Saturday Evening Post Co. v. Rumbleseat Press, Inc. - 816 F.2d 1191 (7th Cir. 1987)

Rule:

9 U.S.C.S. § 4, provides that if a question is raised as to whether the parties have agreed to arbitrate and the party alleged to be in default demands a jury trial of the question, the district court shall conduct such a trial. But it also provides that upon being satisfied that the making of the agreement for arbitration is not in issue, the court shall make an order directing the parties to arbitrate. It is not true that by merely demanding a jury trial a party to an arbitration agreement can get one. He can get one only if there is a triable issue concerning the existence or scope of the agreement. If the arbitrability of the parties' dispute involves no questions or only legal questions, a jury trial would be pointless because its outcome could not affect the judge's decision on whether to order arbitration. 

Facts:

In 1979 the Saturday Evening Post Company granted Rumbleseat Press, Inc. an exclusive license to manufacture porcelain dolls derived from certain illustrations done by the artist Norman Rockwell and published in the Saturday Evening Post. Later, the Post (as we shall call the company and the magazine interchangeably) cancelled the license; but, contrary to the terms of the license agreement, Rumbleseat continued making the dolls. This conduct led the Post to sue Rumbleseat. The Post won in the district court. Rumbleseat appealed.

Issue:

Is the validity of a copyright arbitrable?

Answer:

Yes.

Conclusion:

The court affirmed the arbitration award. Rumbleseat’s claim that the district court should have ordered a jury trial on the arbitrability issue was rejected, because there was no question that the dispute arose from the license agreement, and the agreement required arbitration. The court held that no federal policy barred arbitration of a copyright's validity, and the license agreement's no-contest clause relating to copyright's validity was enforceable because the danger of creating an unlawful monopoly by copyright was small.