MEMORANDUM OPINION AND ORDER
In part this case poses the frequently litigated question of who owns the copyright when an organization engages someone to create or to rework materials in a copyrightable way that suits the organization's needs, but does not define--in writing-whether the compensated creator is an employee or an independent contractor.
At stake are competing policies--policies that on the one hand support those whose work (and often creativity) brings a vision to life, as against on the other hand supporting the organizations without whose funds and supervision (and perhaps creativity) the final product might never have come to fruition. As is often the case when such an issue arises, the concept of joint authorship may also be in play.
What sets this case apart from most other copyright cases that involve work-made-for-hire and joint-authorship questions is the interaction of a federal agency regulation that seeks to give the government rights when its funds are used to develop a copyrightable work. As it turns out, this opinion must decide whether (absent a written agreement) an organization that has received government funds and permission to reprint a work--even though neither it nor the government owns the copyright--may compete with the copyright owner by printing and distributing copies of the work that would otherwise have to be purchased from the owner.
This action began when Coleen Mast ("Mast") and Respect Incorporated ("Respect," treated as a singular collective noun) lodged an eight-count Complaint against Committee on the Status of Women ("Committee") that sought relief for a number of alleged violations of Respect's rights. This Court's January 2, 1992 memorandum opinion and order (the "Opinion," 781 F. Supp. 1358
) has granted summary judgment dismissing Counts III and VI, leaving open the Complaint's claims asserting copyright infringement (Count I), service mark/trademark infringement (Count II), common law unfair competition (Count IV), Lanham Act violations (Count V) and fraud in the inducement of a contract (Count VII), as well as a request for an accounting (Count VIII).
Each party now moves under Fed.R.Civ.P. ("Rule") 56 for a partial summary judgment in its favor limited to Count I's copyright claim. More accurately, what has been placed at issue currently is liability on that claim--neither side has sought to quantify the damages if Respect prevails. For the reasons stated in this memorandum opinion and order, Respect's motion is granted and Committee's is denied.
As in their filings that led to the Opinion, the parties' submissions are factually far broader than proves necessary to hit the current motions' target.
This section will therefore set out only those facts that are both necessary to give the uninitiated a quick overview of the case and germane to the copyright issues now at hand. Some pertinent facts not contained in this section are found later in the text.
Both Respect and Committee are proponents of sexual abstinence education as an element of school curricula. To that end each has been involved in development of a program called "Sex Respect" (sometimes referred to here simply as "the program") for use in schools--a program that included three books entitled Sex Respect: The Option of True Sexual Freedom: a teacher's manual, a parent's manual and a student workbook (collectively "the books").
But despite their shared convictions on the promulgation of sexual abstinence education, discord has frequently marked the relationships among those involved in this case--not only the current litigants but others with whom they have dealt. What follows is a recital of the development and disintegration of alliances between the early beginnings of the abstinence education concept and the administration of the later-obtained federal grant.
Sex Respect was initially developed as a program by Mast, who taught it for years before she entered into negotiations with Committee. By 1985 Committee (through its President Kathleen Sullivan ("Sullivan")) had become involved and advised Mast that federal funds might be secured to develop use of the program in public schools. Mast, desiring to work further on the program and to disseminate it more widely, met--through Sullivan--Douglas Hofmeister ("Hofmeister"), head of publishing company United Communications of America, Inc. ("UCA"), to explore commercial reproduction of the teaching materials.
On July 8, 1985 Committee submitted a grant application to the Office of Adolescent Pregnancy Programs of the United States Department of Health and Human Services ("HHS"). Because the then administration policy was consistent (if not indeed a hand- in-glove fit) with abstinence education, on September 30, 1985 HHS (through Jo Ann Gasper ("Gasper"), the HHS official administering the funds) awarded Committee a three year grant of over $ 275,000 in federal funds to carry out a pilot expansion of the program in selected public schools. HHS conditioned the grant in part on the submission, for suggestions and pre-approval, of drafts and final versions of all printed materials developed with grant funds.
Meanwhile, on July 29, 1985 Mast and UCA had entered into a publishing contract under which UCA agreed to publish the workbook, a teacher handbook and a parent handbook. Mast assigned to UCA the exclusive right to publish the three works as well as the copyrights themselves. Mast began to write the books in August 1985.
On October 15, 1985 Mast and Committee entered into an oral personal services agreement (an agreement that Opinion at 1362-65 has held unenforceable under Illinois law). Then after Mast had delivered her manuscripts to UCA, it began to produce the books, some of which Committee ordered.
Mast and UCA later had a falling-out that resulted in litigation separate from this case. That litigation (and the settlement that ensued) provided Mast with renewed control over the manuscripts and Respect with the assigned copyrights to the books. Hence beginning in January 1986 Committee ordered books directly from Respect.
But Committee was not content to look to Respect as its sole source of the books. On February 11, 1987 it requested permission from HHS to print and distribute the books itself. Having received a March 17, 1987 letter from HHS (through Gasper) that purportedly granted it unrestricted permission to reprint and to disseminate the books, Committee began to do so. Meanwhile it had continued to order additional books from Respect until some time in the spring of 1987, when a dispute arose over price. Committee's own independent activity, by its own account, has encompassed the printing and distribution of over 160,000 books.
Each party now claims entitlement to a judgment as a matter of law on Count I's copyright issues. Analysis of their respective rights requires an initial determination of copyright ownership, to be followed by a decision on whether--if it does not own the copyrights--Committee has been legitimately authorized to reproduce and distribute the books without making any payment to Respect.
There is no doubt that the books are copyright-protectable, though Respect needlessly devotes significant space to that subject in its memorandum. To resolve the question of who owns the copyrights, this opinion must explore the two already-mentioned subjects of work made for hire and joint authorship.
1. Work Made For Hire
Respect and Committee--having failed to define their relationship in writing--disagree vehemently on whether (assuming for present purposes that Mast received compensation from Committee for writing the books
) Mast was an employee or an independent contractor. Committee goes so far as to say that "Mast's assertion that she is entitled to judgment that she was not a . . . work for hire is not only baseless, but is close to the Rule 11 precipice." As support for its position, Committee emphasizes that Mast received a salary and that Committee withheld taxes.
But on the facts of this case, that in terrorem argument and its invocation of Rule 11 are dead wrong. Instead that bootless threat exemplifies the old saw that those who live in glass houses should not throw stones. On all the evidence, this Court has concluded that no reasonable factfinder could accept Committee's argument that Mast was an employee in the context of 17 U.S.C. § 101(1),
the definitional "work made for hire" provision of the Copyright Act of 1976 ("Act").
Copyright ownership "vests initially in the author or authors of the work" (Act § 201(a)), and the owner has the exclusive right to reproduce, distribute or display the copyright-protected work (Act § 106). But under the Act's "work made for hire" concept, an organization accused of copyright infringement not only has a valid defense but actually owns the copyright if it proves that the allegedly infringed-on materials were "prepared by an employee within the scope of his or her employment" (Act § 101(1), defining work made for hire as that phrase is employed in Act § 201(b)). Alternatively the organization may also own the copyright of a work developed by a nonemployee (1) if the parties have agreed in writing that the work should be deemed a work made for hire and (2) if the work falls within the categories set forth in the statutory definition of that term (Act § 101(2)).
Community for Creative Non-Violence v. Reid, 490 U.S. 730, 104 L. Ed. 2d 811, 109 S. Ct. 2166 (1989) ("CCNV") teaches that the legal status (that is, employee v. independent contractor) of the compensated party--an issue decided by referring to common law agency principles
(see CCNV at 750-51, followed in a different context in Nationwide Mut. Ins. Co. v. Darden, 117 L. Ed. 2d 581, 112 S. Ct. 1344, 1348 (1992))--determines how the work-made-for-hire provisions operate. If the creator is found to be an employee, Act § 101(1) applies and the organization that engaged him or her owns the copyright, unless of course a written agreement to the contrary exists (Act § 201(b)). If however the creator was an independent contractor, Act § 101(2) applies.
Under that provision the organization owns the copyright only if the work fits within one of a group of nine specifically enumerated groups and if the "parties expressly agreed in a written instrument signed by them that the work shall be considered a work made for hire."
Here is how CCNV, 490 U.S. at 751-52 (footnotes omitted), drawing on the Restatement and citing numerous cases, has spoken of the first step in the analysis:
In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.
Those factors are nonexhaustive, and no one consideration is determinative (id. at 452). And as Aymes v. Bonelli, 980 F.2d 857, 861 (2d Cir. 1992) has recently pointed out:
It does not necessarily follow that because no one factor is dispositive all factors are equally important, or indeed that all factors will have relevance in every case. The factors should not merely be tallied but should be weighed according to their significance in the case.
No more is required than to look at such cases as CCNV itself, Aymes12 and the recent Third Circuit decision in Marco (see n.8)--all ascribing independent contractor status to the creators of the works involved, despite the presence in those cases of more factors that would be consistent with an employer-employee relationship than existed in the Committee-Mast arrangement--to see that Mast too was not an employee in Act § 101(1) terms. And that conclusion clearly applies even with the required reasonable inferences drawn in Committee's favor.
Well before Committee came onto the scene, Mast was an experienced teacher who was at the forefront of abstinence education. When she entered into discussions with Committee she continued to act as an entrepreneur, dealing with UCA on her own behalf. And the nature of her arrangements with Committee as to her completion of the books simply lacked the hallmarks of common law employment.
Though Committee did have a limited kind of input to the books--for example, by suggesting revisions--it did not even begin to approach the level of composition control present in Marco or of planning and detail control present in CCNV. It was Mast and not Committee who was responsible for the books' content and flavor.
As was true of the creators in CCNV and Marco, Mast did the bulk of her work at her own home and office. Neither Mast's office nor her home were so proximate to Committee's office as to permit the latter's control of how and when Mast worked.
Some dispute exists over ownership of some of the tools--for instance each party claims some sort of proprietary right to Mast's typewriter, which Mast picked out and purchased but for which Committee reimbursed her. Similar disagreement exists over just who it was that hired assistants, because even though Mast selected typists without approval Committee did reimburse her for typing costs and for the help of an editor. But those minor quarrels are really nonmaterial, for there is no doubt that Mast worked from her own research materials (the principal weapon in an author's arsenal), maintained her own supplies and file cabinets and controlled the books' layout.
Nor was Committee a business in the normal (or commercial) exercise of the term--clearly it did not have a history of employing persons like Mast or of publishing textbooks, factors that would cut in its favor. Instead, rather uncommonly, Committee (at least in part) regenerated itself because the opportunity arose to commission Mast.
In an effort to bootstrap itself into the posture of an employer, Committee implies that it could have assigned more book writing to Mast. But that contention is wholly unsupported in the objective evidence (including the documents between the parties). And Mast testified without contradiction that she in fact produced and published other works (for herself and Respect--not for Committee) during the period at issue.
As for the mode of Commission's payment to Mast, it is wholly consistent with payments for commissioned works--entirely comparable to those in CCNV and Marco, for example. Nor is that really undercut by the fact that Committee withheld payroll taxes from Mast's checks. Mast, who did not receive employee benefits in the customary use of the term, explained without contradiction that parties who retained her to consult or lecture often withheld her taxes. It should be remembered that CCNV, 490 U.S. at 751-52 mandates consideration of all the factors--and under the summary judgment standard prescribed in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-52, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986) (akin to that for what used to be called a directed verdict under Rule 50(a)), the feather in the scales represented by Committee's tax withholding is insufficient to require a trial on whether Mast was an independent contractor or an employee.
Because Mast was thus an independent contractor as a matter of law, CCNV requires resort to Act § 101(2) rather than to Act § 101(1). And that provision creates work-made-for-hire rights only (1) if the product falls within one of nine enumerated categories (which, crediting Committee with favorable inferences for Rule 56 purposes, it does as an "instructional text") and (2) if the parties agreed that in writing that the product would be a work made for hire. Unquestionably Respect and Mast never did the latter. Hence Committee has no rights stemming from the work-made-for-hire statutes.
2. Joint Authorship
Respect and Committee diverge just as sharply on whether the books were joint works.
Joint authors are "coowners of copyright in the work" (Act § 201(a)), and characterization as a joint author is accompanied by substantial benefits. Joint authors hold an undivided interest in copyright-protected work--that is, coownership constitutes partial ownership of the entire copyright in the work, notwithstanding any differences in contribution among the authors--as well as other rights of authorship (see Childress v. Taylor, 945 F.2d 500, 505 (2d Cir. 1992)). Importantly "each coowner of a copyright may revise the work (that is, make a derivative work) and publish the original or the revision" ( Weinstein v. University of Illinois, 811 F.2d 1091, 1095 (7th Cir. 1987)). Thus crediting a minor contributor with joint-authorship status confers substantially greater benefits than the relative amount of his or her effort.
Under the Act a joint work is "a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole" (Act § 101). "Inseparable" and "interdependent" are distinct concepts, as Childress, 945 F.2d at 505 makes plain:
Parts of a unitary whole are "inseparable" when they have little or no independent meaning standing alone. That would often be true of a work of written text, such as the play that is the subject of the pending litigation. By contrast, parts of a unitary whole are "interdependent" when they have some meaning standing alone but achieve their primary significance because of their combined effect, as in the case of the words and music of a song.
One small portion of the statute's legislative history seems somewhat at odds with the statutory language itself (H.R. Rep. No. 1476, 94th Cong., 2d Sess. 120 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5736; S.Rep. No. 473, 94th Cong., 2d Sess. 103 (1975) (emphasis added)):
[A] work is "joint" if the authors collaborated with each other, or if each of the authors prepared his or her contribution with the knowledge and intention that it would be merged with the contributions of other authors as "inseparable or interdependent parts of a unitary whole." The touchstone here is the intention, at the time the writing is done, that the parts be absorbed or combined into an integrated unit.