garcia that a single individual who contributes to a collaborative work cannot use the copyright laws to hold hostage the dominant author's exploitation of the work, the Second Circuit has provided needed clarity as to the rules for copyright ownership in joint creative works. Nevertheless, it remains the case that, to avoid uncertainty and the risks of litigation, the best practice for a producer of a film or other collaborative work remains obtaining proper work-for-hire agreements and copyright assignments at the outset of the project.

The decision is 16 Casa Duse, LLC v. Merkin, 791 F.3d 247 (2d Cir. 2015).

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