Classic Media, Inc. v. Mewborn - 532 F.3d 978 (9th Cir. 2008)

Rule:

The clear Congressional purpose behind 17 U.S.C.S. § 304(c) is to prevent authors from waiving their termination right by contract. Ruling otherwise would allow litigation-savvy publishers to use their superior bargaining power to compel authors to recharacterize their works, thus rendering § 304(c) a nullity. The "notwithstanding any agreement to the contrary" language is intended to protect against attempted contractual circumvention of the termination right.

Facts:

Eric Knight authored the beloved children's story, "Lassie Come Home," about a boy and his dog who, when sold to a rich duke by the boy's poverty-stricken family, made an arduous journey to return home to her original owner. In 1976, plaintiff's predecessor-in-interest secured an agreement from defendant, Eric Knight’s daughter, for the renewal term of motion picture, television, and radio rights to the Lassie works. To conform the grant of rights among defendant and her sisters, defendant signed a second agreement in March 1978 which transferred additional ancillary rights such as merchandising rights. In 1996, defendant served a notice of termination--with an effective date of May 1, 1998--within the five-year period required under 17 U.S.C.S. § 304(c) of the Copyright Act of 1976 (1976 Act), 17 U.S.C.S. § 101 et seq., which became effective January 1, 1978. Subsequently, plaintiff filed a declaratory relief action in the Central District of California against defendant seeking a declaration that defendant has no interest in the Lassie film or in any of the rights she previously assigned to plaintiff’s predecessor-in-interest. Summary judgment was granted in favor of the plaintiff. The district court found that the parties intended that the 1978 Assignment “give away" all of defendant’s additional rights not transferred in 1976, which included her newly acquired § 304(c) right to terminate the 1976 Assignment. Accordingly, defendant had relinquished her termination right, and the 1996 Notice of Termination was ineffective because defendant no longer had any interest in the rights transferred in 1976 and 1978. Defendant sought review of the summary judgment granted to plaintiff. 

Issue:

1. Did the defendant relinquish her termination right when she executed the 1978 assignment? 
2. Was the 1996 Notice of Termination ineffective? 

Answer:

1) No. 2) No.

Conclusion:

The court reversed the district court's order granting plaintiff's motion for summary judgment, and it remanded the case to the district court with directions to enter partial summary judgment in favor of defendant on her claim seeking a declaration that the termination notice was valid and effective. The court held that the district court erred in concluding that defendant intended to relinquish and impliedly waived her newly acquired right of termination under § 304(c) when she executed the 1978 assignment. The court held such a result would circumvent the plain statutory language under § 304(c) of the 1976 Act as well as the Congressional intent to give the benefit of the additional renewal term under § 304(a) to the author and his heirs.