You may think there is one simple hard-and-fast rule of copyright law: You cannot transfer a copyright without a written instrument signed by the copyright owner. It’s right there in section 204 of the Copyright Act.
But writings and signatures today can be electronic, and as a recent case illustrates, the “instrument” need not be a formal document that specifically addresses copyrights.
As a result, in copyright litigation, defendants often use discovery to intensely scrutinize the basic issue of who owns the copyright in question.
In Johnson v. Storix, for example, the issue was whether Anthony Johnson had transferred the copyright in a software program to a company, Storix, Inc. Johnson had developed the program as a sole proprietor and the issue in the case was whether he transferred the copyright to his company prior to others taking control of it. When a dispute later developed between Johnson and others in the company, Johnson claimed that he owned the software copyright personally, and hence could prevent Storix from continuing to develop and sell the software.
The issue then became whether, in the absence of a customary copyright assignment, any other document sufficiently met the section 204 requirement of a written instrument to prove that Johnson had transferred his copyright to Storix. Eventually a jury, looking at various documents, concluded that an “annual report” signed by Johnson, during the time he owned Storix, satisfied the written instrument requirement.
The annual report simply stated that “all assets from Storix Software were transferred to Storix, Inc.” as of its incorporation date. The annual report wasn’t a formal copyright assignment, it was written almost a year after the deal occurred, it never specifically mentioned the software program, and it never even used the word “copyright.” Johnson disputed that that sentence indicated a copyright transfer.
But the U.S. Court of Appeals for the 9th Circuit, in its decision affirming a jury verdict against Johnson, concluded that that sentence in the annual report about “all assets” sufficiently transferred the copyright. It was not necessary, the court held, for a copyright transfer document “to be the Magna Carta; a one-line pro forma statement will do.” The district court had similarly noted that Storix wasn’t required “to provide a writing that recited details regarding price, consideration, negotiated terms, reproduction rights, or other ‘magic words.’” The critical issue was to discern “the parties' intent,” and the annual report did that.
The case is yet another illustration of the complexities and twists attendant to copyright ownership in an era in which so many copyrightable products of human creativity have become valuable.
Mark Sableman is a partner in Thompson Coburn's Intellectual Property group.