Jared Leto Can’t Use Copyright to Stop TMZ Leak, Court Rules

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By Peter Leung

Sept. 26—Actor Jared Leto’s production company Sisyphus Touring Inc. can’t block publication of a leaked video by celebrity gossip site TMZ by retroactively claiming that it owned the copyright, a federal district court ruled Sept. 23.

The U.S. District Court for Central District of California rejected Sisyphus's claims that it had an ownership right in the video, through a “work-for-hire” agreement with the person who created and later leaked the footage, because there was no written agreement signed before the footage was filmed ( Sisyphus Touring, Inc. v. TMZ Prods., Inc. , 2016 BL 315102, C.D. Cal., No. CV No. 15-09512-RSWL-PJW, 9/23/16 ).

The decision highlights the uncertainty about whether a work-for-hire agreement must be executed before the work is created.

TMZ Productions Inc. purchased footage of Leto dismissively talking about the singer Taylor Swift. This footage came from a project that Sisyphus had asked cinematographer Naeem Munaf to work on, without a written agreement. Munaf later agreed to sell the footage to TMZ.

After Sisyphus learned of the leak, it had Munaf sign an agreement stating that the footage was created as a work made for hire. Sisyphus then sued TMZ, which had already published the video, for copyright infringement. TMZ moved for summary judgment.

A work made for hire is a work whose copyright interest belongs to the creator's employer rather than to the actual creator when the work was made within the scope of the creator's employment.

A work made by a freelancer or contractor is usually owned by the creator, but some kinds of such works can be works made for hire if the parties sign a written agreement to that effect.

No Retroactive Agreements

The court granted TMZ's motion, finding that Sisyphus had never owned the copyright, because the video was not a work for hire. The court held that for commissioned works for hire, any written agreement must be executed before the creation of the work. Here, the work-for-hire agreement was signed about three months after the creation of the video footage in question.

The court acknowledged that the controlling circuit, the U.S. Court of Appeals for the Ninth Circuit, has not ruled on this issue, but pointed out that the Seventh Circuit has ruled that the work for hire agreement has to be signed before the creation of the work, in Schiller & Schmidt, Inc. v. Nordisco Corp. , 969 F.2d 410, 23 U.S.P.Q.2d 1762 (7th Cir. 1992).

The court said that the written agreement requirement helps to clearly identify copyright ownership, and allowing an after-the-fact agreement to be effective defeats that purpose.

There was no factual dispute over when the agreement was signed, nor over the fact that Munaf was never a Sisyphus employee.

Already Transferred

The court also rejected an alternative theory that Munaf had ownership of the copyright for three months and then transferred it to Sisyphus with the signing of the agreement. It ruled that by then Munaf no longer owned the copyright interest, because he had transferred it to TMZ days before. An e-mail exchange between Munaf and TMZ agreeing to an “outright purchase” of the video was enough to meet the written agreement requirement for copyright ownership transfers, the court said.

Judge Ronald S.W. Lew decided the motion. King Holmes Paterno & Soriano LLP represented Sisyphus. Munger Tolles & Olson LLP represented TMZ.

To contact the reporter on this story: Peter Leung in Washington at pleung@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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