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Cover-Up Isn’t Covered Under VARA

by | Aug 31, 2023 |

The US Court of Appeals for the Second Circuit affirmed that the Visual Artists Rights Act of 1990 (VARA) does not prohibit covering an artist’s mural where there is no damage to the mural. Samuel Kerson v. Vermont Law School, Inc., Case No. 21-2904 (2d. Cir. Aug. 18, 2023) (Livingston, Cabranes, Kovner, JJ.)

In 1993, Samuel Kerson and Vermont Law School entered into a written agreement for Kerson to paint two murals on the walls of the law school’s community center. The completed murals were publicly viewable and depicted several distinct scenes spanning the history of US slavery, from the capture of Africans in their homelands through the abolitionist movement.

Because of complaints from community members regarding how the murals presented Black people, the law school considered options for the murals’ removal. The school decided to conceal the murals behind a barrier of fabric-cushioned acoustic panels. The panels were constructed such that they were suspended approximately two inches away from the murals’ surface and did not touch the murals.

Kerson filed suit seeking to enjoin the installation of the acoustic panels on the theory that they amounted to a violation of his rights under VARA. Under the relevant part of VARA, the author of a “work of visual art” “shall have the right”:

(A) to prevent any intentional distortion, mutilation, or other modification of that work which would be prejudicial to his or her honor or reputation, and any intentional distortion, mutilation, or modification of that work is a violation of that right, and

 

(B) to prevent any destruction of a work of recognized stature, and any intentional or grossly negligent destruction of that work is a violation of that right.

17 U.S.C. §§ 106A(a)(3)(A)-(B).

In the district court, Kerson argued that blocking the public from viewing his work of art would amount to the “destruction” or “intentional distortion, mutilation, or other modification” of the murals. The district court disagreed and granted summary judgment in favor of the law school. Kerson appealed.

Kerson argued that permanently concealing the murals with a solid barrier of acoustic panels modified and thus “destroy[ed]” his work. The Second Circuit agreed with the district court that covering a work of art did not amount to “destruction” under VARA. The Court explained that Kerson’s argument did not comport to the conventional understanding of the word “destruction” under the plain meaning of the statute. The acoustic panels were designed to not touch the murals, let alone destroy them.

The Second Circuit also rejected Kerson’s argument that covering a work of art amounts to “modification.” Under VARA, “modification” would entail a change to the work of art that alters some portion of it without radically transforming the whole. For example, an additional brush stroke, erasure of content or the reorganization of a movable component would be a modification of a work of art. Modifications do not include concealing the entire work behind a solid barrier.

The Second Circuit also rejected Kerson’s argument that concealing the murals was [...]

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Electra Powers Second Circuit’s False Endorsement Analysis

by | Jun 8, 2023 |

Following on the heels of its 2021 decision in Electra v. 59 Murray, the US Court of Appeals for the Second Circuit affirmed the summary judgment denial of a Lanham Act claim related to false endorsement premised upon the unauthorized use of photographs in connection with promotional materials. Souza et. al. v. Exotic Island Enterprs., Inc., Case No. 21-2149 (2d Cir. May 19, 2023) (Lynch, Nardini, Menashi, JJ.) The Second Circuit also affirmed the district court’s summary judgment denial of Lanham Act false advertising and New York state right of publicity claims.

The operator of a gentlemen’s club used photographs of current and former professional models in social media posts promoting the club. The photographs were obtained without the models’ permission through a third-party vendor. The models sued the club operator asserting false endorsement, false advertising and right of publicity violations. The parties filed dueling summary judgment motions in February 2021. During the pendency of those motions, the Second Circuit decided Electra, a case involving overlapping plaintiffs suing on several of the same causes of action based on highly similar fact patterns. The district court subsequently granted the club operator’s motion for summary judgment and denied the models’ motion. The models appealed.

The Second Circuit relied heavily on its Electra decision to affirm the district court’s denial of the models’ false endorsement claim. To prevail on a false endorsement claim under Section 43 of the Lanham Act, the models were required to prove that there was a likelihood of confusion between their goods or services and those of the club operator. Likelihood of consumer confusion is evaluated using the eight Polaroid factors:

  1. Strength of the trademark
  2. Similarity of the marks
  3. Proximity of the products and their competitiveness with one another
  4. Evidence that the senior user may bridge the gap by developing a product for sale in the market of the alleged infringer’s product
  5. Evidence of actual consumer confusion
  6. Evidence that the imitative mark was adopted in bad faith
  7. Respective quality of the products
  8. Sophistication of consumers in the relevant market.

First, the models argued that the district court oversimplified the “strength of the mark” analysis (factor 1) to focus only on the recognizability of the mark. The Second Circuit disagreed, explaining that not only was Electra’s focus on recognizability binding precedent but also, that factor was required to be evaluated in the context of the mark’s strength in the false endorsement context (i.e., as a function of the extent to which the endorser’s identity could be linked with the product being sold). In other words, without an adequate showing that the models were recognized in the social media posts promoting the club, there could be no case of endorsement, let alone false endorsement.

Second, the models challenged the district court’s exclusion of their expert testimony on certain Polaroid factors. The district court excluded surveys conducted by the models’ expert as unreliable because they suffered from various methodological flaws and, therefore, did not provide a reliable [...]

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No Lost Value Damages Despite Trade Secret Misappropriation

by | Jun 8, 2023 |

The US Court of Appeals for the Second Circuit vacated a damages award, finding that although there was liability for appropriating trade secrets, the trade secret proprietor was only entitled to compensatory damages under federal trade secret law, not avoided cost damages based on alleged estimated research and development or loss of value. Syntel Sterling Best Shores Mauritius, Ltd., et al. v. The TriZetto Grp., Inc., et al., Case No. 21-1370 (2d Cir. May 25, 2023) (Wesley, Raggi, Lohier, JJ.)

This case involved trade secrets concerning healthcare insurance software called Facets® that was developed by TriZetto and alleged misappropriation by a TriZetto subcontractor, Syntel Sterling. In 2010, TriZetto and Syntel entered a Master Service Agreement (MSA) under which Syntel agreed to support TriZetto’s Facets customers. In exchange, TriZetto granted Syntel access to its trade secrets related to Facets. In 2012, the parties amended the MSA to allow Syntel to compete directly with TriZetto for consulting services. A dispute arose in 2014 when Syntel’s competitor Cognizant acquired TriZetto. Syntel terminated the amended MSA and requested payment of rebates owed. TriZetto refused, raising concerns about Syntel’s continued use of confidential trade secrets post-termination.

Syntel filed suit for breach of contract in the Southern District of New York, and TriZetto counterclaimed. During trial, TriZetto proceeded on trade secret misappropriation counterclaims related to the Facets software under the Defend Trade Secrets Act (DTSA) and New York law. Syntel argued that the amended MSA authorized Syntel to compete for Facets services business while using TriZetto’s trade secrets.

During discovery, the district court issued a preclusion order that sanctioned Syntel for discovery misconduct, finding that “Syntel was actively creating a repository of [TriZetto’s] trade secrets on its own . . . to be used in future work.” Citing the preclusion order, the district court instructed the jury that Syntel had misappropriated two of 104 asserted trade secrets.

With respect to damages, TriZetto presented expert testimony that established that Syntel avoided spending about $285 million in research and development costs because of the misappropriation covering the period between 2004 and 2014, an amount that covered only a portion of TriZetto’s overall $500 million research and development costs. Syntel’s expert did not counter that amount. Instead, Syntel argued that these avoided costs did not apply here for several reasons: because the alleged misappropriation did not destroy the value of Facets since Syntel could have used Facets for free by entering a third-party access agreement with TriZetto because TriZetto continued to make millions using its Facets software, and because Syntel was not a software company but a competing service provider. The jury instructions included Syntel’s avoided development costs as one form of unjust enrichment that applied to the federal claims but not the state claims.

The jury returned a verdict in favor of TriZetto on all counts. The jury awarded TriZetto $285 million in avoided development costs under the DTSA as compensatory damages and double that amount in punitive damages. Following trial, Syntel renewed its motion for judgment as [...]

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When Are Compulsory Copyright Licenses Compulsory?

by | Oct 20, 2022 |

The US Court of Appeals for the Second Circuit partially affirmed a district court’s summary judgment order holding that audiovisual recordings of live concerts do not fall within the scope of the Copyright Act’s compulsory license provision while purchasers of audio-only recordings obtain a compulsory license in the copyright of the work fixed by their predecessors/sellers. ABKCO Music, Inc. et al. v. Sagan et al., Case No. 20-3816 (2d Cir. Oct. 6, 2022) (Jacobs, Wesley, Menashi, JJ.)

In 2002, William Sagan purchased, through Norton, a collection of audio and audiovisual live concert recordings from Bill Graham Archives. All three parties are named defendants in this case. The agreement conveyed all intellectual property that the Archives held (from a transaction with Sagan) and included a disclaimer stating that record company and artist approval was required to exploit the recordings. The defendants’ subsequent purchases of other recordings contained similar limited assurance language regarding intellectual property rights. In 2006, the defendants made the entire collection publicly available online for a streaming and downloading fee. A year later, the defendants began using a third-party licensing agent to obtain compulsory licenses under 17 USC § 115 and negotiated licenses from plaintiff music publishers in the audio and audiovisual live concert recordings.

Section 115 of the Copyright Act requires persons seeking to make and distribute phonorecords of a previously published musical work to obtain a compulsory license by providing notice to the copyright owner before distribution and paying government-prescribed royalties. (§ 115(a)(1), (b), (c).) The Copyright Act defines phonorecords as “[m]aterial objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed.” (§ 101.) Section 115’s substantive requirements for duplications of audio/sound recordings fixed by another include requirements that the sound be fixed lawfully, and that duplication be authorized by the copyright owner. (§ 115(a)(1).)

In 2015, the music publishers sued defendants for copyright infringement of 197 musical works posted online without valid compulsory licenses. The music publishers alleged that the defendants did not obtain compulsory licenses for audiovisual works as required by § 115 and that the defendants failed to comply with § 115 substantive compulsory licensing requirements for audio-only works. Defendants argued implied license and equitable estoppel as affirmative defenses. The publishers sought damages and a permanent injunction pursuant to the Copyright Act.

The district court, on summary judgment, ruled that the defendants had no valid license authorizing the reproduction and distribution of the musical works in either audio or audiovisual format, that the defendants had neither an implied license nor any basis for estoppel, and that Sagan (a principal in several of the defendant streaming services) was liable for direct infringement. The district court denied the publishers’ request for an injunction but granted the publishers an award of attorneys’ fees. The defendants appealed from the summary judgment order and the order granting fees and costs. The plaintiffs cross-appealed denial of an injunction.

The Second Circuit affirmed the district court’s holding that the defendants infringed each musical work [...]

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Don’t Dew It: Second Circuit Cans Likelihood of Confusion Argument

by | Aug 11, 2022 |

The US Court of Appeals for the Second Circuit reversed and vacated a district court’s preliminary injunction grant because the district court erred in assessing the strength of a trademark. RiseandShine Corporation v. PepsiCo, Inc., Case No. 21-2786 (2d Cir. July 22, 2022) (Leval, Chin, Menashi, JJ.)

Rise Brewing began selling canned coffee under the registered mark “RISE” in 2016. The registered mark consists of the word “rise” in large, red, regular capital letters with the words “Brewing Co.” below in a smaller, similar font on a horizontal line. The mark appears on every bottle of Rise Brewing’s canned coffee products.

In March 2021, PepsiCo launched a canned energy drink product under the mark “MTN DEW RISE ENERGY,” which contains the word “rise” on the top of each can, followed by the word “energy” running vertically up its side in a much smaller font and the MTN DEW house mark above the word “rise.”

Rise Brewing filed a complaint for trademark infringement and filed a motion for a preliminary injunction to enjoin PepsiCo from using or displaying the challenged in the market pending trial. The district court granted the motion, finding that Rise Brewing was likely to succeed on the merits regarding likelihood of confusion. PepsiCo appealed.

The Second Circuit explained that the party seeking a preliminary injunction over the use of a trademark can meet the likelihood of success prong of the preliminary injunction standard by showing that a significant number of consumers are likely to be misled or confused as to the source of the products in question. Here, the district court found that there would be a likelihood of reverse confusion—that consumers would mistake Rise Brewing’s coffee products (the prior user) as Mountain Dew products (the subsequent user). The Court disagreed and reversed, finding that the district court erred in the evaluation of the most important factor: strength of the mark.

The strength of a trademark is assessed based on either or both of two components:

  1. The degree to which it is inherently distinctive
  2. The degree to which it has achieved public recognition in the marketplace.

Although the Second Circuit agreed with the district court that the RISE trademark was a suggestive mark, it disagreed on the extent to which it was distinctive. The Court explained that “[t]he district court failed to note that the strong logical associations between ‘Rise’ and coffee represent weakness and place the mark at the low end of the spectrum of suggestive marks.” Because of the legal element in determination of the strength of a given mark, the district court’s mistake constituted a legal error.

The Second Circuit found that the lack of distinctiveness in using the term “rise” to describe coffee products can be demonstrated by [...]

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Lost and “Found”: Fourth Circuit Interpretation of Discovery in Support of Foreign Litigation Opens Circuit Split

by | Jun 23, 2022 |

The US Court of Appeals for the Fourth Circuit held that a corporation that is not physically present in a district is not “found” in the district for purposes of the federal statute that authorizes courts to order discovery for use in a foreign tribunal. In re Eli Lilly and Co., Case No. 22-1094 (4th Cir. 2022) (Niemeyer, Diaz, JJ.; Floyd, Sr. J.) The Court rejected the approach of the Second Circuit, which previously had held that a district court’s power to order discovery under 28 USC § 1782 was coextensive with the minimum contacts inquiry of specific jurisdiction.

After acquiring a patent portfolio related to the psoriasis drug Taltz, Novartis AG sued Eli Lilly for patent infringement in several European courts. Eli Lilly requested discovery from Novartis in the Eastern District of Virginia under § 1782, which authorizes a district court “of the district in which a person resides or is found” to “order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal.” Novartis is based in Switzerland and has no offices or employees in the Eastern District of Virginia.

Following a magistrate judge’s grant of Eli Lilly’s ex parte application for a discovery subpoena, the district court vacated that order. The Fourth Circuit affirmed, substantially echoing the district court’s reasoning.

There was no dispute that Novartis did not “reside” in the district; the only issue was whether Novartis could be “found” there. The Fourth Circuit considered the plain meaning of “found,” Supreme Court precedent interpreting similar statutory language, and the legislative history of the statute, and held “that a corporation is found where it is physically present by its officers and agents carrying on the corporation’s business.”

The Fourth Circuit rejected Eli Lilly’s counterargument that the satisfaction of specific jurisdiction requirements was sufficient for a corporation to be “found” in a district, including Eli Lilly’s reliance on the 2019 Second Circuit decision in In re del Valle Ruiz, which held that a corporation was “found” wherever it could be subject to specific jurisdiction. The Fourth Circuit concluded that In re del Valle Ruiz failed to give “found” its plain meaning, incorrectly ignored Supreme Court precedent and did not give appropriate weight to the legislative history of § 1782.

Even if the Fourth Circuit had disagreed with the district court’s interpretation of § 1782, the Court would still have affirmed based on the deferential abuse-of-discretion standard. Because § 1782 permits, but does not require, an order of discovery, the Court found that the district court’s determination that to “request[ ] [ ] a substantial volume of data and materials located abroad [to] be brought into the United States for subsequent use in proceedings abroad, [would be] a nonsensical result” was well reasoned.

With this decision, the Fourth Circuit broke with the Second Circuit and created a circuit split in the interpretation of § 1782.

Ian Howard, a summer associate in the Washington, DC, office, also contributed [...]

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The Perils of Falling in Love

by | May 12, 2022 |

The US Court of Appeals for the Second Circuit affirmed the dismissal of a lawsuit that sought a declaratory judgment on the basis that a notice of termination of copyright assignment under 17 U.S.C. § 203 did not validly terminate a 1983 grant of rights in the copyright. Valentina M. Peretti Acuti, et al. v. Authentic Brands Group, LLC, et al., Case No. 21-2174 (2d Cir. May 4, 2022) (Livingston, C.J.; Lynch, Lohier, JJ.)

Hugo Peretti co-wrote “Can’t Help Falling in Love,” a ballad popularized by Elvis Presley in 1961, and registered the composition with the US Copyright Office the same year. In 1983, Peretti, his wife and his daughters transferred their contingent rights and interest in the renewal term of the copyright to Julian and Jean Aberbach, predecessors-in-interest to Authentic Brands. Under the Copyright Act of 1976 (1976 Act), the renewal rights would not vest until the original term of the copyright expired in 1989 (28 years after the copyright was registered, under the Copyright Act of 1909, which applied to the initial term of the copyright because of its registration in 1961). Peretti died in 1986, before the renewal rights vested. His family registered the renewal of the copyright in 1989.

In 2014, Peretti’s widow and his daughter Valentina served a notice on Authentic Brands to terminate the 1983 assignment under 17 U.S.C. § 203. Section 203 provides for the right to terminate a grant executed by the author at any time during a five-year period beginning at the end of 35 years from the date of execution of the grant. Authentic Brands contested the effectiveness of the termination, and Valentina filed a lawsuit seeking a declaratory judgment that the termination was properly effectuated. The district court dismissed the claim, holding that Valentina had no right to terminate the assignment because the rights to the renewal term that were transferred were those of Valentina and her mother, which had vested upon expiration of the original copyright term. The district court held that § 203 provides termination rights only to post-1978 grants executed by an author and, therefore, Peretti’s widow and daughter’s rights to the renewal were not subject to termination under that provision. Valentina appealed.

The Second Circuit began with a discussion of § 203 of the Copyright Act, which applies only to grants executed by the author on or after January 1, 1978. The Court noted that the appeal hinged on the meaning of “executed by the author.” The 1976 Act provides that execution of a transfer of a copyright is not valid unless an instrument of conveyance is in writing and signed by the owner of the rights conveyed. Thus, as the Second Circuit explained, a grant “executed by the author” is a grant that is documented in writing, is signed by the author and conveys rights owned by the author.

Turning to the Peretti 1983 assignment, the Second Circuit explained that at the time the assignment was executed, ownership of the copyright in the composition [...]

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#Blessed? Preliminary Injunction Related to Social Media Accounts Vacated

by | Feb 3, 2022 |

Addressing a dispute between a bridal designer and her former employer regarding the use of the designer’s name and control of various social media accounts, the US Court of Appeals for the Second Circuit affirmed the district court’s preliminary injunction prohibiting the designer from using her name(s) in commerce, vacated the portion of the preliminary injunction granting the employer exclusive control over the social media accounts and remanded the case for further consideration by the district court. JLM Couture, Inc. v. Gutman, Case No. 21-870 (2d Cir. Jan. 25, 2022) (Park, J.) (Newman, J., concurring in part and dissenting in part) (Lynch, J., concurring in part and dissenting in part).

Hayley Paige Gutman worked for JLM Couture from 2011 to 2020, during which time she designed bridal and bridesmaid dresses and developed the Hayley Paige brand. Hayley Paige brand apparel generated hundreds of millions of dollars in sales, and Gutman’s fame (and social media account followers) grew alongside the brand’s sales revenue. Gutman and JLM’s relationship began to break down in 2019. Following the parties’ failed contract negotiations, Gutman locked JLM out of her Instagram account and changed the account bio to indicate that it was a “personal and creative” account.

JLM subsequently sued Gutman for breach of contract, trademark dilution, unfair competition, conversion of social media accounts and trespass to chattels on social media accounts, among other things. The district court agreed with JLM that Gutman had breached the contract but declined to decide “whether JLM had shown a likelihood of success on its conversion and trespass claims or opine on the ‘novel’ and ‘nuanced’ question of who owns the [social media accounts].” The district court granted a temporary restraining order and then a preliminary injunction barring Gutman from changing, using and/or controlling the social media accounts and using the names “Hayley,” “Paige,” “Hayley Paige Gutman,” “Hayley Gutman,” “Hayley Paige” or any derivate thereof (collectively, the designer’s name) in commerce. Gutman appealed.

Gutman argued that the district court erred in concluding that she likely breached the noncompete and name-rights provisions of the employment contract, that JLM’s breach of the contract prohibited it from seeking injunctive relief and that the social media accounts should not have been assigned to JLM. The Second Circuit rejected Gutman’s contract-related arguments and disagreed with the proffered alternative interpretations of the text, concluding that the district court did not err in prohibiting Gutman from any use of the designer’s name in commerce. With respect to the social media accounts, however, the Court held that the preliminary injunction was overbroad because “the character of the district court’s relief—a grant of perpetual, unrestricted, and exclusive control throughout the litigation—sounds in property, not in contract. Yet the district court disclaimed any effort to ground the [preliminary injunction] on its evaluation of the ownership question.” The Court concluded it was “unclear on what basis the district court excluded Gutman from using the Disputed Accounts and granted total control to JLM.” Thus, the Court remanded the case for the district [...]

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Change the Look of the Room: Appeal Transferred to Federal Circuit

by | Jan 6, 2022 | ,

The US Court of Appeals for the Second Circuit transferred an appeal of a preliminary injunction enjoining alleged copyright and trademark infringement to the US Court of Appeals for the Federal Circuit because the operative complaint included six counts of patent infringement and thus arose under patent law. Hudson Furniture, Inc. et al. v. Lighting Design Wholesalers Inc., Case No. 20-3299 (2d Cir. Dec. 21, 2021) (Livingston, CJ; Kearse, Lee, JJ.) (per curiam).

Hudson filed a complaint against Lighting Design alleging patent, trademark and copyright infringement. The district court granted Hudson’s preliminary injunction and enjoined Lighting Design from alleged infringement of Hudson’s copyrights and trademarks. The district court also denied Lighting Design’s motion to dismiss for lack of personal jurisdiction and its motion for reconsideration permitting alternative service of process. Lighting Design appealed the rulings to the Second Circuit.

Hudson asked the Second Circuit to dismiss the appeal, arguing that the appeal arose from a complaint involving patent law claims and thus fell under the exclusive jurisdiction of the Federal Circuit. Under 28 U.S.C. §§ 1292 and 1295, the Federal Circuit has exclusive jurisdiction over interlocutory appeals involving any action that arises under any act of US Congress relating to patents. An action arises under patent law when a well-pleaded complaint establishes that (1) federal law creates the cause of action or (2) the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal patent law.

The Second Circuit agreed that exclusive jurisdiction rested with the Federal Circuit, explaining that the operative complaint included six counts of patent infringement, and the appeal concerned the district court’s ruling on a motion for injunctive relief involving patent law and non-patent law claims. The Court rejected Lighting Design’s argument that patent law did not constitute a substantial part of the overall success of the case since Hudson failed to secure preliminary injunctive related to the patent law claims. The Court explained that Lighting Design’s argument focused on only the second basis for Federal Circuit jurisdiction (whether the right to relief depends on a “substantial question” related to patent law). The Court found that even if it accepted Lighting Design’s argument, the fact that federal patent law created the cause of action was sufficient to establish Federal Circuit jurisdiction under the first basis of jurisdiction. While the Second Circuit agreed with Hudson, it declined to dismiss the appeal and instead opted to transfer the appeal to the Federal Circuit because the original appeal was timely filed in good faith and transferring the appeal was in the interest of justice.



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Oh the Horror: No Work for Hire in Friday the 13th Screenplay

by | Oct 14, 2021 |

The US Court of Appeals for the Second Circuit affirmed a summary judgment grant, ruling that an author was an independent contractor when writing the screenplay for a horror film and entitled to authorship rights, and therefore entitled to exercise his copyright § 203 termination right. Horror Inc. v. Miller, Case No. 18-3123 (2d Cir. Sept. 30, 2021) (Carney, J.)

Victor Miller is an author who has written numerous novels, screenplays and teleplays. Sean Cunningham is a producer, director and writer of feature films and is the general partner of Manny Company. Miller and Cunningham were close friends who began working together around 1976 and collaborated on five motion pictures in their first five years working together. Miller was a member of the Writers Guild of America, East (WGA) and was a signatory of their Minimum Basic Agreement (MBA), which was the collective bargaining agreement at the time.

In 1979, the success of the horror film Halloween inspired Cunningham to produce a horror film. Cunningham reached out to Miller and they orally agreed that Miller would write the screenplay for their upcoming project. The two came to an agreement using the WGA standard form. Miller then began developing the screenplay and the two worked closely together in discussing ideas for the film. Miller picked his working hours but was responsible for completing drafts based on the production schedule of the film. Cunningham had no right to assign additional works to Miller beyond the screenplay.

The dispute concerns whether, for Copyright Act purposes, Miller was an employee or independent contractor of Manny Company, of which Cunningham was the general partner. Cunningham argued that he taught Miller the key elements of a successful horror film, that he gave significant contributions and that he had final authority over what ended up in the screenplay. Miller agreed that Cunningham gave notes but stated that Cunningham never dictated what he wrote. The parties agreed that Cunningham did provide the ideas for making the movie killings “personal,” that the killer remain masked and that they kill a major character early. Miller received “sole ‘written by’ credit” as the screenwriter.

Horror Inc. (successor to Georgetown Horror) financed the project and was given complete control over the screenplay and film. Manny assigned its rights in the film and screenplay to Horror, which registered the copyrights. In the registration, Horror was listed as the film’s work made for hire author with a credit given to Miller for the screenplay. The initial film was a huge hit and has spawned 11 sequels.

In 2016, Miller attempted to reclaim his copyright ownership by invoking his termination rights under 17 U.S.C. § 203 and served notices of termination to Manny and Horror. The two responded by suing Miller and seeking a declaration that the screenplay was a “work for hire,” and therefore Miller could not give a valid termination notice. The district court granted summary judgment to Miller, stating that Miller was the author as he did not prepare the screenplay as [...]

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