Copyrights can be an extremely valuable commodity. Deals exchanging that commodity may be required to be in writing. A copyright holder doesn’t need a written deal to simply grant a non-exclusive license to use a copyrighted work. The exchange is evident, not only by an oral agreement, but through the conduct of the parties, as the copyright holder is not giving up ownership, but merely giving another person permission to use the work. When a copyright holder transfers rights, however, that exchange must be in writing between the parties because the copyright holder is giving up ownership in the copyrights to the acquiring party and thus the Copyright Act requires proof of that exchange.
Section 204(a) of the Copyright Act specifically provides that a “transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent.” What constitutes sufficient writing to satisfy this requirement has been the subject of many cases. A recent California Court of Appeals decision, MVP Entertainment, Inc. v. Frost, adds to that collection. In it, the court held that an email purportedly confirming the terms of a deal to transfer copyrights was insufficient to meet the Section 204 writing requirement.
In MVP, Frost wrote the book “The Match: The Day the Game of Golf Changed Forever” and MVP wanted to make a movie out of it. In late 2008 and early 2009, the parties' attorneys exchanged correspondence about acquiring the work. MVP’s lawyer sent Frost’s lawyer an email proposing terms for a deal to transfer the copyright and then stated “Let me know if this is okay and we'll send paperwork” Frost’s lawyer (whose last name was Wertheimer) responded with an email saying, “done…thanks! Werth.” MVP’s lawyer then sent an agreement but ultimately no formal agreement was signed. In the summer of 2009, Frost changed his mind and said he did not want MVP to make “The Match” into a movie, prompting a lawsuit for breach of contract and related claims. That lawsuit hinged on MVP’s argument that the email stating “done…thanks! Werth” created a binding contract.
In moving for summary judgment, Frost’s lawyer, Wertheimer, declared that he was responsible for negotiating deals, but never signed contracts on Frost's behalf and that he had never been authorized to transfer rights in any intellectual property, including “The Match.” He further stated that his "done…thanks" email was not intended to convey rights, but was simply a note “that the parties were in accord on the broad economic terms of a deal." Finally, he stated that he did not intend the typing of his nickname "Werth" to constitute a signature or to bind himself or Frost to anything. Frost filed a declaration concurring with the lawyer’s declaration.
In opposition, MVP’s lawyer declared that he believed the "done…thanks" email created a binding contract and that Frost’s lawyer had led him to believe that he was Frost’s “duly authorized agent.” Another lawyer for MVP declared that he also reasonably believed Wertheimer was Frost's duly authorized agent, that Frost had provided a pitch memorandum after the “done…thanks” email was sent, which indicated that the "deal had been closed" and that Frost had sent copies of the book and gave approval of a draft brochure for marketing the movie.
The trial court granted summary judgment based on Section 204 and the Court of Appeal affirmed. As to the Copyright Act’s writing requirement for transfers, the court noted that “The rule is really quite simple: If the copyright holder agrees to transfer ownership to another party, that party must get the copyright holder to sign a piece of paper saying so. It doesn't have to be the Magna Charta [sic]; a one-line pro forma statement will do. The Copyright Act's writing requirements are intended to force parties to bargain carefully and to determine precisely what rights are being transferred, and at what price."
The court noted that it was undisputed that Wertheimer did not have actual authority to transfer the copyright of “The Match.” MVP had argued that the facts at least showed potential ostensible authority, requiring a trial, but the court held that Section 204 requires actual authority and thus ostensible authority is insufficient. The court held that requiring express authorization from the copyright owner was consistent with the purpose of Section 204 to ensure that copyright holders will not give away copyrights inadvertently, and to force a party that wants to use a copyrighted work to negotiate with the holder to determine precisely what rights are being transferred and at what price. Thus, because ostensible authority is insufficient, whether MVP believed (reasonably or not) that Wertheimer was Frost's duly authorized agent was irrelevant. The court held that this failure to meet the writing requirement of Section 204 defeated all of MVP’s causes of action.
Thus, under MVP and a number of other cases, the parties seeking to take part in the transfer of rights in a copyrighted work must have a writing that makes it abundantly clear that the owner of the rights in that work or that owner’s duly authorized agent has expressly conveyed those rights. An email from a copyright holder’s lawyer saying “we got ourselves a deal” may not cut it.
