Continuing yesterday's theme of works for children that have become fabulous money machines and, as a result, are the subject of long-running copyright feuds, I want to note a case on appeal to the Ninth Circuit involving the works of A.A. Milne, a favorite of my soon-to-be four year boy-girl twins. The state law side of this dispute has been vicious but with elements of farce. (Here is a link to a self-styled "politically incorrect" article from the London Times of 2003.) The federal component of it raises serious issues of copyright law.
The issue I will discuss is narrow, but dense. There are three termination of transfer rights. The first is for works published before January 1, 1978, and is in Section 304(c). The second, for transfers made on or after January 1, 1978 is in Section 203. The third, in Section 304(d)(which I take credit for) was added in CTEA, and gives to those who missed their 304(c) termination, the possibility to terminate the extra 20 years added in 1998. (See my June 9 posting for some background).
In the Pooh dispute, author A.A. Milne licensed certain rights in the Pooh stories to a literary agent, Stephen Slesinger. Slesinger then assigned the rights to his corporation, SSI. By will, Milne transferred his beneficial interests (which would include his recapture rights) to a trust. In 1956, Milne died. At Milne's death, this trust operated for the benefit of his wife, Daphne, who died in 1971. In 1972, the rights in the trust were transferred to another trust which operated for the benefit of the Milne's son, Christopher Robin.
In 1961, SSI licensed rights to Disney, as did Daphne and the estate's executors. In 1983, within the time for service of a 304(c) termination notice, Christopher Robin, joined by the trust, entered into a new contract with Disney. At this time, Christopher Robin had a daughter, Clare, who is disabled and whose affairs are managed by a court-appointed receiver. An opinion was obtained and paid for from Melville Nimmer that the new contract would not run afoul of the language in both Sections 203 and 304(c) which declare that the termination of transfer right may be exercised "notwithstanding any agreement to the contrary." Mel's belief may have been that while Congress did not want authors to be coerced into signing transfer agreements that also waived a termination right, Congress did not intend to prevent those possessing termination rights from entering into new contracts (legislative history supports this), and certainly not during the period when termination was possible.
The issue is important, because the 1983 deal included language expressly recognizing the intent of the parties to negate termination rights under both 304(c) and 203. Nimmer's son, David, is representing Clare Milne who filed a 304(d) termination notice arguing that the 1983 agreement was not effective (contrary to Melville's prior written opinion) and that since her father (who had earlier died) did not terminate under 304(c) she could under (d).
Leaving aside both Nimmers' extra-statutory "moment of freedom" argument, David also argues that the language "notwithstanding any agreement to the contrary" is plain and that resort to legislative history is inappropriate. That position is unusual for a treatise editor to make where that treatise cites legislative history constantly. Does, for example, "any agreement" include a waiver by one party years after the original assignment in return for loads more money? Does an "agreement" have to be in writing? Does it, as in the 1983 agreement, preclude the giving up of a termination of transfer when the copyright owner could have at that time terminated, but instead chose to enter into a new agreement? The theory here would be that the bar on waiving the termination right was solely to prevent in waivers in futuro, and that this wasn't the case for Christopher Robin. Should Clare (or more accuratley her lawyer) be able to undo what her father agreed to? And what is the purpose behind the provision, a key determination for any statute?
These are all difficult questions and hardly plain. Any bets on how well the 9th Circuit will handle them? Oral argument has not been set although the briefs have been submitted.