American Vitagraph, Inc. v. Levy

• Decision Date: 23 October 1981
• Docket Number: No. 79-3555,79-3555
• Citation: 659 F.2d 1023
• Parties: , 1981 Copr.L.Dec. P 25,320 AMERICAN VITAGRAPH, INC. a Corporation, Lloyd V. Friedgen, Jr., and William J. Gleason, Plaintiffs-Appellees, v. Ronald R. LEVY, M.D. and Cinamco, Inc., a Corporation, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1023

659 F.2d 1023

213 U.S.P.Q. 31, 1981 Copr.L.Dec. P 25,320

AMERICAN VITAGRAPH, INC. a Corporation, Lloyd V. Friedgen Jr., and William J. Gleason, Plaintiffs-Appellees, v. Ronald R. LEVY, M.D. and Cinamco, Inc., a Corporation Defendants-Appellants.

No. 79-3555.

United States Court of Appeals Ninth Circuit.

Argued and Submitted March 2, 1981.

Decided Oct. 23, 1981.

O. R. Rouse, Palos Verdes Estate, Cal., for defendants-appellants.

Keith D. Beecher, Jessup & Beecher, Los Angeles, Cal., for plaintiffs-appellees.

Appeal from the United States District Court for the Central District of California.

Before ELY and ALARCON, Circuit Judges, and TEMPLAR, ^* District Judge.

ELY, Circuit Judge:

This is an appeal from a declaratory judgment action, 28 U.S.C. §§ 2201, 2202, involving copyright questions under the 1909 Copyright Act, as amended, ¹ 17 U.S.C. §§ 10, 26. Jurisdiction rests under 28 U.S.C. § 1338(a), giving federal courts original jurisdiction of civil actions arising under an Act of Congress relating to copyrights.

This appeal raises important questions concerning what constitutes "publication" of a motion picture under the 1909 Act. Plaintiff-appellee Vitagraph ² successfully contended below that copyright protection to the film "Hooray for Hollywood" had been destroyed by acts of divestive publication prior to the film's general release in 1976. We reverse, holding that the alleged divestive acts were not publications and that the film never lost its common law copyright until its publication by general release in 1976. At that time statutory copyright was obtained by publication in compliance with the requisite notice formalities. Accordingly, the film never lost copyright protection, and Vitagraph's contractual claim for damages based on a loss of its security interest is without merit.

FACTS

I. The Sale-Purchase Agreement

An understanding of the contractual relationship entered into between Vitagraph and Levy is necessary to understand Vitagraph's asserted claim. ³ In August of 1975 Vitagraph and Levy entered into a written agreement for the sale of the film to Levy. Part of the consideration received was a non-recourse promissory note to be paid from net income of the film under a percentage points profit allocation arrangement. Vitagraph retained a security interest in the film to secure payment of the note, and in the event of default Vitagraph's sole remedy was to look to the film pledged as security. Under the terms of the agreement, title to the film would also revest in Vitagraph in eight years in the event the note was not paid. Levy obtained all distribution rights to the film, and an assignment of all rights, title, and interest, including copyright, was executed on February 11, 1976.

II. Vitagraph's Asserted Claim

Vitagraph's theory of recovery below and on appeal is that statutory copyright was obtained in its name and subsequently lost when Levy, following the assignment of the film, caused several alleged publications without proper copyright notice. Damages were determined to be those resulting from the loss of value to Vitagraph's security interest in the film occasioned by the injection of the film into the public domain.

DISCUSSION

I. The District Court Reasoning

Vitagraph successfully argued below that statutory copyright was obtained in its name by three separate acts. In December of 1975 Vitagraph delivered to Levy a print of their initial version of the film, which bore copyright notice reading "(c) Copyright American Vitagraph, Inc. 1975". That print was screened to the public for one week in late December 1975 in Eureka, California, and subsequently returned to Vitagraph for additional editing. The District Court held that the Eureka screening constituted an investive publication under 17 U.S.C. §§ 10, 26. ⁴ The effects of finding an investive publication are the loss of common law copyright, Wheaton v. Peters, 33 U.S. (8 Peters) 591, 8 L.Ed. 1055 (1834); Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 347, 28 S.Ct. 722, 725, 52 L.Ed. 1086 (1908); and a resulting limited duration of the statutory copyright being measured from the date of first publication. 17 U.S.C. § 26.

The District Court also ruled that the subsequent assignments of the film from Vitagraph to Levy and from Levy to Cinamco, which bore copyright notice in Vitagraph's name, constituted investive publications securing statutory copyright. This conclusion is without legal support. Assignment per se is not a publication. If the "work" assigned has not been published and is therefore protected by common law copyright, the assignee becomes the proprietor of the copyright. Copyright notice at the time of first publication is then required to be in the assignee's name. Dave Grossman Designs, Inc. v. Bortin, 347 F.Supp. 1150, 1156 (N.D.Ill.1972); 3 Nimmer on Copyright § 10.07(D) (2)(a) (1978) (hereinafter Nimmer). Conversely, if the "work" assigned has statutory copyright, copyright notice affixed to subsequent publications is required to be in the name of the assignor, unless a recordation of the assignment has been made. 17 U.S.C. § 32 (1909 Act); Group Publishers v. Winchell, 86 F.Supp. 573, 576 (S.D.N.Y.1949); Carter v. Hawaii Transp. Co., 201 F.Supp. 301, 305 (D.C.Haw.1961); 3 Nimmer § 10.07(D)(2)(b).

Therefore, the finding of statutory copyright in Vitagraph's name rests solely upon the one week screening in Eureka, California. That finding is critical to the outcome of this case. Statutory copyright is destroyed and injects a work into the public domain if it is thereafter published with a defective copyright notice. National Comics Publications, Inc. v. Fawcett Publications, Inc., 191 F.2d 594, 599 (2d Cir. 1951); 1 Nimmer § 4.01(B), 2 Nimmer § 7.14.

The District Court held, inter alia, that the general release of the film in 1976 bearing copyright notice in Cinamco's name injected the film into the public domain because no recordation of copyright assignment had been made. Group Publishers v. Winchell, supra. If statutory copyright in Vitagraph's name was obtained, the general release in Cinamco's name would divest the film of its copyright.

The District Court also found that several prerelease screenings of the film to the trade were publications requiring compliance with statutory formalities. These screenings, if deemed publications, would result in loss of copyright protection in the film if notice was required to be in Vitagraph's name. As discussed infra, these pregeneral release screenings were not acts of general publication, and thus did not divest the film of its copyright.

We disagree with the District Court that the Eureka exhibition was a publication forfeiting common law copyright protection and creating a statutory copyright in favor of Vitagraph. We also disagree that any publication requiring compliance with statutory formalities occurred prior to the film's general release in 1976. We well recognize that the concept of publication under the 1909 Act, especially as it relates to motion pictures, is an arcane and unsettled area of law. Nevertheless, a few well established principles guide our decision here.

Publication, while of immense importance under the 1909 Act, is not statutorily defined. Case law has created a distinction between general and limited publication, holding that only the former operates to divest common law copyright and subject a work to the federal statutory scheme. General publication has been stated to be "such a dissemination of the work of art itself among the public, as to justify the belief that it took place with the intention of rendering such work common property." American Tobacco Co. v. Werckmeister, 207 U.S. 284, 299-300, 28 S.Ct. 72, 77, 52 L.Ed. 208 (1907) (quoting Slater on the Law of Copyright and Trademark at 92). An oft quoted modern definition of general publication is that "publication occurs when by consent of the copyright owner, the original or tangible copies of a work are sold, leased, loaned, given away, or otherwise made available to the general public, or when an authorized offer is made to dispose of the work in any such manner even if a sale or other such disposition does not in fact occur." 1 Nimmer § 4.04 at 4-18 4-19. A limited publication

"communicates the contents of a (work) ... to a definitely selected group and for a limited purpose, and without the right of diffusion, reproduction, distribution or sale ... (and) does not result in loss of the author's common-law right to his (work) .... (T)he circulation must be restricted both as to persons and purpose, or it can not be called a private or limited publication."

White v. Kimmell, 193 F.2d 744, 746-47 (9th Cir. 1952). The restrictions can be implied as well as express. Burke v. National Broadcasting Co., Inc., 598 F.2d 688, 692 (1st Cir. 1979); Werckmeister v. American Lithograph Co., 134 F. 321, 324 (2d Cir. 1904).

The courts have treated these two concepts of publication so as to mitigate the harsh forfeiture effects of an improper publication. "From the results of the decided cases, the principle is discernible that it takes more publication to destroy a common-law copyright than to perfect a statutory copyright." Hirshon v. United Artists Corp., 243 F.2d 640, 644-45 (D.C.Cir.1957); see also American Visuals Corp. v. Holland, 239 F.2d 740 (2d Cir. 1956). "(I)t takes more in the way of publication to invalidate any copyright, whether statutory or common law, than to validate it." Hirshon, supra at 645. Vitagraph's theory of recovery hinges on an invalidation of the copyright. The significance of American Visuals and Hirshon lies in the recognition that publication may more readily be found if the issue is whether the copyright statute has been complied with than if forfeiture of common law rights is involved.

The case law has also drawn a distinction between performance of a work and other means of dissemination. It has long been held that mere...