Siegel v. Warner Bros. Entertainment, Inc., CV-04-8400-SGL (RZx),  2009 WL 2512842 (C.D. Cal. 2009)

Judge Larson issued a mammoth decision last week that addressed whether the copyrights in certain early Superman works were validly terminated. The plaintiffs failed to list two week’s worth of newspaper strips in their termination notice.  The strips, first published in the Milwaukee News Journal in 1939, were especially valuable because they were the first material to name Superman’s home planet of Krypton and present the back story behind its destruction.

The plaintiffs acknowledged that they forgot to include the two weeks of strips in their termination notice but argued that the strips were covered under a catch-all provision in the notice:

This Notice of Termination applies to each and every work (in any medium whatsoever, whenever created) that includes or embodies any character, story element, or indicia reasonably associated with SUPERMAN or the SUPERMAN stories, such as, without limitation, Superman, . . . the planet Krypton . . . . Every reasonable effort has been made to find and list herein every such SUPERMAN-related work ever created. Nevertheless, if any such work has been omitted, such omission is unintentional and involuntary, and this Notice also applies to each and every such omitted work.

Copyright Office regulations set forth that a termination must include a  ”complete and unambiguous statement of facts . . . without incorporation by reference of information in other documents or records,” 37 C.F.R. § 201.10(b)(2), with:

1. the name of each grantee whose rights are being terminated or the grantee’s successor in title, and each address at which service is made;
2. the title and the name of at least one author of, and the date copyright was originally secured in, each work to which the notice applies (including, if available, the copyright registration number);
3. a brief statement reasonably identifying the grant being terminated;
4. the effective date of the termination; and
5. the name, actual signature, and address of the person executing the termination.
37 C.F.R. §§ 201.10(b)(1)-(1), (c)(1), and (c)(4).

The Court noted that the regs contain a “safety valve” which states that  “[h]armless errors in a notice that do not materially affect the adequacy of the information required to serve the purposes of [the statute] shall not render the notice invalid.” 37 C.F.R. § 201.10(e)(1).

Music Sales Corp. v. Morris

As precedent, the Court looked to Music Sales Corp. v. Morris, 73 F. Supp. 2d 364 (S.D.N.Y. 1999), where the Southern District of New York found that a boilerplate statement that didn’t “reasonably identify[] the grant” was nonetheless adequate.

Copyright treatise battle royale

The Court framed the issue as a battle between Nimmer and Patry.  The Court presented Nimmer as an advocate for a hard-line rule:

[T]he Register of Copyrights does not pass judgment by accepting notices of termination, so that the ministerial act of filing them connotes no approval of their verbiage. On that basis, the court’s citation to authority allowing agencies to interpret statutory requirements is inapposite. But the court also cites unspecified custom of the industry as validating the boilerplate approach. It remains to test what that custom might be. 3 NIMMER ON COPYRIGHT § 11.06[B] at 11-40.22 – 11.40.22(1).

The Court painted Patry as representing the opposite end of the spectrum:

In Music Sales Corp. v. Morris, the requirement of a ‘brief statement reasonably identifying the grant to which the terminated grant applies’ was reviewed, with the court wisely accepting industry custom and Copyright Office practices as indicating compliance. PATRY ON COPYRIGHT § 7:45

Having framed the two ends of the debate, the Court stated that it was splitting the difference in finding that the transfer was valid:

On the one hand, the Nimmer approach, i.e., an insistence on rigid adherence to the formalities specified in the regulations or, on the other hand, the less formalistic (but more practical), lax approach set forth in Music Sales and endorsed by Patry, i.e., acceptance of industry and agency custom. The Court declines to choose one extreme or the other, applying instead a middle path that requires a more fact-intensive inquiry in applying the harmless error safety valve.

Here, it is clear to the Court that plaintiffs undertook enormous effort to comply with the overly formalist requirements of the termination provisions, literally providing 546 pages’ worth of works subject to the termination notice. The purpose of the regulations is to give the recipient of the termination notice sufficient information to understand what rights of theirs may or may not be at stake. Here, any recipient of the termination notice would quickly understand that the plaintiffs have sought to reclaim the copyright in any and all Superman works ever created. Indeed, any publisher receiving the notice would be foolish to believe otherwise. That the termination notice included a broad and comprehensive catch-all clause only reinforces that which the 546-page listing of titles of works subject to the notice makes painfully obvious.

This reasoning is all the more sound because what was sought to be
recaptured involved the rights to works involving a particular character that has been continuously exploited for decades. It is this peculiar nature of the subject matter of the termination notice that makes rigid adherence to the regulatory formalities particularly inapt: In the case of works consisting of a series or containing characters requiring the terminating party to list separately each work in the series or all works in which the character appears would render the termination right meaningless. Instead, notice that reasonably puts the terminated party on notice of the character being terminated is sufficient. 3 PATRY ON COPYRIGHT § 7:45.