Addressing the issue of copyright transfers, the U.S. Court of Appeals for the Third Circuit affirmed the district court’s summary judgment ruling that the plaintiff did not own the asserted copyrighted materials at the time of the alleged infringement. Barefoot Architect, Inc. v. Bunge, Case Nos. 09-4495; -4600 (3d Cir., Jan. 14, 2011) (Smith, J.)

Sarah Bunge and Thomas Friedberg (the owners) hired an architectural firm, Village Vernacular, Inc. (Village) to render necessary drawings and plans to build a new home in the Virgin Islands. Michael Milne (Milne), vice president of Village, worked on the drawings, but at some point left Village to form his own corporation, Barefoot Architect, Inc. (Barefoot). The parties continued working together, but eventually Milne stopped his work for non-payment of bills, which were disputed. The owners hired another architect to complete the drawings and plans.

Milne’s new corporation, Barefoot, sued the owners for copyright infringement of the architectural drawings, among other claims. One of the owners’ defenses was that Barefoot did not own the copyrights to the drawings. Barefoot argued that there was an oral transfer of the copyrights from Village to Barefoot that was memorialized in writing nine years later. The owners argued that a late transfer of the copyright was ineffective. The Third Circuit held that the transfer was effective. The court held that the text of 17 U.S.C § 204(a) clearly allows for a subsequent writing to effectuate an earlier oral transfer, and it does not specify a time period during which the writing must be consummated. The Third Circuit stated that “there is little reason to demand that a validating written instrument be drafted and signed contemporaneously with the transferring event.” The Third Circuit adopted similar case law from the Second Circuit, Ninth Circuit and Eleventh Circuit.

However, in this case, the court found that there was no evidence of a valid transfer. The only evidence of an earlier oral transfer was a later memorandum attesting to the earlier transfer. The court held, “[w]e do not think that a ‘note or memorandum of transfer’ can simultaneously serve each of these purposes. If it could, a distantly post-hoc writing would be capable of rendering enforceable a (possibly fictional) ‘transfer’ that purportedly took place years or decades earlier but for which there is no independent evidence.” The court refused to construe §204(a) in a way that would allow this outcome. The court dismissed Barefoot’s other attempts to evidence a transfer, such as checks and business communications between Village and Barefoot unrelated to copyrights.

Practice Note: While subsequent agreements can effectively transfer copyright ownership under 17 U.S.C. § 204(a), oral transfers of copyrights cannot be validated only by a long-delayed subsequent agreements. Parties transferring copyright via an oral transfer must have a relatively contemporaneous evidence of the transfer.