Defendants wrote and produced Hand to God (the Play), a play incorporating verbatim more than a minute of Abbott & Costello’s iconic Who’s On First? comedy routine (the Routine). Plaintiffs alleged a copyright interest in the Routine as Abbott & Costello’s purported successors-in-interest and filed a copyright infringement lawsuit in the U.S. District Court for the Southern District of New York. After Defendants filed a motion to dismiss for failure to state a claim, the District Court dismissed Plaintiffs’ lawsuit, finding that Defendants’ use of the Routine was fair use. Plaintiffs appealed, and the U.S. Court of Appeals for the Second Circuit affirmed. TCA Television Corp. v. McCollum, – F.3d –, Case No. 16-134-CV, 2016 WL 5899174 (2d Cir. Oct. 11, 2016). Notably, the Second Circuit rejected the District Court’s fair use analysis, finding that Plaintiffs’ use of the Routine did not constitute fair use. Nonetheless, the Second Circuit held that Plaintiffs failed to plead a valid copyright interest in the Routine, which provided alternative grounds to affirm the District Court’s dismissal.

The Routine’s humor derives from Costello’s misunderstandings that arise when Abbott announces the roster of a baseball team filled with players with names such as “Who,” “What,” and “I Don’t Know.” The point of the Routine is that “who’s on first” is not a question, but rather a statement of fact, i.e., a player named “Who” is the first baseman. In 1999, Time magazine named the Routine the best comedy sketch of the 20th century. In the Play, one of the characters performed a portion of the Routine by using an evil sock puppet in order to impress another character, which led to Plaintiffs’ lawsuit against Defendants.

Copyright protection promotes not only individual interests, but — in the words of the Constitution — “the progress of science and useful arts” for the benefit of society as a whole. U.S. Const. art I, § 8, cl. 8. The United States Supreme Court has explained that copyright protection is based on the “economic philosophy ... that encouragement of individual effort by personal gain is the best way to advance public welfare.” Mazer v. Stein, 347 U.S. 201, 219 (1954). The “monopoly created by copyright ... rewards the individual author,” but only “in order to benefit the public.” Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 546 (1985) (internal quotation marks omitted). Nonetheless, the law recognizes that “some opportunity for fair use of copyrighted materials” is necessary to promote progress in science and art. Campbell v. Acuff–Rose Music, Inc., 510 U.S. 569, 575 (1994). Courts consider four nonexclusive factors in “determining whether the use made of a work in any particular case is a fair use.” 17 U.S.C. § 107.

The first fair use factor — the purpose and character of Defendants’ use of the Routine — favored Plaintiffs. Defendants’ commercial use of the Routine was not transformative, but rather a verbatim performance of the two minutes of the Routine, which weighed heavily against a finding of fair use. The Play did not instill any new expression, meaning, or message in the Routine, and nor did Defendants add any new dramatic purpose to the Play through the Routine. The second fair use factor — the nature of the copyrighted work — also favored Plaintiffs. The Routine is a creative work that falls squarely within the scope of copyright’s intended protection.

Next, the court found that the third fair use factor — the amount and substantiality of the portion used in relation to the copyrighted work as a whole — favored Plaintiffs as well. Even though Defendants used roughly only two minutes of the Routine in the Play, Defendants’ copying was “substantial.” Finally, the court found that the fourth factor also favored Plaintiffs. The fourth factor considers the effect of the use upon the potential market for or value of the copyrighted work. Here, Plaintiffs alleged that they receive and grant requests to license the Routine, and that Defendants’ use of the Routine adversely affected the licensing market for the Routine.

Thus, the Second Circuit reversed the District Court’s fair use ruling. However, the court also found that Plaintiffs failed to allege a valid interest in the copyright to the Routine based on contractual assignment. The court then rejected Plaintiffs’ argument that they acquired the copyright for to the Routine based on the work-for-hire doctrine, which essentially provides that an employer who hires another to create a copyrightable work is the “author” of the work for purposes of copyright law. Finally, the court rejected Plaintiffs’ argument that the Routine had “merged” into a copyrighted movie to which Plaintiffs claimed an ownership interest. Abbott and Costello created the Routine two years before that movie and continued to perform the Routine after the movie was copyrighted. The court concluded that Plaintiffs failed to allege a valid ownership interest in the Routine and dismissed Plaintiffs’ complaint for failure to state a claim.

Plaintiffs have stated their intent to file a motion for rehearing before an en banc panel, which, if granted, means all active judges in the Second Circuit would rehear this appeal. If the Second Circuit does not rehear the case, the Second Circuit’s decision will stand and it is possible that Plaintiffs would then petition the U.S. Supreme Court for relief.