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III. OWNERSHIP OF RIGHTS
EXAMPLE:
Suppose a film-maker wants some special effects for his film. A supplier quotes
a price in writing, and orally says that the copyright would belong to the film-
maker. The latter duly orders and uses the effects, but only partly pays for them.
The supplier claims copyright infringement against him. The relevant law says
“no assignment of copyright is valid except in a writing signed by the copyright
owner or his duly authorized agent.”
As noted above, whether the supplier will succeed in its infringement claim may
vary by country. There are at least three possibilities:
(a) The plaintiff will succeed since, because there is no writing, the
defendant has not acquired the copyright nor any licence to use it.
(b) The plaintiff will fail because the court will, for reasons of justice,
compel the plaintiff to sign a writing to put the defendant in the
position of copyright owner, as he orally represented.
(c) The plaintiff will fail, not because the defendant is or should be a
copyright owner but because the court will imply a licence in his favour
to use the special effects, as contemplated, in the film.
The following U.S. case takes the third route as the standard:
Effects Associates Inc. v. Cohen, 908 F.2d 555 (U.S.: Court of Appeals, 9th
Cir., 1990)
JUDGE KOZINSKI for the Court:
Common sense tells us that agreements should routinely be put in writing. This simple practice
prevents misunderstandings by spelling out the terms of a deal in black and white, forces parties
to clarify their thinking and consider problems that could potentially arise, and encourages them
to take their promises seriously because it’s harder to backtrack on a written contract than on an
oral one. Copyright law dovetails nicely with common sense by requiring that a transfer of
copyright ownership be in writing. Section 204 [of the Copyright Act, requiring assignments and
exclusive licenses to be in writing – Ed.] ensures that the creator of a work will not give away
his copyright inadvertently and forces a party who wants to use the copyrighted work to
negotiate with the creator to determine precisely what rights are being transferred and at what
price. ... Most importantly, section 204 enhances predictability and certainty of copyright
ownership... Rather than look to the courts every time they disagree as to whether a particular
use of the work violates their mutual understanding, parties need only look to the writing that
sets out their respective rights.
Section 204’s writing requirement is not unduly burdensome; it necessitates neither protracted
negotiations nor substantial expense. 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; a one-line pro forma statement
will do. ... As section 204 makes no special allowances for the movie industry, neither do we.
...The sole issue that remains, then, is whether Cohen had a non-exclusive license to use
plaintiff ’s special effects footage. ... Effects created a work at defendant’s request and handed it
over, intending that defendant copy and distribute it. To hold that Effects did not at the same time
