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District Court Finds That Jersey Boys Creators Held a ''Selectively Exclusive License'' To Use the Biography Co-owned by Plaintiff

Thursday, November 3, 2011

Laura McQuade | Bloomberg Law Corbello v. Devito, No. 08-CV-00867, 2011 BL 277334 (D. Nev. Oct. 27, 2011) In an action alleging copyright infringement and failure to pay royalties in connection with the hit Broadway musical, Jersey Boys, the U.S. District Court for the District of Nevada granted in part and denied in part the parties' cross motions for summary judgment on plaintiff's claims for a declaratory judgment and an equitable accounting. In reaching its decision, the court rejected plaintiff's contention that the Ninth Circuit's decision in Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137 (9th Cir. 2008) was entirely procedural. Instead, the court held that under Sybersound, the sublicensee defendants held a selectively exclusive license to use the biography on which the play was allegedly based.

Woodard Writes the Biography of Tommy DeVito, a Founding Member of "The Four Seasons"

Plaintiff Donna Corbello is the widow of Rex Woodard. Woodard was an avid fan of the band "The Four Seasons," who met founding member Tommy DeVito as a result of the publicity generated from an article Woodard had written about the band. DeVito eventually offered Woodard the opportunity to write his authorized biography. The two memorialized the agreement for the biography in a letter agreement. Woodard completed the autobiography in late 1990, and he and DeVito attempted, unsuccessfully, to find a publisher. After Woodard's death in 1991, for a period of time Corbello and Woodard's sister, Cindy Ceen, looked for a publisher for the autobiography without DeVito. In 2005, Corbello and Ceen got back into contact with DeVito about finding a publisher for the book. DeVito asked them to send him a copy of the book and said that he wanted to make some edits to the book, however, he did not contact them again. Ceen and Corbello later heard from DeVito's lawyer that DeVito had concluded that the book was "not saleable." Corbello at 5. The Broadway play Jersey Boys opened a few days later, and by late 2006, the play was a hit, earning four Tony awards. Corbello later discovered that in 1991 DeVito had registered a work that appeared to be an almost exact copy of Woodard's work with the U.S. Copyright Office. In the registration materials, DeVito claimed the only he had authored the work.

Woodard's Widow Brings Suit Against Creators of Jersey Boys

DeVito granted defendants Frankie Valli and Robert Gaudio an exclusive, irrevocable, perpetual, worldwide, assignable license to use and adapt certain materials, including his "biographies" in order to create a musical about "The Four Seasons" (the "Valli/Gaudio Agreement"). Valli and Gaudio, in turn, licensed those same materials to defendants Marshall Brickman and Eric Elice in order to write Jersey Boys. The production agreement to create Jersey Boys (the "Jersey Boys Agreement") named Valli and Gaudio as "Owner," Brickman and Elice as "Bookwriter," and Dodger Stage Holding Theatricals, Inc. ("DSHT") as "Producer." These parties further licensed their rights under this agreement to defendant Dodger Theatricals, Ltd., as the primary producer for the play, and later to defendant Jersey Boys Broadway. Corbello brought numerous claims against DeVito, Valli, Gaudio, DSHT, Dodger Theatricals, Jersey Boys Broadway (collectively, "defendants") among others. Corbello alleged that Jersey Boys has earned gross revenues of approximately $300 million per year and that she was owed at least $6.5 million. Defendants moved for summary judgment on Corbello's thirteenth and fourteenth causes of action, which were for a declaratory judgment as to the validity of the sublicenses, and for an equitable accounting.

Joint Ownership of the DeVito Biography

The court first concluded that DeVito's creative edits to the DeVito biography, which Corbello appeared to concede, made him a joint author of the work. The court also explained that under copyright law, unless otherwise agreed by contract, a deceased joint owner's rights in a work pass to his heirs, not to the other joint owners. Further, a joint owner cannot be liable for infringement to another joint owner. If a joint owner retains only beneficial ownership of the work, by signing away his ownership in exchange for royalties in the form of an exclusive license, he can be liable for infringement if he exploits the work without his coowner's permission.

The Ninth Circuit's Sybersound Decision

The court began with a discussion of the controversial decision in Sybersound Records, Inc. v. UAV Corp., 517 F.3d 1137 (9th Cir. 2008). According to the court, Sybersound stands for the proposition that "any attempt by a joint owner to grant an exclusive license without the consent of all other joint owners results in the grant of a nonexclusive license as a matter of law, at least for the purposes of standing to sue for infringement." Corbello at 19. Corbello argued that under Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 99 U.S.P.Q.2d 1654 (9th Cir. 2011), Sybersound stood for the limited procedural proposition that an exclusive licensee whose license was not granted by all joint owners stood in the position of a nonexclusive licensee, i.e., he did not have standing to sue for copyright infringement; while an exclusive licensee with permission from all co-owners did have standing to sue. Corbello strongly rejected the notion that under Sybersound, an attempt by a co-owner of a work to grant an exclusive license without the permission of his co-owners resulted in a nonexclusive license per se. Rejecting Corbello's interpretation, the court explained that the Sybersound court "likely" meant that a joint owner cannot, without the consent of the other joint owners, grant a license that is exclusive as against all joint owners; but if the joint owner attempts to do so, he only grants the license he has the power to grant, i.e., a license that is not exclusive as against all joint owners, but which is exclusive as against him. Id. at 20. In other words, the court explained,Sybersound merely states the "unremarkable" principle that where there is joint ownership of certain property, one joint owner cannot license that property to the detriment of his co-owner's ability to use or license the property. Acknowledging the ambiguity in the Sybersound decision, the court stated:
Surely the Ninth Circuit will clarify that it meant something like this if given the chance, and perhaps it will have the chance in the present case. In any case, this Court is confident that the Sybersound court is guilty at most of imprecise syntax or some minor equivocation, as opposed to outright copyright-law heresy.
Id. at 20.

Validity of the Valli/Gaudio and Jersey Boys Agreements

Based on the foregoing analysis of Sybersound, the court reasoned that DeVito's license to Valli and Gaudio was either a "selectively exclusive license" to the biography, or a transfer of DeVito's ownership, but "in no case was it an exclusive license as against [Corbello]." Corbello at 21. In using the term "selectively exclusive license," the court acknowledged that it was "perhaps coining a new term here, but it [was] not creating any new doctrine." Id. The court concluded that the Valli/Gaudio agreement was not a transfer of ownership, but a "selectively exclusive license" as against DeVito, because the agreement did not sufficiently identify the "work" being transferred in order effectively to transfer DeVito's 50% ownership. Moreover, the court noted that parole evidence suggested that there was no intent to transfer the copyright in the biography, in particular because Valli and Gaudio appeared not to have known specifically about the biography at the time they entered the agreement with DeVito. Notably, the court explained that the fact that Valli and Gaudio were not specifically aware of the biography at the time of contract was not relevant to whether or not the biography fell within the scope of the license—the license was written in broad enough terms to include the biography. Because the Valli/Gaudio Agreement included DeVito's express permission to sublicense, the Jersey Boys Agreement constituted a nonexclusive license to DSHT. The court thus denied, in part, Corbello's motion for summary judgment on her claim for a declaratory judgment as to the validity and nature of the Valli/Gaudio License and the Brickman/Elice Sublicense, and denied defendants' motion for summary judgment on these claims. The court also granted summary judgment to defendants on Corbello's claim for an equitable accounting because because a joint owner's licensee's duties are limited to the licensee's contractual duties under the license, and, therefore, Valli, Gaudio, and DSHT did not owe Corbello a direct accounting. small>Disclaimer This document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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