Thursday, August 21, 2008

Terminations of transfer (and Dastar)

Classic Media, Inc. v. Mewborn, 532 F.3d 978 (9th Cir. 2008)

This case is most notable for creating an apparent circuit split between the 9th and the 2nd, the other key circuit for the publishing industry, about the effect of a post-1978 agreement purporting to affect termination rights under §304(c) when the agreement is executed before the termination window opens. The Ninth Circuit ruled that the agreement was an invalid “agreement to the contrary.” (Filewrapper offers a bit more summary.) The court relied in part on the analysis in the recently reversed SDNY case Steinbeck v. McIntosh & Otis, Inc., 433 F. Supp. 2d 395 (S.D.N.Y. 2006). (The facts there are complicated; at the time of the post-1978 agreement, Steinbeck’s widow—the person who made and benefited from the agreement--at least arguably held more than half the termination interest/expectancy and definitely held half, while at the time the termination windows opened, she had passed away and the remaining heirs, with whom she’d been in dispute, wanted their share.)

It’s not a big circuit split, but it’s an economically significant one, and the New York/Hollywood divide may create forum-shopping opportunities. I wonder if anyone’s considering a cert petition.

Of less general interest, the district court denied the rights owner’s motion for attorneys’ fees under the Lanham Act; the heir had brought a misattribution claim, which she lost. The court of appeals agreed that the district court didn’t abuse its discretion in refusing to find an “exceptional case” under the Lanham Act, a requirement the Ninth Circuit has construed narrowly. The heir’s claim involved “close questions in an unsettled area of the law,” because Dastar left open the possibility of attribution-based false advertising claims. Thus, the heir’s Lanham Act claim was “not so obviously foreclosed” by Dastar that her claim was groundless or unreasonable, and a fee award against her was inappropriate. (Contrast to cases like Antidote, from SDNY, rejecting such claims outright.)

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