Foad Consulting Group, Inc. v. Azzalino

270 F.3d 821, 2001 WL 1335034

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 30, 2001
• Docket: No. 98-56017
• Status: Published

Opinions

Opinion by Judge B. FLETCHER; Concurrence by Judge KOZINSKI.

BETTY B. FLETCHER, Circuit Judge:

In this copyright case, we must decide an issue unaddressed by our prior decisions: Which law, state or federal, governs the creation of an implied, nonexclusive copyright license? We conclude that while federal law answers the threshold question of whether an implied, nonexclusive copyright license can be granted (it can), state law determines the contract question: whether a copyright holder has, in fact, granted such a license. Construing California law and applying it to the facts of this case, we conclude that Foad Consulting Group, Inc., gave an implied, nonexclusive license to the predecessor in interest of defendants Canyon Partners, LLC, and Agra, LLC, to reproduce and adapt the revised project plan at issue in this case and to publish the subsequent work, all in conjunction with defendants’ development of a shopping center. Because we also conclude that defendants’ modification and use of the plans did not exceed the scope of the implied license, we affirm the district court’s grant of summary judgment to defendants.

Background

In August 1995, GenCom, Inc., hired the engineering firm Foad Consulting Group, Inc. to create a “preliminary Concept Development Plan” for a 45.5 acre shopping center project (the project) that GenCom intended to build in Arroyo Grande, California (the city). Pursuant to a contract dated August 18, 1995, Foad prepared a preliminary plot plan that showed the “location of the proposed buildings, parking lots, [and] landscape areas.” GenCom submitted this plan to the city on January 3, 1996, as part of its application to build the shopping center. GenCom and Foad entered into a second contract, dated February 12, 1996, under which Foad agreed to create “final engineering drawings” for the project, including a revised plot plan, and to “process the [various] plans through the offices of the city of Arroyo Grande.” The revised plot plan was subsequently submitted to the city,¹ and the city approved GenCom’s application for the project on July 9,1996.

After it obtained the city’s approval, GenCom transferred its rights to develop the project to Claire Enterprises, LLC.² In October 1996, Claire hired Hawkeye Investments, LLC, as the project’s developer. Hawkeye, in turn, hired the predecessor of Musil Govan Azzalino (MGA), to perform architectural and engineering services.³ MGA obtained copies of the revised plot plan and other documents from the city; it also obtained copies of various documents relating to the project from Foad. Based on the plot plan approved by the city, and suggestions and requirements of the project owners, the city, and potential tenants, MGA prepared final site plans for the project. In creating the final site plan, MGA copied much of Foad’s revised plot plan by tracing from it onto an overlay. The developers wished to substantially revise Foad’s plan, but the city was unwilling to allow major deviation from the plan that it had already approved. MGA circulated the final site plans to the city as well as to the shopping center’s potential tenants.

Concerned that its copyright was being infringed, Foad sent a letter of admonition to MGA, dated February 3, 1997, informing MGA that Foad’s revised plot plan was copyrighted and that Foad would pursue any violation of its copyright in federal court. Foad also obtained a Certificate of Registration for the revised plot plan from the Register of Copyrights, which is also dated February 3, 1997. On August 15, 1997, Foad filed a complaint in federal district court alleging copyright infringement.⁴ On April 15, 1998, the district court heard defendants’ motion for summary judgment. It granted the motion because it concluded that the merger doctrine applied.⁵ On April 17, the court entered final judgment for the defendants. Foad timely appealed.

Jurisdiction and Standard op Review

The district court had jurisdiction under 28 U.S.C. § 1338(a). We have jurisdiction over Foad’s appeal pursuant to 28 U.S.C. § 1291. We review de novo a district court’s determination of pure questions of law at summary judgment. Royal Foods Co., Inc. v. RJR Holdings, Inc., 252 F.3d 1102, 1106 (9th Cir.2001).

Discussion

I.

One who owns a copyright in a work has the exclusive right to reproduce, adapt, publish, perform, and display the work. 17 U.S.C. § 106. A copyright holder may transfer any or all of these rights, id. § 201(d)(2), but in order for the transfer to be valid it must be in writing, id. § 204(a).

Foad argues that defendants infringed its copyright in the revised plot plan by copying and modifying it and by publishing the resulting work.⁶ Defendants also infringed its reproduction rights, Foad contends, by using the revised plot plan without its permission to build the project. They infringed its exclusive right to adapt the revised plot plan by using it as a basis for the final site plan. And by fifing the final site plan with the city and circulating it among prospective tenants, defendants infringed Foad’s publication rights. There is nothing in either contract between Gen-Com and Foad which purports to transfer any of Foad’s exclusive rights to GenCom, and defendants do not point to any other writing that evidences a transfer of copyright. Thus, we cannot conclude from the writings that Foad transferred to GenCom explicitly its reproduction, adaptation, and publication rights in the revised plot plan.

II.

We have recognized, however, that § 204(a)’s writing requirement applies only to the transfer of exclusive rights; grants of nonexclusive copyright licenses need not be in writing.⁷ Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir.1990). So we must consider whether Foad granted GenCom a nonexclusive license to copy and modify its revised plot plan and to publish the resulting work. A nonexclusive copyright license may be granted orally or by implication. Effects Associates, 908 F.2d at 558. Defendants argue that Foad granted GenCom an implied license to reproduce, adapt, and publish in the February 1996 contract between the parties. We agree that the contract grants GenCom an implied license to use the revised plot plan to complete development of the project, to hire another firm to create derivative works using the revised plot plan for the purpose of completing the project, and to publish the resulting work.

Foad asks us to consider certain extrinsic evidence in interpreting the contract.⁸ The contract was formed in California, concerns work that was done in California, and contains a choice-of-law clause that identifies California law as governing its interpretation. In contrast to many other states, California has a liberal parol evidence rule: It permits consideration of extrinsic evidence to explain the meaning of the terms of a contract even when the meaning appears unambiguous. Compare City of Manhattan Beach v. Superior Court, 13 Cal.4th 232, 52 Cal. Rptr.2d 82, 914 P.2d 160, 169 (1996) (“‘[T]he test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible.’ ”) (quoting Pacific Gas & Elec. Co. v. G.W. Thomas Dray age & Rigging Co., 69 Cal.2d 33, 69 Cal.Rptr. 561, 442 P.2d 641, 644 (1968)) with, e.g., Namad v. Salomon Inc., 74 N.Y.2d 751, 545 N.Y.S.2d 79, 543 N.E.2d 722, 723 (1989) (“Parol evidence is inadmissible if a contract is clear on its face and sufficient alone to divine the intent of the parties.”). Thus, if state law determines whether an implied, nonexclusive copyright license has been granted, we should consider whether Foad’s extrinsic evidence discloses a latent ambiguity in the contract. If state law does not apply, then we will need to consider whether the extrinsic evidence is admissible under federal common law. Cf. Itar-Tass Russian News Agency v. Russian Kurier, Inc., 153 F.3d 82, 90 (2d Cir.1998) (developing federal common law to decide a conflicts of law issue in a copyright case, where the Copyright Act does not contain a controlling provision). Accordingly, before we interpret the contract between Foad and GenCom, we consider whether federal or state law determines whether a copyright holder has granted an implied, non-exclusive copyright license to another.⁹

As a general matter, we rely on state law to fill in the gaps Congress leaves in federal statutes. PM Group Life Ins. Co. v. W. Growers Assurance Trust, 963 F.2d 543, 546 (9th Cir.1992). “The case for adopting state law rules is strongest where Congress legislates interstitially, leaving state law largely undisturbed. Under those circumstances, comity and common sense counsel against exercising the power of federal courts to fashion rules of decision as a matter of federal common law.” Id. In enacting the Copyright Act, Congress did not preempt the field. Morseburg v. Balyon, 621 F.2d 972, 977-78 (9th Cir.1980) (discussing Goldstein v. Cal., 412 U.S. 546, 93 S.Ct. 2303, 37 L.Ed.2d 163 (1973)). Thus, where the Copyright Act does not address an issue, we turn to state law to resolve the matter, so long as state law does not otherwise conflict with the Copyright Act. See, e.g., Sun Microsys., Inc. v. Microsoft Corp., 188 F.3d 1115, 1122 (9th Cir.1999) (stating that we “rely on state law to provide the canons of contractual construction provided that such rules do not interfere with federal copyright law or policy” (internal quotation marks and citation omitted)); Rano v. Sipa Press, Inc., 987 F.2d 580, 585 (9th Cir.1993) (rejecting California rule that “agreements of non-specified duration are terminable at the will of either party” because the rule directly conflicts with federal copyright law); Barris Indus., Inc. v. Worldvision Enters., Inc., 875 F.2d 1446, 1449-50 (9th Cir.1989) (stating that state contract law determines ownership of federal statutory royalties due copyright owners); Dolch v. United Cal. Bank, 702 F.2d 178, 180 (9th Cir.1983) (stating that while the assignability of copyright renewal rights is a federal question, the conditions for valid assignment is a question of state law); Topolos v. Caldewey, 698 F.2d 991, 993-94 (9th Cir.1983) (stating that ownership of a copyright is a matter of state contract law); cf. Aronson v. Quick Point Pencil Co., 440 U.S. 257; 263, 99 S.Ct. 1096, 59 L.Ed.2d 296 (1979) (“State law is not displaced merely because the contract relates to intellectual property which may or may not be patentable; the states are free to regulate the use of such intellectual property in any manner not inconsistent with federal law”). There is no reason we should treat implied copyright licenses any differently. Congress did not choose to regulate the conditions under which a copyright holder can grant a nonexclusive copyright license to another. Thus, so long as it does not conflict with the Copyright Act, state law determines whether a copyright holder has granted such a license.¹⁰

We must ask, then, whether California’s parol evidence rule conflicts with federal copyright law or policy. The principle effect of the California parol evidence rule is to lessen the importance of written contracts. It does so because the rule requires courts to consider extrinsic evidence of possible ambiguity even where the terms of the contract appear unequivocal. And if a party’s extrinsic evidence creates the possibility of ambiguity, a court may not rely on the text of the contract alone to determine the intent of the parties. See Trident Ctr. v. Conn. Gen. Life Ins. Co., 847 F.2d 564, 568-69 (9th Cir.1988). The Copyright Act places great emphasis on the necessity of writings to grant exclusive licenses, but not when it comes to granting nonexclusive licenses: As we have noted, nonexclusive licenses may be granted orally. Thus, if a copyright holder and another have a contract that clearly does not grant the other an exclusive copyright license, in a copyright infringement suit the other may nonetheless introduce nonwritten evidence-such as testimony, course of conduct, and custom and practice-to show that the copyright holder orally granted her a nonexclusive license.¹¹ Since the Copyright Act itself places no particular emphasis on writings in the case of nonexclusive licenses, we conclude that application of California’s parol evidence rule in interpreting a contract that a party purports to have granted an implied copyright license does not conflict with the Act or its underlying policies.

III.

We must now determine whether the February 1996 contract between Foad and GenCom granted GenCom an implied copyright license. In this analysis, we consider whether Foad’s extrinsic evidence discloses any ambiguities in the contract.

a. License to Reproduce

Foad claims that defendants infringed its reproduction rights to build the project by using the revised plot plan without its permission. We conclude from the terms of the contract that Foad granted GenCom an implied license to do just that. The central purpose of the contract was the production of a set of engineering documents “for ‘The Grande Plaza’ Commercial Center in the city of Arroyo Grande.” Under the contract, Foad agreed to create multiple maps, drawings, and plans for the project and to “process” these documents with the city. For this service, GenCom agreed to pay Foad a fee of $175,000. Given the amount of money GenCom paid for Foad’s services and because part of the agreement was for Foad to help GenCom with its application to the city, it would be surprising if the parties had intended for GenCom to seek Foad’s permission before using the plans to build the project. Had that been the parties’ intention, one would expect to see the requirement spelled out explicitly in the agreement. But nowhere does the contract state that after the city had granted its approval, GenCom would need to obtain Foad’s permission before commencing work. We conclude that the contract gives GenCom an implied license to use the revised plot plan to build the project.¹²

As evidence that the contract indicates the parties’ intent to restrict GenCom’s ability to use the revised plot plan without Foad’s approval, Foad asks us to consider a legend that appears on the plan. The legend reads:

All ideas, designs, arrangements and plans indicated or represented by this drawing are owned by, and the property of Foad Consulting Group, Inc. and were created, evolved and developed for use on, and in connection with the specified project. None of such ideas, designs, arrangements or plans shall be used without written permission of Foad Consulting Group, Inc.

This legend does not divulge a latent ambiguity in the contract, much less show that under the contract Foad’s permission was required before GenCom could start work. It is patent that the plans were developed for use on the specific project that was built. Although the legend states that no “plans shall be used without written permission of Foad,” it appears on a document that was created after the agreement was made, and presumably was written by Foad or its agent. What’s more, the legend would apply, if at all, to projects other than the specified project. Foad offers no explanation of how such a statement calls into question the parties’ intent, as manifested by the contract, that GenCom would pay Foad for plans that it could use to develop its property.¹³ Cf. Foster-Gardner, Inc. v. Nat’l Union Fire Ins. Co., 18 Cal.4th 857, 77 Cal.Rptr.2d 107, 959 P.2d 265, 272 (1998) (“The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties.” (internal quotation marks and citation omitted) (emphasis added)).

b. License to Adapt

Foad next alleges that defendants infringed its adaptation rights by using much of the revised plot plan in creating the final site plan. But the February 1996 contract contains no language prohibiting others from modifying the revised plot plan. Quite the opposite: The contract contains a clause requiring GenCom to indemnify Foad in the event that others modify the plan and the changes lead to some liability.¹⁴ In addition, that clause does not require GenCom to obtain Foad’s consent in order to modify the plans; it only requires consent in order to avoid Foad’s waiver of liability. The indemnification clause plus the absence of any prohibition against modification by others indicates that the contract granted GenCom an implied license to hire others to create derivative works using the revised plot plan for the purpose of completing the project.¹⁵

Foad points to paragraph 12 of the contract in support of its argument that it did not grant GenCom a license to hire another company to complete the project using the revised plot plan. Paragraph 12 states:

All original drawings, plans, documents, other papers and copies thereof prepared in connection with this agreement will remain the property of FOAD CONSULTING GROUP, INC. and may be used without the consent of the client and/owner(s). [T]he aforementioned papers will be kept on file by FOAD CONSULTING GROUP, INC. and copies will be provided to the client and/owner(s) at client and/owner(s)’s request, and at client and/owner(s)’s expense.

The paragraph provides Foad no support. It concerns ownership of the original documents and copies prepared by Foad under the agreement. It also makes plain Foad’s intention to retain its right to “use” the documents, presumably by reproduction, adaptation, or publication. However, the paragraph is silent about what GenCom may or may not do with the copies prepared for it.

Foad also asks us to consider extrinsic evidence: a declaration from an alleged architectural expert who asserted that, under the custom and practice in the industry, a plan “may not be used to produce a similar plan, without the permission of the original designer.”¹⁶ This statement does nothing to undermine our conclusion that the contract grants Gen-Com an implied license to modify the revised plot plan. The contract protects Foad against any liability that might arise from a plan modified by others while imposing no restriction on such modifications. Even assuming that industry custom and practice requires a client to obtain an engineer’s consent before modifying a plan created by the engineer, we conclude that the contract gave Gen-Com the requisite permission.

c. License to Publish

Finally, Foad contends that defendants infringed its publication rights by filing the final site plan with the city and circulating it among prospective tenants. The conclusion that the February 1996 contract granted GenCom an implied license to file the final site plan with the city and to use the plan to attract potential tenants follows from our previous analysis. The contract granted GenCom a license to reproduce and adapt the revised plot plan for the purpose of developing the project. It would defy common sense to conclude that the contract at the same time withheld permission to publish the resulting work for the same purpose. In the absence of a contractual provision concerning GenCom’s right to circulate any derivative works as part of its development of the project, we conclude that GenCom did not infringe Foad’s publication rights.

This Agreement binds consultant and client and their successors, assigns and partners. Neither party shall assign, sublet or transfer its interests, rights or obligations in this Agreement without the written consent of the other party hereto.

IV.

The February 1996 contract contains a clause prohibiting either party from assigning any rights under the contract without the written consent of the other.¹⁷ There is no evidence in the record that GenCom obtained Foad’s written permission to assign its rights under the contract to its successor. Foad argues that, even assuming that Foad granted GenCom an implied license to reproduce, copy, and publish, in the absence of Foad’s written consent to an assignment of rights, Gen-Com’s license was not passed on to its successor. California law, however, is to the contrary. In California, contractual “provisions against assignment ... are for the benefit of the vendor only, and in no way affect the validity of an assignment without consent as between the assignor and assignee.” Johnston v. Landucci, 21 Cal.2d 63, 130 P.2d 405, 408 (1942) (in bank); accord Klamath Land & Cattle Co. v. Roemer, 12 Cal.App.3d 613, 91 Cal.Rptr. 112, 115-16 (1970). The limitation on assignment contained in the contract between Foad and GenCom does not affect the validity of GenCom’s transfer of its development rights, including its rights concerning the revised plot plan, to its successor-in-interest.¹⁸

Conclusion

The Copyright Act permits copyright holders to grant nonexclusive copyright licenses by implication. But whether a copyright holder has properly granted another a nonexclusive license by implication is a matter of state contract law, provided that the state law does not conflict with the Copyright Act or its underlying policies. In this case, the February 1996 contract granted GenCom an implied license to copy and adapt Foad’s revised plot plan and to publish the resulting derivative work in aid of constructing the project for which it was designed. The extrinsic evidence which we consider as required by California law reveals no latent ambiguity in the contract. The defendants did not exceed the scope of the license by using the revised plot plan to create a final site plan, build the project, and publish the final site plan. Finally, the clause in the contract limiting assignments does not affect the validity of GenCom’s transfer of its development rights. For these reasons, the district court’s grant of summary judgment to defendants is

Affirmed.¹⁹

1 . It is unclear from the record whether Gen-Com submitted the revised plot plan or Foad did so as part of its agreement to "process” the plans with the city.

2 . Claire Enterprises thereafter transferred its interest in the project to Canyon Partners, Inc., which then transferred the development rights to Agra, LLC.

3 .Defendant Larry Musil is a principal of MGA. We will not distinguish between MGA and its predecessor and will refer to both as "MGA.”

4 . In addition, Foad filed a state-court action against Claire Enterprises. Foad and Claire settled that suit.

5 . While the "expression” of an idea can be copyrighted, an idea itself cannot. 17 U.S.C. § 102(b); Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 547, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985). "Under the merger doctrine, courts will not protect a copyrighted work from infringement if the idea underlying the copyrighted work can be expressed in only one way, lest there be a monopoly on the underlying idea. In such an instance, it is said that the work's idea and expression ‘merge.’ ” Ets-Hokin v. Skyy Spirits, Inc., 225 F.3d 1068, 1082 (9th Cir.2000).

6 . We will use "copy” and "modify” as synonyms for, respectively, "reproduce” and "adapt.”

7 . By its terms, the Copyright Act's writing requirement applies only to a "transfer of copyright ownership.” Id. § 204(a). The Act defines "transfer of copyright ownership” as "an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hy-pothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a nonexclusive license.” 17 U.S.C. § 101. Thus, the requirement does not apply to the transfer of nonexclusive copyright licenses.

8 . Specifically, Foad asks us to consider a copyright notice that appears in a legend on the revised plot plan and the affidavit of a planning and architectural expert concerning industry custom and practice.

9 . Cases from other circuits provide little guidance on this issue, some recognize that the copyright act permits copyright holders to grant nonexclusive licenses by implication but fail to discuss what law determines whether such a license has been granted. See, e.g., Johnson v. Jones, 149 F.3d 494, 500 (6th Cir.1998); Pinkham v. Sara Lee Corp., 983 F.2d 824, 830-31 (8th Cir.1992); MacLean Assocs., Inc. v. Wm. M. Mercer-Meidinger-Hansen, Inc., 952 F.2d 769, 778-79 (3d Cir.1991). Others rely on a leading copyright treatise for the principle that a copyright holder grants another a nonexclusive license " '[w]hen the totality of the parties' conduct indicates an intent to grant such permission’ ” but fail to explain the source of the principle. Lulirama Ltd.., Inc. v. Axcess Broadcast Servs., Inc., 128 F.3d 872, 879 (5th Cir.1997) (quoting 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 10.03[A], at 10-41 (1997)). Still others rely on the same treatise for the proposition that the validity and scope of implied copyright licenses are generally determined by state law but provide little or no analysis of the issue. See, e.g., Jacob Maxwell, Inc. v. Veeck, 110 F.3d 749, 752 n. 2 (11th Cir.1997) (citing Fantastic Fakes, Inc. v. Pickwick Int'l, Inc., 661 F.2d 479, 483 (5th Cir.1981), and Nimmer & Nimmer, supra, § 12.01[A], at 12-8 n.19); I.A.E., Inc. v. Shaver, 74 F.3d 768, 774 n. 4 (7th Cir.1996) (citing Nimmer & Nimmer, supra, § 12.01[A], at 12-8 & n.19).

10 . In Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir.1990), we held that the Copyright Act permits a copyright holder to grant a nonexclusive copyright license by implication and that Effects Associates had granted an implied license to Cohen. In reaching the latter conclusion, we did not consider whether federal or state law determines the circumstances under which a copyright holder has validly granted another an implied copyright license. This is not surprising, since the choice-of-law issue was not material to our determination of the case. Effects Associates stands for the principle that a seller grants a buyer an implied license to use a product for the purpose for which the seller sold it to the buyer. We can find no California cases on point, but we have no reservations about predicting that were the California Supreme Court to be presented with the issue, it would adopt this commonsense principle underlying Effects Associates. Since Effects Associates ' finding of an implied license is consistent with California law, it is consistent with our holding that state law generally determines whether a copyright holder has granted an implied license.

11 . Of course, to be enforceable, the oral grant would have to be backed by consideration and otherwise satisfy the formation requirements of state contract law. Cf. McCoy v. Mitsuboshi Cutlery, Inc., 67 F.3d 917, 920 (Fed.Cir.1995) ("Whether express or implied, a license is a contract governed by ordinary principles of state contract law.” (internal quotation marks and citation omitted)) (patent and trademark infringement case).

12 . If accepted, Foad's claim that although it was hired to create documents for the project, GenCom had no right to use the documents to build the project, would allow architectural or engineering firms to hold entire projects hostage, forcing the owner either to pay the firm off, continue to employ it, or forego the value of all work completed so far and start from scratch. If the client did not want to pay the firm’s ransom demand, the client might be willing to incur the costs of starting from scratch. Going back to the drawing board, however, may not be an option where neces-saiy government approvals have already been obtained and the approving authority is unwilling to reconsider the issue, as happened here. Alternatively, the firm’s ransom demand might be unreasonable. One would expect project owners to think long and hard before placing their fortunes so entirely in the hands of a single firm. And one would expect that a firm that intended to exercise such ongoing control over a project would clearly specify this in a contract. Cf., e.g., infra note NOTE 1515.

13 . We also note that Foad’s legend overreaches by asserting ownership of the ideas represented by the plan: Copyright law protects only the expression of ideas, not ideas themselves. 17 U.S.C. § 102(b); Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 547, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985).

14 . Paragraph 19 of the contract states:

In the event that any changes are made in the plans and specifications by client or persons other than consultant, any and all liability arising out of such changes is waived as against consultant and client assumes full responsibility for such changes unless client has given consultant prior notice and has received from consultant written consent for such changes.

The dissent analogizes to indemnity provisions in car rental agreements, claiming they forbid rather than allow the described conduct. The analogy is not apt — car rental agreements, unlike the agreement here, expressly forbid the conduct for which indemnity is required. Here the implication is the opposite.

15 . This case is distinguishable from Johnson v. Jones, 149 F.3d 494 (6th Cir.1998). Johnson was an architect who was hired by Jones to create plans for a " 'dream house.’ ” Id. at 497. After the plans had been submitted to the city, the parties' contract negotiations collapsed and Jones fired Johnson. Id. at 498-99. Jones subsequently hired new architects to complete the project, and they used Johnson's plans in doing so. Id. at 499. Johnson sued for copyright infringement. In the face of Jones' claim that Johnson had granted her an implied license to use the plans, Johnson presented evidence that he had twice presented Jones with a contract that expressly provided that “[d]rawings, specifications and other documents shall not be used by the Owner on other projects, additions to this project, or ... for completion of this Project by others, except by written agreement relating to use, liability, and compensation." Id. at 498 (emphasis and omission in original). Johnson also showed that while Jones had not signed the contract, she asked him to continue working. Id. The Sixth Circuit held that under these facts, Jones had notice that Johnson intended to retain control over his designs and any derivative works necessary to complete the project and that he had not granted Jones an implied license to reproduce or modify the plans. Id. at 500-02.

16 .The parties dispute whether the expert’s affidavit was properly before the district court. We need not resolve this issue because we conclude that the affidavit does not affect our interpretation of the contract.

17 . Paragraph 35 states:

18 . Although "the interest of the assignor in the contract passes to the assignee” even in the face of a non-assignment clause, the transfer of rights is "subject to the rights of the original seller.” Landucci, 130 P.2d at 408. Thus, if GenCom impermissibly assigned its rights in the revised plot plan, Foad may have a claim for breach of contract. We state no opinion concerning the merits of such a claim.

19 . We may affirm a decision of the district court on any ground supported by the record. Tanaka v. Univ. of S. Cal., 252 F.3d 1059, 1062 (9th Cir.2001). Because we conclude that the contract granted GenCom an implied copyright license, we do not consider whether the district court properly relied on the merger doctrine in reaching its decision. Nor need we consider defendants’ argument that their use of the revised plot plan was "fair use" under 17 U.S.C. § 107.