Margret Rey v. Richard G.D. Lafferty, Margret Rey v. Richard G.D. Lafferty

Margret Rey, who owns the copyright to the “Curious George” children’s books, challenges an award of damages to Lafferty Harwood & Partners (“LHP”) for Rey’s withholding of approval of various ancillary products utilizing the “Curious George” character under their 1983 licensing agreement. LHP appeals the district court order awarding Rey damages and future royalties on certain other “Curious George” products. We affirm in part and reverse in part.

I

BACKGROUND

“Curious George” is an imaginary monkey whose antics are chronicled in seven books, written by Margret and H.A. Rey, which have entertained readers since the 1940s. A mischievous personality consistently lands Curious George in amusing scrapes and predicaments. The more recent “monkey business” — leading to the present litigation — began in 1977 when Margret Rey granted Milktrain Productions an option to produce and televise 104 animated “Curious George” film episodes. The option agreement was contingent on Milktrain’s obtaining financing for the film project, and adverted to a potential agreement to license “ancillary products,” based on the “Curious George” character, once the 104 film episodes had been completed.

A. The Original Film Agreements.

Milktrain approached LHP, a Canadian investment firm, to obtain financing for the project. LHP agreed to fund the venture by selling shares in the project to investors (hereinafter: the “Milktrain Agreement”); LHP and its investors were to divide a 50% share of Milktrain’s profits on the films and on any future ancillary products.

With the financing commitment in place, Rey granted Milktrain and LHP a limited license “to produce (within a two-year period from the date of exercise) one hundred and four (104) four minute film episodes based on the [“Curious George”] character solely for broadcast on television” (hereinafter: the “Rey License”). Rey was to receive a fee for assisting with the editing and production of the episodes, and an additional royalty amounting to 10% of the revenues from any film telecasts. The Rey License made no mention of ancillary product rights. Nevertheless, LHP promoted the project to investors through a prospectus (hereinafter: the “1978 Private Placement Memorandum”) which represented, inter alia, that “the production contract [with Rey] gives LHP the right to participate in the financing of ... the option ... to undertake the exploitation of other rights to ‘Curious George’ including manufacturing, food, licensing and other commercial areas of exploitation.”

B. The Revised Agreements.

The film project soon encountered delays and financial setbacks. By early 1979, though only 32 of the 104 episodes had been completed, the original investment funds had been virtually exhausted. In order to rescue the project and complete the films to Rey’s satisfaction, LHP offered to arrange additional financing. In consideration, LHP insisted that the Milk-train Agreement be revised to permit LHP to assume control of the film production process and to receive higher royalties on the completed episodes. Milktrain assented to these revisions, and the revised Milk-train Agreement (hereinafter: the “Revised Milktrain Agreement” or “RMA”) was signed on November 5, 1979.

*1382 As prelude to its description of the new obligations between Milktrain and LHP, the RMA recited that Milktrain and LHP owned “the rights to Curious George which have been obtained from ... Rey” under the Rey License. The RMA further stated that:

Investors acquiring the episodes shall acquire all right, title and interest therein, without limitation or reserve, including the original negative....

LHP shall have the right to participate on an equal basis with [Milktrain] in their right of first refusal after the present agency rights expire to undertake the exploitation of other rights to Curious George, including manufacturing-, food, licensing and the publication of the 104 episodes in book form ... in accordance with the rights granted to [Milktrain] and LHP [by Rey] in [the Revised Rey License]. 1

Simultaneously with the negotiation of the RMA, LHP proposed several changes in the Rey License, including language which would have granted LHP the immediate right to “undertake the exploitation of other rights to ‘Curious George/ including manufacturing, food, licensing and the publication of the 104 episodes in book form.” Rey rejected the LHP proposal in a letter to Richard G.D. Lafferty (president and C.E.O. of LHP): “I have repeatedly stated to Milktrain and to you that I will not consider negotiating such rights before the films are done.” Rey did consent, however, to certain changes to the royalty arrangements, whereby Rey would receive a 10% share of film revenues only “after the investors have recouped [their investment] and certain soft dollar commitments ... have been paid.”

On November 5, 1979, concurrently with the execution of the Revised Milktrain Agreement, a revised version of the Rey License (hereinafter: the “Revised Rey License” or “RRL”) was executed, incorporating these changes, and superseding the original Rey License. The RRL recited that the original Rey License had granted Milktrain and LHP the right to produce and distribute animated “Curious George” films “for television viewing,” but made no mention of the "ancillary product” rights unsuccessfully sought by LHP.

As agreed, LHP undertook to arrange further financing to complete the film project. On November 23, 1979, LHP released another prospectus (hereinafter: the “1979 Private Placement Memorandum”) to which it attached the Revised Milktrain Agreement. The 1979 Private Placement Memorandum again stressed the prospect of eventual revenues from ancillary products but noted that these rights “have yet to be negotiated” with Rey.

C. The Ancillary Products Agreement

Production of the 104 TV episodes was completed in 1982. On January 3, 1983, an Ancillary Products Agreement (or “APA”) was signed by Rey and LHP, granting LHP a general right to license “Curious George” in spin-off (“ancillary”) products for a renewable term of five years. The APA defined “ancillary products” as:

All tangible goods ... excluding books, films, tapes, records, or video productions .... However, for stories already owned by [LHP] and which have been produced as 104 episodes under the license granted in the January, 1978 agreement and the November 5, 1979 revision of that agreement, [LHP] shall have the right to produce books, films, tapes, records and video productions of these episodes under this Agreement, subject to [Rey’s] prior approval ... which prior approval shall not be unreasonably withheld.

In return for these rights, Rey was to receive one-third of the royalties on the licensed products, with certain minimum annual payments guaranteed. Rey retained the right to disapprove any product, and to propose changes which would make a disapproved product acceptable to her. The APA provided, inter alia, that Rey’s approval would not be withheld “unreasonably.”

*1383 D. The Houghton Mifflin Contract

Following the execution of the Ancillary-Products Agreement, LHP assigned its licensing rights to a new subsidiary, Curgeo Enterprises, which turned its attention to licensing the “Curious George” character in various product forms. 2 On March 27, 1984, Curgeo executed a contract with Houghton Mifflin Company to publish the 104 television film episodes in the form of a children’s book series. The contract provided that Houghton Mifflin would publish at least four books, with illustrations drawn directly from the film negatives, in each year from 1984 through 1987; the contract was renewable for an additional five-year term if LHP and Rey agreed to extend the APA beyond 1987. Pursuant to the contract, Houghton Mifflin published four books each year from 1984 through 1987.

In 1987, LHP notified Houghton Mifflin that it had declined to extend the APA, but that Curgeo had “entered into a new operating agreement which permits us to continue to act in the capacity in which we have been acting for the last five years.... [Y]ou are free to pick up your option to renew.” In response, Houghton Mifflin extended its contract for the additional five-year term, publishing an additional four books in 1988 and again in 1989. It ceased publication of the book series in 1990, when Rey advised that the APA had been can-celled.

E. Other Product Licenses.

Curgeo moved aggressively to license the “Curious George” character in other product areas as well. Beginning in 1983, the “Curious George” TV episodes were licensed to Sony Corporation, which transferred the images from the television film negatives to videotape. LHP takes the position that the Sony video license was entered pursuant to the RRL; Rey claims it is subject to the APA. See supra at p. 1382.

Curious George” to Eden Toys Inc., which proposed to market a “Curious George” plush toy. In the beginning, Rey rejected Eden’s proposed designs for the toy, but Eden eventually proposed several versions which were acceptable to Rey. The plush toy was marketed from 1983 to 1990, but experienced poor sales and generated less revenue than expected. Eden blamed the poor market performance on Rey’s alterations to Eden’s original design proposals. In 1983, Curgeo licensed

In 1987, Curgeo received a commitment from Sears, Roebuck to market “Curious George” pajamas through the Sears catalog. The Sears pajama project promised high returns, but catalog deadlines necessitated immediate approval of a product design. Glen Konkle, Curgeo’s agent, brought Rey a prototype pajama and a flat paper sketch of “Curious George” which had been proposed as the basis for the final pattern. Rey rejected the proposal, complaining that the pajama material was “hard, ugly [and] bright yellow,” and that the sketch of “Curious George” was “plump” and “not recognizable.” The catalog deadline passed and the pajama manufacturers withdrew their bids. In addition, Beach Paper Products, which had orally agreed to license “Curious George” for a line of paper novelties, withdrew its offer after learning that “Curious George” products would not receive exposure in the Sears catalog.

In 1988, Curgeo licensed “Curious George” to DLM Inc., which intended to use the “Curious George” character in a trilogy of educational software. Rey approved the software in principle, and production began in July 1988. In August 1988, however, DLM withdrew its plans to complete the “trilogy” after Rey telephoned DLM’s project director and harshly criticized the design of the first software product and the accompanying manual developed by DLM.

*1384 F. The Ancillary Products Agreement Renewal

Due in part to these product rejections, LHP earned less money than it anticipated from ancillary products. When the APA came up for renewal in January 1988, LHP declined to exercise its option for an additional five-year term. Instead, the parties agreed to renew on a month-to-month basis, terminable by either party on one month’s notice. Rey’s royalty rate was increased to 50% (effective January 3, 1988), but with no guaranteed minimum payment. On April 10, 1989, Rey terminated the APA. LHP responded by advising that Curgeo would “continue to administer those licenses which [remained] outstanding and report to you from time to time accordingly.” LHP thereupon continued to market the Sony videos and to publish the television films in book form under the Houghton Mifflin agreements.

G. “Curious George” Goes to Court

On February 8, 1991, Rey filed suit against Lafferty, Curgeo and LHP, in connection with LHP’s continuing, allegedly unauthorized production of the Houghton Mifflin books and Sony videos. Rey’s complaint alleged violations of federal copyright, trademark and unfair-competition statutes, breach of contract, and violations of Mass.Gen.L. ch. 93A (“chapter 93A”); it sought to enjoin further violations and to recover unpaid royalties on the books and videos. LHP countersued, claiming that Rey unreasonably had withheld approval of various products while the APA remained in force. The LHP complaint alleged breach of contract, interference with contractual and advantageous business relationships, and violation of chapter 93A.

After a four-day bench trial, the district court found for Rey on her claims for breach of contract, ruling that the book and video licenses were governed by the APA and that Rey was entitled to recover $256,327 in royalties. The court found for LHP on several LHP counterclaims, however, holding that Rey unreasonably had withheld approval of, inter alia, the Sears pajamas, the DLM software, and Eden’s original plush toy design. LHP was awarded $317,000, representing lost profits and consequential damages resulting from Rey’s rejection of these products.

II

DISCUSSION

“Under Massachusetts law, the ‘interpretation of a contract is ordinarily a question of law for the court’.” Fairfield 274-278 Clarendon Trust v. Dwek, 970 F.2d 990, 993 (1st Cir.1992) (quoting Edmonds v. United States, 642 F.2d 877, 881 (1st Cir.1981)); see also, e.g., Lawrence-Lynch Corp. v. Department of Environmental Mgmt., 392 Mass. 681, 682, 467 N.E.2d 838, 840 (1984); Sparks v. Microwave Associates, Inc., 359 Mass. 597, 600, 270 N.E.2d 909, 911 (1971). 3 Only if the contract is ambiguous will there arise issues of fact reviewable for clear error. See Dwek, 970 F.2d at 993; see also ITT Corp. v. LTX Corp., 926 F.2d 1258 (1st Cir.1991); Fashion House, Inc. v. K Mart Corp., 892 F.2d 1076, 1083 (1st Cir.1989) (New York law). “Contract language is usually considered ambiguous where an agreement’s terms are inconsistent on their face or where the phraseology can support reasonable difference of opinion as to the meaning of the words employed and obligations undertaken,” K Mart, 892 F.2d at 1083 (citing In re *1385 Navigation Technology Corp., 880 F.2d 1491, 1495 (1st Cir.1989)). The ambiguity determination itself is subject to plenary review, id, and parol evidence may not be used to “create ambiguity where none otherwise exists.” See Boston Car Co. v. Acura Auto. Div., 971 F.2d 811, 815 (1st Cir.1992) (citing ITT Corp., 926 F.2d at 1261).

A. The Book/Video Claims.

The Rey complaint alleged that LHP’s only right to publish the “Curious George” TV episodes in book and video form derived from the Ancillary Products Agreement, was subject to the APA’s royalty provisions, and expired when Rey terminated the APA in 1989. LHP responds that the book and video rights to the TV episodes were governed by the parties’ other agreements, specifically the Revised Rey License, which (according to LHP) incorporated the Revised Milktrain Agreement. According to LHP, these other agreements continued in effect notwithstanding termination of the APA; moreover, these agreements provided that no royalties were due Rey before LHP’s investors recovered their investment in the 104 TV films. 4 The district court accepted the interpretation urged by Rey, based on the language of the various contracts and the circumstances surrounding their execution. We agree.

1. The Houghton Mifñin Books.

The Ancillary Products Agreement provided, inter alia, that

for stories already owned by [LHP] ... which have been produced as 104 episodes under the license granted in the January, 1978 agreement and the November 5, 1979 revision of that agreement, [LHP] shall have the right to produce books, films, tapes, records and video productions of these episodes under this Agreement, subject to [Rey’s] prior approval ...

(Emphasis added.) Throughout the document the term “this Agreement,” utilizing the capital letter “A”, refers to the APA. Thus, the plain language of the operative provision clearly contemplates that the APA was to govern the licensing of any books and “video productions” arising from the 104 films. See Barilaro v. Consolidated Rail Corp., 876 F.2d 260, 265 n. 10 (1st Cir.1989) (“it is ... ‘a general rule in the construction of a written instrument that the same word occurring more than once is to be given the same meaning unless a different meaning is demanded by the context.’ ”) (quoting Dana v. Wildey Sav. Bank, 294 Mass. 462, 466, 2 N.E.2d 450, 453 (1936)).

LHP argues, nonetheless, that a narrow meaning must be ascribed to the quoted APA language, insofar as the RMA purported to grant investors “all right, title and interest [to the 104 film episodes], without limitation or reserve, including the original negative.” The problem with LHP’s argument is that Rey never signed the RMA. LHP concedes this, but argues that the RMA and RRL were negotiated and executed simultaneously by LHP, and must be interpreted in pari materia. See, e.g., Interstate Commerce Comm’n v. Holmes, 983 F.2d 1122, 1126-1127 (1st Cir.1993) (escrow agreement and consent decree read together, as “synergistic” documents); accord Chelsea Indus., Inc. v. Florence, 358 Mass. 50, 55-56, 260 N.E.2d 732 (1970); Thomas v. Christensen, 12 Mass.App.Ct. 169, 422 N.E.2d 472, 476 (1981). The Massachusetts courts sometimes have held that the party to be bound need not have signed each component part of an integrated agreement where it is the “sense” of the transaction, as supported by reliable indicia in the writings which were signed by the party to be bound, that a unitary transaction was contemplated by the parties. See Chase Commercial Corp. v. Owen, 32 Mass.App.Ct. 248, 588 N.E.2d 705 (1992) (holding that non-signatory guarantor was bound by jury trial waiver contained in loan and security agreements, *1386 though guarantee agreement contained no such waiver, where “the three documents were part of one transaction”); see also Gilmore v. Century Bank & Trust Co., 20 Mass.App.Ct. 49, 50, 477 N.E.2d 1069, 1073 (1985) (holding that non-signatory trustee could recover for breach of workout agreement, even though not a party to its terms, based on “sense” of agreement, and “such factors as simultaneity of execution, identity of subject matter and parties, cross-referencing, and interdependency of provisions”). On this theory, LHP contends, Rey’s signature on the RRL bound her to the" language of the RMA, and authorized LHP to transfer the television episodes to book form, using available technology.

However, where contract language contains no unambiguous indicia of the parties’ mutual intent to enter into a unitary transaction, we review for “clear error” the fact-dominant determination whether their separate documents were intended by the parties as an integrated agreement. Interstate Commerce Comm’n v. Holmes, 983 F.2d at 1126-1127; Holmes Realty Trust v. Granite City Storage Co., 25 Mass.App.Ct. 272, 517 N.E.2d 502, 504 (1988) (“it would be open to a fact finder ... to treat [separate documents] as intended by the parties to be parts of a single transaction”) (emphasis added); Fred S. James & Co. v. Hoffmann, 24 Mass.App.Ct. 160, 163, 507 N.E.2d 269, 271 (1987).

In the present case, we find no “clear error” in the district court’s determination that the parties contemplated separate (though related) transactions for film rights and financing. The evidence cut both ways. On the one hand, the RMA and the RRL were executed at approximately the same time, with some overlap in their interna] references and subject matter. On the other hand, their respective provisions are less in unison than parallel. 5 Most importantly, the written and circumstantial indicia sharply contradict any suggestion of a meeting of the minds relating to the licensing of ancillary products. Rey did not participate in negotiating the RMA, did not sign it, was never made a party to its terms, and expressly refused, during the RRL negotiations, to license “Curious George”for the “ancillary”purposes now urged by LHP. See supra at p. 1382. Moreover, the 1979 Private Placement Memorandum prepared by LHP acknowledges Rey’s nonacceptance by attaching the RRL as an exhibit and noting that ancillary product rights “have yet to be negotiated” with Rey. Finally, the parties’ intention to exclude the Houghton Mifflin books from the RRL, and their intention to cover them in the APA, are corroborated by their subsequent course of dealing: among other things, the record shows that LHP paid Rey royalties on the books and videos on several occasions at the 33% rate required under the APA, rather than the 10% rate prescribed by the RRL, and that Curgeo expressly keyed the dates of the Houghton Mifflin contract to the term (and anticipated renewal term) of the Ancillary Products Agreement:

By September 30, 1987, Curgeo [will] inform [Houghton Mifflin] in writing as to whether Curgeo has exercised its option to exploit the character “Curious George” through December 31,1993 and, if Curgeo has exercised said option, Cur-geo shall give the Publisher the option to extend this Agreement through December 31, 1993.

It was for the district court to balance the evidence in the first instance, see Holmes Realty Trust, 517 N.E.2d at 504, and we discern no sound reason to disagree with its findings, particularly on “clear error” review. See Interstate Commerce *1387 Comm’n v. Holmes, 983 F.2d at 1127 (citing Cumpiano v. Banco Santander Puerto Rico, 902 F.2d 148, 152 (1st Cir.1990)) (even if proffered interpretation did “[give] rise ... to another plausible view of the evidence,” reversal not warranted on “clear error” review). 6

To sum up: Since the district court sup-portably found that the RRL and the RMA are separate, though related, agreements, the RMA’s purported grant of rights did not bind Rey, who was bound only by the grant of rights she endorsed in the RRL and APA. The RRL contained no grant of rights to produce the Houghton Mifflin books, and the APA, which granted the right “to produce books ... of these episodes,” obligated LHP to pay Rey royalties on the books without regard to whether LHP’s investors had recouped their investment on the television film project. Thus, the district court did not err in finding that LHP’s withholding of the Houghton Mifflin book royalties was wrongful, and we affirm its ruling on this point.

2. The Sony Videos.

LHP’s claim to the Sony video royalties is more complicated: assuming the videos were not covered by the contractual clause in the RMA, see supra Part II.A.l., might they nonetheless have been covered by the grant of rights in the RRL, which licensed LHP to produce the 104 episodes “for television viewing ”? The district court thought not: the parties’ “reference to television viewing ... in a licensing agreement ... does not include [video technology] ... which probably was not in existence at the time that the rights were given.”

a. “New Uses” and Copyright Law.

For purposes of the present appeal, we accept the uncontested district court finding that the relevant video technology “was not in existence at the time that the rights” were granted under the RRL in January 1979. Consequently, it must be inferred that the parties did not specifically contemplate television “viewing” of the “Curious George” films in videocassette form at the time the RRL was signed. Such absence of specific intent typifies cases which address “new uses” of licensed materials, i.e., novel technological developments which generate unforeseen applications for a previously licensed work. See Melville B. Nimmer and David Nimmer, 3 Nimmer on Copyright § 10.10[B] at 10-85 (1992) (“Nimmer”) (“the ... fact that we are most often dealing with a later developed technological process (even if it were known in some form at the time of execution) suggests that the parties’ ambiguous phraseology masks an absence of intent rather than a hidden intent which the court simply must ‘find’ ”).

Normally, in such situations, the courts have sought at the outset to identify any indicia of a mutual general intent to apportion rights to “new uses,” insofar as such general intent can be discerned from the language of the license, the surrounding circumstances, and trade usage. See, e.g., Murphy v. Warner Bros. Pictures, Inc., 112 F.2d 746, 748 (9th Cir.1940) (grant of “complete and entire” motion picture rights to licensed work held to encompass later-developed sound motion picture technology); Filmvideo Releasing Corp. v. Hastings, 446 F.Supp. 725 (S.D.N.Y.1978) (author’s explicit retention of “all” television rights to licensed work, in grant of motion picture rights predating technological ad- *1388 vanees permitting movies to be shown on television, included retention of right to show motion picture on television). Where no reliable indicia of general intent are discernible, however, courts have resorted to one of several interpretive methods to resolve the issue on policy grounds.

Under the “preferred” method, see 3 Nimmer at 10-85, recently cited with approval in SAPC, Inc. v. Lotus Development Corp., 921 F.2d 360, 363 (1st Cir.1990), the court will conclude, absent contrary indicia of the parties’ intent, that “the, licensee may properly pursue any uses which may reasonably be said to fall within the medium as described in the license.” 3 Nimmer at 10-86. Under this interpretive method, the courts will presume that at least the possibility of nonspecific “new uses” was foreseeable by the contracting parties at the time the licensing agreement was drafted; accordingly, the burden and risk of drafting licenses whose language anticipates the possibility of any particular “new use” are apportioned equally between licensor and licensee. See, e.g., Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150, 155 (2d Cir.), cert. denied, 393 U.S. 826, 89 S.Ct. 86, 21 L.Ed.2d 96 (1968) (“[i]f the words [of the license] are broad enough to cover the new use, ... the burden of framing and negotiating an exception should fall on the grantor” of the licensed rights).

An alternative interpretive method is to assume that

a license of rights in a given medium {e.g., ‘motion picture rights’) includes only such uses as fall within the unambiguous core meaning of the term ... and excludes any uses which lie within the ambiguous penumbra {e.g., exhibition of motion picture film on television). Thus any rights not expressly (in this case meaning unambiguously) granted are reserved.

See 3 Nimmer at 10-85; see also Bourne Co. v. Walt Disney Co., 1992 Copyr.L.Rep. (CCH) ¶ 26,934, 1992 WL 170686 (S.D.N.Y. 1992) (“if the disputed use was not invented when the parties signed their agreement, that use is not permitted under the contract”). This method is intended to prevent licenseés from “ ‘reappng] the entire windfall’ associated with the new medium,” Cohen v. Paramount Pictures Corp., 845 F.2d 851, 854 (9th Cir.1988) (quoting Neil S. Nagano, Comment, Past Software Licenses and the New Video Software Medium, 29 U.C.L.A.L.Rev. 1160, 1184 (1982)), and is particularly appropriate in situations which involve overreaching or exploitation of unequal bargaining power by a licensee in negotiating the contract. See, e.g., Bartsch, 391 F.2d at 154 & n. 2 (citing Ettore v. Philco Television Broadcasting Corp., 229 F.2d 481 (3d Cir.1956) (suggesting narrow construction where licensor was not “an experienced businessman” and had no “reason to know of the ... potential” for new uses at the time he signed the relevant agreement)). It may also be appropriate where a particular “new use” was completely unforeseeable and therefore could not possibly have formed part of the bargain between the parties at the time of the original grant. Cohen, 845 F.2d at 854; Kirke La Shelle Co. v. Paul Armstrong Co., 263 N.Y. 79, 188 N.E. 163 (1993). Obviously, this method may be less appropriate in arm’s-length transactions between sophisticated parties involving foreseeable technological developments; in such situations, narrow construction of license grants may afford an unjustifiable windfall to the licensor, who would retain blanket rights to analogous “new uses” of copyright material notwithstanding the breadth of the bargained-for grant. See generally 3 Nimmer at 10-85 (“it is surely more arbitrary and unjust to put the onus on the licensee by holding that he should have obtained a further clarification of a meaning which was already present than it is to hold that the licensor should have negated a meaning which the licensee might then or thereafter rely upon.”). 7

*1389 b. Video Technology as “New Use”.

These fine-tuned interpretive methods have led to divergent results in cases considering the extension of television rights to new video forms. Thus, for example, in Rooney v. Columbia Pictures Industries, Inc., 538 F.Supp. 211 (S.D.N.Y.), aff'd, 714 F.2d 117 (2d Cir.1982), cert. denied, 460 U.S. 1084, 103 S.Ct. 1774, 76 L.Ed.2d 346 (1983), the court determined that a series of contracts granting motion picture distributors a general license to exhibit plaintiffs’ films “by any present or future methods or means” and “by any means now known or unknown ” fairly encompassed the right to distribute the films by means of later-developed video technology.

The contracts in question gave defendants extremely broad rights in the distribution and exhibition of pre-1960 films, plainly intending that such rights would be without limitation unless otherwise specified and further indicating that future technological advances in methods of reproduction, transmission and exhibition would inure to the benefit of defendants.

(Emphasis added.) Similarly, in Platinum Record Co. v. Lucasfilm, Ltd., 566 F.Supp. 226, 227 (D.N.J.1983), the court held that videocassette rights were encompassed by a broad synchronization license to “exhibit, distribute, exploit, market, and perform [a motion picture containing licensed musical composition] ... perpetually throughout the world by any means or methods now or hereafter known.” Again, the court rested its holding on the “extremely broad and completely unambiguous” contractual grant of general rights to applications of future technologies, which was held to “preclude[ ] any need in the Agreement for an exhaustive list of specific potential uses of the film.” Id.

By contrast, in Cohen, 845 F.2d at 853-54, the Ninth Circuit concluded that a 1969 contract granting rights to “[t]he exhibition of [a] motion picture [containing a licensed work] ... by means of television,” but containing a broad restriction reserving to the licensor “all rights and uses in and. to said musical composition, except those herein granted,” did not encompass the right to revenues derived -from sales of the film in videocassette form. After deciding that “[t]he general tenor of the [contract] section [in which the granting clause was found] contemplate[d] some sort of broadcasting or centralized distribution, not distribution by sale or rental of individual copies to the general public,” see id. at 853 (emphasis added), the court stressed that the playing- of videocassettes, with their greater viewer control and decentralized access on an individual basis, did not constitute “exhibition” in the sense contemplated by the contract.

Though videocassettes may be exhibited by using a television monitor, it does not follow that, for copyright purposes, playing videocassettes constitutes “exhibition by television.” ... Television requires an intermediary network, station, or cable to send the television signals into consumers’ homes. The menu of entertainment appearing on television is controlled entirely by the intermediary and, thus, the consumer’s selection is limited to what is available on various channels. Moreover, equipped merely with a conventional television set, a consumer has no means of capturing any part of the television display; when the program is over it vanishes, and the consumer is powerless to replay it. Because they originate outside the home, television signals are ephemeral and beyond the viewer’s grasp.

Videocassettes, of course, allow viewing of a markedly different nature.... By their very essence, ... videocassettes liberate viewers from the constraints otherwise inherent in television, and eliminate the involvement of an intermediary, such as a network.

Television and videocassette display thus have very little in common besides the fact that a conventional monitor of a television set may be used both to re *1390 ceive television signals and to exhibit a videocassette. It is in light of this fact that Paramount argues that VCRs are equivalent to “exhibition by means of television.” Yet, even that assertion is flawed. Playing a videocassette on a VCR does not require a standard television set capable of receiving television signals by cable or by broadcast; it is only necessary to have a monitor capable of displaying the material on the magnetized tape.

Id. at 853-54.

Most recently, in Tele-Pac, Inc. v. Grainger, 168 A.D.2d 11, 570 N.Y.S.2d 521, appeal dismissed, 79 N.Y.2d 822, 580 N.Y.S.2d 201, 588 N.E.2d 99 (1991), the court held (one judge dissenting) that a license to distribute certain motion pictures “for broadcasting by television or any other similar device now known or hereafter to be made known” did not encompass the videocassette film rights. “Transmission of sound and images from a point outside the home for reception by the general public ... is implicit in the concept of ‘broadcasting by television.’ Conversely, while one may speak of ‘playing,’ ‘showing,’ ‘displaying,’ or even perhaps ‘exhibiting’ a videotape, we are unaware of any usage of the term ‘broadcasting’ in that context.” Id. 570 N.Y.S.2d at 523 (emphasis added).

c. Video Rights and the RRL.

Although the question is extremely close, under the interpretive methodology outlined above we conclude that the RRL’s grant of rights to the 104 film episodes “for television viewing” did not encompass the right to distribute the “Curious George” films in videocassette form.

First, unlike the contracts in