Nancey Silvers v. Sony Pictures Entertainment, Inc.

May an assignee who holds an accrued claim for copyright infringement, but who has no legal or beneficial interest in the copyright itself, institute an action for infringement? After analyzing the 1976 Copyright Act and its history, as well as the scant, although persuasive, precedent that is available in analogous situations, we answer that question "no." Accordingly, we reverse the ruling of the district court, which allowed this action by the assignee to proceed.

Nancey Silvers wrote the script of a made-for-television movie called "The Other Woman." Although Silvers wrote "The Other Woman" script, she did not hold the copyright, because "The Other Woman" was a work-for-hire that Silvers completed for Frank & Bob Films II, aka Von Zerneck/Sertner Films ("Frank & Bob Films"). Frank & Bob Films was the original owner of the copyright to "The Other Woman," and remains so today.

About three years after "The Other Woman" aired on a broadcast network, Sony Pictures Entertainment, Inc., released the motion picture "Stepmom." After the release of "Stepmom," Frank & Bob Films executed an "Assignment of Claims and Causes of Action" in favor of Silvers. Frank & Bob Films retained ownership of the underlying copyright to "The Other Woman" script, but assigned to Silvers "all right, title and interest in and to any claims and causes of action against Sony Pictures Entertainment, Inc., Columbia TriStar, and any other appropriate persons or entities, with respect to the screenplay `The Other Woman' ... and the motion picture `Stepmom.'"

Silvers then filed a complaint against Sony for copyright infringement, alleging that the movie "Stepmom" was substantially similar to the script for "The Other Woman." Sony moved to dismiss on the ground that Silvers lacked standing to bring an action for copyright infringement in the absence of some legal or beneficial ownership in the underlying copyright. The district court denied the motion and certified the issue for interlocutory appeal. See 28 U.S.C. § 1292(b) (providing procedure).

A panel of this court affirmed the district court's decision. Silvers v. Sony Pictures Entm't, Inc., 330 F.3d 1204 (9th Cir.2003). The court then voted to take this case en banc, 370 F.3d 1252 (9th Cir.2004), withdrawing that opinion.

We review de novo the district court's denial of Sony's motion to dismiss. Glen Holly Entm't v. Tektronix Inc., 352 F.3d 367, 368 (9th Cir.2003). Likewise, we review de novo the district court's resolution of legal issues. Cal. Satellite Sys. v. Seimon, 767 F.2d 1364, 1366 (9th Cir.1985).

Article I, section 8, clause 8, of the Constitution states: "The Congress shall have Power ... To promote the Progress of Science and useful Arts by securing for limited Times to Authors ... the exclusive Right to their ... Writings...." As is clear from its text, that clause of the Constitution grants no substantive protections to authors. Rather, Congress is empowered to provide copyright protection.

Copyright, therefore, is a creature of statute, and the only rights that exist under copyright law are those granted by statute. As the Supreme Court wrote 170 years ago:

This right [in copyright] ... does not exist at common law-it originated, if at all, under the acts of congress. No one can deny that when the legislature are about to vest an exclusive right in an author or an inventor, they have the power to prescribe the conditions on which such right shall be enjoyed....

Wheaton v. Peters, 33 U.S. (8 Pet.) 591, 663-64, 8 L.Ed. 1055 (1834); see also Stewart v. Abend, 495 U.S. 207, 251, 110 S.Ct. 1750, 109 L.Ed.2d 184 (1990) (Stevens, J., dissenting) (stating that copyright is statutorily created); M. Kramer Mfg. Co. v. Andrews, 783 F.2d 421, 432 (4th Cir.1986) ("The right of copyright is a creature of federal statute, with its constitutional base in Article I, § 8, cl. 8."); Russell v. Price, 612 F.2d 1123, 1129 n. 17 (9th Cir.1979) ("Common-law copyright is no longer recognized under the [1976] Act...."); Microsoft Corp. v. Grey Computer, 910 F.Supp. 1077, 1084 (D.Md.1995) ("Unlike contracts, copyrights and the rights flowing therefrom are entirely creatures of statute...."). Accordingly, our starting point is the statute.

Section 501(b) of the 1976 Copyright Act establishes who is legally authorized to sue for infringement of a copyright:

The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it.

17 U.S.C. § 501(b) (emphasis added). The meaning of that provision appears clear. To be entitled to sue for copyright infringement, the plaintiff must be the "legal or beneficial owner of an exclusive right under a copyright." See 4 Business and Commercial Litigation in Federal Courts, at 1062, § 65.3(a)(4) (Robert L. Haig ed.) (West Group & ABA 1998) ("If a claimant is not a proper owner of copyright rights, then it cannot invoke copyright protection stemming from the exclusive rights belonging to the owner, including infringement of the copyright.").

Section 106 of the 1976 Copyright Act, in turn, defines "exclusive rights":

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

17 U.S.C. § 106. The right to sue for an accrued claim for infringement is not an exclusive right under § 106. Section 201(d) refers to exclusive rights and provides:

(1) The ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will or pass as personal property by the applicable laws of intestate succession.

(2) Any of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by section 106, may be transferred as provided by clause (1) and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title.

17 U.S.C. § 201(d). Exclusive rights in a copyright may be transferred and owned separately, but § 201(d) creates no exclusive rights other than those listed in § 106, nor does it create an exception to § 501(b).

Section 501(b) must also be read in conjunction with § 501(a), which provides that one who "violates any of the exclusive rights of the copyright owner as provided by sections 106 through 122 ... is an infringer." The definition of an infringer in subsection (a) is parallel to the definition of a proper plaintiff in subsection (b). Common to both subsections is an exclusive copyright interest.

In addition, when a copyright interest is transferred it must be recorded to protect the copyright holder's right to bring an infringement suit. 17 U.S.C. § 205(d); see H.R.Rep. No. 94-1476, at 129 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5744 ("The provisions of subsection (d)[ ] requir[e] recordation of transfers as a prerequisite to the institution of an infringement suit...."). This requirement ensures that prospective buyers or transferees have notice of the copyright interests owned by others. See H.R.Rep. No. 94-1476, at 128, reprinted in 1976 U.S.C.C.A.N. at 5744 (stating that a copyright recorded in compliance with subsection (c) provides constructive notice of its contents). By contrast, the recording statute does not contemplate a transfer of anything other than an ownership interest in the copyright, along with the concomitant exclusive rights.

Returning to the operative section, under § 501(b) the plaintiff must have a legal or beneficial interest in at least one of the exclusive rights described in § 106. Additionally, in order for a plaintiff to be "entitled ... to institute an action" for infringement, the infringement must be "committed while he or she is the owner of" the particular exclusive right allegedly infringed. 17 U.S.C. § 501(b).

The statute does not say expressly that only a legal or beneficial owner of an exclusive right is entitled to sue. But, under traditional principles of statutory interpretation, Congress' explicit listing of who may sue for copyright infringement should be understood as an exclusion of others from suing for infringement. The doctrine of expressio unius est exclusio alterius"as applied to statutory interpretation creates a presumption that when a statute designates certain persons, things, or manners of operation, all omissions should be understood as exclusions." Boudette v. Barnette, 923 F.2d 754, 756-57 (9th Cir.1991).

There are two particularly important reasons to apply such a presumption here. First, we are mindful of the principle with which we began our discussion: Copyright is a creature of statute, so we will not lightly insert common law principles that Congress has left out. Second, the durational limitation in § 501(b) shows that Congress restricted even the legal or beneficial owner of a copyright; the owner is not entitled to sue unless the alleged infringement occurred "while he or she [was] the owner of it." In other words, Congress' grant of the right to sue was carefully circumscribed.

We think the meaning of § 501(b) is clear, but we recognize that its omission explicitly to address the present question may create an ambiguity. Therefore, we consult legislative history. See United States v. Daas, 198 F.3d 1167, 1174 (9th Cir.1999) ("The first step in ascertaining congressional intent is to look to the plain language of the statute.... If the statute is ambiguous ... courts may look to its legislative history for evidence of congressional intent.").

The 1976 Copyright Act was the result of 15 years of drafting, deliberations, and compromise. See H.R.Rep. No. 94-1476. The House Report suggests strongly that Congress intended to limit the class of persons who may sue for infringement:

Subsection (b) of section 501 enables the owner of a particular right to bring an infringement action in that owner's name alone, while at the same time insuring to the extent possible that the other owners whose rights may be affected are notified and given a chance to join the action.

The first sentence of subsection (b) empowers the "legal or beneficial owner of an exclusive right" to bring suit for "any infringement of that particular right committed while he or she is the owner of it." A "beneficial owner" for this purpose would include, for example, an author who had parted with legal title to the copyright in exchange for percentage royalties based on sales or license fees.

H.R.Rep. No. 94-1476, at 159, reprinted in 1976 U.S.C.C.A.N. at 5775 (emphasis added). Non-owners claiming a bare right to sue, such as Silvers, are not entitled to notice or joinder, which suggests that Congress did not envision their existence, or that the right to sue was a right severable from ownership of one of the authorized exclusive rights.

In other words, Congress wanted to ensure that an owner of any exclusive right in the copyright was entitled to bring a suit for infringement. Congress foresaw a permissible division of exclusive rights; the owner of any one of those exclusive rights may sue, with other owners being entitled to notice and joinder. In this sense, Congress intended to "unbundle" the exclusive rights.

Under the 1909 Copyright Act, which was the predecessor of the Copyright Act of 1976, a copyright "proprietor" was the only individual who had standing to sue for an infringement. 17 U.S.C. § 101(b) (1952); Gardner v. Nike, Inc., 279 F.3d 774, 777-78 (9th Cir.2002). Courts interpreted the 1909 statute as providing a proprietor with an indivisible bundle of rights arising from a copyright — rights that could not be assigned piecemeal. Id. at 778. This enforced unity of rights created serious hardships for copyright holders who were interested in assigning the various property rights arising from a copyright separately, for instance selling the motion picture rights in a novel separately from the right to print the novel in book form. See Roger D. Blair & Thomas F. Cotter, The Elusive Logic of Standing Doctrine in Intellectual Property Law, 74 Tul. L.Rev. 1323, 1366-67 (2000) (discussing history). Congress, aware of these constraints on commercial dealings, largely dispensed with the doctrine of indivisibility in the Copyright Act of 1976. Id.; see also H.R.Rep. No. 94-1476, at 123, reprinted in 1976 U.S.C.C.A.N. at 5738-39 (noting that the right to assign separate property interests in a copyright had "long been sought by authors and their representatives" and had "attracted wide support from other groups"). Although Congress allowed for divisibility of ownership interests under a copyright, it did not alter the requirement that only owners of an exclusive right in the copyright could bring suit.

The legislative history makes clear, too, that the list of exclusive rights found in § 106 is exhaustive. The House Report states:

The exclusive rights accorded to a copyright owner under section 106 are "to do and to authorize" any of the activities specified in the five numbered clauses.

H.R.Rep. No. 94-1476, at 61, reprinted in 1976 U.S.C.C.A.N. at 5674. If a right is not "specified," then it is not one of the exclusive rights granted by Congress. The House Report that deals with the exclusive rights provided in § 106 also explains that "[e]ach of the five enumerated rights may be subdivided indefinitely and, ... in connection with section 201 [governing transfer of rights], each subdivision of an exclusive right may be owned and enforced separately." Id. (emphasis added). In other words, exclusive rights may be chopped up and owned separately, and each separate owner of a subdivided exclusive right may sue to enforce that owned portion of an exclusive right, no matter how small. For instance, A may own the copyright in a book, while B may own the right to develop the book into a screenplay. A may sue an infringer of the book; B may sue an infringer of the screenplay. But only owners of an exclusive right in a copyright may sue. For instance, neither A nor B in the example above could assign an accrued claim for copyright infringement to C if C had no legal or beneficial interest in the copyright.

We have long noted the strong connection between copyright and patent law: "Where precedent in copyright cases is lacking, it is appropriate to look for guidance to patent law `because of the historic kinship between patent law and copyright law.'" Harris v. Emus Records Corp., 734 F.2d 1329, 1333 (9th Cir.1984) (quoting Sony Corp. of Am. v. Universal City Studios, 464 U.S. 417, 439, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984)); see also Gardner, 279 F.3d at 780-81 (relying in part on patent law to hold that rights under an exclusive copyright license could not be assigned without the original licensor's consent and holding that assignee lacked standing to sue). Although the Supreme Court has not addressed the issue at hand, it has addressed the question whether a bare assignment can give rise to a cause of action in the context of patent law.

The Patent Act of 1952 provides that "[a] patentee shall have remedy by civil action for infringement of his patent." 35 U.S.C. § 281 (1988). Like the 1976 Copyright Act, the Patent Act does not explicitly forbid an assignment of causes of action separate from an assignment of substantive rights in the protected work. Nonetheless, the Supreme Court has interpreted the Patent Act to provide that only a holder of patent rights may sue.

In Crown Die & Tool Co. v. Nye Tool & Machine Works, 261 U.S. 24, 26, 33-35, 43 S.Ct. 254, 67 L.Ed. 516 (1923), the Supreme Court considered whether a patent holder could assign its claims for infringement to another party without also transferring rights in the patent. Like the 1976 Copyright Act, the Patent Act that was in force at the time the Supreme Court decided Crown Die did not explicitly forbid the assignment of bare causes of action for infringement:

Every patent or any interest therein shall be assignable in law by an instrument in writing, and the patentee or his assigns or legal representatives may in like manner grant and convey an exclusive right under his patent to the whole or any specified part of the United States.

Pub.L. No. 147, § 6, 42 Stat. 389, 391 (1922) (amending R.S. § 4849). Nevertheless, the Supreme Court held that a bare assignment cannot give rise to a cause of action for infringement. The Court expressed its holding in durational terms that echo 17 U.S.C. § 501(b): "If the owner of the patent when the infringements took place has assigned his patent to one, and his claims for damages for infringement to another, then the latter cannot sue at law at all but must compel his assignor of the claims to sue for him." Id. at 44, 43 S.Ct. 254. The Court reasoned:

"The [patent] monopoly did not exist at common law, and the rights, therefore, which may be exercised under it cannot be regulated by the rules of the common law. It is created by the act of Congress; and no rights can be acquired in it unless authorized by statute, and in the manner the statute prescribes."

Id. at 40, 43 S.Ct. 254 (quoting Gayler v. Wilder, 51 U.S. (10 How.) 477, 494, 13 L.Ed. 504 (1850)). That text is substantively identical to the Court's expression of the nature of copyright in Wheaton, 33 U.S. at 663-64:

This right [in copyright] ... does not exist at common law — it originated, if at all, under the acts of congress. No one can deny that when the legislature are about to vest an exclusive right in an author or an inventor, they have the power to prescribe the conditions on which such right shall be enjoyed....

Crown Die effectively creates a presumption that, when we consider standing under a statutory scheme involving intellectual property, common law doctrine does not apply.

Courts continue to read the patent statute to mean that, in general, only a patentee (or an exclusive licensee who possesses all substantial rights in the patent) may institute an action for infringement. See Prima Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1381 (Fed.Cir.2000) ("Standing to sue for infringement depends entirely on the putative plaintiff's proprietary interest in the patent, not on any contractual arrangements among the parties regarding who may sue and who will be bound by judgments.... [A]'right to sue' clause cannot confer standing on a bare licensee...."); Ortho Pharm. Corp. v. Genetics Inst., Inc., 52 F.3d 1026, 1030 (Fed.Cir.1995) ("Thus, the statute requires that the parties to an infringement suit will have the patentee on one side and the accused infringer on the other. Without the patentee as plaintiff, the remedies provided in the patent statute are unavailable except in extraordinary circumstances as where the patentee is the infringer, and cannot sue himself." (internal quotation marks omitted)).

We should interpret the Copyright Act consistently with the requirement of the Patent Act. Despite the differences between patents and copyrights, and between the statutes governing them, the common question is whether a substantive, exclusive right to intellectual property may be divorced from a cause of action for infringement of that substantive right. Under both copyright and patent law, substantive rights are assignable; the question whether those rights are severable from the entitlement to sue someone for infringing those rights requires a similar analysis. Crown Die rejected the centerpiece of the district court's reasoning here, viz.: that because Congress did not expressly proscribe the right to assign a cause of action alone, such a right must exist. Instead, the Court used the same logic that we have applied: No rights exist with respect to patents unless they are created affirmatively by Congress, and courts may recognize only those rights that appear in the statute.

Last but not least, we turn for guidance to the case law of other courts. Two other circuits have faced questions somewhat similar to the one we confront here. We find the Fifth Circuit's decision under the 1909 Copyright Act to be less persuasive than the Second Circuit's more recent opinion under the 1976 Copyright Act.

In Prather v. Neva Paperbacks, Inc., 410 F.2d 698, 699 (5th Cir.1969), an author's publisher assigned to the author both the copyright to the author's work and the accrued causes of action related to the work. When the author sued the publisher for copyright infringement, the publisher claimed that the author lacked standing to sue. Id. The Fifth Circuit disagreed and held that the publisher clearly had transferred the right to sue to the author; the author, therefore, could maintain an action for infringement. Id. at 700.

Prather is unhelpful authority for two reasons. First, it was decided before the 1976 Copyright Act was enacted and thus does not bear on how we should interpret § 501(b). The predecessor to the 1976 Act, the 1909 Act, simply afforded the "proprietor" of a copyright the right to sue for infringement. 17 U.S.C. § 101(b) (1952); see also Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 132 (1976). The 1909 Act did not define "proprietor" or "exclusive rights," nor did it provide that "legal or beneficial owners" of exclusive rights were entitled to sue for infringement. 17 U.S.C. § 101(b) (1952). Those features, missing in the 1909 Act, but present in the 1976 Act, are central to a decision on the present question.

Second, the assignment in Prather involved both accrued causes of action and some of what we now would call exclusive rights. The contract included an assignment of "all... right, title and interest in and to the copyright" of the book involved. Prather, 410 F.2d at 699 n. 1. Therefore, the Prather court was not faced, as we are, with a situation in which the owner of all the exclusive rights and the owner of the accrued causes of action are two different people.

The Second Circuit came to a different conclusion under the 1976 Copyright Act. In Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27 (2d Cir.1982), superseded by rule and statute on other grounds, the court held that one who owns no exclusive right in a copyright may not sue for infringement. The court explained:

Eden apparently believed that a third basis for standing under the Copyright Act existed, namely authorization by the copyright holder of suit by a person other than an exclusive licensee. Clause 9 of the 1975 Eden/Paddington agreement ... contemplates such an arrangement. We do not believe that the Copyright Act permits holders of rights under copyrights to choose third parties to bring suits on their behalf. While F.R. Civ. P. 17(a) ordinarily permits the real party in interest to ratify a suit brought by another party, the Copyright Law is quite specific in stating that only the "owner of an exclusive right under a copyright" may bring suit.

Id. at 32 n. 3 (citations omitted).

It is not entirely clear whether the copyright holder in Eden Toys had granted to Eden the right to sue on accrued causes of action, as is the case here, or only the right to sue prospectively. Whether the assignment was prospective or retrospective, however, the court made plain the basic principle, which we also have derived from § 501(b) and its context and history, that only the owner of an exclusive right under the copyright is entitled to sue for infringement.

A few years later, the Second Circuit decided ABKCO Music, Inc. v. Harrisongs Music, Ltd., 944 F.2d 971, 980 (2d Cir.1991), a copyright case in which ABKCO had bought both the copyright to a song and"any and all rights assertable under copyright against the Infringing Composition in any part of the world which may have heretofore arisen or which may hereafter arise." (Internal quotation marks omitted.) Although the infringement in question had occurred before ABKCO bought the copyright, the court held that ABKCO could sue the infringer "not out of its ownership of the copyright, but from its ownership of the claims themselves which it purchased, along with the copyright, in 1978." Id. at 981. The Second Circuit made clear that its decision was limited to the situation in which the same entity purchased both the copyright and accrued claims;1 the only issue was one of timing, whether ownership of the copyright and occurrence of the infringement had to coincide. The court reaffirmed the principle of Eden Toys that a party that has no ownership interest has no standing to sue; "the Copyright Act does not permit copyright holders to choose third parties to bring suits on their behalf." Id. at 980.

We think it important to parallel the Second Circuit for two reasons. First, and more importantly, our independent analysis leads us to the same conclusion. Second, the creation of a circuit split would be particularly troublesome in the realm of copyright.2 The Supreme Court has noted "Congress' paramount goal in revising the 1976 Act of enhancing predictability and certainty of copyright ownership." Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 749, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989). As we have phrased it, "[c]ongressional intent to have national uniformity in copyright laws is clear." Syntek Semiconductor Co. v. Microchip Tech. Inc., 307 F.3d 775, 781 (9th Cir.2002). That admonition makes sense, given the nature of intellectual property. Inconsistent rules among the circuits would lead to different levels of protection in different areas of the country, even if the same alleged infringement is occurring nationwide.

The bare assignment of an accrued cause of action is impermissible under 17 U.S.C. § 501(b). Because that is all Frank & Bob Films conveyed to Silvers, Silvers was not entitled to institute and may not maintain this action against Sony for alleged infringement of the copyright in "The Other Woman."

REVERSED.

BERZON, Circuit Judge, with whom REINHARDT, Circuit Judge, joins, dissenting:

I respectfully dissent. Applying the usual mode of analysis used in this circuit for determining whether a statute allows assignment of claims, I would conclude that Nancey Silvers, as the original creator of "The Other Woman," should be allowed to pursue the accrued causes of action that Frank & Bob Films II assigned to her.

Section 501(b) of the 1976 Copyright Act establishes the standing requirement for infringement actions:

The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it.

17 U.S.C. § 501(b). The majority relies on the notion that "[t]he meaning of that provision appears clear," ante at 884, to conclude that the assignment to Silvers is invalid because she does not own an exclusive right under the copyright. Ante at 890.

The majority opinion, however, is internally inconsistent, provides inadequate support for its conclusion, and ignores our analogous precedents.

1. The inconsistency turns on the majority's citation of § 501(b)'s durational limitation, i.e., that the owner is not entitled to sue unless the alleged infringement occurred "while he or she [was] the owner of [the copyright right]," as evidence of Congress's tight circumscription of persons who have standing to sue. Ante at 885-86. The majority maintains that "Congress' explicit listing of who may sue for copyright infringement should be understood as an exclusion of others from suing for infringement." Ante at 885.

As the majority later acknowledges, however, the durational limitation is hardly airtight. After a copyright holder sells a copyright, in whole or in part, the new owner may pursue a cause of action that accrued before purchase, as long as the cause of action is transferred along with the copyright. Ante at 890, fn. 1. The majority maintains that this "makes perfect sense," because "[w]hen one acquires a copyright that has been infringed, one is acquiring a copyright whose value has been impaired," and "[c]onsequently, to receive maximum value for the impaired copyright, one must also convey the right to recover the value of the impairment by instituting a copyright action." Ante at 890, fn. 1.

However practical this analysis, the fact remains that it cannot be squared with a literal reading of section 501(b), on which the majority otherwise rests. And, as the language of section 501(b) is not necessarily determinative in deciding the viability of assignments of accrued rights to sue for copyright infringement, section 501(b) cannot, absent further analysis, dictate th