Why it matters: On June 29, 2015, the Second Circuit in 16 Casa Duse, LLC v. Merkin et al. held that a film's director does not own a separate copyright interest in the film. In so doing, the court followed the Ninth Circuit's recent en banc decision (reversing its own panel) in Garcia v. Google et al., which came to the same conclusion with respect to an actor's performance in a film.

Detailed discussion: On June 29, 2015, the Second Circuit in the case of16 Casa Duse, LLC v. Merkin et al. upheld the district court's grant of summary judgment and preliminary injunction in favor of the plaintiff film production company and held that the defendant film director did not own a separate copyright interest in the film. In so doing, the court specifically agreed with the conclusion that the Ninth Circuit, sitting en banc, reached on May 18, 2015, in Garcia v. Google et al., when it reversed the earlier decision of its own panel to hold that an actor in a film did not hold a separate copyright interest in her performance (see our discussion of theGarcia decision in our June 2015 newsletter). Also part of the suit but not addressed here, the court reversed the district court's grant of summary judgment in favor of the plaintiff with respect to state tortious interference with business relations claims and remanded the case to the district court for further proceedings on that issue.

To briefly recap the relevant facts, in September 2010, Robert Krakovski, the principal of Brooklyn-based film production company 16 Casa Duse, LLC asked Alex Merkin to direct a short film he was financing and producing titled Heads Up. Merkin agreed, and Krakovski and Merkin informally agreed on a fee of $1,500 for Merkin's services. In February 2011, Krakovski sent Merkin a draft work-for-hire "Director Employment Agreement" that contained a provision that Casa Duse owned all rights, including the copyright, in the film. Merkin never signed the agreement, ignoring Krakovski's numerous requests that he do so. Nevertheless, production on the film began in May 2011 and, during the three days of filming, Merkin "performed his role as director by advising and instructing the film's cast and crew on matters ranging from camera angles and lighting to wardrobe and make-up to the actors' dialogue and movement." In June 2011, Krakovski gave Merkin a hard drive containing the raw film footage and asked him to help edit it. Because Merkin had never signed the work-for-hire Director Employment Agreement, Krakovski and Merkin entered into a "Media Agreement" under which Merkin would edit the film but not exploit any of the footage without Casa Duse's permission. Afterwards, Krakovski emailed Merkin seeking to amend the terms of the Media Agreement so as to "clarify" that Casa Duse had not relinquished any of its rights contained in the work-for-hire agreement. Merkin responded by "clarifying" that he would not give up "any creative or artistic rights" he had in the film, which rights were his property and not the property of Casa Duse. Much legal wrangling ensued. Over the next four months, negotiations broke down, with Merkin refusing to return the raw footage to Krakovski, claiming it was his property, and "forbidding" Krakovski to make use of it. In the meantime, Krakovski hired another editor to edit the raw footage into a film. In January 2012, unbeknownst to Krakovski, Merkin registered a copyright in the raw footage of the film with the U.S. Copyright Office. In March 2012, Krakovski began submitting Heads Up to film festivals and organized a screening and reception (subsequently canceled) for the film at the New York Film Academy. Merkin began sending "cease and desist" letters to festival organizers and the Academy, prompting Krakovski to file a complaint in the Southern District of New York in May 2012 seeking relief under both the federal copyright and state tortious interference laws. On May 18, 2012, the district court granted a preliminary injunction against Merkin interfering with Krakovski's use of the film, and on September 27, 2013, the district court granted Krakovski's motion for summary judgment on the grounds that, inter alia, Merkin did not own a separate copyright in the film or the raw footage. The parties appealed to the Second Circuit.

The court began its analysis by stating up front that "[t]his case requires us to answer a question of first impression in this Circuit: May a contributor to a creative work whose contributions are inseparable from, and integrated into, the work maintain a copyright interest in his or her contributions alone? We conclude that, at least on the facts of the present case, he or she may not." After establishing that Merkin was neither a "joint author" of nor "work-for-hire" on the film, the court first looked to the applicable provisions of the federal Copyright Act and determined that, based on the facts of the case, Merkin's "contributions to the film did not themselves constitute a 'work of authorship' amenable to copyright protection." The court cited to legislative history and to interpretations issued by the Copyright Office to support this conclusion.

The court then looked to the Ninth Circuit Garcia case, noting that a three-judge panel had initially held "to the contrary" with respect to the actor in that case who was seeking to claim a copyright interest in her performance in a film, finding that "copyright protection may subsist in an actor's performance in a motion picture" because her performance exhibited a "minimal degree of creativity" that was "fixed" in a tangible medium as part of the completed film. However, the court emphasized that the panel's decision was reversed by the Ninth Circuit sitting en banc on May 18, 2015, which had concluded that the actor's " 'theory of copyright law would result in [a] legal morass … [making] Swiss cheese of copyrights.' "

The court agreed with the Ninth Circuit's en banc decision reversing its panel, stating that "[f]ilmmaking is a collaborative process typically involving artistic contributions from large numbers of people, including—in addition to producers, directors, and screenwriters—actors, designers, cinematographers, camera operators, and a host of skilled technical contributors. If copyright subsisted separately in each of their contributions to the completed film, the copyright in the film itself, which is recognized by statute as a work of authorship, could be undermined in any number of individual claims." The court stated that, while the various contributors to a film may make "original creative expressions" that are arguably "fixed in the medium of film footage," that alone is not sufficient, holding that "[a]uthors are not entitled to copyright protection except for the 'works of authorship' they create and fix."

The court went on to state that "[o]ur conclusion in the present case does not suggest that motion picture directors such as Merkin may never achieve copyright protection for their creative efforts," noting that the director can be the sole or joint author of the film and secure copyright protection in that way. In addition, the court noted that authors of "freestanding works" that are incorporated into a film, such as a dance performance or song, can secure copyright protection for them. The court concluded, however, that "a director's contribution to an integrated 'work of authorship' such as a film is not itself a 'work of authorship' subject to its own copyright protection."

With respect to the raw footage of the film, the court agreed with the district court that Merkin didn't hold a copyright interest in that either. The court found that Casa Duse was the "dominant author" of the film in all of its stages and "[t]he record does not reflect any developments that occurred between the creation of the raw film footage and Casa Duse's attempts to create a finished product that would alter this analysis." Thus, the court concluded that "Casa Duse, not Merkin, owns the copyright in the finished film and its prior versions, including the disputed 'raw film footage.'"

Click here to read the Second Circuit's opinion in 16 Casa Duse, LLC v. Alex Merkin et al., No. 13-3865 (6/29/15).