16-134-cv
TCA Television Corp. v. McCollum
In the
United States Court of Appeals
For the Second Circuit
________________
August Term, 2015
(Argued: June 23, 2016 Decided: October 11, 2016)
Docket No. 16‐134‐cv
________________
TCA TELEVISION CORP., HI NEIGHBOR, DIANA ABBOTT COLTON,
Plaintiffs‐Appellants,
—v.—
KEVIN MCCOLLUM, ROBERT ASKINS, DOES, ABC COMPANIES, 1‐10, HAND TO GOD
LLC, THE ENSEMBLE STUDIO THEATER, INC., MANHATTAN CLASS COMPANY, INC.,
Defendants‐Appellees,
BROADWAY GLOBAL VENTURES, CMC, MORRIS BERCHARD, MARIANO V.
TOLENTINO, JR., STEPHANIE KRAMER, LAMS PRODUCTIONS, INC., DESIMONE
WINKLER, JOAN RAFFE, JHETT TOLENTINO, TIMOTHY LACZYNSKI, LILY FAN, AYAL
MIODOVNIK, JAM THEATRICALS LTD., KEY BRAND ENTERTAINMENT INC.,
Defendants.
________________
1
Before:
JACOBS, CALABRESI, RAGGI, Circuit Judges.
________________
On appeal from a judgment entered in the Southern District of New York
(Daniels, J.) dismissing an action for copyright infringement by the heirs of
William “Bud” Abbott and Lou Costello, plaintiffs challenge the district court’s
determination, made as a matter of law on a Rule 12(b)(6) motion, that
defendants’ verbatim use of a portion of Abbott and Costello’s iconic comedy
routine, Who’s on First?, in the recent Broadway play Hand to God, qualified as
a non‐infringing fair use. Defendants defend the district court’s fair use ruling,
and further argue that dismissal is supported, in any event, by plaintiffs’ failure
to plead a valid copyright interest. We here conclude that defendants’
appropriation of Who’s on First? was not a fair use, but, nevertheless, affirm the
challenged judgment on defendants’ alternative invalidity ground.
AFFIRMED.
________________
JONATHAN D. REICHMAN (Jonathan W. Thomas, on the brief), Kenyon
& Kenyon LLP, New York, New York, for Plaintiffs‐Appellants.
MARK J. LAWLESS, Law Office of Mark J. Lawless, New York,
New York, for Defendants‐Appellees.
________________
2
REENA RAGGI, Circuit Judge:
In this action for copyright infringement, plaintiffs, successors‐in‐interest
to the estates of William “Bud” Abbott and Lou Costello, appeal from a
judgment of dismissal entered in the United States District Court for the
Southern District of New York (George B. Daniels, Jr., Judge) in favor of
defendants, who include the producers of Hand to God and the play’s author,
Robert Askins. See TCA Television Corp. v. McCollum, 151 F. Supp. 3d 419
(S.D.N.Y. 2015). Plaintiffs assert that the district court erred in concluding from
the amended complaint that defendants’ use of a portion of the iconic Abbott and
Costello comedy routine, Who’s on First?, in Act I of Hand to God was so
transformative as to establish defendants’ fair use defense as a matter of law. See
Fed. R. Civ. P. 12(b)(6). Defendants here not only defend the district court’s fair
use determination but also argue that affirmance is warranted, in any event, by
plaintiffs’ failure to plead a valid copyright interest. The district court rejected
3
that argument. See TCA Television Corp. v. McCollum, 151 F. Supp. 3d at 430–
31.1
For the reasons explained herein, we conclude that defendants’ verbatim
incorporation of more than a minute of the Who’s on First? routine in their
commercial production was not a fair use of the material. Nevertheless, we
affirm dismissal because plaintiffs fail plausibly to allege a valid copyright
interest.
I. Background
The following facts derive from plaintiffs’ amended complaint,
incorporated exhibits, and documents susceptible to judicial notice. See Goel v.
Bunge, Ltd., 820 F.3d 554, 559 (2d Cir. 2016) (acknowledging that, on motion to
dismiss, courts may consider documents appended to or incorporated in
complaint and matters of which judicial notice may be taken); Island Software &
1 Defendants do not cross‐appeal the district court’s denial of dismissal on the
ground of copyright invalidity; rather, they argue it as an alternative ground for
affirmance, even if plaintiffs’ fair use challenge prevails. In this opinion, we first
address plaintiffs’ challenge to the fair use determination supporting dismissal
because if we were to identify no error in that ruling there would be no need to
consider defendants’ proposed alternative ground for affirmance.
4
Comput. Serv., Inc. v. Microsoft Corp., 413 F.3d 257, 261 (2d Cir. 2005) (stating
that court may take judicial notice of copyright registrations). For purposes of
this appeal, we presume these facts to be true. See Anschutz Corp. v. Merrill
Lynch & Co., 690 F.3d 98, 102 (2d Cir. 2012).
A. Abbott and Costello’s Who’s on First? Routine
Abbott and Costello were a popular mid‐Twentieth Century comedy duo.
One of their routines, commonly referred to as Who’s on First? (also, the
“Routine”), has become a treasured piece of American entertainment history.2
The Routine’s humor derives from misunderstandings that arise when Abbott
announces the roster of a baseball team filled with such oddly named players as
“Who,” “What,” and “I Don’t Know.” A rapid‐fire exchange reveals that “who’s
on first” need not be a question. It can be a statement of fact, i.e., a player named
“Who” is the first baseman. Later parts of the routine reveal, after similar comic
misunderstandings, that a player named “What” is the second baseman, and one
named “I Don’t Know” is the third baseman.
2 In 1999, Time magazine named the Routine the best comedy sketch of the
Twentieth Century. See Am. Compl. ¶ 37; Best of the Century, Time, December
31, 1999, at 73.
5
B. Agreements Pertaining to Rights in the Routine
The parties cite various contracts and copyright filings spanning more than
40 years as relevant to claimed rights in the Routine.
1. Abbott and Costello’s Agreements with UPC
a. The July 1940 Agreement
Abbott and Costello first performed Who’s on First? in the late 1930s,
notably on a 1938 live radio broadcast of The Kate Smith Hour. The Routine was
published for purposes of federal copyright law when Abbott and Costello
performed a version of it in their first motion picture, One Night in the Tropics
(“Tropics”).3
The team appeared in Tropics pursuant to a July 24, 1940 contract (the
“July Agreement”) with Universal Pictures Company, Inc. (“UPC”). The July
Agreement guaranteed Abbott and Costello a minimum of five weeks’ work at a
3 Viewing the facts in the light most favorable to plaintiffs, the district court
discussed in some detail why (1) before Tropics’s release, the Routine was
protected by common law copyright; and (2) the movie’s release could constitute
“publication” of the Routine, extinguishing any common law right and requiring
registration and deposit with the federal Copyright Office to claim any statutory
copyright protection. See TCA Television Corp. v. McCollum, 151 F. Supp. 3d at
427–30.
6
pay rate of $3,500 per week. In turn, Abbott and Costello (the “Artists”) agreed
to grant UPC (the “Producer”) certain rights and to furnish it with certain items.
We reproduce the relevant text here, adding bracketed signals and highlighting
to distinguish various provisions:
[1] The Artists expressly give and grant to the Producer
the sole and exclusive right to photograph and/or
otherwise reproduce any and all of their acts, poses,
plays and appearances of any and all kinds during the
term hereof, and [2] further agree [a] to furnish to the
Producer, without charge to it, the material and routines
heretofore used and now owned by the Artists for use
by the Producer in the photoplay in which they appear
hereunder and for which the Producer shall have the
exclusive motion picture rights, and [b] to record their
voices and all instrumental, musical and other sound
effects produced by them, and [c] to reproduce and/or
transmit the same, either separately or in conjunction
with such acts, poses, plays and appearances as the
Producer may desire, and further [3] give and grant to
the Producer solely and exclusively all rights of every
kind and character whatsoever in and to the same, or
any of them, perpetually, including as well the
perpetual right to use the names of the Artists and
pictures or other reproductions of the Artists’ physical
likenesses, and recordations and reproductions of the
Artists’ voices, in connection with the advertising and
exploitation thereof.
J.A. 168–69.
7
b. The November 1940 Agreement
On November 6, 1940, only days before Tropics’s public release, Abbott
and Costello entered into a new multi‐year/multi‐picture agreement with UPC
(the “November Agreement”).4 That contract terminated the July Agreement
without prejudice to, among other things, UPC’s “ownership . . . of all rights
heretofore acquired,” including those “in or to any . . . material furnished or
supplied by the Artists.” Id. at 162. In the November Agreement, Abbott and
Costello agreed “to furnish and make available to the Producer all literary and
dramatic material and routines heretofore used by the Artists either on the radio
or otherwise and now owned by the Artists,” and acknowledged that “the
Producer shall have the right to use said material and routines to such extent as
the Producer may desire in connection with any photoplay in which the Artists
4 Plaintiffs’ amended complaint cites only the November Agreement with UPC as
the relevant contract. See Am. Compl. ¶ 43. By the time that agreement was
signed, however, Abbott and Costello presumably had already finished their
work on Tropics—including any additions to the Routine reflected in that movie.
Thus, it would appear that the team’s work on Tropics was pursuant to the July
Agreement, discussed supra at I.B.1.a. The discrepancy does not affect our
analysis here because, in the district court, defendants conceded that, at least for
purposes of their motion to dismiss, the July Agreement had “in effect, been
pleaded” by plaintiffs in support of their claim. Sept. 9, 2015 Hr’g Tr. 2–3.
8
render their services hereunder and in connection with the advertising and
exploitation of such photoplay.” Id. at 129. Abbott and Costello agreed that they
would “not use or license, authorize or permit the use of any of the material
and/or routines” so referenced “in connection with motion pictures” by others
than UPC for specified times. Id. Nevertheless, they reserved the right to use
materials and routines created by them (without the assistance of UPC writers)
“on the radio and in personal appearances.” Id. at 129–30.
2. UPC Registers a Copyright for Tropics
In November 1940, UPC registered a copyright for Tropics with the United
States Copyright Office, which it renewed in December 1967. See id. at 36, 39–40.
3. UPC Uses an Expanded Version of the Routine in The Naughty
Nineties and Registers a Copyright for that Movie
In 1945, Abbott and Costello performed an expanded version of Who’s on
First? in another movie for UPC, The Naughty Nineties. That version maintains
the core of the Routine—with “Who” on first base, “What” on second, and “I
Don’t Know” on third—but several new players take the field: left fielder “Why,”
center fielder “Because,” pitcher “Tomorrow,” catcher “Today,” and shortstop “I
Don’t Care.”
9
In June 1945, UPC registered a copyright for The Naughty Nineties with
the United States Copyright Office, which it renewed in 1972. See id. at 37, 41–
42; Am. Compl. ¶ 45.5
4. The 1944 Copyright Registration for “Abbott and Costello
Baseball Routine”
In April 1944, a work entitled “Abbott and Costello Baseball Routine” was
registered with the Copyright Office “in the name of Bud Abbott and Lou
Costello, c/o Writers War Board.” J.A. 114. The certificate indicates that this
“Baseball Routine” was published on “March 13, 1944” in “‘Soldier Shows,’ No.
19.” Id.6 The record suggests that this registration was not renewed, prompting
the Copyright Office to conclude that the work had entered the public domain in
5 By operation of the Sonny Bono Copyright Term Extension Act, Pub. L. No.
105–298, 112 Stat. 2827 (1998), the renewal term for Tropics will not expire until
2035 and that for The Naughty Nineties will not expire until 2040. See 17 U.S.C.
§ 304(b).
6 The George Mason University Libraries, in their “Guide to the John C. Becher
Soldier Show Collection, 1940‐1953,” indicates that “Soldier Shows” refers to
entertainments “made by soldiers for soldiers,” with the object of “mass
participation” to raise morale. J.A. 208–09. Because the record here is devoid of
any information about either Soldier Shows generally or Soldier Shows, No. 19 in
particular, we make no assumptions about the content of the material that is the
subject of the 1944 copyright registration.
10
1972, and, on that ground, to reject a 1984 application for a derivative work
registration filed by the children of Abbott and Costello based on the 1944
registration.
5. The 1984 Quitclaim Agreement
Plaintiffs do not rely on the 1944 registration to support their copyright
claim here. Rather, they claim to have succeeded to UPC’s copyright interests in
the Routine as performed in Tropics and The Naughty Nineties based on a
quitclaim agreement dated March 12, 1984 (the “Quitclaim”).
In the Quitclaim, which was subsequently recorded with the Copyright
Office, UPC’s successor‐in‐interest, Universal Pictures (“Universal”), granted
Abbott & Costello Enterprises (“A & C”), a partnership formed by the heirs of
Abbott and Costello,7 “any and all” of Universal’s rights, title, and interest in the
Routine. Id. at 45. Universal stated that it did so relying upon A & C’s
representation that it was “a partnership composed of the successors in interest
7 Bud Abbott died in 1974; Lou Costello died in 1959. See Bud Abbott, Straight
Man to Lou Costello, Is Dead, N.Y. Times, April 25, 1974, at 42; Lou Costello, 52,
Dies on Coast; Comic Had Teamed with Abbott, N.Y. Times, Mar. 4, 1959, at 31.
11
to the late Bud Abbott and Lou Costello” and, therefore, “the owner of copyright
in and to the Routine.” Id. at 46.
A & C dissolved in 1992, with 50% of its assets transferred to TCA
Television Corporation, a California entity owned by Lou Costello’s heirs, and
the other 50% divided evenly between Bud Abbott’s heirs, Vickie Abbott
Wheeler and Bud Abbott, Jr. Wheeler would later transfer her 25% interest to a
California partnership, Hi Neighbor, and Abbott, Jr. would transfer his 25%
interest to Diana Abbott Colton. It is by operation of the Quitclaim and the
referenced dissolution and transfer agreements that plaintiffs TCA Television, Hi
Neighbor, and Colton now claim a copyright interest in Who’s on First?.
C. Hand to God
As described in the amended complaint, Hand to God (the “Play”) is “a
dark comedy about an introverted student in religious, small‐town Texas who
finds a creative outlet and a means of communication through a hand puppet,
wh[ich] turns into his evil or devilish persona.” Am. Compl. ¶ 58. After two
successful off‐Broadway runs, Hand to God opened to critical acclaim on
Broadway in the spring of 2015. Through press coverage, plaintiffs learned that
12
Hand to God incorporated part of the Routine in one of its “key scene[s],”
without license or permission. Id. at ¶ 63. While the Play was still in previews
for its Broadway opening, plaintiffs sent defendants a cease and desist letter.
Defendants’ failure to comply with that request prompted this lawsuit.
1. The Relevant Scene
Plaintiffs allege that the Play infringes their copyright in the Routine by
using its first part—that is, the part pertaining to first baseman “Who”—in Act I,
Scene 2. In that scene, which occurs approximately 15 minutes into the Play, the
lead character, “Jason,” and the girl with whom he is smitten, “Jessica,” have just
emerged from the basement of their church, where they had been participating in
a Christian puppet workshop. Jason tries to impress Jessica by using his sock
puppet, “Tyrone,” to perform, almost verbatim, a little over a minute of Who’s
on First?. Jason plays the Bud Abbott role, while Tyrone assumes Lou Costello’s
character.8
8 The Routine is used in the Play as follows:
JASON . . . . You wanna see something[?]
JESSICA Ummm.
13
JASON You’ll like it.
JESSICA Yeah?
JASON I think you’ll like it.
JESSICA Okay.
JASON Okay.
Jason slicks back his hair. Takes a deep breath and then
says...
JASON Well Costello, I’m goin’ to New York with
you. You know Buck Harris the Yankee[s’]
manager gave me a job as coach as long as
you’re on the team.
TYRONE Look Abbott, if you’re the coach, you must
know all the players.
JASON I certainly do.
TYRONE Well I’ve never met the guys. So you’ll
have to tell me their names and then Iʹll
know who’s playing on the team.
JASON Oh I’ll tell you their names, but you know
it seems to me they give these ball players
now‐a‐days very particular names.
As he starts he’s a little aspergersy. As he goes on he gets
more and more comfortable.
TYRONE You mean funny names?
JASON Well let’s see we have on the bags, Who’s
on first, What’s on second, I don’t know is
on third...
TYRONE That’s what I want to find out.
14
JASON I say Who’s on first, What’s on second, I
don’t know’s on third.
TYRONE Are you the manager?
JASON Yes.
TYRONE You gonna be the coach too?
JASON Yes.
TYRONE And you don’t know the fellows’ names.
JASON Well I should.
TYRONE Then who’s on first?
JASON Yes?
TYRONE I mean the fellow’s name.
JASON Who.
TYRONE The guy on first.
JASON Who.
TYRONE The first baseman.
JASON Who.
TYRONE The guy playing . . .
Jason is really into it. Jessica is giggling a bit. But you
can imagine him going into it all alone on a Saturday
night.
JASON Who is on first.
TYRONE I’m askin[’] you who’s on first.
JASON That’s the man’s name.
TYRONE That’s whose name.
JASON Yes.
TYRONE Well go ahead and tell me.
JASON That’s it.
TYRONE That’s who?
JASON Yes.
15
When Jason somewhat bashfully concludes the “Who” part of the Routine,
Jessica compliments him by saying, “That’s really good,” and asks, “Did you
come up with that all by yourself[?]” Suppl. App’x 21. When Jason answers,
“Yes,” the audience laughs at what it recognizes as a lie. Id.; see Am. Compl.
¶ 64. The answer, however, triggers a different response from the puppet,
which, seemingly of its own volition, calls Jason a “Liar,” and states that the
comic exchange they just performed is “a famous routine from the [F]ifties.”
Suppl. App’x 21. Jason corrects Tyrone, stating that the sketch is from the
“Forties.” Id. Tyrone then insults Jessica, telling her that she would know the
Routine’s origin if she “weren’t so stupid.” Id. Jason and Jessica each order
Jason reaches a pause in the routine and looks out at her.
He becomes aware of what he’s doing.
JESSICA What are you doing[?] Don’t stop.
JASON I . . .
He gets red.
JESSICA What?
JASON I can’t remember anymore.
Suppl. App’x 17–21 (emphases added).
16
Tyrone to “shut up” to no effect. Id. at 22. Instead, as the scene continues,
Tyrone vulgarly divulges Jason’s physical desire for Jessica. Only after a
seeming physical struggle with Tyrone is Jason able to remove the puppet from
his hand and thereby end Tyrone’s outburst. Jason tries to apologize to Jessica,
but she quickly exits, leaving Jason—in the words of the stage direction—
“[d]efeated by what he ca[]n’t defeat.” Id. at 24.
The scene foreshadows darker and more disturbing exchanges between
Jason and the puppet that will occur as the Play proceeds.
2. Promotional Materials
Plaintiffs allege that, in online promotional materials for the Play,
defendants used a “video clip” of Jason and his puppet performing Who’s on
First? to “stoke interest” in and sell tickets for the Play. Am. Compl. ¶¶ 69, 89.
These promotional materials are not part of the court record.
D. District Court Proceedings
On June 4, 2015, plaintiffs filed this action in the Southern District of New
York, claiming both federal and common law copyright infringement.
Defendants promptly moved to dismiss, arguing, inter alia, that (1) plaintiffs did
17
not hold a valid copyright; (2) the Routine was in the public domain; and
(3) Hand to God’s incorporation of the Routine was sufficiently transformative to
qualify as a permissible fair use, not prohibited infringement.
On December 17, 2015, the district court granted defendants’ motion to
dismiss. It declined to do so on either of the first two grounds argued by
defendants, concluding that, at the 12(b)(6) stage, plaintiffs had “sufficiently
alleged a continuous chain of title” to the Routine to survive dismissal. TCA
Television Corp. v. McCollum, 151 F. Supp. 3d at 431. Instead, the court
concluded that dismissal was warranted because defendants’ use of Who’s on
First? in Hand to God was “highly transformative” and a non‐infringing fair use.
Id. at 434, 437.
This appeal followed.
II. Discussion
A. Dismissal Was Not Properly Based on Fair Use
1. Standard of Review
We review de novo a judgment of dismissal under Fed. R. Civ. P. 12(b)(6),
accepting all factual allegations in the amended complaint and its incorporated
18
exhibits as true and drawing all reasonable inferences in plaintiffs’ favor. See
Concord Assocs., L.P. v. Entm’t Props. Tr., 817 F.3d 46, 52 (2d Cir. 2016). The
challenged dismissal here is based on the district court’s determination that
plaintiffs could not succeed on their copyright infringement claim because the
Rule 12(b)(6) record established defendants’ fair use defense as a matter of law.
Our review of that decision is necessarily informed by certain basic
copyright principles. First, the law affords copyright protection to promote not
simply individual interests, but—in the words of the Constitution—“the progress
of science and useful arts” for the benefit of society as a whole. U.S. Const. art I,
§ 8, cl. 8. As the Supreme Court has explained, copyright protection is based on
the “economic philosophy . . . that encouragement of individual effort by
personal gain is the best way to advance public welfare.” Mazer v. Stein, 347
U.S. 201, 219 (1954). In short, the “monopoly created by copyright . . . rewards
the individual author,” but only “in order to benefit the public.” Harper & Row
Publishers, Inc. v. Nation Enters., 471 U.S. 539, 546 (1985) (internal quotation
marks omitted); see Fox Film Corp. v. Doyal, 286 U.S. 123, 127 (1932) (“The sole
19
interest of the United States and the primary object in conferring the monopoly
lie in the general benefits derived by the public from the labors of authors.”).
Second, and consistent with this public purpose, the law has long
recognized that “some opportunity for fair use of copyrighted materials” is
necessary to promote progress in science and art. Campbell v. Acuff‐Rose Music,
Inc., 510 U.S. 569, 575 (1994); Iowa State Univ. Research Found., Inc. v. Am.
Broad. Cos., 621 F.2d 57, 60 (2d Cir. 1980) (stating that fair use doctrine “permits
courts to avoid rigid application of the copyright statute when, on occasion, it
would stifle the very creativity which that law is designed to foster”). The
doctrine of fair use, derived from common law, is now codified in the Copyright
Act of 1976, Pub. L. No. 94‐553, 90 Stat. 2541. See 17 U.S.C. § 107. That
codification does not so much define “fair use” as provide a non‐exhaustive list
of factors to guide courts’ fair use determinations. This affords the doctrine a
certain “malleability” that can challenge judicial application. 4 Melville B.
Nimmer & David Nimmer, Nimmer on Copyright (hereinafter “Nimmer”)
§ 13.05, at 13‐156 (Matthew Bender, rev. ed., 2016).
20
Courts most frequently address a proffered fair use defense at summary
judgment. See, e.g., Blanch v. Koons, 467 F.3d 244, 250 (2d Cir. 2006) (explaining
that court may resolve fair use question at summary judgment if there are no
genuine issues of fact); see also Harper & Row Publishers, Inc. v. Nation Enters.,
471 U.S. at 560 (stating that appeals court may decide fair use where “district
court has found facts sufficient to evaluate each of the statutory factors”).
Nevertheless, this court has acknowledged the possibility of fair use being so
clearly established by a complaint as to support dismissal of a copyright
infringement claim. See Cariou v. Prince, 714 F.3d 694, 707 (2d Cir. 2013)
(granting defendant partial summary judgment on fair use and citing
approvingly to Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687 (7th
Cir. 2012) (rejecting argument that fair use could not be decided on motion to
dismiss)).
On de novo review here, we conclude that defendants’ entitlement to a fair
use defense was not so clearly established on the face of the amended complaint
and its incorporated exhibits as to support dismissal.
21
2. The Statutory Framework for Analyzing Fair Use
In the preamble to 17 U.S.C. § 107, Congress states that “the fair use of a
copyrighted work . . . for purposes such as criticism, comment, news reporting,
teaching (including multiple copies for classroom use), scholarship, or research is
not an infringement of copyright.” As the words “such as” indicate, the listing is
“illustrative and not limitative.” 17 U.S.C. § 101; see Harper & Row Publishers,
Inc. v. Nation Enters., 471 U.S. at 561. Four nonexclusive factors—incorporating
common law traditions—are properly considered in “determining whether the
use made of a work in any particular case is a fair use.” 17 U.S.C. § 107. These
statutory factors are as follows:
(1) the purpose and character of the use, including
whether such use is of a commercial nature or is for
nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in
relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or
value of the copyrighted work.
Id.; see generally Folsom v. Marsh, 9 F. Cas. 342, 348 (C.C.D. Mass. 1841) (Story,
22
J.) (explaining that common law courts “deciding questions of this sort” should
“look to the nature and objects of the selections made, the quantity and value of
the materials used, and the degree in which the use may prejudice the sale, or
diminish the profits, or supersede the objects, of the original work”).
In reviewing the challenged determination of fair use in this case, we
necessarily discuss these factors individually, at the same time that we heed the
Supreme Court’s instruction that the factors must be viewed collectively, with
their results “weighed together, in light of the purposes of copyright.”
Campbell v. Acuff‐Rose Music, Inc., 510 U.S. at 578.
a. Purpose and Character of the Use
(1) Transformative Use
The first statutory fair use factor considers the purpose and character of
the secondary use. In this regard, the uses identified by Congress in the
preamble to § 107—criticism, comment, news reporting, teaching, scholarship,
and research—might be deemed “most appropriate” for a purpose or character
finding indicative of fair use. Nimmer § 13.05[A][1][a], at 13‐162; see Authors
Guild v. Google, Inc., 804 F.3d 202, 215 (2d Cir. 2015) (noting that providing
23
commentary or criticism on another’s work is “[a]mong the best recognized
justifications for copying”).
The challenged use here does not appear to fit within any of these
statutory categories. Nevertheless, the district court concluded that defendants’
use was “transformative,” indeed, so “highly transformative” as to be
“determinative” of fair use. TCA Television Corp. v. McCollum, 151 F. Supp. 3d
at 434–35. The district court explained that by having a single character perform
the Routine, the Play’s authors were able to contrast “Jason’s seemingly soft‐
spoken personality and the actual outrageousness of his inner nature, which he
expresses through the sock puppet.” Id. at 436. This contrast was “a darkly
comedic critique of the social norms governing a small town in the Bible Belt.”
Id. This reasoning is flawed in that what it identifies are the general artistic and
critical purpose and character of the Play. The district court did not explain how
defendants’ extensive copying of a famous comedy routine was necessary to this
purpose, much less how the character of the Routine was transformed by
defendants’ use.
24
The Supreme Court has stated that “the goal of copyright . . . is generally
furthered by the creation of transformative works.” Campbell v. Acuff‐Rose
Music, Inc., 510 U.S. at 579.9 But how does a court decide “whether and to what
extent the new work is ‘transformative’”? Id. Campbell instructs that a court
properly considers “whether the new work merely supersedes the objects of the
original creation, or instead adds something new, with a further purpose or
different character, altering the first with new expression, meaning, or message.”
9 The idea that “transformative” purpose could support fair use was put forth by
our colleague, Judge Leval, in a seminal article, “Toward a Fair Use Standard.”
See 103 Harv. L. Rev. 1105, 1111 (1990) (“[T]he question of justification turns
primarily on whether, and to what extent, the challenged use is transformative.
The use must be productive and must employ the quoted matter in a different
manner or for a different purpose from the original. A quotation of copyrighted
material that merely repackages or republishes the original is unlikely to pass the
test . . . . If, on the other hand, the secondary use adds value to the original—if
the quoted matter is used as raw material, transformed in the creation of new
information, new aesthetics, new insights and understandings—this is the very
type of activity that the fair use doctrine intends to protect for the enrichment of
society.”).
Fair use is not limited to transformative works. See Campbell v. Acuff‐Rose
Music, Inc., 510 U.S. at 579. But because the only purpose found by the district
court and relied on by defendants is the creation of a transformative work, in
analyzing this factor, we necessarily focus on whether a finding of
transformative purpose could be made as a matter of law on a Rule 12(b)(6)
motion.
25
Id. (emphases added) (alterations, citations, and internal quotation marks
omitted).
As the highlighted language indicates, the focus of inquiry is not simply
on the new work, i.e., on whether that work serves a purpose or conveys an
overall expression, meaning, or message different from the copyrighted material
it appropriates. Rather, the critical inquiry is whether the new work uses the
copyrighted material itself for a purpose, or imbues it with a character, different
from that for which it was created. See id. Otherwise, any play that needed a
character to sing a song, tell a joke, or recite a poem could use unaltered
copyrighted material with impunity, so long as the purpose or message of the
play was different from that of the appropriated material.
In sum, even if, as the district court concluded, Hand to God is a “darkly
comedic critique of the social norms governing a small town in the Bible Belt,”
TCA Television Corp. v. McCollum, 151 F. Supp. 3d at 436, and even if the Play’s
purpose and character are completely different from the vaudevillian humor
originally animating Who’s on First?, that, by itself, does not demonstrate that
26
defendants’ use of the Routine in the Play was transformative of the original
work.
We made this point in Cariou v. Prince, 714 F.3d 694. There, the
defendant, a self‐styled “appropriation artist,” id. at 699, had taken plaintiff’s
copyrighted photographs—“serene and deliberately composed” portraits of
Rastafarian men—and altered them to create “crude and jarring” collages, id. at
706. Defendant acknowledged that he had not used the photographs to
“comment on” the original works. Id. at 707. Instead, both works had an
underlying artistic purpose, but defendant stated that he had sought to change
the original material “into something that’s completely different.” Id. (internal
quotation marks omitted). Reversing a district court award of summary
judgment in favor of plaintiff, this court ruled that, although commentary
frequently constitutes fair use, it is not essential that a new creative work
comment on an incorporated copyrighted work to be transformative. See id. at
706.10 Rather, “to qualify as a fair use” in the absence of such a different purpose,
10 Even if such commentary is not essential to fair use, it remains the case, even
after Cariou, that commentary or criticism on another’s work is “[a]mong the
27
the new work “generally must alter the original with ‘new expression, meaning,
or message.’” Id. (quoting Campbell v. Acuff‐Rose Music, Inc., 510 U.S. at 579).11
best recognized justifications for copying” because such commentary or criticism
is in the public interest and frequently requires quoting the copyrighted work to
be effective. Authors Guild v. Google, Inc., 804 F.3d at 215; see Campbell v.
Acuff‐Rose Music, Inc., 510 U.S. at 580–81 (explaining that if new work “has no
critical bearing on the substance or style of the original composition . . . the claim
to fairness in borrowing from another’s work diminishes accordingly (if it does
not vanish), and other factors, like the extent of its commerciality, loom larger”).
Hand to God may be a “critique of the social norms governing a small town in
the Bible Belt,” TCA Television Corp. v. McCollum, 151 F. Supp. 3d at 436, but
defendants have not argued that it is a commentary or criticism of Who’s on
First?. Thus, such transformative purposes do not justify defendants’ challenged
use here.
11 In Swatch Group Management Services Ltd. v. Bloomberg L.P., 756 F.3d 73 (2d
Cir. 2014), we stated in dictum that “a secondary work can be transformative in
function or purpose without altering or actually adding to the original work.”
Id. at 84 (internal quotation marks omitted). But that statement must be read in
context. We were there discussing the fair use of data, not the creation of new
artistic work as in Cariou. In the former context, we recognized that “the need to
convey information to the public accurately may in some instances make it
desirable and consonant with copyright law for a defendant to faithfully
reproduce an original work without alteration.” Id. That is not this case.
Defendants used a verbatim portion of Who’s on First? in Hand to God. The
unaltered use of such creative material within another creative work has a
weaker claim to fair use protection. See Campbell v. Acuff‐Rose Music, Inc., 510
U.S. at 579; Cariou v. Prince, 714 F.3d at 706; see also Nimmer § 13.05[A][2][a], at
13‐187 (recognizing that “scope of fair use is greater when informational type
works, as opposed to more creative products[,] are involved” because there is
28
Cariou concluded that the challenged artworks there satisfied this
standard because they not only strove for “new aesthetics with creative and
communicative results distinct from” that of the copyrighted material, but also
gave the incorporated photographs “new expression,” thereby admitting a
transformative purpose. Id. at 708. Indeed, where the defendant’s use so
“heavily obscured and altered” the original photographs as to make them
“barely recognizable” within the new work, the court ruled that transformative
purpose (and ultimately fair use) was established as a matter of law. Id. at 710.
But where lesser changes retained certain of the original work’s aesthetics, the
court could not say “for sure” that their incorporation into the defendant’s works
had “transformed [the original] work enough to render it transformative.” Id. at
711. As to those works, Cariou remanded for further proceedings. Id.
Insofar as Cariou might be thought to represent the high‐water mark of
our court’s recognition of transformative works, it has drawn some criticism. See
“greater license to use portions” of “work more of diligence than of originality or
inventiveness” (internal quotation marks omitted)). For such an appropriation to
be deemed “fair use,” the new creative work must either use the copyrighted
work for a different purpose or imbue it with a different character, so as to alter
the expression, meaning, or message of the original.
29
Kienitz v. Sconnie Nation LLC, 766 F.3d 756, 758 (7th Cir. 2014) (expressing
skepticism as to Cariou’s approach and criticizing reliance on transformativeness
as substitute for the statutory factors, which threatens to override the copyright
owner’s exclusive right to prepare derivative works); see also Nimmer
§ 13.05[B][6], at 13.224.20 (stating with respect to Cariou: “It would seem that the
pendulum has swung too far in the direction of recognizing any alteration as
transformative, such that this doctrine now threatens to swallow fair use. It is
respectfully submitted that a correction is needed in the law.”). We need not
defend Cariou here, however, because our point is that even scrupulous
adherence to that decision does not permit defendants’ use of Who’s on First? in
Hand to God to be held transformative.
Far from altering Who’s on First? to the point where it is “barely
recognizable” within the Play, Cariou v. Prince, 714 F.3d at 710, defendants’ use
appears not to have altered the Routine at all. The Play may convey a dark
critique of society, but it does not transform Abbott and Costello’s Routine so
that it conveys that message. To the contrary, it appears that the Play specifically
has its characters perform Who’s on First? without alteration so that the audience
30
will readily recognize both the famous Routine and the boy’s false claim to
having created it. Indeed, it is only after Who’s on First? is performed—at some
length, almost verbatim, and with the Play’s characters mimicking the original
timing, tone, and delivery of Abbott and Costello—that the boy’s lie about
creating the classic Routine—no part of the Routine—becomes the triggering
event for the puppet to assume an independent persona.
Defendants nevertheless maintain that using the Routine for such a
“dramatic,” rather than comedic, purpose was transformative. Appellees’ Br. 18
(stating that Play’s use of Routine was “far cry” from original “comedy schtick”).
The argument will not bear close scrutiny. The “dramatic” purpose served by
the Routine in the Play appears to be as a “McGuffin,” that is, as a theatrical
device that sets up the plot, but is of little or no significance in itself.12 To
12 See 3 Oxford English Dictionary Additions Series 285 (1997) (defining
“McGuffin” as “particular event, object, factor, etc., which . . . acts as the impetus
for the sequence of events depicted, although often proving tangential to the plot
it develops”); see also Merriam‐Webster’s Collegiate Dictionary 744 (11th ed.
2003) (defining “MacGuffin” as “object, event, or character in film or story that
serves to set and keep the plot in motion despite usu[ally] lacking intrinsic
importance”).
31
advance the plot of the Play, specifically, to have the puppet Tyrone take on a
persona distinct from that of Jason, defendants needed Jason to lie about
something and for Tyrone to call him on it. But the particular subject of the lie—
the Routine—appears irrelevant to that purpose. Such unaltered use of an
allegedly copyrighted work, having no bearing on the original work, requires
justification to qualify for a fair use defense. See Authors Guild v. Google, Inc.,
804 F.3d at 215 (stating that “taking from another author’s work for the purpose
of making points that have no bearing on the original may well be fair use, but
the taker would need to show a justification”).
More than the Routine’s ability to capture audience attention is necessary
to provide such justification. As the Supreme Court has cautioned, where a
secondary use “has no critical bearing on the substance or style of the original
composition, which the alleged infringer merely uses to get attention . . . , the
claim to fairness in borrowing from another’s work diminishes accordingly (if it
does not vanish).” Campbell v. Acuff‐Rose Music, Inc., 510 U.S. at 580. Nor is a
different conclusion warranted because defendants here place the unaltered
Routine in a sharply different context from its original authors. See id. at 598
32
(Kennedy, J., concurring) (observing that courts should not afford fair use
protection to persons who merely place characters from familiar copyrighted
works into novel or eccentric settings).
The fact that, even as a McGuffin, the Routine is quite funny, also cannot
justify its use in the Play. That humor is an achievement of the Routine’s
creators, not of the playwright who takes advantage of it without transforming
the Routine’s aesthetic. Moreover, the Play appropriates the Routine’s humor
not incidentally, but extensively by having the characters perform some dozen of
the original exchanges on the comic ambiguity of the words “who’s on first.” No
new dramatic purpose was served by so much copying. Cf. Campbell v. Acuff‐
Rose Music, Inc., 510 U.S. at 589 (concluding that copying of song for parodic
purpose was fair where it was not “excessive” in relation to that purpose as
secondary user took only what was necessary to evoke original). The only
purpose served by the extent of defendants’ taking is identically comedic to that
of the original authors, that is, to have two performers expand on a singular joke
in order to generate increasing audience laughter. As this court has recognized,
there is “nothing transformative” about using an original work “in the manner it
33
was made to be” used. On Davis v. Gap, Inc., 246 F.3d 152, 174 (2d Cir. 2001); see
Ringgold v. Black Entm’t Television, Inc., 126 F.3d 70, 79 (2d Cir. 1997)
(concluding that purpose factor favored copyright owner where defendant used
“work for precisely a central purpose for which it was created”). Defendants’
use of the Routine, not briefly as the basis for a dramatic lie, but extensively for
its original comedic effect, cannot be deemed transformative.
In sum, nothing in the 12(b)(6) record shows that the Play imbued the
Routine with any new expression, meaning, or message. Nor does any new
dramatic purpose justify defendants’ extensive copying of the Routine.
Accordingly, the district court erred both in finding defendants’ use of the
Routine transformative and in concluding, on that basis, that a fair use defense
was established as a matter of law.13
13 We note that even a correct finding of transformative use is not necessarily
determinative of the first statutory factor, much less of fair use. See Authors
Guild v. Google Inc., 804 F.3d at 218; Leval, Toward a Fair Use Standard, 103
Harv. L. Rev. at 1111 (recognizing that “existence of . . . transformative objective
does not . . . guarantee success in claiming fair use” because “transformative
justification must overcome factors favoring the copyright owner”).
34
(2) Commercial Purpose
The first statutory factor specifically instructs courts to consider whether
copyrighted materials are used for a commercial purpose or for a nonprofit
educational purpose, the former tending “to weigh against a finding of fair use.”
Campbell v. Acuff‐Rose Music, Inc., 510 U.S. at 585 (internal quotation marks
omitted). There is no question here that defendants’ use of Who’s on First? in
Hand to God was for a commercial purpose. Nevertheless, the district court
discounted that fact upon finding the use “highly transformative.” TCA
Television Corp. v. McCollum, 151 F. Supp. 3d at 434–35; see Campbell v. Acuff‐
Rose Music, Inc., 510 U.S. at 579 (recognizing that “the more transformative the
new work, the less will be the significance of other factors, like commercialism,
that may weigh against a finding of fair use”). Because we here conclude that
defendants’ use was not transformative, let alone “highly transformative,” we
conclude that the district court erred in discounting Hand to God’s commercial
character. See Campbell v. Acuff‐Rose Music, Inc., 510 U.S. at 579–81.14
14 This court has sometimes assigned little weight to the commercial nature of a
secondary use even absent a transformative purpose. See, e.g., Castle Rock
35
This conclusion applies with particular force here where plaintiffs allege
that defendants not only used an unaltered and appreciable excerpt of the
Routine in a commercial play but also featured the Routine in the Play’s
advertising, conduct which reasonably qualifies as commercial exploitation
weighing strongly against fair use. See id. at 585 (observing that use of
copyrighted work “to advertise a product, even in a parody, will be entitled to
less indulgence under the first factor of the fair use enquiry than the sale of a
parody for its own sake”); American Geophysical Union v. Texaco Inc., 60 F.3d
913, 922 (2d Cir. 1994) (stating that fair use claim will not be sustained when
secondary use can fairly be characterized as “commercial exploitation” (internal
quotation marks omitted)); Consumers Union of U.S., Inc. v. Gen. Signal Corp.,
724 F.2d 1044, 1049 (2d Cir. 1983) (observing that some infringement actions
involve copying of creative expression for “purpose of having that precise form
Entm’t, Inc. v. Carol Publ’g Grp., Inc., 150 F.3d 132, 142 (2d Cir. 1998). But
where, as here, defendants justify their use solely by reference to a
transformative purpose, commercialism cannot automatically be discounted
absent a finding of such purpose. See Blanch v. Koons, 467 F.3d at 254
(discounting commercial nature of secondary use only because new work was
substantially transformative).
36
of expression advance someone else’s commercial interests—for example, using
well‐known copyrighted lines to attract attention to an advertisement”). Indeed,
to the extent defendants excessively copied from the Routine even within the
Play, their advertising focus on the Routine’s comic exchanges raises particular
commercial exploitation concerns.
Thus, defendants’ commercial use of the Routine was not transformative.
Rather, it duplicated to a significant degree the comedic purpose of the original
work. As such, the first statutory factor, far from weighing in defendants’ favor,
weighs in favor of plaintiffs.
b. Nature of Copyrighted Work
The second statutory factor, “the nature of the copyrighted work,” also
weighs in plaintiffs’ favor. As the Supreme Court has observed, certain “works
are closer to the core of intended copyright protection than others, with the
consequence that fair use is more difficult to establish when the former works are
copied.” Campbell v. Acuff‐Rose Music, Inc., 510 U.S. at 586. Like the district
court, we conclude that Who’s on First?, an original comedy sketch created for
public entertainment, lies at the heart of copyright’s intended protection. See id.
37
(recognizing that creative expression created for public dissemination is at core
of “copyright’s protective purposes”); On Davis v. Gap, Inc., 246 F.3d at 175
(concluding that second factor favored plaintiff because copyrighted work was
“in the nature of an artistic creation”). Thus, while the secondary user of
noncreative information can more readily claim fair use based on the law’s
recognition of “a greater need to disseminate factual works than works of fiction
or fantasy,” Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. at 563; see
Authors Guild v. Google, Inc., 804 F.3d at 220 & n.21 (explaining that factual
works “often present well justified fair uses” because “there is often occasion to
test the accuracy of, to rely on, or to repeat their factual propositions,” which
“may reasonably require quotation”), the secondary user of a creative work must
justify his use, usually by explaining the functional or creative rationale behind
its quotation, see Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L. Rev.
1105, 1113 (1990) (explaining that, in considering whether quotation is fair, courts
must consider utility of each challenged passage).
Defendants argue that their use was justified by the dramatic need to use
an instantly recognizable “cultural” touchstone in the relevant scene. Appellees’
38
Br. 15. Defendants do not explain, however, why Jason’s lie had to pertain to a
cultural touchstone, as opposed to any obvious tall tale—e.g., inventing the
Internet, traveling to Mars, out‐swimming Michael Phelps. See generally Leval,
Toward a Fair Use Standard, 103 Harv. L. Rev. at 1111 (observing that court
considering fair use must determine not only if justification for copying exists,
but also “how powerful, or persuasive, is the justification”). But even assuming
defendants’ professed dramatic need, they do not explain why the cultural
touchstone had to be the Routine—or even a comedy sketch—as opposed to
some other readily recognizable exchange, including those already in the public
domain. Most troubling, even if defendants could justify their dramatic need to
use a small, identifiable segment of the Routine, that does not justify having their
characters perform, verbatim, some dozen variations on the Routine’s singular
joke. As already noted, the purpose of such extensive use was to provoke
audience laughter in exactly the same way as the Routine’s creators had done.
In sum, because defendants’ use of the Routine cannot be deemed
transformative, and because the record is devoid of any persuasive justification
39
for the extent of defendants’ use, the creative nature of the Routine weighs
strongly against a fair use defense.
c. Amount and Substantiality of Use
The third statutory factor asks whether “‘the amount and substantiality of
the portion used in relation to the copyrighted work as a whole’ . . . are
reasonable in relation to the purpose of the copying.” Campbell v. Acuff‐Rose
Music, Inc., 510 U.S. at 586 (quoting 17 U.S.C. § 107(3)). In assessing this factor,
we consider not only “the quantity of the materials used” but also “their quality
and importance.” Id. at 587; see Harper & Row Publishers, Inc. v. Nation Enters.,
471 U.S. at 565 (stating that “fact that a substantial portion of the infringing work
was copied verbatim is evidence of the qualitative value of the copied material,
both to the originator and to the plagiarist who seeks to profit from marketing
someone else’s copyrighted expression”).
While acknowledging that the portion of the Routine used by defendants
was “instantly recognizable” and “more than merely the ‘introductory premise,’”
the district court decided—without explanation—that this factor tipped only
“slightly” in plaintiffs’ favor in light of defendants’ transformative use. TCA
40
Television Corp. v. McCollum, 151 F. Supp. 3d at 434. We reject the district
court’s transformative use determination for reasons already explained. On de
novo review, we further conclude that the third statutory factor weighs strongly
in favor of plaintiffs.
While the portion of the Routine copied by defendants takes less than two
minutes to perform, it plainly reveals the singular joke underlying the entire
Routine: that words understood by one person as a question can be understood
by another as an answer. Moreover, defendants repeatedly exploit that joke
through a dozen variations. This manifests substantial copying. See Harper &
Row Publishers, Inc. v. Nation Enters., 471 U.S. at 548, 565–66 (concluding that
third factor favored plaintiffs where defendants copied approximately 300 words
verbatim in light of “expressive value of the excerpts”); Castle Rock Entm’t v.
Carol Publ’g Grp., Inc., 955 F. Supp. 260, 269 (S.D.N.Y. 1997) (citing Harper &
Row as support for proposition that copying even few words of challenged work
can constitute substantial taking if it amounts to taking heart of original work),
aff’d, 150 F.3d 132 (2d Cir. 1998).
41
Even a substantial taking, however, can constitute fair use if justified. See
Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 98 (2d Cir. 2014) (acknowledging
that some purposes require copying entirety of copyrighted work); see also
Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. at 1123 (explaining that,
under third factor, “an important inquiry is whether the selection and quantity of
the material taken are reasonable in relation to the purported justification”). But,
as already explained, defendants offer no persuasive justification for their
extensive use of the Routine. Cf. Authors Guild, Inc. v. HathiTrust, 755 F.3d at
98 (stating that “crux” of third factor inquiry is whether “no more was taken than
necessary” (internal quotation marks omitted)).
d. Effect on Potential Market for Copyrighted Work
The final statutory factor considers “the effect of the use upon the potential
market for or value of the copyrighted work,” 17 U.S.C. § 107(4), focusing on
whether the secondary use usurps demand for the protected work by serving as
a market substitute, see Campbell v. Acuff‐Rose Music, Inc., 510 U.S. at 592
(stating that role of courts is to distinguish between “biting criticism that merely
suppresses demand and copyright infringement, which usurps it” (alterations
42
and internal quotation marks omitted)). In weighing this factor, a court properly
looks to “not only the extent of market harm caused by the particular actions of
the alleged infringer, but also whether unrestricted and widespread conduct of
the sort engaged in by the defendant would result in a substantially adverse
impact on the potential market for the original.” Id. at 590 (alteration and
internal quotation marks omitted).
The district court weighed this factor in defendants’ favor, concluding that
the Play’s use of the Routine could not reasonably be expected to usurp the
market for Abbott and Costello’s original performance. See TCA Television
Corp. v. McCollum, 151 F. Supp. 3d at 434–35. In so doing, however, the district
court disregarded the possibility of defendants’ use adversely affecting the
licensing market for the Routine. See id. at 434 (citing Cariou v. Prince, 714 F.3d
at 708 (stating that fourth factor “does not focus principally on the question of
damage to [a] derivative market”)).
While derivative markets are not the principal focus of the fourth inquiry,
that does not mean that they are irrelevant. See Campbell v. Acuff‐Rose Music,
Inc., 510 U.S. at 593 (recognizing that evidence of substantial harm to derivative
43
market would weigh against fair use). A court considering fair use properly
identifies and weighs relevant harm to the derivative market for a copyrighted
work, which market includes uses that creators of original works might “license
others to develop.” Id. at 592; see American Geophysical Union v. Texaco Inc., 60
F.3d at 929 (“[T]he impact on potential licensing revenues is a proper subject for
consideration in assessing the fourth factor.”).
To be clear, in assessing harm posed to a licensing market, a court’s focus
is not on possible lost licensing fees from defendants’ challenged use. See
American Geophysical Union v. Texaco Inc., 60 F.3d at 929 n.17 (explaining that
fourth factor would always favor copyright owner if courts focused on loss of
potential licensing fees from alleged infringer); see also Leval, Toward a Fair Use
Standard, 103 Harv. L. Rev. at 1124 (“By definition every fair use involves some
loss of royalty revenue because the secondary user has not paid royalties.”).
Rather, a court properly considers the challenged use’s “impact on potential
licensing revenues for traditional, reasonable, or likely to be developed markets.”
American Geophysical Union v. Texaco Inc., 60 F.3d at 930; accord Swatch Grp.
Mgmt. Servs. Ltd. v. Bloomberg L.P., 756 F.3d 73, 91 (2d Cir. 2014).
44
Plaintiffs here alleged the existence of a traditional—and active—
derivative market for licensing the Routine. See Am. Compl. ¶¶ 40, 81–83
(alleging that plaintiffs receive “regular” requests to license Who’s on First?,
which they frequently grant). Further, they alleged market harm. See id. at ¶ 83
(alleging that defendants’ unlicensed use of Who’s on First? negatively affected
commercial market for future licensing). Accepting these allegations as true at
this stage of the litigation, we conclude that this factor weighs in favor of
plaintiffs. See On Davis v. Gap, Inc., 246 F.3d at 175–76 (concluding that fourth
factor favored copyright owner where defendants’ taking caused both loss of
royalty revenue and “diminution of [owner’s] opportunity to license to others
who might regard [owner’s] design as preempted by [defendant’s] ad”).
In sum, on the 12(b)(6) record, all four statutory factors weigh in favor of
plaintiffs and against a defense of fair use. Because, at this stage of the
proceeding, defendants have identified no other equitable factors as here
relevant to the fair use analysis, we conclude that the dismissal of plaintiffs’
amended complaint on the ground of fair use was error. Nevertheless, for
reasons explained in the next section of the opinion, we conclude that dismissal
45
was warranted because plaintiffs did not plausibly allege a valid copyright
interest in the Routine.
B. Dismissal for Failure To Plead a Valid Copyright
Defendants argue that, even if we reject dismissal on the basis of a fair use
defense, we should affirm because plaintiffs fail plausibly to plead ownership of
a valid copyright in the Routine. See Feist Publ’ns, Inc. v. Rural Tel. Serv. Co.,
499 U.S. 340, 361 (1991) (identifying two elements of infringement: (1) ownership
of valid copyright and (2) copying original elements of work). Defendants assert
that Abbott and Costello’s Who’s on First? Routine fell into the public domain in
1968, when the initial copyright term for Tropics expired. Defendants concede
that UPC’s registration for that movie protected the Routine—first published
therein—from entering the public domain through the term of that copyright, see
Shoptalk, Ltd. v. Concorde‐New Horizons Corp., 168 F.3d 586, 592 (2d Cir. 1999),
but they assert that only Abbott and Costello, as the Routine’s authors, could
46
renew the copyright in that work—as distinct from Tropics—which the team
failed to do.15
In disputing this challenge, plaintiffs argue that UPC had the right to
renew the copyright in the Routine because (1) Abbott and Costello assigned
ownership of their common law copyright in the Routine to UPC in either the
July or November Agreement, (2) the Routine as published in Tropics was a
“work for hire” owned by UPC, and (3) the Routine merged into Tropics so as to
support a single copyright. Plaintiffs maintain that, under any of these theories,
UPC’s renewal of the Tropics copyright also maintained copyright protection for
the Routine, so that they now hold a valid copyright in that work by virtue of
UPC’s transfer of its rights in the Routine in the Quitclaim.
We identify no merit in any of the theories relied on by plaintiffs to
support their copyright claim and, accordingly, we affirm dismissal of the
15 Because both parties seemingly concede that the Routine was protected from
entering the public domain through at least Tropics’s initial copyright term, we
need not determine whether Tropics’s publication automatically divested Abbott
and Costello of their common law copyright and injected it into the public
domain. See Roy Export Co. Establishment of Vaduz, Liechtenstein v. Columbia
Broad. Sys., Inc., 672 F.2d 1095, 1101–02 (2d Cir. 1982).
47
amended complaint for failure to plead a valid copyright.
1. Copyright Assignment
In rejecting defendants’ copyright invalidity challenge, the district court
thought that “[t]he contract language, together with UPC’s subsequent
registration of the copyrights” for Tropics and The Naughty Nineties, might
admit a finding of “implied assignment of the initial copyright from Abbott and
Costello.” TCA Television Corp. v. McCollum, 151 F. Supp. 3d at 429; see
Nimmer § 10.03[B][2], at 10‐56.2(6) (explaining that pre‐1978 assignment of
common law copyright could be effectuated orally or implied from conduct).
The conclusion is flawed in two respects. First, as detailed in this section, the
July and November Agreements clearly express the parties’ intent for Abbott and
Costello to license the use of, not to assign copyrights in, their existing comedy
routines for use in UPC movies in which the team appeared. Second, and
requiring no further discussion in the face of clear contract language, UPC’s
registration (and renewal) of copyrights in its movies says nothing about what
Abbott and Costello intended to convey in the two agreements because UPC
would have taken such action to protect its independent movie rights in any
48
event. See generally Faulkner v. Nat’l Geographic Soc’y, 220 F. Supp. 2d 237, 239
(S.D.N.Y. 2002) (noting that under 1909 Copyright Act, proprietor of collective
work had right to renew copyright in collective work itself).
Turning then to the agreements, we note at the outset that neither contract
has a choice of law provision. Thus, the controlling law would be the contract’s
“center of gravity,” which typically is the place of contracting or performance.
Lazard Freres & Co. v. Protective Life Ins. Co., 108 F.3d 1531, 1539 (2d Cir. 1997)
(internal quotation marks omitted). The July Agreement was executed in New
York with expected performance in California. The November Agreement was
also to be performed in California and may have been executed there, where
UPC was located and Abbott and Costello were then completing Tropics. Any
uncertainty on the latter point is irrelevant, however, because New York and
California law both instruct that contracts must be interpreted according to the
mutual intent of the parties at the time the contract was formed. See Welsbach
Elec. Corp. v. MasTec N. Am., Inc., 7 N.Y.3d 624, 629, 825 N.Y.S.2d 692, 695
(2006); AIU Ins. Co. v. Superior Court, 51 Cal. 3d 807, 821, 799 P.2d 1253, 1264
(1990). Both states recognize that the best evidence of the parties’ intent is the
49
language used in their contract. See Brad H. v. City of New York, 17 N.Y.3d 180,
185, 928 N.Y.S.2d 221, 224 (2011); AIU Ins. Co. v. Superior Court, 51 Cal. 3d at
822, 799 P.2d at 1264. Thus, where contract language is clear and unambiguous,
courts will enforce an agreement according to its terms, without looking outside
the four corners of the document. See Brad H. v. City of New York, 17 N.Y.3d at
185, 928 N.Y.S.2d at 224; AIU Ins. Co. v. Superior Court, 51 Cal. 3d at 822, 799
P.2d at 1264.
The July Agreement employing Abbott and Costello for “one feature
photoplay,” J.A. 165, states that the team would furnish UPC with “routines
heretofore used and now owned by Artists for use by the Producer in the
photoplay in which they appear hereunder and for which the Producer shall
have the exclusive motion picture rights,” id. at 169 (emphases added). The
longer‐term November Agreement similarly states that the team would furnish
UPC with all “routines heretofore used by the Artists either on the radio or
otherwise and now owned by the Artists,” and that UPC would “have the right
to use said material and routines to such extent as the Producer may desire in
connection with any photoplay in which the Artists render their services
50
hereunder.” Id. at 129 (emphases added). As the highlighted language in each
agreement makes plain, Abbott and Costello furnished UPC with their routines
for a limited purpose: use in any movies in which the team appeared under the
respective agreements.16 This is unmistakably the language of an exclusive,
limited‐use license, not the assignment of copyright. See Compendium of
Copyright Office Practices § 12.2.1 (1973) (stating that license is “exclusive or
non‐exclusive grant of permission to use a copyrighted work for certain
purposes”).
A clause in the July Agreement granting UPC “all rights of every kind and
character whatsoever in and to the same . . . perpetually” warrants no different
conclusion. J.A. 169. This language appears in the same sentence as that quoted
in the preceding paragraph and, thus, “all rights . . . in and to the same” can only
be understood to reference UPC’s motion picture rights, not the team’s common
16 Plaintiffs acknowledged as much in the district court when they argued that
the agreements’ language “represented a clear grant of rights to UPC in all
previous acts and routines created by Abbott and Costello . . . if used in any
motion pictures produced by UPC in which Abbott & Costello provided their
services.” Pls.’ Mem. Opp. Mot. Dismiss at 7, TCA Television Corp. v.
McCollum, No. 15‐cv‐4325 (GBD), ECF No. 61 (emphasis added).
51
law copyright in its routines.17 Indeed, in the November Agreement, wherein the
team grants UPC the right to photograph and reproduce their “acts,” the
“perpetual” right “to use the same” is expressly granted “only in connection
with the photoplays in which the Artists appear hereunder and in connection
with the advertising and exploitation thereof.” Id. at 127. The November
Agreement states that “the Producer shall not have the right to use the Artists’
names or likenesses or reproductions of their voices in radio broadcasts (except
as hereinafter expressly permitted) independent of . . . motion picture
productions or in commercial tie‐ups.” Id. at 128.
Other language in the November Agreement further confirms that Abbott
and Costello granted UPC only a license to use their routines. The team therein
agreed “that they w[ould] not use or license, authorize or permit the use of any
of the material and/or routines” furnished to UPC under the agreement “in
connection with motion pictures for any person, firm or corporation other than
the Producer, at any time prior to the termination of the employment of the
17 See supra p. 7 (quoting relevant sentence in July Agreement in full).
52
Artists under this agreement or one year after the general release of the
photoplay in which used, whichever is later.” Id. at 129. The fact that the
Agreement limits Abbott and Costello’s ability to use or license specified
material (i.e., material created before the agreements) only “in connection with
motion pictures,” and only for a limited time, plainly indicates the parties’
understanding that the team retained ownership of the copyright in their pre‐
agreement material and granted UPC only a license. See P.C. Films Corp. v.
MGM/UA Home Video Inc., 138 F.3d 453, 456 (2d Cir. 1998) (explaining that
under 1909 Copyright Act, “transfer of anything less than the totality of rights
commanded by copyright was automatically a license rather than an assignment
[of] the copyright”).
Thus, the language of the July and November Agreements, by itself,
clearly belies plaintiffs’ claim that Abbott and Costello therein conveyed their
common law copyright in the Routine to UPC. That conclusion is reinforced by
the very Quitclaim on which plaintiffs’ claimed ownership of the Who’s on First?
copyright depends. To secure the Quitclaim of UPC’s interests in the Routine
(then held by its successor, Universal), plaintiffs’ predecessors‐in‐interest therein
53
represented that they owned the copyright in the Routine. In short, the parties to
the Quitclaim understood Abbott and Costello not to have transferred, but to
have retained, ownership of the Routine’s copyright.
Accordingly, plaintiffs cannot state a plausible infringement claim based
on a 1940 transfer of copyright ownership from Abbott and Costello to UPC in
either the July or November Agreement. The record does not support such
assignment.18
2. Work Made for Hire
Plaintiffs maintain that, even if the July and November Agreements cannot
be construed to have assigned copyrights, they are work‐for‐hire agreements.
They argue that UPC, “[a]s the author under a work‐for‐hire agreement of the
films . . . , properly registered its copyright in these two films with the Copyright
Office, and thereafter timely renewed their copyright registrations.” Appellants’
18 Because the agreements cannot be construed to effect an assignment of the
Routine’s copyright to UPC, we need not decide whether they further conveyed
the Routine’s renewal rights. See Corcovado Music Corp. v. Hollis Music, Inc.,
981 F.2d 679, 684 (2d Cir. 1993) (recognizing strong presumption against
conveyance of renewal rights).
54
Br. 9; see Estate of Burne Hogarth v. Edgar Rice Burroughs, Inc., 342 F.3d 149,
156–57 (2d Cir. 2003) (explaining that, under 1909 Copyright Act, employer was
legal author and, therefore, had renewal rights).
The argument is defeated by plaintiffs’ own allegation—which we must
accept as true—that the Routine was first performed in March 1938, more than
two years before Abbott and Costello entered into the July and November
Agreements with UPC. See Am. Compl. ¶ 32. Insofar as Abbott and Costello
had already performed Who’s on First? in 1938, they plainly did not create the
Routine at UPC’s “instance and expense” in 1940, as would be required for it to
be a work‐for‐hire. Playboy Enters., Inc. v. Dumas, 53 F.3d 549, 554 (2d Cir. 1995)
(stating that work is considered “for hire” when made at hiring party’s instance
and expense, i.e., “when the motivating factor in producing the work was the
employer who induced the creation” (internal quotation marks omitted)); see
also Urantia Found. v. Maaherra, 114 F.3d 955, 961 (9th Cir. 1997) (“An
employment (or commissioning) relationship at the time the work is created is a
condition for claiming renewal as the proprietor of a work made for hire.”
(internal quotation marks omitted)).
55
Plaintiffs seek to avoid this conclusion by noting defendants’
(1) concession—at least for purposes of their motion to dismiss—that new
material was added to the Routine for Tropics, see TCA Television Corp. v.
McCollum, 151 F. Supp. 3d at 431; and (2) failure to establish “the contents,
language or scope of protectable expression of the 1938 radio broadcast,”
Appellants’ Reply Br. 22. We are not persuaded.
On review of a motion to dismiss, courts must draw all reasonable
inferences in plaintiffs’ favor. Even applying that principle here, it is not
plausible to infer that the Routine, as performed in 1938, did not already contain
the initial series of exchanges about a person named “Who” playing first base for
the simple reason that there is no Routine without at least that part. Further,
because that is the part of the Routine appropriated in Hand to God, plaintiffs
must plausibly allege a valid copyright in that material, regardless of later
additions. Thus, to the extent plaintiffs’ copyright claim rests on a theory of
work‐for‐hire, it was their burden to plead facts showing that the appropriated
parts of the Routine had not existed in the 1938 iteration of Who’s on First?, but
were first created for Tropics so as to be covered by the copyright and copyright
56
renewal of that movie. See Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. at
361 (stating that to establish infringement claim, plaintiff must demonstrate,
among other things, ownership of valid copyright).
3. Merger of Routine in Motion Pictures
Finally, plaintiffs argue that even if their copyright ownership claim
cannot rest on either an assignment or work‐for‐hire theory, it is plausible
because “so much of the Routine as was used in the Movies ‘merged’ with the
Movies to become a ‘unitary whole.’” See Appellants’ Reply Br. 28. Thus, the
Routine was not separately registerable; rather it was protected by UPC’s
statutory registration and its renewal of the copyrights for movies using the
Routine.
This argument also fails because, as this court recently observed, “authors
of freestanding works that are incorporated into a film . . . may copyright these
‘separate and independent works.’” 16 Casa Duse, LLC v. Merkin, 791 F.3d 247,
259 (2d Cir. 2015) (emphasis added) (quoting 17 U.S.C. § 101); see id. at 257
(noting that separate copyrights may be necessary where motion picture
incorporates “separate, freestanding pieces that independently constitute ‘works
57
of authorship’”). Who’s on First? was such a freestanding work within Tropics.
As already noted, plaintiffs acknowledged in the amended complaint that the
Routine (1) was prepared and existed on its own for some years before it was
performed in Tropics, see Am. Compl. ¶ 32; and (2) was performed
independently from the films “thousands of times” on the radio and elsewhere,
see id. at ¶¶ 34–35; see also J.A. 129 (stating in November Agreement that
“Artists reserve the right to use on the radio and in personal appearances” all
preexisting routines). The Quitclaim representation that plaintiffs’ predecessors‐
in‐interest still owned the Routine’s copyright in 1984 is also at odds with the
argument that the Routine had so merged with Tropics as to admit a single
copyright owned by UPC.
Neither Garcia v. Google, Inc., 786 F.3d 733 (9th Cir. 2015) (en banc), nor
Richlin v. Metro‐Goldwyn‐Mayer Pictures, Inc., 531 F.3d 962 (9th Cir. 2008),
relied on by plaintiffs, is to the contrary. In Garcia, the Ninth Circuit reversed a
panel decision holding that an actor’s five‐second contribution to a movie was
sufficiently creative to entitle her to register a copyright in her performance. The
en banc court explained that “[t]reating every acting performance as an
58
independent work” would be a “logistical and financial nightmare.” Garcia v.
Google, Inc., 786 F.3d at 743. This case is not analogous. While the screen actor’s
performance there was so “integrated into” the filmed work as to be “inseparable
from” it, see 16 Casa Duse, LLC v. Merkin, 791 F.3d at 254, Who’s on First? is a
freestanding comedy routine performed by Abbott and Costello not only years
before the first frame of Tropics was ever filmed but also for many years
thereafter. Thus, the concerns at issue in Garcia are not present here.
As for Richlin, the Ninth Circuit did not there hold, as plaintiffs contend,
that an author is “not entitled to an independent copyright by reason of inclusion
of his [story] treatment’s material in [a] motion picture.” Appellants’ Reply Br.
27–28 (emphasis in original). Rather, the court there assumed that plaintiffs’
story treatment was independently copyrightable when it held that plaintiffs had
“failed to secure a federal copyright for it.” Richlin v. Metro‐Goldwyn‐Mayer
Pictures, Inc., 531 F.3d at 976. Thus, the court acknowledged that “publication of
a motion picture with notice secures federal statutory copyright protection for all
of its component parts,” but observed “that does not mean that the component
parts necessarily each secure an independent federal statutory copyright.” Id. at
59
975–76. The movie’s publication protected so much of the treatment as was
disclosed therein, but it “did not constitute publication of the Treatment ‘as
such’—i.e., as a work standing alone.” Id. at 973.
This reasoning undermines rather than supports plaintiffs’ merger theory.
The plaintiffs in Richlin “clearly intended” that the treatment “be merged into
inseparable or interdependent parts of a unitary whole.” Id. at 967. That is not
this case. As already explained, the Routine was created and performed by
Abbott and Costello well before Tropics was filmed, and the team continued to
perform it for years after. Indeed, the Agreements’ licensing of the Routine’s
performance in Tropics and The Naughty Nineties contemplated such
independent performances. In these circumstances, we conclude that the
Routine did not merge into UPC’s films so as to avoid the need for its creators to
renew the copyright. See 16 Casa Duse, LLC v. Merkin, 791 F.3d at 259.
In sum, because plaintiffs fail plausibly to allege that (1) Abbott and
Costello assigned their common law copyright in Who’s on First? to UPC; (2) the
Routine, as appropriated by defendants in Hand to God, was first created for
UPC as a work‐for‐hire; or (3) the Routine so merged with the UPC movies in
60
which it was performed as to become a unitary whole, we conclude that
plaintiffs did not plead their possession of a valid copyright in the Routine, as
required to pursue their infringement claim.
Accordingly, even though the district court erred in dismissing plaintiffs’
amended complaint based on defendants’ fair use of the appropriated material,
we affirm dismissal based on plaintiffs’ failure plausibly to allege a valid
copyright.
III. Conclusion
To summarize, we conclude as follows:
1. Dismissal was not supported by fair use because all four relevant
factors weigh in plaintiffs’ favor:
a. Defendants’ verbatim use of over a minute of Who’s on First?
in their commercial production, Hand to God, was not transformative because
defendants neither used so much of the Routine for a different purpose nor
imbued the original with a different message, meaning, or expression;
b. Defendants failed persuasively to justify their use of the
Routine, as a secondary user who appropriates a creative work without
61
alteration must do;
c. Defendants’ use of some dozen of the Routine’s variations of
“who’s on first” was excessive in relation to any dramatic purpose; and
d. Plaintiffs allege an active secondary market for the work,
which was not considered by the district court.
2. Dismissal is warranted by plaintiffs’ failure plausibly to plead
ownership of a valid copyright. Their efforts to do so on theories of assignment,
work‐for‐hire, and merger all fail as a matter of law.
Accordingly, the judgment of dismissal is AFFIRMED.
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TCA Television Corp. v. McCollum
Court: Court of Appeals for the Second Circuit
Date filed: 2016-10-11
Citations: 839 F.3d 168
Copy CitationsCombined Opinion