Hampton v. Paramount Pictures Corporation

• Decision Date: 02 June 1960
• Docket Number: No. 16486.,16486.
• Citation: 279 F.2d 100
• Parties: John HAMPTON and Dorothy Hampton, Appellants, v. PARAMOUNT PICTURES CORPORATION, and Eastman Kodak Company, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

279 F.2d 100 (1960)

John HAMPTON and Dorothy Hampton, Appellants, v. PARAMOUNT PICTURES CORPORATION, and Eastman Kodak Company, Appellees.

No. 16486.

United States Court of Appeals Ninth Circuit.

June 2, 1960.

Anthony V. Randles, Los Angeles, Cal., for appellants.

Meville B. Nimmer, Nimmer & Selvin, Beverly Hills, Cal., for appellees.

Before BARNES, HAMLEY, and JERTBERG, Circuit Judges.

HAMLEY, Circuit Judge.

This copyright infringement suit in which injunctive relief and damages were sought involves the silent motion picture film, "The Covered Wagon," produced in 1923. The plaintiff is Paramount Pictures Corporation which through a predecessor corporation, holds the copyright by assignment from the original producer, Famous Players-Lasky Corporation. The defendants are John and Dorothy Hampton, herein referred to as Hampton.

In addition to answering Paramount's complaint Hampton filed a complaint as third-party plaintiff against Eastman Kodak Company and Kodascope Libraries, Inc., as third-party defendants. In this third-party complaint, based on asserted breach of warranty and fraud, Hampton sought a monetary recovery equal to whatever damages the court might award Paramount against Hampton.

The cause was tried to the court without a jury. In the judgment thereafter entered Hampton was enjoined from exhibiting "The Covered Wagon" for profit without the consent of Paramount. No damages were awarded, and the third-party complaint against Eastman and Kodascope was dismissed without prejudice.

Hampton appeals, contending: (1) By contract between Paramount and Kodascope the latter had been given power to sell a 16 mm. print of "The Covered Wagon" to Hampton for commercial exhibition; (2) Paramount abandoned its rights to the release of substandard-size prints of the film in question; (3) Paramount is estopped to enjoin the exhibition of the film by Hampton; and (4) the action is barred because of laches on the part of Paramount.

On June 15, 1927, a predecessor of Paramount as assignee of the copyright entered into a written agreement with Kodascope, a subsidiary of Eastman. Under this agreement Kodascope was given certain rights to produce prints of certain films for "non-theatrical exhibitions." Eighteen films were transferred by this agreement, including "The Covered Wagon."

About 1930 silent films were considered obsolete for general commercial exhibitions. From that time on Kodascope rented and sold 16 mm. ("substandard") prints of these films without restriction. They were openly advertised in catalogs of Kodascope and many other distributors, and were openly sold and traded by Kodascope and other dealers, all without restriction.

On February 21, 1938, Hampton purchased from Kodascope a 16 mm. print of "The Covered Wagon." This print bore a notice of Paramount's copyright on the runner or leader film immediately preceding the film of the photoplay itself. Hampton used this print in road shows and subsequently in Hollywood. In 1942 Hampton built a special building known as the "Silent Movie Theater" for exhibiting 16 mm. prints or silent moving pictures in Hollywood. He has been showing such films there continuously since that time. "The Covered Wagon" was exhibited for profit at this theater on four occasions, as follows: three days in March 1942, six days in November 1948, seven days in January 1952, and seven days in April 1955.

Hampton exhibited not only "The Covered Wagon" at this theater, but also all of the other seventeen Paramount films which were transferred by the 1927 agreement. All eighteen of these films were known as "Kodascope film prints." One-week showings of these other films were exhibited on fifty-two separate occasions from 1942 to June 25, 1953. It was on or about the latter date, according to Paramount's answer to an interrogatory, that Paramount first learned of an instance in which a Kodascope film print was being used commercially. In answer to another interrogatory it was stated that on or about January 29, 1954, Paramount first learned of an instance in which a Kodascope print was sold.

On April 21, 1954, an attorney for Paramount telephoned to Hampton and told him that he had no right to exhibit "The Covered Wagon," and that any exhibition of that print would constitute an infringement of Paramount's copyright. Notwithstanding this notice Hampton commercially exhibited this moving picture at his Hollywood theater on April 27, 1955.

On April 28, 1955, Paramount sent Hampton a telegram notifying him to cease and desist from all further exhibition of "The Covered Wagon." The film was nevertheless continually shown for the remainder of the week. Paramount filed its complaint herein on December 22, 1955.

Hampton's first point on appeal is that the contractual arrangement between Paramount and Kodascope gave the latter power to sell a 16 mm. print of "The Covered Wagon" to Hampton for commercial exhibition. According to appellant, the contractual arrangement amounted to an assignment of the right to exhibit substandard films and was not a mere restricted license. Appellant contends that one who assigns, rather than licenses, the right to exhibit a film loses the power to restrict the use of the picture.

In support of his view that the contractual arrangement between Paramount and Kodascope was an assignment and not a license, appellant points to certain provisions contained in or absent from that contract. It is asserted that the contract contains no limitation as to time; a flat lump-sum payment was to be made for each film transferred; there was no requirement that outstanding prints and negatives were to be returned; no limitation was placed on the right to alter or abridge the films transferred; and the contract gave Kodascope exclusive territorial rights co-extensive with the rights of Paramount.

If the contract in question were ambiguous with regard to its nature as an assignment or a license or as to the purposes for which Kodascope might make reproductions, the fact that provisions of the kind referred to above were present or absent would be helpful in construing the instrument. Here, however, the contract expressly provides that Paramount "licenses" Kodascope to do certain things, thereby precluding a construction that there was an assignment. Moreover, the things Kodascope was licensed to do were to make reproductions of the photoplays "and to license the use thereof * * *," thereby precluding a construction that Paramount gave Kodascope the right to sell such reproductions.

If it be assumed, however, that the contract between Paramount and Kodascope was an assignment, and that Kodascope was thereby given power to sell reproductions, the fact remains that any such power to sell was not unlimited, but was expressly restricted. The power gained by Kodascope under the 1927 agreement was to make miniature reproductions of certain photoplays and to license the use thereof "for strictly non-theatrical exhibitions." It is not contended that appellant has been using "The Covered Wagon" for a nontheatrical exhibition.

The instant case is to be distinguished from Universal Film Mfg. Co. v. Copperman, 2 Cir., 218 F. 577, relied upon by appellant. It was...