USCA First Circuit, January 29, 2010

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First Circuit holds that the district court did not err in declining to instruct jurors that a termination of a copyright transfer must be in writing to be valid.

In September 1981, composer Simón Díaz granted the copyright in his song “Caballo Viejo” to a predecessor of West Side Music Publishing, Inc. (West Side). West Side is a predecessor of defendant American Society of Composers Authors and Publishers (ASCAP).

In 1982, West Side transferred its “Caballo Viejo” grant to the Asociación de Compositores y Editores de Música Latino Americana (ACEMLA), a predecessor of plaintiff Latin American Music Company (LAMCO). The 1982 contract between West Side and ACEMLA was silent with respect to the date, conditions and manner of termination.

Due to the lack of clarity over termination, in 1996, LAMCO filed a federal action in which it claimed to own the copyright. ASCAP responded that its predecessor, West Side, had terminated the contract. The case proceeded to trial where jurors heard videotaped deposition testimony from West Side’s president, Hector Varona, who testified that he had verbally terminated the 1982 agreement during a conversation with ACEMLA president Raul Bernard.

At the close of evidence, LAMCO argued that the court should instruct the jurors that West Side’s termination was governed by the federal Copyright Act and, thus, had to be in writing. ASCAP took the position that New York law governed termination and that New York’s “reasonable notice of termination” rule governing contracts of unspecified duration applied. The court ultimately adopted ASCAP’s position that New York law, not the Copyright Act, governed and that West Side only needed to provide reasonable notice. The jury found in favor of ASCAP.

The First Circuit, in reviewing the instructional error de novo, affirmed the trial court’s finding that the appropriate law was New York, where the agreement was formed. It further found that the federal Copyright Act sections proffered by plaintiff in support of its claim were irrelevant to the termination at issue.

First, the court considered whether § 204 of the Copyright Act – which requires transfers of copyright ownership to be in writing – applied to the present case. It concluded that while § 204 did require a writing to transfer the ownership of a copyright, there was no concomitant writing requirement for termination of transfers. It noted that such a reading of § 204 would allow a transferee of a copyright to effectively veto any request to re-convey the interest back to the terminating party.

Second, the court considered the applicability of § 203 – which requires authors or heirs of authors wishing to terminate a copyright transfer to give notice in writing. The court found that § 203 did not apply as West Side was neither the author nor a statutory heir of the author.

Finally, the court concluded that plaintiff’s argument that, even if New York law applied, the only “reasonable” notice would be written notice was waived as plaintiff failed to cite any authority and did not develop the argument beyond a mere passing mention.

Having concluded that the instruction regarding lawful termination was valid, the court also ruled that the district court did not err when it refused to issue a “missing witness” instruction for West Side’s president. The court found that because the defendant used videotaped deposition of the president, he was not considered a classic missing witness and the judge acted within its discretion in denying the request. The court further rejected the plaintiff’s arguments that the verdict form and defendant’s closing arguments were improper.