Miller v. Universal Pictures Co.

• Decision Date: 30 November 1961
• Citation: 180 N.E.2d 248,10 N.Y.2d 972,224 N.Y.S.2d 662
• Parties: , 180 N.E.2d 248, 132 U.S.P.Q. 77 Helen D. MILLER, Individually and as Executrix of Alton G. Miller, Appellant, v. UNIVERSAL PICTURES COMPANY, Inc., et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 662

224 N.Y.S.2d 662

10 N.Y.2d 972, 180 N.E.2d 248, 132

U.S.P.Q. 77

Helen D. MILLER, Individually and as Executrix of Alton G Miller, Appellant, v. UNIVERSAL PICTURES COMPANY, Inc., et al., Respondents.

Court of Appeals of New York.

Argued Oct. 5, 1961.

Decided Nov. 30, 1961.

George Trosk, Jesse Climenko, Herbert L. Scharf and David Mackay, New York City, for appellant.

David W. Peck, Robert J. Feldman, Edgar M. Rubin and Adolph Schimel, New York City, for respondents.

Judgment affirmed, with costs, on the Per Curiam opinion in the Appellate Division.

DESMOND, C. J., and DYE, VAN VOORHIS and FOSTER, JJ., concur.

BURKE, J., dissents in the following opinion in which FULD and FROESSEL, JJ., concur.

BURKE, Judge (dissenting).

The majority would affirm a decision of the Appellate Division reversing Special and Trial Term and dismissing a complaint on the ground that where a licensor does not have 'property' rights in an intellectual product, so far as the Copyright Act, 17 U.S.C.A. § 1 et seq., and the general rules of common law are concerned, he must show that the licensee expressly convenanted that it would not use the granted rights in media other than that in which rights are granted. In other words, from now on the scope of a grant in a license contract depends not on the parties' intention which is reflected by the bargain they made, but only on status.

No other reported decision reaching such a result can be found. The decision represents an abrupt departure from the established concepts governing the existence and nature of literary and artistic rights. In New York and California, which are centers of the American artistic world, ideas, even though common or open to public knowledge, are protected if there is a contract between the parties prior to disclosure of the idea (Ann. 23 A.L.R.2d 244, 328, § 24, and cases cited therein).

Heretofore once an idea became the subject matter of a contract, the contract forever precluded licensees from the right enjoyed by all others to the use of the idea, wherever obtained, whether from the public domain or independent creation, without complying with the obligations of the contract (High v. Trade Union Courier Pub. Co., 31 Misc.2d 7, 69 N.Y.S.2d 526, affd. 275 App.Div. 803, 89 N.Y.S.2d 527; Gellert v. Dick, 277 N.Y. 123, 13 N.E.2d 603; Chandler v. Roach, 156 Cal.App.2d 435, 319 P.2d 776).

The duty of a licensee not to exceed the express limits of its grant is no less a part of the consideration flowing to the licensor than its duty to pay the stipulated royalties. The obligation not to exceed the scope of the grant cannot be avoided any more readily than the obligation to pay royalties. The enforcement of both obligations is based on contract, not property. 'By entering into the contract and accepting and retaining the consideration therefor, the respondents assumed a fiduciary relationship which had its origin in the contract, and which imposed upon them the duty of utmost good faith.' (Kirke La Shelle Co. v. Paul Armstrong Co., 263 N.Y. 79, 85, 188 N.E. 163, 166.)

The question, therefore, is not whether plaintiff had a legally recognized property right or particular 'status' but whether a breach of fiduciary duty has occurred which has its origin in contract for which the licensee must be held. We think there was such a breach of contract.

The action arises from the release and sale by Decca Records, under a grant from Universal Pictures, which Decca controls, of phonograph records embodying most of the musical portion of the sound track of Universal's motion picture, 'The Glenn Miller Story'. Decca Rocords paid nothing to Universal Pictures or plaintiff for this right, sold the records in competition with records on which plaintiff was receiving royalties, and has received substantial profits from the recordings.

In Decca's publicity attending the exploitation of the records, the Miller name and reputation, and the unique quality of the Miller music, were emphasized. Thus, on the reverse side of the cover of the 'sleeve' captioned 'The Glenn Miller Story', in which the Decca record was sold, we find: 'Although few bands achieve it, every band wants to have a sound all its own. Glenn Miller got the organization, trained the men, scored the arrangements, and finally made a band that had a sound like no other, a rich golden sound, a sound like * * * Glenn Miller.' 'These recordings preserve the Glenn Miller character. Those who were old enough to remember it will cherish this re-animation; those who have never heard that amazing leader will thrill to a great and exciting sound a sound which no band has ever surpassed.'

It is plaintiff's contention that defendant's sale of records made from the sound track is a breach of the contract which she had with Universal authorizing the making of the sound picture 'The Glenn Miller Story', based on the life and musical success of her husband.

Plaintiff is, as defendants knew, the recipient of royalties from the sale of RCA records of Glenn Miller, and claims her royalties have been reduced by the competing sale of records made from the sound track from 'The Glenn Miller Story'.

Defendants assert that 'Universal could have made the musical sound track and used it to make records without any contract with or leave from plaintiff' and 'as Universal was free to make the musical (portion of the) sound track and any recordings therefrom without any license from plaintiff, it could be placed under restraint in the use of its musical sound track only by a contractual undertaking, clearly expressed, that it would not make some particular use of the sound track'.

The contention is based on a faulty analogy with cases such as Chaplin v. Amador, 93 Cal.App. 358, 269 P. 544, and Supreme Records v. Decca Records, D.C., 90 F.Supp. 904, where the litigants were not parties to a contract which covered the subject matter of the lawsuit.

These cases establish what no one disputes but they do not hold that a licensee who has bargained for the use of arrangements, compositions and orchestrations in connection with music to be made part of a sound track in the preparation and production of a sound picture, and used them, can breach its agreement in subsequent dealings with the sound track. The holding of the Appellate Division that the sole consideration is whether plaintiff had any legally recognized 'property interest' in the Miller material and performances resulted, it seems to us, from a failure to differentiate this case concerning a musical sound track made pursuant to a contract authorizing the making of a sound picture, and the cases which have held that strangers are privileged to make imitations where the copyists have used independent performances rather than 'dubbing' or mechanical devices (Supreme Records v. Decca Records 90 F.Supp. 904, supra; Chaplin v. Amador, 93 Cal.App. 358, 269 P. 544, supra).

Since sound tracks are an integral part of 'photoplays' (Jerome v. Twentieth Century Fox-Film Corp., D.C., 67 F.Supp. 736, 741), defendants, in order to sustain their theory that Universal's right to use the musical sound track was not dependent on any grant from plaintiff, but rather an exercise of the rights of independent imitators, were required to show either that the musical portion of the sound was made before the agreement was entered into, or that Universal did not contract at all in respect to such musical portion of the sound track. They have failed. The musical portion of the sound track was made after Universal signed the agreement, made expressly for the picture and would never have been made had there been to picture. The agreement, as well as the declarations of Universal, prove that Universal contracted not only generally for authorization to make a sound track for 'The Glenn Miller Story', but in particular the musical portion of the sound track.

In not one of the cases relied on by the Appellate Division and respondents was there an agreement in writing dealing with specific obligations. Absent an agreement, any one could independently create a musical sound track and use it free of any claims of plaintiff. But the defendants may not do so. Universal gave up that right by the contract.

The fundamental law is that where there is an agreement in writing the parties to the contract must remain faithful to its terms whether or not the disclosure is novel or original. Chandler v. Roach, 156 Cal.App.2d 435, 441-442, 444, 319 P.2d 776, 781, supra, is expositive of the rationale upon which this proposition rests:

"Even though the idea disclosed may be 'widely known and generally understood' * * *, it may be protected by an express contract providing that it will be paid for regardless of its lack of novelty. * * *'

'We believe that if a producer obligates himself to pay for the disclosure of an idea, whether it is for protectible or unprotectible material, in return for a disclosure thereof he should be compelled to hold to his promise. There is nothing unreasonable in the assumption that a producer would obligate himself to pay for the disclosure of an idea which he would otherwise be legally free to use, but which in fact, he would be unable to use but for the disclosure. * * *

"The test for a property right, applied in common law copyright cases, is that the work be new, novel and in concrete form. * * *

"Not only is this property right test not a part of any traditional contract action, but there is no reason for applying such a test in this particular type of contract action. The reason for the requirement in common law copyright was that to have a remedy good against the world a property right must be shown. This reason for the test is missing in an action on a contract." (Emphasis added.)

In this matter Universal obligated itself to pay for the disclosure of the Miller ideas of 'composition', 'arrangement' or 'adaptation' of the scores which were to be played as part of...