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Second Circuit rejects fair use defense in copyright action brought by Abbott and Costello heirs for use of comic duo’s “Who’s On First?” routine in play “Hand to God,” but affirms dismissal on grounds that plaintiffs failed to adequately allege copyright ownership after duo failed to renew registration.

William “Bud” Abbott and Lou Costello first performed their iconic “Who’s On First?” comedy routine in 1938, centered on a fictional baseball team filled with players named “Who,” “What” and “I Don’t Know.” Pursuant to license agreements with Universal Pictures Company in 1940, Abbott and Costello performed the routine in Universal’s motion picture “One Night in the Tropics,” which Universal released and registered for copyright in 1940, and which registration Universal timely renewed. The duo performed the routine again in the 1945 film “The Naughty Nineties,” which Universal also registered for copyright and timely renewed. Abbott and Costello separately registered the routine for copyright in 1944, but failed to timely renew the registration, leading the Copyright Office to later conclude that the routine had fallen into the public domain. In 1984, Universal transferred all of its rights, title and interest in the comedic routine by quitclaim deed to a partnership formed by the heirs of Abbot and Costello.

Relying on chain-of-title flowing from this quitclaim deed, the successors-in-interest to the duo’s heirs sued the producers and author of the critically acclaimed Broadway comedy “Hand to God” for copyright infringement, based on a scene in the play in which the main character and his demonically possessed sock puppet recite one minute and seven seconds of the routine. Defendants moved to dismiss on the grounds that the routine had passed into the public domain and that their use of the routine constitutes fair use. The district court held that plaintiffs adequately pleaded ownership of a valid copyright in the routine, but that defendants’ use of the routine in the play was transformative and therefore protected under the fair use doctrine. Accordingly, the district court granted defendants’ motion to dismiss. (Read our summary of the district court decision here.) On appeal, the Second Circuit affirmed the dismissal, but rejected the district court’s reasoning on both fair use and ownership.

The Second Circuit rejected the district court’s fair use analysis, holding that defendants failed to establish fair use on the face of the complaint and its incorporated exhibits. Considering the first of the four traditional fair use factors — the purpose and character of the use — the court concluded that defendants’ verbatim use of more than a minute of the routine in a commercial production was not transformative. The court explained that in considering whether a work is transformative, “the focus of inquiry is not simply on the new work, i.e., on whether that work serves a purpose or conveys an overall expression, meaning, or message different from the copyrighted material it appropriates. Rather, the critical inquiry is whether the new work uses the copyrighted material itself for a purpose, or imbues it with a character, different from that for which it was created.” On this inquiry, the court concluded that defendants’ use of the routine was for the same comedic purpose as the original, and thus not transformative, regardless of its ultimate purpose in the context of the play’s larger plot. The Second Circuit further held that the other fair use factors — the nature of the copyrighted work, the amount and substantiality of use, and the effect on the potential market — all weighed in favor of plaintiffs.

The Second Circuit nonetheless affirmed the dismissal, rejecting plaintiffs’ claim of ownership based on the 1984 quitclaim deed from Universal to Abbott and Costello’s heirs because, the court held, Universal did not own the copyright to the routine at the time it conveyed the quitclaim deed. First, the court rejected plaintiffs’ argument that Abbott and Costello had assigned ownership in the routine to Universal in their original 1940 agreements with Universal, explaining that those agreements were licenses rather than assignments. Second, the court rejected plaintiffs’ contention that the routine was a work-made-for-hire in connection with the “One Night in the Tropics” film, explaining that the routine was first created and performed by Abbott and Costello in 1938, more than two years before their 1940 agreements with Universal to perform the routine in the film. Third, and finally, the Second Circuit rejected plaintiffs’ argument that the routine was “merged” into Universal’s copyrighted films such that plaintiffs could rely on Universal’s copyright registrations in the films. The court explained that the routine existed independently of the films, as evidenced by its creation before the films, and by Abbott and Costello’s performance of the routine independently of the films both before and after the films’ release.