“The appellate court noted that labor law serves different purposes regarding the employee-employer relationship than copyright law, under which ‘employee’ should be construed according to the common law of agency.”
On September 30, the U.S. Court of Appeals for the Second Circuit issued a ruling in Horror Inc. v. Miller in which the appellate court affirmed a summary judgment ruling in the District of Connecticut which found that Victor Miller was an independent contractor when writing the script for the 1980 classic horror film Friday the 13th. The ruling enables Miller to move forward with copyright termination notices served on Horror, which became the successor-in-interest to the rights to Friday the 13th, so that Miller can claim copyright in the original screenplay.
Miller Serves Section 203 Copyright Termination Notice to Horror Inc.
Under 17 U.S.C. § 203, authors executing a license or granting a transfer of copyright on or after January 1, 1978, can terminate those licenses or grants by serving a notice in writing to the licensee or grantee once 35 years have elapsed from the original transaction; the period for giving a notice only extends for five years. In the spring of 1979, Miller and Sean Cunningham, general partner of the film production company Manny, Inc., began collaboration on a low-budget horror film concept, one of five motion pictures the two worked on together. Cunningham paid Miller, a member of the Writers’ Guild of America, East (WGA), $9,282 by an agreement executed via a standard WGA contract. Miller wrote various drafts of the screenplay, each of which included screenwriting credits for Miller, over a two-month period.
Prior to the film’s 1980 release, Manny, Inc. transferred its copyright in Miller’s screenplay to Georgetown Productions, which registered the screenplay as a work made for hire and made several changes to the screenplay, including the resurrection of Jason Voorhees (a change to which Miller was vehemently opposed) to serve as the immortal villain of the Friday the 13th franchise. Miller’s original agreement with Manny, Inc. was conducted under a collective bargaining agreement governing WGA writers and signatory employers like Manny. Over the years, Miller collected a nearly $27,400 settlement in the late 1980s for unpaid sequel and residual payments, and has received about $220,000 in additional residuals from Horror, Inc. Miller sent the Section 230 copyright termination notice to Horror in 2016, at which time Horror filed a complaint in Connecticut district court seeking a determination that the script was a “work made for hire” by Miller as Manny’s employee and thus not subject to copyright termination.
Second Circuit: Labor Law and Copyright Law Service Different Purposes
In deciding Horror’s appeal, the Second Circuit pushed back on several attempts by Horror to argue for a broader definition to “employee” found under labor law. The appellate court noted that labor law serves different purposes regarding the employee-employer relationship than copyright law, under which “employee” should be construed according to the common law of agency. Although Georgetown’s 1980 copyright registration created a presumption that the screenplay was a work made for hire, the appellate court ultimately found that presumption rebutted by an application of the scope of employment framework laid out by the U.S. Supreme Court in Community for Creative Non-Violence v. Reid (1989). In discussing Reid, the Second Circuit noted that “section 101 of the Copyright Act uses a more restrictive definition of employment” in order to protect authors whereas labor law construes employment broadly “to serve workers and their collective bargaining interests and establishing rights” including safety and pay rights. Thus, Miller’s membership in the WGA and Manny’s status as a signatory employer to their collective bargaining agreement did not create an employment relationship that converted the screenplay into a work made for hire.
The Second Circuit also affirmed the district court’s refusal to treat Miller’s union membership as an additional factor under Reid. The appellate court found nothing in the record suggesting that the screenwriter community as a whole expected to be treated as employees for anything other than collective bargaining purposes, despite any benefits enjoyed by WGA members under collective bargaining agreements. “Miller’s [WGA] membership is relevant only insofar as it informs our analysis of other factors, namely whether Miller received benefits commonly associated with an employment relationship,” the Second Circuit wrote.
Applying the Reid factors, especially the five factors enumerated by the Second Circuit in Aymes v. Bonelli (1992) as core considerations in the “work made for hire” analysis, the appellate court found that the undisputed facts showed that Miller was an independent contractor as a matter of law when writing Friday the 13th. Viewing the facts in the light most favorably to Horror Inc., Manny’s right to control Miller’s creation weighed marginally in favor of finding Miller as Manny’s employee based on Cunningham’s input during Miller’s writing process. However, the remaining Reid factors enumerated in Aymes all weighed in favor of Miller: Miller’s previous screenwriting employment and graduate degree in theater established his expertise and skill in screenwriting; Manny never provided Miller with typical employment benefits such as health insurance or paid vacation time; Manny never withheld or deducted any taxes or Medicaid payments from Miller’s compensation; and nothing in Miller’s employment agreement with Manny could be construed as granting Manny the right to assign additional projects. Viewing these and the additional Reid factors together, the Second Circuit had “no difficulty in concluding” that Miller was properly classified as an independent contractor.
No Express Repudiation of Miller’s Authorship to Start Three-Year Statute of Limitations
The Second Circuit also conducted de novo review of the district court’s rejection of Horror’s argument that Miller filed his termination notices outside of the Copyright Act’s three-year statute of limitations. The appellate court noted that authorship claims only accrue when there has been an express repudiation of authorship that is communicated to the author and found none of Horror’s evidence of past express repudiation to be persuasive. A 1979 copyright notice on screenplay drafts listing Cunningham as the copyright holder only identified Cunningham as the copyright owner, not the author of Friday the 13th. Similarly, a 2003 interview in which Miller identified Cunningham and Georgetown as the owners of the Friday the 13th franchise was not a repudiation of authorship but rather an acknowledgment that those parties owned some rights in the screenplay. Finally, Georgetown’s 1980 copyright registration identifying the film as a work made for hire did not suffice to trigger the accrual of an authorship claim, a principle the Second Circuit recently established in Wilson v. Dynatone Publishing Co. (2018). As a result, the Second Circuit affirmed the district court’s finding that Miller’s authorship claim was not filed outside of the three-year statute of limitations.
Copyright termination notices have been causing a bit of a scare for owners of some substantial media properties in recent months. Marc Toberoff, the lawyer representing Victor Miller in the Friday the 13th litigation, is also involved with a series of copyright termination notices that have been sent to Marvel on behalf of comic book artists seeking to reclaim their copyrights to several major characters and their origin stories. For example, a copyright termination notice filed on behalf of the estate of comic book artist Stephen Ditko would allow Ditko’s estate to reclaim the copyright to the specific comic book releases featuring the origin stories of Spiderman and Doctor Strange. Marvel has responded by filing lawsuits, several of them in the Southern District of New York, seeking declaratory relief that the subject matter of the copyright termination notices are works made for hire.
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