Tuesday, November 22, 2005

DaStar II: The Ninth Circuit Does it Again

Many will remember the Supreme Court's rebuke of the Ninth Circuit for creating what it termed a "mutant" form of copyright in the DaStar case, 539 U.S. 23 (2003). That case didn't reach the issue of copyright infringement, which depended upon a work for hire issue. The Ninth Circuit has now decided that issue (link here), and while I can't imagine the case being cert. worthy, it is worthy of criticism.

At issue was whether General Dwight D. Eisenhower’s wartime memoirs, Crusade in Europe, published in 1948 by Doubleday, was a work for hire. The majority held it was, largely through a selective emphasis of facts, use of a presumption to overcome contrary facts, by ignoring contractual langauge, as well as discounting General Eisenhower’s careful crafting of his tax status.

Upon the German surrender in 1945, numerous publishers approached Eisenhower about publishing his memoirs. He turned them down, although previously, in 1942, while stationed in Gibraltar, he had written the first 60,000 words of what became Crusade in Europe. He had written to publishers about a book deal before he was approached by Doubleday. Eventually, Doubleday was able to overcome Eisenhower’s reluctance. Keenly aware, however, of the possibility of making money, Eisenhower sought advice from his lawyers about how to structure the book deal to minimize his taxes. An opinion was obtained from the IRS that his proceeds could be taxed at the lower capital gains rate if he could be classified as a nonprofessional, first-time writer, and if he completed the manuscript six months before conveying any rights in it.

With this opinion in hand, Eisenhower entered into a handshake agreement with Doubleday and set to work, 16 hours a day. Doubleday provided extensive assistance to Eisenhower, in the form of round-the-clock secretarial help and researchers. Editors also periodically met with him and gave him comments. There is no evidence that anyone other than General Eisenhower had final say over the content. After completion of the book, Eisenhower waited the six months required by the IRS and then signed a contract with Doubleday, stating, "I do hereby sell, assign, transfer and set over unto Doubleday & Co., for its own use, absolutely and forever, the manuscript of my War Memoir entitled CRUSADE IN EUROPE, and all rights of every nature pertaining thereto." He received a lump sum payment rather than royalties, but only because he did not want to be bothered by further dealings with the publisher.

In a bench trial, the district court found there was a work-for-hire relationship, a determination the majority affirmed. The governing legal standard applied was "an independent contractor creates a work-for-hire when it was made at the instance and expense of the commissioning party." As the dissent pointed out, however, that standard was not announced until 1965, 17 years after the book was published: the governing standard in 1948 only extended to traditional employment relationships

Was Eisenhower’s book created at Doubleday’s instance and expense? Certainly at Doubleday’s expense, but not at its instance. The instance for any publication was not Doubleday. As the majority itself noted, the success of Doubleday’s pitch was based on convincing Eisenhower that failure to publish his memoirs would permit inaccurate versions to create the public record. Having convinced that Eisenhower that it was a good idea for him to publish his memoirs is a far cry, though, from being the motivating factor for Doubleday being the author of them: Eisenhower could just as easily have said to Doubleday: "You’re correct, I should write my memoirs; I will now put them up for bidding." The fact that he chose Doubleday is evidence only of their sales prowess.

On the legal side of the instance and expense test, as the majority conceded: "the ‘instance’ test is shaped in part by the degree to which the ‘hiring party had the right to control and supervise the artist’s work." There was no evidence of any control or supervision over Eisenhower’s work. In finding to the contrary, the majority recast assistance as supervision. It is preposterous to believe Doubleday could have supervised the just-retired Supreme Allied Commander of Allied Expeditionary Forces during World War II composing his own memoirs. Doubleday pulled out all the stops for the simple reason that it wanted Eisenhower to write his entire book in less than three months so they could rush it in to print and catch the wave of his popularity. To find that such assistance is the equivalent of control is to fabricate a legal relationship out of a commercial desire for speed.

Such weaknesses in facts, of course, can be cured by results-oriented courts by relying on presumptions, and the Ninth Circuit was quick to rely heavily on its own self-created presumption: where a work was created at another's instance and expense, it was presumptively a work for hire. But it is only a presumption, and would fall in the face of other evidence. Here is some of that other evidence: Eisenhower wrote the first 60,000 words five years before he talked to Doubleday, he had contacts with other publishers before his contact with Doubleday, the Eisenhower-Doubleday contract was expressly an assignment, and there is the all-important tax treatment of Eisenhower as a non-employee: after all, employees don’t pay capital gains taxes on their salaries. Under the majority’s approach, General Eisenhower was a tax cheat. Finally, there is the little problem of a different legal standard being extant at the relevant time, something the majority ignored.

Judge Nelson dissented on the above grounds, but alas it is a dissent. The majority’s approach opens a football field wide loophole for work for hire treatment under the 1909 Act. Like much from that circuit, it is best confined to it.


Anonymous said...

Incidentally, did you agree with the Supreme Court's Dastar decision?

I thought the 9th Circuit actually had the better of that argument. There is no "mutant copyright" created by preventing a copier from misleading consumer's into believing that the copier created a work that it did not create.

If the 9th Circuit's decision stood, copiers would be free to use public domain works without making such claims -- which is all the copyright policies need guarantee.

But if someone passes off an author's work -- even if that work is in the public domain -- as his own work then I don't see why the Lanham Act should not be implicated. Real public confusion could still occur and obviously real damage to an author's reputation.

Depriving author's of trademark protection does not protect copyright, it simply leaves a class of injuries unaddressed. In particular, I think it suppresses donation to the public domain by those who would still desire to protect their reputations.


William Patry said...


I went to the argument in DaStar, and there was great confusion about the nature of the claim: was it a failure to attribute or a false attribution? If, for example, defendant had said: "We took this documentary from a well-known movie studio whose copyright lapsed," would that have been OK for trademark purposes? Or, was the nature of the claim based on a requirement that the original studio affirmatively be identified? That tied in to what "source" meant, and hence the narrow approach taken in the opinion.
I think another concern was the massive damages sought and the possibility of double-dipping, receiving both trademarka nd copyright damages for the same distribution.

Anonymous said...

I think I see now; I've always read the decision more broadly. Thanks for the insight!