Shoptalk, Ltd. v. Concorde-New Horizons Corp.

168 F.3d 586, 49 U.S.P.Q. 2d (BNA) 1599, 1999 U.S. App. LEXIS 1416, 1999 WL 73980
CourtCourt of Appeals for the Second Circuit
DecidedFebruary 3, 1999
DocketNos. 97-9209, 97-9251
StatusPublished
Cited by10 cases

This text of 168 F.3d 586 (Shoptalk, Ltd. v. Concorde-New Horizons Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shoptalk, Ltd. v. Concorde-New Horizons Corp., 168 F.3d 586, 49 U.S.P.Q. 2d (BNA) 1599, 1999 U.S. App. LEXIS 1416, 1999 WL 73980 (2d Cir. 1999).

Opinion

KEARSE, Circuit Judge:

Plaintiffs Shoptalk, Ltd. (“Shoptalk”), and Alan Menken appeal from so much of a final judgment of the United States District Court for the Southern District of New York, Deborah A. Batts, Judge, as (a) ordered Shoptalk to pay defendant Concorde-New Horizons Corp. (“Concorde”) $75,592.65 and ordered Menken to pay Concorde $56,843.84, [587]*587both sums representing unpaid royalties and prejudgment interest, for use of material in a 1959 screenplay co-owned by Concorde and registered for copyright protection in 1982 as an unpublished work, and (b) ordered plaintiffs to make future royalty payments until the expiration of the copyright in the screenplay. The district court ruled that Concorde’s copyright in the screenplay has not expired because the screenplay was neither published nor registered prior to 1982, notwithstanding the 1960 publication of a motion picture (whose copyright has now expired) based on the screenplay. On appeal, Shoptalk and Menken, supported by the United States Copyright Office (“Copyright Office”) as amicus curiae, argue that the district court erred in ruling that publication of the motion picture did not constitute publication of its underlying screenplay. Concorde has cross-appealed from so much of the judgment as limits its recovery of royalties to the lives of the copyrights in the screenplay and the motion picture, contending that an agreement among the parties obligates plaintiffs to pay royalties independently of the existence of the copyrights. For the reasons that follow, we reject Concorde’s arguments in support of its cross-appeal, and we agree with plaintiffs and the Copyright Office that, under the Copyright Act of 1909, which governs works published before 1978, see 17 U.S.C. 8 1 et seq., (“1909 Act”), repealed effective 1978 by Copyright Act of 1976, 17 U.S.C. § 101 et seq. (“1976 Act”), the publication of the Motion Picture in 1960 published so much of the Screenplay as was disclosed in the Film. We therefore affirm in part, vacate in part, and remand for further proceedings.

I. BACKGROUND

At the core of the present dispute is an original screenplay (“Screenplay”) entitled “The Little Shop of Horrors,” authored by Charles Byron Griffith in 1959, which is the subject of an agreement dated May 27, 1983 (“1983 Agreement” or “Agreement”) settling a prior dispute. The facts have largely been stipulated here.

A. The Film, the Musical Stage Play, and the 1988 Agreement

In 1960, a motion picture entitled “The Little Shop of Horrors” (“Motion Picture” or “Film”) was produced, based on the Screenplay. The Screenplay was registered for copyright protection in 1982, pursuant to an application indicating that it was an unpublished work. The copyright in the Screenplay was assigned jointly to Griffith and Millennium Films, Inc. (“Millennium”), which was successor-in-interest to New World Pictures, Inc. (“New World”), the original owner of the Motion Picture. The Motion Picture itself was registered for copyright protection in 1985, and its registration stated the Film’s date of first publication as January 5, 1960. The copyright in the Motion Picture was assigned to Millennium. Concorde is a successor-in-interest to Millennium and has “all of Millennium’s rights, if any,” in the Film “and Millennium’s rights, if any, in and to the underlying screenplay.” (Joint Statement pursuant to Rule 3(g) of the Local Rules for the Southern District of New York (1994) ¶10.)

In 1981, New World authorized the production of a musical stage play (“Musical”) based on the Film. The Musical’s score was composed by Menken; its book and lyrics were written by Howard Ashman, who eventually assigned his rights and obligations in the book and lyrics to Shoptalk. A controversy arose in 1982 when Griffith contended that the Musical infringed his rights in the Screenplay; the dispute was settled by the 1983 Agreement.

In the 1983 Agreement, the Musical’s producers were given the rights, inter alia, to “make, write[,] compose,” and produce a “dramatico-musical stage play” based on the Motion Picture and the Screenplay (1983 Agreement ¶ SECOND); in return, Menken, Ashman, and the producers agreed to pay royalties (id. ¶ THIRD). The 1983 Agreement provided that the copyright “Owner” (defined as Millennium and Griffith) would “renew or extend” the copyright in “the Work” (defined as the Motion Picture) prior to its expiration, and that if they

should fail or neglect to execute or record any document required to renew or extend such copyright, and/or to confirm or effectuate the rights granted hereunder, ... [588]*588[Menken and Ashman] shall have the right to execute or record such document, in Owner’s name as Owner’s irrevocable attorney-in-fact.

(Id. ¶ NINTH.)

The copyright in the Film was not renewed; it expired in 1988, and the Film entered the public domain. Sometime prior to 1991, Shoptalk and Menken learned of the failure to renew, and they thereafter ceased making royalty payments to Concorde. (They continued, however, to pay royalties to Griffith.)

B. The Present Action

Plaintiffs commenced the present diversity action in 1993, asserting principally that their obligations to make royalty payments under the 1983 Agreement ended upon the expiration of Concorde’s copyright in the Motion Picture. Plaintiffs contended that, in the Agreement, Concorde agreed to renew the copyright in the Motion Picture and that the failure to do so constituted a material breach, relieving them of any further royalty obligations. The amended complaint requested a judgment declaring, inter alia, that, pursuant to the Agreement and United States copyright law, Concorde had no right to collect further domestic royalties; that plaintiffs were entitled to reimbursement for royalty payments made to Concorde after the copyright’s expiration; and that their continuing production of the Musical would not constitute copyright infringement of the Motion Picture.

Concorde took the position that plaintiffs’ rights and obligations under the 1983 Agreement were not conditioned on the renewal of the Motion Picture copyright and that it was plaintiffs who had breached. Concorde alleged that plaintiffs had agreed to pay royalties based on “the right to prepare, produce, and publicly perform and/or display a musical play based upon and derived from the screenplay and the original motion picture” (Answer ¶ 46), and that by failing to pay royalties on the performance or display of “derivative works based upon the screenplay and motion picture,” plaintiffs had breached and were continuing to breach the 1983 Agreement (id. ¶ 49). Concorde contended that its nonrenewal of the Motion Picture copyright gave plaintiffs the right to renew the copyright but gave them no other rights.

Concorde also contended, inter alia, that a valid copyright subsisted in the underlying Screenplay, which preserved Concorde’s right to receive royalty payments under the Agreement, and that plaintiffs’ claims were barred by estoppel, ratification, laches, and waiver. In a counterclaim, j Concorde requested, inter alia,

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168 F.3d 586, 49 U.S.P.Q. 2d (BNA) 1599, 1999 U.S. App. LEXIS 1416, 1999 WL 73980, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shoptalk-ltd-v-concorde-new-horizons-corp-ca2-1999.