1st Cir: Implied Non-Exclusive License Survives Death of Architect

The First Circuit dealt with the question of whether an architect had granted an implied non-exclusive license, and if so, whether such non-exclusive implied license survived his death.

The architect had been a partner in a group that developed a property the development of which was planned according to his original plans.  Then he died.

Could the partners use the plan?  Yes, the circumstances implied a non-exclusive license.  Do such licenses survive death?  Yes.

1st Cir: Implied Non-Exclusive License In Architect's Plans After His Death

If You've Licensed A Copyrighted Work and A New Technology Arises, Who Can Exploit It?

Nice explanation by Andy Berger at IP in Brief of the Random House v. Rosetta Books case and its continuing importance here.

I will be going to see Andy speak at a FREE CSUSA Licensing event Tues May 18 more info here.

11th Cir: Copyright Owners Deliver Artworks At Their Peril - Implied License Doctrine Swallows Copyright Act

The Copyright Act provides:

Detail from Todd Latimer's Midnight Rider - Full image here.

§ 202. Ownership of copyright as distinct from ownership of material object


Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. Transfer of ownership of any material object, including the copy or phonorecord in which the work is first fixed, does not of itself convey any rights in the copyrighted work embodied in the object; nor, in the absence of an agreement, does transfer of ownership of a copyright or of any exclusive rights under a copyright convey property rights in any material object.

(emphasis supplied).

§ 204. Execution of transfers of copyright ownership


(a) A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent.


The 11th Circuit basically tossed out the bolded language in a recent decision captioned Latimer v. Roaring Toyz, Inc., 2010 WL 1253090 (11th Cir. April 2, 2010) and radically expanded the doctrines of implied license and constructive delivery.

Here's the scenario, wildly oversimplified: 

Artist paints artwork onto motorcycle.  Knows it will be used in photography, stream of commerce.  Motorcycle company gets no release.  Artist is not plaintiff, has nothing to do with the case, but 11th Circuit spends a lot of time on him.

Plaintiff is motorcyle photographer.  Takes photos at motorcycle company's request.  Orally grants certain publication rights and thinks he owns/reserves the rest.  Photographer has granted first publication rights to Two Wheel Tuner mag.   Instead of distributing his high quality digital files per his instructions, company distributes them to press who unwittingly publish them, including defendant Hachette's Cycle World.

Motorcycle company who uses photos claims that they were unauthorized derivative works because the photographer didn't have a release from the guy who made the paintings on the motorcycle.

11th Circuit finds that the fact that motorcyle photographer delivered photographs without clear reservation of rights grants an implied license to motorcycle company to do whatever it likes.   FURTHER finds that anyone downstream has "constructive delivery" from the photographer and can do whatever they like without getting written permission.

Here is the 11th Circuit's new rule:

"Thus, an implied license will be limited to a specific use only if that limitation is expressly conveyed when the work is delivered"

In other words, if you deliver your photograph to someone and YOU don't write down that they can't do whatever the heck they want with it, you lose your copyright to that person and to anyone they give it to.

This case is really a breathtaking blow to photographers who often deliver their works hoping that a potential client will fall in love and license them.   Since the photographer said he knew that Kawasaki "might" use them, the 11th Circuit threw out his affidavit as a "sham".

In other Circuits, one must generally obtain written permission to use a photograph, the implied license doctrine is narrowly construed.

In addition, the 11th Circuit held that the photographer must prove that he gave the motorcycle company a course in copyright law to prevail:

Kawasaki asserts that Latimer did not expressly communicate to Kawasaki any restrictions on the use of the photographs. However, Latimer contends that all of his communications with Kawasaki went through Roaring Toyz and that he granted Kawasaki permission to use the photographs for a specific purpose-a media display at Bike Week. Thus, the question here is whether Latimer delivered a warning adequate to put Kawasaki on notice that certain uses of Latimer's photos would constitute copyright infringement.


Latimer v. Roaring Toyz, Inc., 2010 WL 1253090, 11 (11th Cir. April 2, 2010).

It should be noted that the 11th Circuit purported to give a victory to the photographer, but the burdens of proof that have been spelled out are highly problematic and appear to be inconsistent with the plain language of the Copyright Act and a body of case law that generally puts photographers in the driver's seat when there is an unauthorized publication of their works.

The Photoattorney blog found some good news in the decision, read here.

For a wildly different view from Kevin Smith at Duke, look here.

A totally different angle at Exclusive Rights blog here.

Read on below:

LatimerVRoaringToyz

Sixth Circuit - Confidentiality Agreements For the Development of Copyrighted Works - CAD and 3D

Dodge Avenger

Chrysler Sebring

In Multimatic Inc. v. Faurecia Interior Systems USA, 2009 WL 4927957 (6th Cir. Dec. 22, 2009), the Sixth Circuit Court of Appeals considered the question of whether a confidentiality agreement entered into by two parties protected intellectual property (trade secrets and copyright) developed during the course of the confidential relationship.

Multimatic agreed to develop cross-beam systems for the DaimlerChrysler Avenger and Sebring lines for Faurecia, a supplier to Chrysler.   There was no agreement on price, but the agreement implied that if Multimatic used Faurecia's 3D CAD designs, the parties would work together.

Instead, Faurecia gave Multimatic's designs to a third party.  Multimatic sued and won.   The Sixth Circuit opinion contains a good discussion of confidentiality agreements:  they are governed by state law under the state's contract law, but they deal with copyrightable subject matter, the source of Faurecia's rights under the Copyright Act in the 3D models. 17 U.S.C. Section 102(a)(5) ["pictorial, graphic, and sculptural works"].   Drafter's note: the Sixth Circuit found that the use of the PRESENT tense includes FUTURE rights.  Thus, neither the confidentiality agreement nor Multimatic's course of conduct in submitting the designs to Chrysler transferred the copyrights to Faurecia or anyone else, because Multimatic did not sign a writing transferring copyright ownership (as required by Section 204(a) of the Copyright Act) which provides:

§ 204. Execution of transfers of copyright ownership

(a) A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent.

Copyright, Software Programmers and The Implied Unlimited License to Use and Modify

In Asset Marketing Systems, Inc. v. Gagnon, 542 F.3d 748 (9th Cir. Sept. 9, 2008), the Ninth Circuit found that a computer programmer granted AMS an "unlimited, nonexclusive license to retain, use, and modify" custom software that the programmer Gagnon dba "Mister Computer" had designed. AMS is a company located in San Diego engaged in, inter alia, "information technology consulting". When AMS employees booted up, they saw a copyrighted "Mister Computer" notice. During the course of dealing between the parties, the issue of AMS using the software after the ongoing consulting relationship was not expressly addressed. At a late point in the relationship, the parties exchanged proposed contracts and written statements reflecting their respective understandings (which differed). AMS eventually terminated the contract, hired most of Mister Computer's employees, and moved happily ahead. During the course of negotiations, Mister Computer variously made exorbitant demands for the continued use of his copyrighted software programs, asserted that the source code was a trade secret, and belatedly registered his copyrights. The legal action started when AMS sued in state court on employment claims, Gagnon removed and counterclaimed for copyright. I am not sure how, but the state claims to have gotten remanded (leaving only federal counterclaims), and then AMS appears to have dropped the now remanded claims in state court and then asserted its state law claims as "counter-counterclaims" to Mister Computer's federal counterclaims in the federal action. Whew!

The court's decison turns around the mysterious language of 17 U.S.C. Section 204(a). Section 204(a) requires that a transfer of copyright be in writing, signed by the owner. The case law has not required a writing for a transfer of a non-exclusive license. I discuss non-exclusive licenses as a litigation defense at Section 13:12 of Copyright Litigation Handbook (3d Ed. West 2008).

The 9th Circuit had previously considered implied licenses in the context of movie special effects and architectural drawings. To illustrate: someone is paid $56,000 for special effects film footage, delivers it, then claims the film company can't use it. Effects Assocs. Inc. v. Cohen, 908 F.2d 555 (9th Cir. 1990) (link courtesy http://www.coolcopyright.com/). This is the "Moviemakers do lunch, not contracts" case.

But in this very hot area of work-for-hire disputes - the implied license doctrine has now been applied to software, substantially reducing the leverage that outside consultants may wield over clients who have not protected themselves in acquiring custom software.

An implied license may be found where (1) licensee requests creation of a work; (2) the creator makes the work and delivers it to the licensee who requested it; (3) the licensor intends that the licensee-requestor copy and distribute his work.

The AMS court found that Mister Computer intended, through "objective manifestations" that AMS "use, retain and modify" the software programs as well. Mister Computer should have put a better warning on his material. Now large and sophisticated software users, too, can do lunch, not contracts.