Batjac Productions Inc., a California Corp. v. Goodtimes Home Video Corp., a Delaware Corp. Marybeth Peters, Register of Copyrights

Citations: 160 F.3d 1223; 48 U.S.P.Q. 2d (BNA) 1647; 98 Daily Journal DAR 11443; 98 Cal. Daily Op. Serv. 8208; 1998 U.S. App. LEXIS 28103; 1998 WL 767484Docket: 97-55947

Court: Court of Appeals for the Ninth Circuit; November 5, 1998; Federal Appellate Court

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Batjac Productions Inc. appealed the district court's summary judgment favoring GoodTimes Home Video Corp. and Marybeth Peters, the Register of Copyrights, regarding a copyright infringement claim related to the screenplay "McLintock!" The district court ruled that publication of the motion picture effectively published the underlying, unpublished screenplay, thereby impacting its copyright status. The central issue was whether § 7 of the Copyright Act of 1909 protected "common law copyrights" or solely federal statutory copyrights. The court concluded that § 7 does not apply to common law copyrights, aligning with the precedent set in Classic Film Museum, Inc. v. Warner Bros. Inc., which stated that a common law copyright loses protection if the related work's copyright is not renewed, resulting in the work entering the public domain.

James Edward Grant wrote the screenplay in 1962 and assigned all rights to Batjac, including those necessary for obtaining and renewing copyrights. Batjac produced the motion picture, which was registered for federal copyright in 1963. However, the motion picture's copyright lapsed in 1991, placing it in the public domain. In 1993, GoodTimes began selling videocassettes of the film. Batjac applied to register two intermediate drafts of the screenplay as unpublished works in 1996, but did not submit the original version. The Copyright Office later declined to register these drafts, asserting that the motion picture's publication also published the screenplay, which now fell within the public domain due to its incorporation in the film. Batjac's lawsuit against GoodTimes was initiated in 1996, but the court affirmed the Copyright Office's decision regarding the screenplay's copyright status.

The action was transferred to the Central District of California to consolidate with Maljack Productions, Inc. v. UAV Corp., focusing on the registrability of two draft screenplays. The district court consolidated the case against GoodTimes with the UAV action solely for this purpose and granted summary judgment in favor of the Register and GoodTimes, ruling that the "McLintock!" screenplays could not be registered since they had secured statutory copyright with the motion picture and entered the public domain due to non-renewal.

The review of summary judgment is conducted de novo, assessing whether genuine issues of material fact exist and if the district court applied the relevant law correctly. The primary question is whether the publication of the "McLintock!" motion picture also published the related unpublished screenplay portions. If the screenplay remained unpublished from 1963 to 1978, it would have gained statutory protection under the 1976 Copyright Act, whereas if publication occurred, those parts of the screenplay entered the public domain in 1991.

Batjac asserts it holds copyright under the 1909 Act, which distinguishes between federal and state copyright protections. Unpublished works received protection under state law, while published works fell under federal law. The 1909 Act mandated renewal for copyright protection, which Batjac failed to secure for the motion picture in 1991. Batjac claims its common law rights to the unpublished screenplay remain intact, arguing that § 7 of the 1909 Act protects these rights from being lost due to publication of derivative works.

The district court determined that the publication of a motion picture also constituted the publication of its screenplay, referencing the First Circuit case, Classic Film Museum, Inc. v. Warner Bros. Inc. It rejected the idea that the 1909 Copyright Act's § 7 extended protection to common law copyrights and ruled that the Supreme Court's decision in Stewart v. Abend did not apply to common law copyrights. Batjac argued that the district court misinterpreted § 7 and the Abend case. 

Section 7 of the 1909 Act clarifies that the publication of derivative works does not impact the validity of existing copyrights. A crucial point of contention is whether "subsisting copyright" refers only to statutory copyright or includes both statutory and common law copyright. The district court interpreted § 7 as applicable solely to statutory copyrights, citing that the 1909 Act specifically addressed common law rights separately. Batjac contended that "copyright" should encompass both forms, but the district court maintained that the term was limited to statutory copyright, describing common law protections as inaccurately termed "common law copyright." Batjac proposed examining the historical understanding of "copyright" from 1909, while GoodTimes and the Register argued for a consistent interpretation of the term within the 1909 Act.

Batjac asserts that the term "copyright" in 1909 encompassed both statutory and common law copyright, while GoodTimes contends that copyright protection in the U.S. is exclusively statutory, referencing White-Smith Music Publishing Co. v. Apollo Co. to support this view. The review of various legal sources indicates agreement with Batjac's position, noting that the term "copyright" was understood to include both forms of protection at that time, as seen in cases like Bobbs-Merrill Co. v. Straus. However, distinctions between statutory and common law protections were also recognized, as exemplified by Caliga v. Inter Ocean Newspaper Co. 

The document emphasizes that Congress's awareness of both copyright systems, as demonstrated in § 2, suggests it did not intend to label common law protections as "common law copyrights" under the 1909 Act. A critical principle of statutory interpretation is that identical terms in legislation carry the same meaning, leading to the conclusion that instances of "copyright" in the 1909 Act refer predominantly to statutory copyright. Batjac counters that the limiting language in several sections indicates that the term "copyright" in § 7 could imply common law copyright; however, this interpretation is deemed questionable. 

Section 2 is identified as the sole provision directly addressing common law rights, notably without using the term "copyright," implying that Congress intended for "copyright" in the Act to refer solely to statutory rights. Additionally, in §§ 10 and 12, where the Act discusses securing copyright through publication and registration, there is no mention of existing common law protections being extinguished, further undermining Batjac's argument that "copyright" includes common law rights. The absence of reference to divested common law copyright in these sections reinforces the interpretation that "copyright" in the 1909 Act is limited to statutory copyright.

Section 7 specifies that derivative works do not secure or extend copyright in original works. The Register posits that the terms "secure" and "extend" refer exclusively to statutory copyright, suggesting all references in Section 7 relate to statutory copyright as well. While there is agreement with GoodTimes and the Register on this interpretation in the context of the 1909 Act, there remains uncertainty that could be influenced by legislative history or agency interpretation.

Legislative history regarding Section 7 is limited and ambiguous. Batjac argues that a legislative change—from stating that "no such copyright shall affect" to "the publication of any such new works shall not affect"—indicates Congressional intent to protect common law copyrights. This change was influenced by testimony from W.B. Hale, who advocated for it to ensure derivative works would not undermine original copyrights. However, the revision only shifted focus to derivative works without clarifying the status of subsisting copyrights.

The Supreme Court’s analysis in Abend references this legislative history but ultimately concludes that Batjac's argument lacks sufficient evidence of Congressional intent to include common law copyrights under Section 7. Notably, Hale’s testimony did not mention common law copyright, and subsequent interpretations of his remarks in legal literature do not convincingly support Batjac's position. The Court highlighted that the language change aimed to prevent unprotected new compilations from entering the public domain, not to address common law copyright issues.

Hale's testimony does not indicate concern about the publication of unpublished works in new compilations, contrary to assertions made by the Brooklyn Law Review. The Abend opinion lacks supporting sources, and the focus of Hale's concern was the potential negative impact on existing copyrighted works due to the publication of a new compilation without copyright protection. The Register of Copyrights has authority to interpret copyright laws, and its interpretations merit judicial deference if reasonable. The Register maintains that the publication of a motion picture also constitutes the publication of its soundtrack, as outlined in Compendium II. This document states that when a preexisting unpublished screenplay is included in a motion picture, the portions of the screenplay revealed in the film are published simultaneously with the motion picture. However, under Compendium I, which pertains to practices under the 1909 Act, the Register did not assert a position on whether a motion picture copyright extends to its soundtrack. It clarifies that partial publication does not imply the publication of the entire work. The Register's policies do not require the listing of unpublished works in registration forms because it treats the publication of a motion picture as a publication of the underlying screenplay. The conclusion is that § 7 under the 1909 Act does not protect common law copyrights, though such copyrights are still safeguarded from publication by derivative works, specifically when the common law copyright and derivative work are owned by the same entity. Finally, Batjac's argument referencing Stewart v. Abend is dismissed, as the Supreme Court did not use § 7 as a basis for its decision, but rather to counter a dissenting opinion regarding the implications of language changes to § 7 concerning the publication of new compiled works without proper notice.

The Supreme Court addressed whether the continued publication of the film "Rear Window" infringed on the copyright of the original work, "It Had to Be Murder," after the original author's rights lapsed due to their death. Although the author had agreed to transfer renewal rights to Alfred Hitchcock and Jimmy Stewart, the executors renewed the copyright but did not transfer the rights. An earlier appellate ruling confirmed that the copyright for the original work was valid, and re-releasing the film constituted an infringement, creating a split with the Second Circuit's ruling that statutory successors could not deprive derivative work owners of their rights to use the underlying copyrighted work.

The Supreme Court affirmed the lower court's ruling, concluding that the copyright in the original work is not extinguished during the renewal period concerning its inclusion in derivative works. The case involved a statutorily copyrighted story, and the applicability of § 7 to common law copyrights was not at issue. The dissent argued that changes to § 7 indicated the derivative work would be independent of the original, while the majority interpreted these changes as allowing derivative works to be copyrighted while preserving the original work's copyright over its use in the derivative. The majority contended that the revision aimed to close a loophole that could protect existing works from derivative works that lacked copyrights, without altering the existing relationship between derivative and original works.

The majority's position relies on legislative history and a law review note, which included language about unpublished works that was not supported by testimony or authority. The district court identified this language as dictum, referencing Nimmer on Copyright. Although Supreme Court dicta typically holds deference, specific circumstances here suggest it is not controlling. The majority's mention of legislative changes aimed to counter dissenting arguments regarding the protection of pre-existing works, making the inclusion of unpublished works unnecessary to the majority's argument, which was focused on derivative work definitions rather than common law copyright issues. The reference to unpublished works could be omitted without impacting the majority's reasoning.

Abend reaffirmed existing case law allowing pre-existing copyright holders to sue for infringement of public domain derivative works, but it did not consider situations where the copyright owner of an unpublished work is also the creator of the derivative work. Concerns arise over potentially reviving copyright protection for unpublished works that could affect derivative works already in the public domain. The dual system under the 1909 Act could allow authors to maintain control indefinitely over derivative works through unpublished pre-existing works, a problem resolved by the 1976 Act.

Furthermore, the effective operation of the Register of Copyrights supports this holding. The district court noted that unpublished works are unrecorded, making it difficult for those using public domain works to ascertain their status. For instance, Batjac's copyright application for "McLintock!" failed to disclose a pre-existing screenplay, leading to confusion about its public domain status due to the presence of unpublished drafts.

The court determined that allowing Batjac to control the screenplay of "McLintock!" would create market uncertainty and inhibit public access to public domain materials. It asserted that such control would not foster the advancement of science and useful arts, as it would imply that authors could bypass the Copyright Act to retain copyright protection. Batjac had already fully benefited from copyright protection for the screenplay and motion picture, and the court found no evidence that Congress intended for authors to maintain perpetual monopolies over their works. Consequently, the court concluded that § 7 does not apply to unpublished works under common law copyrights.

The court examined the publication of "McLintock!" to see if it also published the incorporated screenplay portions. Relying on precedents such as Classic Film Museum, the court agreed that an unpublished screenplay is published by a motion picture if incorporated. Classic Film involved a similar situation where the defendant sought to control a film that had entered the public domain due to an unrenewed copyright. The First Circuit ruled against extending protection to common law copyrights, as it would grant perpetual control through unpublished works, contradicting the limited monopoly intended by copyright law.

The court rejected Batjac's argument that the rationale in Classic Film is obsolete due to the 1976 Act, noting that even under this Act, a common law copyright could extend beyond statutory limits. The Register also emphasized that Classic Film addressed the impropriety of using artifice to extend copyright terms, making it still relevant. The Seventh Circuit’s ruling in Harris under the 1976 Act reinforced that unpublished works are entitled to copyright protection and that underlying works retain copyright even if their derivative works enter the public domain.

In Harris Custom Builders, Inc. v. Builder, the plaintiff's brochure containing drawings from unpublished blueprints was not copyrighted, placing it in the public domain. When a builder used these drawings, Harris claimed copyright infringement. The Seventh Circuit held that the brochure's drawings constituted a derivative work, and their publication meant the original work was also published, negating any copyright claim based on its unpublished status. The court noted that if the original work had been registered separately or if a third party published the derivative work without permission, the outcome might differ. Specifically, since Harris published the drawings, it could not assert copyright based on their unpublished nature.

Batjac contended that Harris was distinguishable because the brochure's drawings were nearly identical to the blueprint plans, while a screenplay and motion picture differ in medium and content. Batjac cited cases to argue that different media do not constitute copies and claimed that a motion picture is an interpretation, not a copy, of a screenplay. However, the court disagreed, stating that Batjac's common law right of first publication allowed it only one first publication in any medium, which it exercised with the motion picture.

The court emphasized that Batjac had the opportunity to secure separate copyright for the screenplay but failed to do so, and thus could not reclaim publication rights decades later. Furthermore, under the 1909 Copyright Act, all copyrightable components of a work, including the screenplay, fell into the public domain once incorporated into the motion picture. The protections from the 1909 Act supported this view, as established in case law regarding the status of screenplays as components of films.

Batjac asserts that a screenplay should not be considered a component of a motion picture. However, under the 1909 Act, recognizing a screenplay as a component would incorrectly allow authors multiple rights to first publication, enabling them to exploit statutory copyright while leaving the work unpublished in another medium, thereby extending copyright indefinitely. There is no legal precedent indicating that a textual work can only be published in print; the Supreme Court has clarified that the right of first publication includes the timing, location, and medium of publication. 

This reasoning is supported by the court's previous decision in La Cienega Music Co. v. ZZ Top, which established that the public release of a recorded song constituted its publication, regardless of the different medium from the printed version. Although subsequent legislation (H.R. 672) has altered the implications of this ruling, the underlying rationale remains valid. If Congress intends to prevent common law screenplays from entering the public domain through motion picture publication, it could enact similar legislation.

Section 2 of the 1909 Act does not apply in this situation to protect Batjac’s common law copyright, as it only prevents the Act from limiting common law copyright but does not shield Batjac's rights from being affected by its own act of publication. Batjac, having controlled both the unpublished screenplay and the derivative film, forfeited its right to first publish the screenplay portions incorporated into the film by choosing to publish the motion picture first. 

Common law copyright, which encompasses both common law and state statutory protections for first publication rights, does not prevent subsequent copying once a work is published. Although GoodTimes argued that certain works entered the public domain due to lack of renewal, the court did not rely on this argument due to insufficient evidence presented by GoodTimes.

The district court did not consider certain publications in its ruling. Section 303 of the 1976 Copyright Act establishes that copyright for works created before January 1, 1978, but not in the public domain, begins on that date and lasts as defined in Section 302. Specifically, copyrights cannot expire before December 31, 2002, and if a work is published by that date, its copyright extends to December 31, 2027. In this case, Grant, who died in 1966, had an unpublished screenplay that would be protected until 2016 under the 1976 Act, and if published by the 2002 deadline, the copyright would last until 2027. The Copyright Renewal Act of 1992 provides for automatic renewal but does not apply to Batjac's failure to renew. 

The case references prior rulings regarding the definition of publication under the 1909 Act, noting that publication of a motion picture occurs when it is commercially distributed, a point not disputed in the appeal. It is established that the film "McLintock" is a derivative work of Grant's screenplays. GoodTimes argues that the concept of "derivative works" did not exist under the 1909 Act, limiting "new works" to those based on public domain or previously copyrighted material. However, the Supreme Court has referred to "new works" and "derivative works" interchangeably under the 1909 Act, indicating that the distinction is one of terminology rather than substance.

Batjac presents two additional arguments against the district court's interpretation. Firstly, it contends that the court erroneously read "statutory" into the statute, which contradicts the rule against adding words not included by Congress. The court counters that both statutory and common law copyrights must be defined to understand the term "copyright." Secondly, Batjac argues that the term "any" in "any subsisting copyright" implies all copyrights, but the court emphasizes that the meaning of "copyright" within the 1909 Act is crucial to interpreting "any," suggesting it refers primarily to statutory copyrights.

The 1909 Copyright Act introduced a new legal framework for copyright, impacting previously secured copyrights under older statutes. The district court's reliance on Nimmer's commentary is flawed, as Nimmer indicates that some "common law copyright" protections were, in fact, statutory in various states. Nimmer's treatise asserts that common law copyrights were essentially equivalent to statutory copyrights. A key provision (17 U.S.C. 2, repealed in 1978) affirmed the rights of authors of unpublished works to prevent unauthorized use and seek damages.

Mr. Hale's concerns focused on derivative works, specifically regarding new compilations of smaller selections. Nimmer states that publication of a derivative work typically constitutes publication of the original work, but acknowledges the need for further examination of this principle following the case of Abend. The Seventh Circuit's ruling in Harris Custom Builders, which contradicted Nimmer's view, is noteworthy.

Batjac's position contests the categorization of certain judicial statements as dicta, arguing that they were directly relevant to the case outcome. Two district court decisions have upheld the protection of common law copyrights in light of Abend, yet these decisions are not considered binding precedent. 

The First Circuit accepted the district court's interpretation. Although the White-Smith case remains valid, its principles were not extended to the context of film adaptations in La Cienega Music Co. v. ZZ Top. White-Smith ruled that a piano roll did not constitute a copy of the original work, raising complications regarding the copyright status of adaptations like screenplays. The 1909 Act specifically excluded performances from being classified as publication events, a provision designed to protect playwrights from unauthorized reproductions through performance.