Copyright Co-Owner’s Ability to Grant an Exclusive Right to a Third Party - Corbello v. DeVito

by McDermott Will & Emery
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Revisiting the issue of a copyright co-owner’s right to grant an exclusive right to a third party, the U.S. Court of Appeals for the Ninth Circuit clarified its prior ruling in Sybersound v. UAV, and explained that a copyright co-owner may unilaterally transfer any exclusive copyright interest he or she possesses.  Corbello v. DeVito, Case No. 12-16733 (9th Cir., Feb. 10, 2015) (O’Scannlain, J.) (Sack, J., sitting by designation, concurring).

In 1988, Rex Woodward entered into a written agreement to ghostwrite the autobiography of Thomas Devito (the Work), who is a former member of the band the Four Seasons.  In 1999, DeVito and another former band member, Nicholas Macioci, executed an agreement granting two of their former bandmates, Frankie Valli and Bob Gaudio, the exclusive right to use aspects of their lives related to the Four Seasons in the development of a musical (which ultimately resulted in Jersey Boys).  The issue raised in this case is whether that 1999 agreement constituted a transfer of DeVito’s copyright interest in the Work, rather than an exclusive license, and, if it did, whether Rex Woodward’s heir, Donna Corbello, is entitled to a portion of the proceeds resulting from the exploitation of the Work. 

The 9th Circuit, relying on New York law, concluded that the 1999 agreement was unambiguous, finding that the term “biography” in the agreement plainly included the Work drafted by Woodward.  The 9th Circuit found that DeVito cannot plausibly claim to have retained his privilege as a copyright co-owner to create derivative theatrical works of any biographical manuscript he owns, yet surrendered exclusively to others to use his “life story,” along with his name and likeness, to create a play.  Thus, the 9th Circuit concluded that the 1999 agreement was a transfer of ownership of DeVito’s derivative-work right in the Work to Valli and Gaudio, rather than a nonexclusive license.

The 9th Circuit distinguished Sybersound v. UAV, holding that under § 201(d) of the Copyright Law (17 USC), a co-owner of a copyright may transfer any of the exclusive rights comprised in a copyright without permission from his co-owner.  The 9th Circuit clarified that while Sybersound reflects the basic principle that one cannot give away more than one’s share in a copyright, the holding should not be extended to limit a co-owner’s ability to unilaterally transfer any exclusive copyright interests that he possesses.  Thus, the 9th Circuit reasoned, because copyright co-owners must account to one another for any profits earned by exploiting that copyright, the district court erred in rejecting Corbello’s claims for accounting and declaratory relief.

Nonetheless, the 9th Circuit found that a material issue of fact as to whether a reversionary clause in the agreement later terminated Valli and Gaudio’s ownership right.  If it is, there remained the issue of Corbello’s infringement claims.  Thus, the 9th Circuit vacated the district court’s grant of summary judgment on copyright infringement and remanded the case for further proceedings.

Concurring, Judge Sack agreed the case should be remanded for further proceedings but disagreed the term “biographies” unambiguously included the Work and that the 1999 agreement therefore transferred certain derivative rights in the autobiography as a consequence to Valli and Gaudio.  Judge Sack also disagreed with the majority’s interpretation of Sybersound, arguing that the transfer from DeVito to Valli and Gaudio created a non-exclusive license, meaning that Corbello’s sole accounting remedy lies against DeVito, the co-owner.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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