Property, intangible

a blog about ownership of intellectual property rights and its licensing

Copyright Owner, Employee, or Both?

Ashley Gasper has several hats.  He is an adult film star using the stage name Jules Jordan. (Not what you think, it’s a USPTO link.  Click away.)   He is the president and sole shareholder of Jules Jordan Video, Inc. (innocent too – Wikipedia), the creator of the videos in which Gasper stars.  He produces, directs and performs in the films (it’s ok – IMDb), writes the scripts, films the scenes, and draws a salary. The copyright registrations for the films listed Gasper as the owner.  (I leave it to you to find the registrations; none of the titles were ones I would link to.)

JJV started getting a higher than normal rate of return on the videos, only to find that the returns were low quality counterfeit copies.  Gasper and JJV sued.

A jury found that the defendants infringed the copyrights, but the trial court granted the defendants’ motion for judgment as a matter of law.  The court held that neither Gasper nor JJV had standing: it decided that Gasper’s work on the films was as a work made for hire so he had no standing, and since the registrations were in Gasper’s name the registrations were invalid and JJV also had no standing.

In largely an exercise of common sense, the Ninth Circuit reversed.  There was no question that Gasper was an employee of JJV for some purposes, so the question was whether that portion of his labor in which the copyright inhered was within the scope of his employment.  Gasper testified at trial that he always intended for his “creative work” to be separate from his work as an employee of JJV.  The trial court nevertheless found that his testimony was “concocted at trial” and concluded that “JJV intended [Gasper] would hold the camera, light the set, write the screenplay, product and direct.”

The Ninth Circuit reversed.

The problem with the district court’s analysis is that JJV was a one-man shop. Gasper was the sole officer, director, and shareholder of JJV, exercised complete control over it, and made all decisions concerning JJV and production of the films. It was all Gasper all the time. JJV as employer and Gasper as employee could certainly agree as to the scope of the employee’s employment, and could agree that Gasper should retain all copyrights. Since JJV was Gasper, JJV intended whatever Gasper intended, and if Gasper intended that his creative work be outside the scope of his employment with JJV, there was no one to disagree.

Further, even assuming JJV was the owner, listing Gasper as the owner of the copyright in the registration forms was an innocent mistake that did not invalidate the registrations.  Errors do not invalidate a copyright unless the infringer has relied to its detriment on the mistake or the claimant intended to defraud the Copyright Office.  The defendants here did not rely on the mistake and there was no reason to believe Gasper was trying to defraud the Office.  All that it would have taken to correct any error was an assignment of the registration, with Gasper signing it himself on behalf of JJV.  The fact that there was no writing, as required by section 204(a) of the Copyright Act, didn’t matter; that section is designed to resolve disputes between owners and transferees, to protect copyright holders from mistaken or fraudulent claims of oral transfers.  “When there is no dispute between the copyright owner and transferee, it would be unusual and unwarranted to permit a third-party infringer to invoke § 204(a) to avoid suit for copyright infringement.”  Gasper therefore had standing for the copyright infringement claim.

The trial court indeed may have been honoring form over substance.  But the appeals court’s reasoning is a little loose for my taste.  Surely there was more evidence, albeit perhaps not elicited at trial, about who actually owned the copyright in the films.  If Gasper owned the copyright, was there no papering up of JJV’s right to reproduce and distribute his copyrighted work?  What was the tax treatment of the copyright in the films?  I find it hard to believe that there was no evidence other than Gasper’s self-serving testimony that was relevant to prove actual ownership.

And I’ve never been comfortable with courts that say that faulty chain of title can’t be invoked by infringers to avoid liability.  If it is only the owner, legal or equitable, who has standing, how is it that the plaintiff gets to avoid a fundamental predicate to suit simply because the missing link is between related parties?  The court wades off into a discussion of assignments and writings, but no assignment would have corrected an actual fraud on the Copyright Office.  I don’t disagree that there was no fraud, but simply because there was no evidence of fraudulent intent, not because the plaintiffs could have played a shell game with the registrations.

Right outcome, questionable reasoning.  For a discussion of the right of publicity and copyright preemption portion of the case, visit the Seattle Trademark Lawyer.

Jules Jordan Video, Inc. v. 144942 Canada Inc., No. 08-55075, 08-55126, (9th Cir. Aug. 16, 2010).

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