The US Court of Appeals for the Fifth Circuit reversed a district court’s dismissal of a copyright authorship dispute, finding that the district court had exclusive jurisdiction over the case because a book publisher’s claim of co-authorship arose under the federal Copyright Act, not state contract law. Di Angelo Publ’ns, Inc. v. Kelley, Case No. 20-20523 (5th Cir. Aug. 12, 2021) (Higginbotham, J.)

Makeup artist Jentry Kelley and Di Angelo Publications entered into a publishing contract for Kelley’s cosmetics book. Kelley provided Di Angelo with an initial three-page manuscript, which Di Angelo claimed it then transformed into a book while communicating and collaborating with Kelley. The book listed Kelley only as the holder of the book’s copyright. After an initial 1,000-copy print run, Kelley asked Di Angelo to prepare an updated or revised version of the book for sale. Di Angelo claimed it had prepared the updated work when it discovered that Kelley was attempting to work directly with Di Angelo’s printer to reduce the costs she would incur selling the revised edition, which violated the parties’ contract.

After unsuccessful overtures to the printer, Kelley filed a complaint in Harris County, Texas, asking for rescission of the parties’ contract because Di Angelo intentionally misled her regarding publishing costs and overcharged her for publishing services. Kelley alleged that she was the sole copyright owner and that Di Angelo did not develop or have any intellectual property rights in connection with the book. Di Angelo counterclaimed for breach of contract, among other claims, and sought a declaratory judgment that Kelley failed to substantially perform under the contract. Di Angelo alleged that Kelley had prevented it from selling the updated edition of the book.

Following partial summary judgment in favor of Kelley, including on the declaratory judgment claim, Di Angelo filed suit in the Southern District of Texas. Di Angelo disputed Kelley’s claim to exclusive copyright ownership and asserted a single claim for relief: A declaration that Di Angelo owned the copyright in the two editions of the book, as well as any derivative works, and had rights in their printing and distribution. Additionally,Di Angelo alleged that it acquired copyrights in the books by “writing, editing, planning and taking all photographs and making all illustrations, and planning, designing, and arranging the layout” of the book. Kelley moved to dismiss Di Angelo’s declaratory relief claim, characterizing the suit as an end-run around the Harris County rulings against Di Angelo and arguing that there was no federal jurisdiction because Di Angelo’s claim was premised solely on Kelley’s alleged breach of the contract, which was governed by Texas law. Di Angelo responded that resolution of the authorship dispute required the district court to interpret federal copyright law, including definitional and ownership provisions, which the state court lacked jurisdiction to address. The district court agreed with Kelley on the jurisdictional question and granted the motion to dismiss. Noting that the parties’ contract referred to Kelley as the “author,” the district court found that that Di Angelo’s claim sounded in contract and did not require construction of the Copyright Act. Di Angelo appealed.

The parties agreed that federal jurisdiction over Di Angelo’s declaratory judgment claim existed only if it raised an issue arising under federal copyright law. Di Angelo argued that resolving the ownership dispute touched on federal concerns and required reference to the Copyright Act. Kelley maintained that the question of authorship sounded in contract, not federal law, pointing to the contract’s reference to Kelley as the “author.”

The Fifth Circuit held that Di Angelo’s claim necessarily implicated the ownership provisions of federal copyright law (17 U.S.C. § 201) because it required an application and interpretation of those provisions. The presence of a contract and contract claims did not alter this fact. The Court emphasized that the parties’ contract never expressly vested a copyright or any intellectual property right in either party and that referring to Kelley as “author” was not determinative of authorship. The contract did not define the term “author,” and the word could include multiple parties who collaboratively engage to produce one work, a possibility expressly contemplated by copyright law. The Court also noted that the contract itself specified that Kelley paid Di Angelo for services described as “manuscript development” and “elaboration on [the] base manuscript,” thus permitting the inference that the parties envisioned Di Angelo would make substantive contributions to the work. The contract also lacked a merger or integration clause.

Accordingly, the Fifth Circuit vacated the district court’s order dismissing Di Angelo’s declaratory judgment claim and remanded the case.