On September 30, 2021, the United State Court of Appeals for the Second Circuit decided a much-anticipated copyright reversion case involving the slasher franchise, Friday the 13th. This case concerns the claim for copyright reversion made by Victor Miller, the screenwriter of Friday the 13th, seeking the reversion to the rights in the screenplay to the popular horror film. The case is aptly entitled Horror Inc v. Victor Miller.
Section 203 of the Copyright Act permits authors (or, if the authors are not alive, their surviving spouses, children or grandchildren, or executors, administrators, personal representatives or trustees) to terminate grants of copyright assignments and licenses, whether exclusive or non-exclusive, that were made on or after January 1, 1978. Generally, the grant may be terminated at any time during a five-year period which begins thirty-five years from the date of execution of the grant. However, if the grant covers the right of publication of the work, the termination period begins at end of thirty-five years from the date of publication of the work or at the end of forty years from the date of execution of the grant, whichever term ends earlier. A notice of termination must be served on the then-current copyright holder not earlier than ten (10) years before the earliest day in the five-year termination window and no later than two (2) years before the last day in the five-year termination window. Additionally, the notice must be recorded in the Copyright Office before the effective date of termination, as a condition to its taking effect.
The transfer of a copyright as a work for hire is not subject to termination. Horror Inc v. Victor Miller involved whether the Friday the 13th screenplay was a work for hire. According to the court’s recounting of the facts of the case, Miller’s engagement to write the screenplay was documented on a WGA form called “Writer’s Flat Deal Contract” which was a two-page document entitled “Employment Agreement.” In 1979, that form did not include any reference to the screenplay being a work made for hire. Since the agreement for Miller’s writing services did not include a “work for hire” provision, the only other way the screenplay could be a work for hire would be if Miller was an employee of the production company who created the screenplay within the scope of his employment.
The 1989 U.S. Supreme Court case of Community for Creative Non-Violence v. Reid establishes the framework for determining whether a creator is an employee or a non-employee author in matters of copyright. In Reid the Supreme Court explained the for the purpose of Copyright, the term “employee” is “intended to describe the conventional master-servant relationship as understood by common-law agency doctrine,” and that the courts should look to “the general common law of agency” to determine whether the individual is an employee or an independent contractor. If the individual qualifies as an employee under the general common law of agency, and if the work is prepared within the scope of his employment, then such work is a work for hire.
After service of Miller’s notice of termination, Horror, Inc. filed a lawsuit seeking declaratory relief that Miller wrote the screenplay as a work for hire. Miller counterclaimed, seeking a declaratory judgment to the contrary. On the parties’ cross-motions for summary judgment, the District Court found in favor of Miller, holding that he did not write the screenplay as a work for hire. On appeal from the adverse ruling, Horror Inc argued that the District Court erred in interpreting “employee” under the Copyright Act in a manner that is in conflict with the National Labor Relations Act. Horror argued that Miller’s membership in the Writers Guild of America “inherently” created an employer-employee relationship between Manny and Miller, independent from the Reid framework. This clever argument was rooted in the creation of the WGA and the establishment of the WGA minimum basic agreement. In the 1938 NLRB case, In re MGM, the NLRB determined that the screenwriters who formed the Screen Writers Guild (the WGA’s predecessor) were “employees” under the NLRA, and therefore entitled to unionize. As a result of this unionization, the WGA was able to negotiate the terms of a basic agreement on behalf of its writers. The terms of this basic agreement were incorporated into the Writers Flat Deal Contract Miller signed more than 40 years later.
Horror argued that because Miller was a WGA member and the production company was a WGA signatory company at the time the Flat Writers Agreement was entered into, Miller was an employee of the production for all purposes. Horror argued that the existence of the WGA and its attendant collectively bargained-for protections establishes an employee/employer relationship, regardless of the outcome of the application of the Reid factors.
Similar to the District Court, the Second Circuit rejected Horror’s attempt to harmonize the Copyright Act and the NLRB’s determination of who is an employee. The court said that labor laws and copyright laws serve two different purposes, with the Copyright Act using a more restrictive definition of employment, one aimed at limiting the contours of the work-for-hire determination and protecting individual creators. So the court rejected Horror’s arguments and, after engaging in an analysis based solely on the Reid factors, found Miller not to be an employee.