Property, intangible

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Choice of Law and Copyright Ownership

RCTV International Corp. v. Rosenfeld is a exhaustive examination of how US copyright law applies to works of foreign origin. Plaintiff Radio Caracas Television RCTV C.V. is a Venezuelan television company that created the telenovela series “Juana La Virgen”1. RCTV Caracas hired defendant Perla Farias De Eskinazi (“Farias”), also Venezuelan, on four different annual contracts to write scripts. The show was first broadcast in 2002.

RCTV Caracas licensed the rights to RCTV Miami for use everwhere but Venezuela. In 2013 RCTV Caracas registered the copyright in the United States and sued Farias and her agent, claiming that media company Televisa approached RCTV to terminate its contract because Farias’ agent told it that RCTV did not have the rights to the show. RCTV brought claims under the Copyright Act and for intentional interference with a business relationship, tortious interference with contract, fraud, and unfair competition. The court bifurcated in order to try the issue of ownership of copyright first.

What I like about the decision is that the court very carefully parses out each step of the creation and ownership of the works, deciding at each step of the way what law applies, US or Venezuelan. As the court describes, the various cases in which foreign law is implicated have generally conflated the legal analysis. No conflation here.

So the first step was to decide what law controlled ownership at inception and, by application of that law, who owned it. Nimmer takes the view that ownership should be decided under U.S. law, called “national treatment”; however, Itar-Tass News Agency v. Russian Kurier, Inc., 153 F. 3d 82, 88-92 (2d Cir. 1998) held that, because copyright is a form of property, under the Restatement (Second) of Conflict of Laws § 222 ownership should be determined by the law of the state with “the most significant relations” to the property and the parties.

With a thorough analysis, as well as observing that the 11th Circuit has a controlling opinion, the RCTV Int’l court agreed with the rationale in Itar-Tass and that Venezuelan law applied:

[I]n this case, there is no dispute that the works at issue for the contracts between 2000 through 2002 were created by Venezuelan nationals, in Venezuela and pursuant to Writer’s Agreements executed in Venezuela. In addition, the Agreements executed between 2000 and 2003, included a Venezuelan choice of law clause. As such, Venezuela, and thereby its laws, has the most significant relation to the copyrights and the parties. Thus, Venezuela is the country of origin and provides the law for determining initial ownership of the copyrights.

The plaintiffs argued that Venezuelan law was similar in effect to the US “work made for hire” provision where ownership initially vests in the employer, but the court said not so:

Plaintiff’s argument is unpersuasive. Article 59 of the VCL states that “[i]t shall be presumed . . . that the authors of works created in the course of employment relations . . . have assigned to [the hiring party] . . . the exclusive right to exploit [the work].” Black’s Law Dictionary defines an “assignment” as “[t]he transfer of rights or property.” Black’s Law Dictionary defines a “transfer” as “[a]ny mode of disposing of or parting with an asset or an interest in an asset” as well as “[t]o convey or remove from one place or one person to another.” In other words, the plain meaning of the word “assign” is for one person to give up their ownership in something and give it to someone else. By using the word “assigned,” Article 59 is thus defining the hiring party as a subsequent owner of the right of exploitation, not its initial owner.

(Emphasis and brackets in original; citations omitted.) So Farias was the initial owner, but the Venezuelan statute says that the employee is presumed to assign it to the employer. The next choice of law question therefore was what law, US or Venezuelan, applied to the assignment. The court held that here, too, Venezuelan law applied.

The wrinkle in the case was two seemingly-conflicting provisions in Venezuelan law on the timing of termination of ownership. Article 52 says:

The assignment of the author’s exploitation rights in his future works shall be valid if those works are specified individually or by genre; the assignment shall be effective only for a maximum period of five years counted from the date of the contract, even where the latter has specified a longer period.. . .

However, Article 59 says:

It shall be presumed, unless expressly agreed otherwise, that the authors of works created in the course of employment relations or on commission have assigned to the employer or commissioning party, as the case may be, without limitation and for the entire duration thereof, the exclusive right to exploit them ….

Based on testimony by experts in Venezuelan copyright law, the court concluded that the express language of Article 59, “without limitation, for the entire duration thereof,” was meant to override the provision in Article 52.

If you have a foreign ownership situation go to this case first; my summary is very brief but the court’s opinion is exceptionally thorough. The parties said at the outset that they would seek immediate appeal, which probably explains the court’s attention to detail.

RCTV Int’l Corp. v. Rosenfeld, No. 13-23611-CIV-SIMONTON (S.D. Fla. Sept. 30, 2016)

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  1. CW Network made a US version of the show, “Jane the Virgin,” I suspect part of the motive for the lawsuit. IMDb says that Farias had also been a writer for Jane the Virgin. 
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