In a lawsuit brought against ABC by a company that licenses films and film clips, the U.S. District Court in New York wrote an opinion April 5, exploring issues involving assignments of copyright infr

In a lawsuit brought against ABC by a company that licenses films and film clips, the U.S. District Court in New York wrote an opinion April 5, exploring issues involving assignments of copyright infringement actions, the statute of limitations, the fair use defense and false attribution of copyrights.

The following is a summary of the court's opinion.

The Facts: Wade Williams Distribution Inc. is a film licensing and distribution company that handled copyright licenses for a film library, which included "The Brain from Planet Arous" (1958), "Robot Monster" (1953) and "Plan 9 from Outer Space" (1959).

ABC's "Good Morning America" aired on July 6, 1997, a segment produced by Ned Berkowitz and inspired by the recent opening of the film "Contact." In the segment, entertainment editor Joel Siegel explored the portrayal of aliens in American film throughout the 20th Century, pointing out the costumes, effects and plots portrayed aliens with humanlike characters.

Including interviews and showing clips of films from the early 1900s, the 1950s and more recently, Siegel attributed the portrayals to the filmmakers' lack of creativity or resources.

He used three seconds from "The Brain from Planet Arous" in close proximity to Columbia professor David Helfand's comment that film aliens exhibited human characteristics because of lack of creativity, showing the alien as a hovering human brain with eyes attacking a woman.

Siegel explained that one reason aliens were basically human was that actors had to be able to wear the costumes. He used 12 seconds from "Robot Monster," stating in the segment that "they couldn't afford an alien costume, but the director happened to have a gorilla suit and a diving bell helmet in his garage." He used nine seconds from "Plan 9 from Outer Space" to show that there were no costumes that physically distinguished the aliens from the humans, and that "the aliens looked suspiciously like bad actors."

Wade Williams claimed that on June 12, 2000, it was assigned ownership of the copyrights in the three films. The document did not expressly include the right to sue for infringement that occurred during the assignor's period of ownership; it conveyed the "copyright registration" to a number of films and reserved all rights not specifically assigned, including remake, ancillary, distribution, exploitation and display.

Wade Williams filed suit against ABC on July 7, 2000. In an Oct. 1, 2000, supplemental assignment, Wade Williams was expressly granted the right to sue for accrued claims and causes of action of copyright infringement.

The Right to Sue: The court noted that, as previously, a copyright assignment -- including the right to sue for past, present and future infringements -- permits a party to sue for infringement even though the right was conveyed after commencement of the action when the following conditions are met: (1) the assignment was made before trial; (2) there is no dispute between the assignor and the assignee as to who may bring the claim; and (3) the defendant suffers no prejudice from the subsequent assignment's recognition. This is the Intimo test set out in Intimo Inc. v. Briefly Stated (948 F.Supp.2d 315, S.D.N.Y. 1996).

The court held that the supplemental assignment to Wade Williams met these conditions. First, it occurred before trial. Second, the timing of the original assignment (shortly before suit was filed) and the language of the supplemental assignment indicated that both parties intended to have Wade Williams bring the suit. Third, the supplemental agreement, executed less than three months after the suit was initiated, did not prejudice ABC since the broadcaster had conducted discovery on the substantive issues of the case; the assignment did not change the issues to be litigated at trial.

Unique to this case, however, was that the supplemental assignment occurred after the three-year statute of limitations expired on July 8, 2000 (the suit was filed on the last permissible day). The court addressed the question of whether an assignee-plaintiff who receives an express assignment of the right to pursue an accrued cause of action, which was granted subsequent to the initiation of an otherwise timely-filed action but after the date the statute of limitations expired, has standing to prosecute the copyright infringement action.

The court held that a plaintiff has standing under these circumstances if it otherwise satisfies the Intimo test. It noted, however, that this opinion should not be interpreted to allow initiation of a suit outside the limitations period based on an assignment.

Fair Use: After noting that there were no genuine issues of material fact to prevent the court from determining this fair use defense by way of a motion for summary judgment, the court explored four "statutorily prescribed factors."

First, it noted that the Second Circuit has stated that the factor of determining the purpose and character of the use is the "heart of the fair use inquiry." Although there is a presumption against fair use where a copyrighted work is used for commercial gain, this is not determinative, the court wrote.

It then focused on two inquiries within this first factor: (1) whether the use was "transformative"; and (2) whether the alleged fair use was commercial or for profit.

ABC conceded its use was commercial, but argued that the segment was a comment or criticism that made transformative use of the films.

The court noted that the more transformative the new work, the less significant the other factors -- such as commercialism -- would be.

Considering Siegel's comments and criticism, how the film clips were used, the proximity of the clips to the comments of a professor, and how the comments were voiced over some clips, the court found that use of the film clips was "clearly transformative." The clips were critiqued along with other movies as examples of how films portray aliens with human. This factor weighed "heavily in favor of ABC."

Second, the nature of the copyrighted work called for recognition that some works are closer to the core of intended copyright protection than others. As this court noted, "courts apply this factor to separate works of fiction or fantasy, 'creative' works, from compilations or scholarly publications that are expected to be freely excerpted."

The court found that this factor favored Wade Williams, but "minimally" affected the fair use analysis in this case.

Third, the court found that the amount and substantiality of the work used favored ABC. The broadcaster used 3 seconds from a 71-minute film, 12 seconds from an 84-minute film and 9 seconds from a 77-minute film.

Wade Williams argued that 24 seconds of clips was quantitatively substantial in proportion to the segment, which was 5 minutes, 45 seconds. It also contended that since the films were usually licensed in short clips, even a short clip was a quantitatively large use given the market.

The court refuted these arguments, stating that section 107 of the Copyright Act requires consideration of "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." The phrase "copyrighted work" does not mean marketable clips or the allegedly-infringing work. ABC "used no more of plaintiff's works than was necessary for purposes of its commentary."

Further, the clips were not the essence or heart of the films. Not only were they short, but Siegel's comments while the clips were visually displayed made the original sound essentially inaudible.

Fourth, there was no evidence that ABC's use of the film clips adversely affected the market for the full-length movies.

Wade Williams argued that the true market for these films was in the form of short clips. However, the court noted that the company only provided 12 licenses of all three films over the last 11 years -- five of those after the GMA segment aired.

The company also asserted the fear that if entertainment companies freely copied the films, its licensing market would be destroyed.

The court stated that such an argument failed to recognize that not all uses of its films would be fair uses. "What plaintiff appears to advocate is an interpretation of the law that would require a license for any broadcast or commercial use of a copyrighted motion picture, regardless of its purpose or length. However, the law has a fair use exception, and criticism is one of the main categories of that exception."

Finally, the court held that the state law claims for unfair competition were duplicative of the copyright law claims; therefore, federal law preempted them.

Lanham Act Violation: Wade Williams claimed that ABC falsely attributed the copyrights to itself by failing to acknowledge the company's ownership. It argued that this violated the federal Lanham Act.

To prove a claim for false attribution of copyrights, plaintiff must prove: (1) the work originated with the plaintiff; (2) the origin was falsely designated by the defendant; (3) the false designation was likely to cause confusion; and (4) the plaintiff was harmed.

The court denied this claim. Wade Williams did not own the copyrights at the time the segments were broadcast, so ABC could not attribute ownership to that company. Also, there was no false designation of original. The segment contained no representations as to copyright ownership. It was unlikely, the court noted, that anyone interested in the film clips would rely on the program or its credits as a reference for finding the source of the films.

In concluding, the court held that Wade Williams had standing to prosecute its copyright infringement claims, but use of the films was a "fair use" that was a complete defense to the claims.

Case: Wade Williams Distribution Inc. v. American Broadcasting Co. Inc.
Court: U.S. District Court for the Southern District of New York; Judge J. McKenna; Case No.00 Civ. 5002 (LMM); April 5, 2005
Counsel for the parties not provided with the opinion.