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Failure to Execute Contract by Specified Date Means Work Was Not Made for Hire

Friday, February 7, 2014
By Anandashankar Mazumdar

Feb. 5 --A defendant's failure to execute a work made for hire contract by the date specified in the contract meant that the resulting work was not a work made for hire, the U.S. District Court for the Eastern District of New York ruled Feb. 4 (Zenova Corp. v. Mobile Methodology, LLC, 2014 BL 29371, E.D.N.Y., No. 1:13-cv-00745-BMC, 2/4/14).

Granting summary judgment on several counterclaims, the court also rejected the defendant's counterclaim of infringement based on the plaintiff's copyright registration.

Dispute Over Payment
Zenova Corp. d/b/a Lookit Design is a web page design company based in Brooklyn, N.Y. Starting in May 2007, Lookit began providing design services to several companies owned by Tal Etshtein a/k/a Tal Etstein, including Mobile Methodology LLC of New York, a technology development company.

In 2010, Lookit and Mobile Methodology began discussing a project through which Lookit would create a website framework for Mobile to use to market its services. The product produced by Lookit was called MMINfluencer.

A July 2010 agreement specified hourly rates and an estimate of charges. It also stated that the project was being produced as “works for hire” and further that Mobile Methodology would own “due, copyright and all rights to page designs, web development source code, and graphic source files” when invoices were paid. Lookit executed the agreement within the 30 days specified by the text, but Mobile Methodology never signed it.

Eventually, Lookit had delivered a portion of the services to Mobile Methodology, but there was a disagreement over past due payments. Lookit then demended that Mobile Methodology stop using the MMInfluencer. Mobile Methodology refused, and Lookit registered its copyright interest in the work with the Copyright Office.

Mobile Methodology then sued Lookit in New York state court alleging breach of contract and other claims. Lookit then filed the instant action alleging copyright infringement. Mobile Methodology asserted that it was the owner of the copyright in the MMInfluencer under the work made for hire doctrine. Lookit moved to strike that defense.

Mobile Methodology also counterclaimed that Lookit was infringing its copyright interest. Lookit moved for summary judgment on the counterclaim.

Judge Brian M. Cogan determined that because Mobile Methodology had failed to sign the work made for hire agreement by the specified date, that it was not an enforceable contract.

Next, the court rejected the counterclaim of copyright infringement after finding that Mobile Methodology had not registered its copyright interest in any relevant work, as required under 17 U.S.C. §501.

The court also rejected the argument that Mobile Methodology could bring an infringement claim based on the registration that Lookit had obtained. First, the court noted that Mobile Methodology had failed to properly plead this argument in its counterclaim. Furthermore, it said that because of its ruling that the MMInfluencer was not a work made for hire, Mobile Methodology could not rely on this registration for its counterclaim.

The court thus granted Zenova's motion.

Zenova was represented by Allan Samuels, Jacqueline Carmen Gerrald, and Oliver R. Chernin of McLaughlin & Stern LLP, New York, and Michael Bruce Cohen of Fort Lauderdale, Fla. Mobile Methodology was represented by Andrew P. Saulitis of New York.


Text is available at http://www.bloomberglaw.com/public/document/Zenova_Corp_v_Mobile_Methodology_LLC_et_al_Docket_No_113cv00745_E.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at amazumdar@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com

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