Termination Information Part 1:
What the Friday the 13th Decision Means for Screenwriters and Other Authors
This is the first in a series of blog posts discussing termination rights – authors’ rights under the Copyright Act to retrieve their copyrights they previously assigned. For past articles about termination rights and the myriad issues they entail, see here and here where I previously wrote about the Friday the 13th case.
Victor Miller’s Story
Last September Victor Miller, writer of the original Friday the 13th screenplay, scored a big victory when the 2nd Circuit held that his termination was valid. The producers argued Miller didn’t have the right to terminate his assignment because he created the script as a work for hire. The result wasn’t surprising. In fact, it was exactly what I expected. But it’s good that the court reached the just decision and provided some clarity on future terminations.
In 1978 producer Sean S. Cunningham, seeking to capitalize on the success of the Halloween slasher movie, contracted Miller to write a horror movie. They entered into a standard 1977 Writers Guild of America (“WGA”) contract, with Miller paid a flat fee in two installments. He assigned his copyright to the production company.
Miller discussed his ideas for the screenplay, originally titled “The Long Night at Camp Blood”, with the producers. Although he “bounced ideas” with the producers, the screenplay was mostly his expression. He received the sole “written by” credit on the movie.
The producer later found an investor to finance the film, and that investor also contributed ideas.
This is where one interesting fact stuck out to me. The investor came up with the idea for the movie’s most iconic scene, over Miller’s objection. I don’t know if I should spoil it, in case you haven’t seen the movie, but it scared the crap out of 11-year-old me even though the babysitter had told me it was going to happen. Suffice it say that although Jason is key to the first movie, he’s not really the Jason we envision when we think about the Friday the 13th series. Ultimately the movie rights were assigned from the investor’s company to Horror, Inc. and Friday the 13th was a remarkable success.
Victor Miller Seeks to Get His Copyright Back
In 2016, Miller invoked the Copyright Act’s termination right to get his copyright back.
Under 17 U.S.C. 203, if an author assigned a copyright on or after 1978, the author (or heirs) has the nonwaivable right to terminate that assignment 35 years after the assignment or 35 years from publication. But the right doesn’t exist if the work was a work for hire.
The producers argued that Miller’s screenplay was a work for hire because he was an employee working with the scope of his employment. That didn’t go over well at the District Court.
On appeal, the producers emphasized one fact to argue Miller was an employee working within the scope of his employment: Miller’s WGA union membership. But the Second Circuit held that labor law doesn’t govern whether Miller is an employee. The Copyright Act does. And the agency standard adopted by the Supreme Court, interpreting work for hire under the Copyright Act, favors Miller.
It’s labor law that allowed screenwriters to unionize as employees, but that doesn’t mean they’re employees under copyright law. On that, the Second Circuit reasoned: “That labor law was determined to offer labor protections to independent writers does not have to reduce the protections provided to authors under the Copyright Act.”
At the time Miller was contracted, they could have done something very simple to cement the screenplay as a work for hire. All they needed was a signed writing that it was a work for hire. That’s the “specially commissioned work” definition of work for hire under 17 U.S.C. 101. That definition is limited to certain categories, including a contribution to motion picture. It’s even in the WGA standard contracts available at the time. But the producers didn’t use it. That’s why they tried so hard to argue he was an employee. So, the Second Circuit concluded, Miller’s termination was valid and the copyright to his screenplay reverted back to him.
The Effect of Horror Inc. v. Miller
So what does this mean for other important disputes involving termination rights? My thoughts on three big picture issues in current lawsuits:
Question 1: Is the decision good for the authors seeking to get their rights back from Marvel?
Answer: Not unless there’s a big shift in the law.
Miller invoked a different termination right than the Marvel authors. Miller’s right is under 17 U.S.C. 203, which governs assignments from 1978 on. The Marvel authors’ rights are under 17 U.S.C. § 304, for assignments before 1978. The termination right under § 304 is effective 56 years after the assignment.
More importantly, different definitions of work for hire apply. For works created before 1978, the Copyright Act of 1909 applies. That Act refers to works for hire but doesn’t define it. Courts typically apply the “instance and expense” test, which asks whether the work was prepared at the instance and expense at the hiring party. The standard is more friendly to the hiring party. In fact, Marvel won previous lawsuits invoking this rule, under facts similar to these new lawsuits. So the authors, in order to prevail, are seeking a change to how works for hire are defined under the 1909 Act.
Question 2: Is Horror Inc. v. Miller a good decision for other screenwriters seeking to get their copyrights back?
Answer: Some screenwriters.
Some screenwriters will benefit from this decision, because it makes it hard for producers to claim that they were employees were working within the scope of their employment. However, if a screenwriter as an independent contractor is commissioned, the screenplay can be a work for hire – if and only if there’s a signed writing designating it as a work for hire.
A standard Writers Guild of America contract will state that the screenplay is written as a work for hire. But the people contracting Miller to write Friday the 13th didn’t have him sign one. Perhaps they neglected this issue. Perhaps they didn’t appreciate how successful and lucrative the movie would be. Or maybe they were being considerate of him.
Regardless of why they didn’t have him sign a work for hire, they didn’t. Most screenwriters dealing with sophisticated production companies won’t have that advantage.
Question 3: How good is this decision for recording artists seeking to get their copyrights back from record companies?
Answer: Not much impact.
Recording artists are battling record companies over termination rights to their sound recordings, or what’s commonly known as their “masters”. The record labels are fighting termination, arguing that sound recordings are works for hire.
But the issue for recording artists isn’t whether they created sound recordings as employees within the scope of their employment. It’s whether or not they are eligible as works for hire under the “specially commissioned” definition. Each of these artists signed a contract designating the recordings as works for hire. However, the Copyright Act lists nine enumerated categories that are eligible “specially commissioned” works for hire. Contributions to motion pictures are among them, which is why it’s not hard for producers to make a screenplay a work for hire and defeat termination. But sound recordings aren’t among those categories, so artists argue they can’t be works for hire regardless of the contractual clause.
Statute of Limitations
A quick word on the statute of limitations issue, because we’re going to see a lot of them in upcoming termination disputes. The producers argued that Miller’s authorship claim was precluded because his authorship was expressly precluded long ago. They argued that Miller was obligated to bring a claim within three years of the express repudiation of his authorship.
The court rejected this argument on the basis that Miller’s authorship wasn’t repudiated. First, the copyright notice on the screenplay’s cover page, on behalf of the film company, wasn’t an express repudiation because copyright ownership is not the same as authorship. Similarly, the producers’ statements that they were owners of Friday the 13th were not indications they were authors of the original screenplay. Finally, the copyright registration designating the screenplay as a work for hire does not start the statute of limitations clock.
I agree with this determination on the statute of limitations and the reasoning behind, but I think the issue is going to arise in more challenging ways. It will be particularly problematic where the statute of limitations potentially shuts out an author before they have the statutory right to terminate. I will be writing more about the statute of limitations in Part 2 of Termination Information.