This action for declaratory judgment centered on a planned movie, The Snow White Ladies of the Third Week (“Ladies”). Based on a decision issued on January 30, 2013, from the U.S. District Court for the Northern District of Georgia,^[1] it appears unlikely that Ladies will be coming to any screen any time soon. The court resolved a motion for summary judgment directed to conflicting claims of copyright ownership in the Ladies screenplay and in so doing prevented plaintiffs from proceeding with production of Ladies without defendants’ consent.

Defendants, joint authors of the unpublished source novel, had entered in October 2009 into a brief agreement with plaintiffs, an actor and a cinematographer/production designer, respectively, for the creation of a screenplay based on defendants’ book. Whether the parties contracted for more was at issue.

The issues arising in Durkin v. Platz should be familiar to every copyright practitioner who has ever attempted to resolve an authors’ dispute, complicated here by a puzzling mathematical computation: a script possibly by four from a book possibly by two. Still, while there is hardly anything unfamiliar here, the court’s conclusion with respect to the rights of authors in what may have been intended as a joint work delivers a surprise ending to the Ladies saga.

Parties’ “Memorandum of Agreement”: What It Says, What It Doesn’t

The second installment of the agreed compensation was tied to completion of the screenplay. Plaintiffs’ production obligations, such as they were—“talent, creative or development attachment” and submission of “top sheet production budget”—were not conditions precedent to payment. There is no stated rationale for calling plaintiffs “producers.”

Nothing in the agreement indicates whether, in addition to being co-owners of copyright, the parties intended to create the screenplay as a joint work; whether the parties anticipated that defendants’ editorial work would rise to the level of copyrightable subject matter; whether the work done by any party was a work made for hire for either entity; whether defendants or their Third Week Brigade, LLC, could claim an undivided, proportional interest in the screenplay as a joint work. The agreement is silent on these salient subjects, typically addressed in well-crafted authorship agreements. In short, the nature of the parties’ bargain was open to interpretation.

Initially the parties appeared cordial. As the screenplay developed and plaintiffs submitted pages to defendants, presumably to facilitate their editorial obligations, Platz responded enthusiastically in e-mails dated October through December 2009. “Absolutely wonderful … great job”; “Great!!!!!!”; “Bravo! I love it sooooooo much … I love it all”; and “I am thrilled to be working with you.” Defendant Hale, after reading the completed first draft, wrote to plaintiffs on December 30, 2009, “You all have done a magnificent job and we love it.”^[5]

In March 2010, for reasons unexplained, defendants broke off communications. On March 30 they demanded that plaintiffs enter into a work-made-for-hire agreement. Plaintiffs declined. This action followed.^[6] Plaintiffs sought declarations that (1) they own a valid, enforceable copyright in the script, (2) the script does not infringe any copyright owned by defendants, and (3) they are entitled to market and produce a film based on the script without interference from defendants.^[7]

The Holdings

With respect to copyright ownership, the court held the screenplay “is copyrightable as a derivative work that it is co-owned by the parties^[8] and “as a matter of law Plaintiffs are co-owners of the copyright.”^[9] Defendants had argued the screenplay lacked sufficient originality to be copyrightable,”^[10] but the court observed that plaintiffs transformed the source sufficiently—by additions, revisions and deletions—to satisfy the originality standard commonly applied. Further, the language of the parties’ agreement provided that the parties would “own the screenplay in full partnership.”^[11] “Here,” the court said, “the parties clearly intended to create the screenplay together and co-own the copyright.”^[12]

With respect to infringement, the court held as a matter of law that “the copyright in the screenplay … does not infringe Defendants’ copyright in their manuscript.”^[13] The screenplay was prepared under license from the authors of the book, thus there is no issue as to whether plaintiffs used the preexisting work without permission.

With respect to plaintiffs’ claim of entitlement to proceed unilaterally with production of a Ladies film, the court disagreed. Quoting Section 103(b) of the Copyright Act, the court stated, the copyright in a derivative work “extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work….”^[14] The court reasoned that the movie would be a derivative of a derivative, and proceeding with the film would violate “[t]he established doctrine that a derivative-work author cannot create additional derivative works that incorporate the original work without the permission of the owner of the original work….”^[15] In the absence of a license granted by defendants to use the underlying source materials, “as a matter of law Plaintiffs are not entitled to declaratory judgment that they have the right to use any materials from the screenplay that are from the underlying manuscript.”^[16] The court did not indicate what constituted the source materials embodied in the script.

Analysis

The court’s bar on preparation of a derivative of a derivative without defendants’ consent appears at odds with its own finding that “the parties clearly intended to create the screenplay together…..” Given the statutory definition of a joint work—“A ‘joint work’ is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole”^[17]—a screenplay prepared “together” by the parties would likely constitute a joint work if the requisite intention existed. The court signaled that it did,^[18] although it did not specifically locate the source of its finding in the parties’ agreement, which speaks of co-ownership of copyright arising as a creature of contract and not as a consequence of joint authorship. The court did acknowledge that Plaintiffs submitted revised portions of the screenplay to Defendants, and Defendants edited the revisions.^[19]

The statutorily required intention to create a joint work notwithstanding, some commentators have urged that in addition each contribution to a joint work must in and of itself rise to the level of independently copyrightable subject matter for rights to be conveyed. The Nimmer treatise (“Nimmer”) declares this a contentious issue.^[20] Nimmer itself submits that “copyright’s goal of fostering creativity is best served, particularly in the motion picture context, by rewarding all parties who labor together…,”^[21] a more permissive standard and a position shared by William Patry.^[22] The court in Durkin v. Platz did not opine on whether defendants’ contribution, presumably in the nature of editorial emendations, rose to that level.

With respect to a joint work, each contributor automatically acquires a proportional ownership in the entire work, including all contributions made by coauthors^[23] and may individually exercise all the rights pertaining to the protected work,^[24] subject only to a caveat that there be an accounting of revenues to each collaborator uninvolved in the exploitation.^[25]

While the court made plain that the parties in Durkin v. Platz co-own copyright in a derivative work both by contract and by law, the question remains with respect to the exercise of their rights as owners of a joint work.