By Frankfurt Kurnit

Following in the footsteps of the Ninth Circuit, the Court of Appeals for the Second Circuit recently held that a director does not have an independent copyright in his contributions to a film. Judge Sack wrote that affording separate protection to each component part could undermine the copyright in the film as a whole —-  and it's the motion picture that the Copyright Act expressly recognizes as a work of authorship. The Court also decided that the prevailing party could be entitled to an award of attorneys' fees, even though the company did not have a registered copyright.   

Background
16 Casa Duse, LLC is a film production company based in New York. In 2010, 16 Casa's principal, Robert Krakovski, acquired the rights in a screenplay entitled Heads Up, which 16 Casa planned to finance and produce. Krakovski asked Alex Merkin to direct the film, and the parties agreed, informally, on a fee of $1,500 for Merkin's services.

Krakovski then assembled a cast and crew of 30, all of whom signed agreements with work-for-hire and assignment provisions, and the film went into production. Upon completion, Krakovski and Merkin disagreed about who owned the copyright in the film and the raw footage. Merkin refused to sign any contracts or otherwise agree that 16 Casa owned all rights in the work, instead registering the copyright in the film. Meanwhile, Krakovski submitted it to festivals and arranged for private screenings. But Merkin threatened the screening venue with a "cease and desist" letter, and wouldn't turn over the film materials and raw footage.  

Ultimately, the parties ended up in court. 16 Casa filed certain state law claims and sought, among other things, a declaration that it was not infringing on any copyright and that Merkin did not own any rights in the film. Merkin counterclaimed, seeking a declaration that a motion picture director is an "author" for purposes of the Copyright Act and that, absent a written agreement, there was no work-for-hire or other assignment of his alleged rights.

A Director Does not Have a Separate, Copyrightable Work in His Contribution
The trial court found for 16 Casa and Merkin appealed. The Second Circuit affirmed in relevant part, holding that Merkin's contributions were not "works of authorship" under Section 102 of the Copyright Act. The Court noted that, while a film like Heads Up is expressly identified as a "work", neither the Act nor its legislative history indicate that a motion picture's constituent parts are separately protectable works. In performing its analysis, the appellate court endorsed the recent en banc decision by the Ninth Circuit in Garcia v. Google, which held that an actor's five second contribution to a film did not constitute separate, copyrightable work.

While the Court reiterated that there are circumstances when a director such as Merkin could be a sole or joint author and share in ownership of a film, neither the facts nor the parties' own positions supported such a finding in this case.    

The Production Company was the "Dominant Author" of the Raw Footage
The Court also determined that Merkin had no rights in the raw film footage that he directed. Because Merkin had not claimed any joint authorship in the footage, the question of ownership turned on which of the footage's authors was "dominant." To make this determination, the Court looked at who had decision making authority, who had what billing credit, and who had entered into written agreements with third parties. 

Based on the facts, the Court determined that 16 Casa was the "dominant author." The production company exercised far more control than Merkin or any other party involved in creating the raw footage: it initiated the project, acquired the screenplay rights, selected the cast, crew and director, controlled the production schedule, and at least attempted to coordinate the publicity and release of the film, notwithstanding the dispute with Merkin. The decision also found that 16 Casa, not Merkin, executed every relevant third-party agreement. Therefore, 16 Casa was the sole owner of the raw footage.

Attorneys' Fees and Costs Absent Registration
Finally, the Court confirmed that, under certain circumstances, the Copyright Act allows a party that has not registered a copyright to recover attorneys' fees and costs. Under Section 505 of the Act, fees and costs are available to a "prevailing party." 17 U.S.C. § 505. Notwithstanding Section 412 of the Act, which limits attorneys' fees in infringement actions to works registered prior to infringement, the Court held that 16 Casa could be eligible for fees even though it hadn't registered the work, because it had not brought an "infringement action", but rather, a declaratory action for "non- infringement." Under those circumstances, an award of attorneys' fees and costs is permissible. Judge Sack gave the district court the opportunity to reconsider its award of fees in light of the Court's decision on the merits of 16 Casa's state law and copyright claims.

Conclusion
With this decision, the Second Circuit has confirmed that affording individual protection to any given contribution to a film could wreak havoc for creators of collaborative works.  And while written agreements remain standard practice, and are always preferable to ensure clear title, the Garcia and 16 Casa opinions have certainly offered welcome guidance concerning the question of who owns the copyright in a motion picture.      

If you have any questions about copyright or other intellectual property law issues, please contact Anna Kadyshevich at (212) 705 4871 or via email, Edward Rosenthal at (212) 826 5524 or via email, or any other member of the Frankfurt Kurnit Litigation Group.

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