Dumas v. Gommerman

• Decision Date: 13 January 1989
• Docket Number: No. 87-6542,87-6542
• Parties: , 1989 Copr.L.Dec. P 26,371, 9 U.S.P.Q.2d 1701 Jennifer DUMAS, an individual and successor-in-interest to Patrick Nagel, Plaintiff-Appellee, v. Stefan GOMMERMAN, dba Eva & Steve Dorog Gallery; S & I Gommerman Publishing, Inc., Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1093

865 F.2d 1093

57 USLW 2456, 1989 Copr.L.Dec. P 26,371,

9 U.S.P.Q.2d 1701

Jennifer DUMAS, an individual and successor-in-interest to Patrick Nagel, Plaintiff-Appellee, v. Stefan GOMMERMAN, dba Eva & Steve Dorog Gallery; S & I Gommerman Publishing, Inc., Defendants-Appellants.

No. 87-6542.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 3, 1988.

Decided Jan. 13, 1989.

Jay S. Rothman and Leland (L.L.) Whitney, Encino, Cal., for defendants-appellants.

Gary S. Phillips and Anthony Kornarens, Rosenberg, Nagler & Phillips, Beverly Hills, Cal., for plaintiff-appellee.

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

Before FLETCHER, CANBY and O'SCANNLAIN, Circuit Judges.

FLETCHER, Circuit Judge:

Defendants appeal the grant of a preliminary injunction restraining them from reproducing and marketing works of art in which plaintiffs claim copyrights. This copyright infringement case requires us to construe for the first time in this circuit the work for hire provisions of the 1976 Copyright Act, 17 U.S.C. Sec. 101 et seq.

I. FACTS

The parties dispute the ownership of copyrights in four works of art (the "ITT works" ¹). The ITT works were produced in 1979 by Patrick Nagel, a graphic artist and commercial illustrator, on contract to the advertising agency of D'Arcy, MacManus & Masius, Inc. (D'Arcy) on behalf of its client, ITT Cannon, a corporate manufacturing entity. None of the original actors is a party to this suit.

Jennifer Dumas, plaintiff-appellee, is Nagel's widow and the representative of his estate. Upon Nagel's death in 1984 she became the successor in interest to copyrights he held in his works. She contends that Nagel, as an independent contractor, was the author of the ITT works and under the 1976 Act retained ownership of the copyrights.

Stefan Gommerman, defendant-appellant, is the owner of an art gallery in Los Angeles, California doing business as Eva & Steve Dorog Gallery. S & I Gommerman Publishing, Inc. is a California corporation doing business as an art publisher. (Defendants collectively will be referred to as "Gommerman".) Gommerman contends that he purchased the copyrights from ITT Cannon which, as Nagel's employer, was the author of the ITT works.

In 1979 ITT Cannon, through D'Arcy, commissioned Nagel to create four works of art that Cannon would give as sets of lithographs to its distributors as part of a promotional campaign. The paintings' content and some aspects of the design, borders, and placement of figures allegedly were determined by D'Arcy, which provided Nagel with sketches to use in preparing his illustrations. The purchase order does not specify that the works were works for hire nor does it transfer the copyright to ITT Cannon.

ITT Cannon accepted and paid for Nagel's paintings, but, because the promotional giveaway was less than successful, was left with many extra sets of lithographs. At some point, ITT Cannon threw away the four original paintings. Several years later Stefan Gommerman learned of the existence of these lithographs, and in 1985 purchased the remaining sets from ITT Cannon. ² At that time he also purchased from ITT any copyrights to the ITT works which ITT may have held and, in January 1986, registered each of the four works in his name.

Dumas learned of the purported copyright transfer in January 1986 and, by letter to Gommerman and ITT Cannon, notified them of her claim of copyright ownership. Gommerman nevertheless proceeded with poster reproduction of one of the works and took purchase orders from around the United States. Dumas filed a conflicting registration of copyright on May 8, 1987.

On June 22, 1987 Dumas filed a complaint against Gommerman for damages and declaratory relief for copyright infringement under 17 U.S.C. Sec. 101 et seq. and for unauthorized use of a deceased personality's name in violation of California Civil Code Sec. 990. On June 23, 1987 she moved for a preliminary injunction to prevent Gommerman from manufacturing, distributing, or copying the lithographs in dispute. The district court granted the preliminary injunction on August 12, 1987 and extended it on October 7, 1987. The injunction specified that neither Gommerman nor his business, nor his business entities, nor his agents may 1) reproduce or otherwise manufacture the ITT works; or 2) sell, advertise, or in any way distribute reproductions of the ITT works already in the possession of the defendants. The court also ordered Dumas to refrain from publicizing the fact of the preliminary injunction. Gommerman timely appeals. This court has jurisdiction under 28 U.S.C. Sec. 1292(a)(1).

II. DISCUSSION

Our review of a preliminary injunction is limited. The grant or denial of a preliminary injunction will be reversed only where the district court abused its discretion or based its decision on an erroneous legal standard or on clearly erroneous findings of fact. Colorado River Indian Tribes v. Town of Parker, 776 F.2d 846, 849 (9th Cir.1985); Fed.R.Civ.P. 52(a). We review de novo the correctness of the legal standards employed by the district court in evaluating the plaintiff's likelihood of success on the merits.

The parties do not contest that the district court employed the correct legal standard for granting a preliminary injunction: that the party seeking the injunction must show either a likelihood of success on the merits and the possibility of irreparable injury or that serious questions going to the merits are raised and the balance of hardships tips sharply in her favor. This test is to be viewed as a continuum. Benda v. Grand Lodge of the Int'l Ass'n of Machinists & Aerospace Workers, 584 F.2d 308, 314-15 (9th Cir.1978).

The sole issue Gommerman raises on appeal is whether the district court applied the correct legal standard in determining whether Nagel was an employee producing "works for hire" under 17 U.S.C. Sec. 101. Gommerman has conceded all other issues regarding the issuance of the preliminary injunction. ³

The district court found that Nagel could not be considered an "employee" for purposes of the Copyright Act "because defendant ITT CANNON did not exercise sufficient direction and control over Mr. Nagel in the creation of the ITT Works." Conclusion of Law No. 6, SER at 19. Gommerman agrees with the district court's use of a "supervision and control" test, but argues that the district court erroneously employed too strict a test by requiring proof of significant control. Gommerman contends that any control, or just limited control, should suffice to make an independent contractor an employee. The issue, he argues, "is whether the creativity has been directed and controlled to any amount by the hiring party." Appellant's Brief at 23 (emphasis added). "Any identifiable direction and control is adequate." Id. at 25.

Dumas does not quarrel with the district court's choice of test (the Aldon "supervision and control" test, discussed below), but does suggest an even narrower standard (the Easter Seal Society "literal interpretation", discussed below) would have been preferable. She further contends that under either analysis Nagel would not be an "employee."

A. History of the Work for Hire Doctrine

The Copyright Act of 1909 made the employer the "author" and initial copyright holder of "works made for hire." 17 U.S.C. Sec. 26 (repealed). Definition of "works made for hire" was left to the courts. Beginning from early cases holding that a commission contract would be presumed to assign the copyright to the patron unless the parties expressly or implicitly provided otherwise, see, e.g., Yardley v. Houghton Mifflin Co., 108 F.2d 28 (2d Cir.1939), ⁴ the rule was gradually expanded into a presumption that anyone who paid an artist to create a copyrightable work was the statutory author under the work for hire doctrine. ⁵ See Murray v. Gelderman, 566 F.2d 1307, 1309-10 (5th Cir.1978) (copyright in book written under contract vested in employer, even though author had specifically bargained for complete control over the work); see generally, Comment, Commissioned Works as Works Made for Hire Under the 1976 Copyright Act: Misinterpretation and Injustice, 135 U.Pa.L.Rev. 1281, 1282-89 (1987) [hereinafter Comment, Commissioned Works ].

This circuit's most recent case interpreting work for hire under the 1909 Act followed this approach, presuming "that the parties expected the employer to own the copyright and that the artist set his price accordingly." May v. Morganelli-Heumann & Assoc., 618 F.2d 1363, 1368 (9th Cir.1980). May involved architectural designs for a residence and horse training facilities. We noted that although the architect's designs were works for hire under the 1909 precedent, the 1976 Act would require the contrary result. 618 F.2d at 1368 n. 4.

B. The Work for Hire Doctrine Under the 1976 Act

Whether Nagel, a freelance artist, produced the ITT works as an "employee" or as an independent contractor hinges on how the term "employee" is to be defined under 17 U.S.C. Sec. 101. If Nagel was an employee, the ITT works were "made for hire" and ITT Cannon is the author. If he was an independent contractor, he retained authorship because the works do not fit under any of the nine enumerated categories of commissioned works in Sec. 101(2) and there was no express written agreement.

No circuit, in deciding copyright ownership under the 1976 Act, has continued to follow the employer-oriented approach of cases decided under the 1909 Act. As will be discussed more fully below, the legislative history of the 1976 Act and the Act's inclusion of a definition of "works made for hire" demonstrate that Congress did not intend a continuation of the status quo. ⁶

To interpret the work for hire provisions, we must begin with a review of the relevant statutory language. If that is not clear, we then proceed to consider pertinent legislative history. Middlesex County Sewerage...