Property, intangible

a blog about ownership of intellectual property rights and its licensing

Sybersound Records Takes Some Hits

Sybersound Records, Inc. v. UAV Corp. is a 2008 Ninth Circuit decision on joint copyright ownership that wasn’t well-received by either Nimmer on Copyright or Patry on Copyright. In Sybersound, the court held that the transfer of an interest by one joint owner of a copyright could only be a non-exclusive license, not an assignment or exclusive license. In a post entitled “Death of Divisiblity,” William Patry described the flawed reasoning in the Sybersound decision this way:

Where there are multiple authors, Congress intended that one co-owner could offer non-exclusive licenses in the whole, but could not offer an exclusive license/assignment/conveyance in the whole without all co-owners’ permission . . . .  At the same time, Congress permitted one co-owner to convey his or her proportional share in the whole, regardless of whether that conveyance was called an assignment or a license. This follows from the plain language of the statute and from the lack of any process for resolving disputes among co-owners: what if one co-owner wants to sell his or her interest, but the other doesn’t want him or her to? Are co-owners stuck together in a marriage that isn’t working? Long after non-fault divorces became common, Congress provided for them through divisibility. All was fine for a long time, until a spate of bad decisions. Sybersound is the most recent.

More recently two district courts, one in the Ninth Circuit and one in the Seventh, whittled away at Sybersound. First up, out of the Eastern District of Wisconsin we have Brownmark Films, LLC v. Comedy Partners, the “What, What, In the Butt” (“WWITB”) decision that is best known for a copyright fair use win on a motion to dismiss (original video here and South Park spoof here: best remark on the court’s decision here). However, before the court reached fair use it had to decide whether the plaintiff had standing to bring the infringement claim. The copyright in the video was originally owned by three individuals, but only two assigned their interest to plaintiff Brownmark Films. Under Sybersound, as a nonexclusive licensee Brownmark Films wouldn’t have standing.

But the Wisconsin court wanted no part of Sybersound. It criticized the Ninth Circuit’s reasoning, concluding:

In sum, while the Sybersound Records decision is most definitely authoritative, it is far from persuasive. Instead, this court agrees that “[t]he determination of whether a grant is exclusive or non-exclusive depends on the grant.” [Cites to Nimmer and Patry.] Here, accepting the allegations in the complaint as true, Messrs. Ciraldo and Swaint’s grant of their interest in WWITB was a complete assignment of rights to Brownmark and, accordingly, Brownmark has standing to sue for infringement of the underlying copyright.

More recently, the District of Nevada had to deal with the same problem. Corbello v. DeVito is a meaty decision about the copyright ownership of an unpublished biography of defendant Tommy DeVito, one of the original Four Seasons. Plaintiff Donna Corbello is the widow and heir of Rex Woodward, the author of the biography (or co-author, more on that in another post) and alleges that the Broadway musical “Jersey Boys” is a derivative work of the book. Corbello sought a declaratory judgment that a purportedly exclusive license DeVito granted to the “Jersey Boys” production couldn’t have been exclusive under Sybersound.

Since the District of Nevada is in the Ninth Circuit, the court had to work harder than in Brownmark Films to distinguish Sybersound – nevertheless, it managed to. It examined what the 9th Circuit meant by the term “exclusive,” deciding that the exclusivity is only as to the grantor of the right, not all the co-owners:

In the context of intellectual property, the difference between “exclusive” and “nonexclusive” licenses concerns the continuing ability of the grantor to use or further license to others the licensed property during the period the license is in effect. An “exclusive” license is “[a] license that gives the licensee the sole right to perform the licensed act . . . and that prohibits the licensor from performing the licensed act and from granting the right to anyone else . . . .” Black’s Law Dictionary 1003 (9th ed.2009). A “nonexclusive” license does not impose this limitation on the licensor. A joint owner of a work may consistent with Sybersound grant a license that is exclusive as against him, i.e., he may no longer exploit or further license the work. But such a licensee cannot prevent the other joint owner(s) from using or further licensing the work. In a sense, then, such a license is both exclusive and nonexclusive.

Therefore, DeVito could have granted an exclusive license as to his own rights, but not to the exclusion of the plaintiff’s right to exploit the copyright in the work, a situation that the court coined as a “selectively exclusively license.” The Corbello court rationalized the Sybersound court’s decision as “guilty at most of imprecise syntax or some minor equivocation, as opposed to outright copyright-law heresy. . . . Surely the Ninth Circuit will clarify that it meant something like this if given the chance, and perhaps it will have the chance in the present case.”

But as a joint owners, DeVito owes Corbello a duty of accounting for her share of his profits from the licensing of the book. Which perhaps is not as easy as it seems, since he had licensed a number of works to the Jersey Boys production and Corbello is only owed royalties for the portion attributable to the unpublished book.

Brownmark Films, LLC v. Comedy Partners, Civ. No. 10-CV-1013 (E.D. Wisc. July 6, 2011).
Corbello v. DeVito, Civ. No. 2:08-cv-00867 (D. Nev. Oct. 27, 2011).

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